Chapter 1

INTRODUCTION

Background of the Study

Packaging is an essential process of every product seen in the market nowadays.

According to Kotler et al. (2005), packaging is defined as all the activities of designing and

producing the container for a product. Also the package includes the primary container, the

secondary, and the shipping package which uses for transportation to store.

Packaging is recognized as a silent salesperson. It plays a dynamic role in attracting

consumers towards the product. It is the overall package offered by the company to its

consumers which stimulates the impulses buying behavior of consumers. A good packaging

design is regarded as an essential part of successful business practice. The packaging design

attributes carry a nonverbal message about the product. According to Rundh (2005), “An

innovative packaging design can change product perception and create a new market position”.

Thus, companies invest massive amount of money on packaging. Companies are well aware that

an exquisite packaging will draw consumer’s attention and is capable of turning the buyer on or

off.

Package attracts consumer’s attention to particular brand, enhances its image, and

influences consumer’s perceptions about the product (Rundh, 2005). Moreover, package imparts

unique value to products, works as a tool for differentiation, i.e., helps consumers to choose the
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product from wide range of similar products, stimulates customers buying behavior (Underwood,

Klein, & Burke, 2001; Silayoi & Speece, 2004).

The packaging has a close relationship with the product but its most important role is in

the development of brand meaning (Keller,1998,2008). Keller argues that packaging does not

facilitates product performance but instead contributes to brand association and is an important

element of the brand which constitutes its identity (Keller,1998,2008). According to de

Chernatony(2008), brands are complex offerings that are conceived in brand plans, but

ultimately reside in consumers’ minds. When consumers think of brands they often automatically

associate packaging with the brand (Cramphorn, 2001; Keller, 2008).

Packaging communicates brand personality through many elements, including a

combination of brand logo, colours, fonts, package materials, pictorials, product descriptions,

and shapes. In the current state of fiercely competitive market, the aesthetic elements of

packaging have occupied an important and unique position in delivering the product to the end

users. It has become important tool of differentiating the product from the similar kinds of

products available in the market. The appearance of the package is believed to have a strong

impact on influencing consumers’ purchase decision than advertising (Mutsikiwa and

Marumbwa, 2013). A particular industry which pours much effort in improving the aesthetics of

their packaging is the cosmetic industry.

In the Philippines, when speaking about cosmetics whether it’s for men or women, the

first product that comes to their mind were Avon products. Avon Products Inc. is the oldest

beauty company originated from the United States. It has grown from a modest line of perfumes

sold door-to-door to one of the world's leading brand of cosmetics. It manufactures and sells
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cosmetics, fragrances, toiletries, accessories, apparel, and various decorative home furnishings.

Avon employs a unique direct-selling method. It was 1978 when Avon entered the Philippines

beauty market with the purchase of local beauty company Beautifont. In 1983, the company

name officially changed from Beautifont by Avon to Avon Cosmetics, Inc.

Avon claims that their products are easy to sell due to the fact that Avon has more than

120 years of existence in the cosmetic industry. As the years pass by, Avon continues to improve

their existing products and try to innovate. Over the years, Avon did a great job in improving the

aesthetic appeal of their package. As a direct selling company, they believe that the packaging of

the product does the selling. Thus, it is important that much effort in improving the packaging is

essential especially at this era where consumers of cosmetics are facing an increasing number of

cosmetic products to choose from. With so many options to choose from, one of the factors that

influence the buying behavior of consumer is the product packaging. Though there is abundance

of literature on this issue in general, this study determined the influence of packaging and its

elements in consumers buying behavior of Avon Cosmetic Inc. products, particularly in residents

of Ilo-ilo City.

Statement of the Problem

This research study determined the influence of products' packaging of Avon Company

on consumer's buying behavior.

Specifically, this research study sought to answer the following questions.

1. What is the respondents' profile in terms of:

1.1 Age
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1.2 Sex

1.3 Income

2. What is the extent of influence of product packaging with regards to its elements on

the consumers buying behavior towards Avon Company in Iloilo City?

The following are the packaging elements:

2.1 design of packaging

2.2 packaging material

2.3 printed information

3. Is there a significant difference in the extent of influence of product packaging with

regards to its elements on the consumers buying behavior towards Avon Company in

Iloilo City and its respondent’s profile?

Hypothesis of the Study

There are significant differences in the extent of influence of product packaging on the

Consumer Buying Behavior towards Avon Company in Iloilo City in terms of design of

packaging, packaging materials, and printed information when respondents are taken as a whole

and grouped according to age, sex, and monthly income.

Scope and Limitation

The study focused on understanding the extent of influence of product packaging on consumers

buying behavior towards Avon Company products in Ilo-ilo City. The participants were selected

by convenience. Product packaging influence was measured using elements of product

packaging such as design of packaging, packaging materials and packaging information.

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The study was limited to two hundred (200) participants. The participants were buyers that goes

in and out from the only Avon Branch in Iloilo City found in Iznart St.Brgy. ________, Ilo-ilo

City. The data were collected through a prepared survey questionnaire.

Significance of the Sstudy

The data gathered in this study will be of benefit to the following:

Avon Company Management. The data in this study can be used by Avon Company

Management as a reference in the improvement of their packaging.

Avon’s Dealers. This study can help dealers on how they should present their product to

end users.

Researchers. The result of this study can be used as their reference.

Definition of Terms

For better and common understanding of the variables and other terms used in the study,

they are defined conceptually and operationally as follows:

Age. Age of a person measured in years, months, and days from the date the person was born

(Business Dictionary2017). In this study, Age refers to the classification of respondents

categorized as 20 years old and below, 21 to 30 years old ,31 to 40 years old and 41 to 50

years old and 51 years old and above.

Sex. Sex refers to the biological and physiological characteristics that define men and women

(Merriam, 2017). In this study, sex refers to biological classification of the respondents as

to either male or female.

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Monthly Income. It is monthly wages or salaries before deduction of employee CPF

contributions and personal income tax. It comprises basic wages, overtime pay,

commissions, tips, other allowances and one-twelfth of annual bonuses. In this study,

monthly income refers to the money that the customers receive in exchange for providing

the goods or service or through investing categorized us below P10,000; P10,001-

P20,000; P20,001-P30,000; and above P30,001 which is the monthly income of the

customers.

Product Packaging. A wrapping material around a consumer item that serves to contain,

identify, describe, protect, display, promote and otherwise make the product marketable

and keep it clean (Encyclopedia, 10/25/17 ). In this study, Product packaging refers to

the study on how to attract the consumer to take a look on the product as is sits on store

shelves.

Consumer Buying Behavior. The process by which individuals search for, select, purchase, use,

and dispose of goods and services, in satisfaction of their needs and wants (business

dictionary,2017).

Avon Company Inc. Avon Company Inc. is the world's largest direct seller and a leading beauty

company. It is the oldest beauty company in the United States. In this study, Avon

Company is referred as the company subject of the study.

Design of Packaging. Packaging design is the process of creating everything on the outside of a

product that a consumer would buy at a store or online. This might include the container,

any graphics or text on the package, as well as all labels and interior packaging. In this
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study, the design of packaging refers to the overall design which plays a vital role in

attracting the consumers.

Packaging Material. Any material used specially to protect something-packing wadding.

Consumer can change its decision regarding packaging material. High quality packaging

attract consumer then low quality packaging. So packaging materials has strong influence

on buying behavior (Business dictionary2017). In this study, packaging of material refers

to the important elements itself which prevents the product from loss that may actually

add value to the product if it meets a consumer need such as recyclable, reusable,

biodegradable, easy to carry, easy to open, and easy to store.

Printed Information. Display of information about a product on its container, packaging, or the

product itself. For several types of consumer and industrial products, the type and extent

of information that must be imparted by a label is governed by the relevant safety and

shipping laws (Business Dictionary 2017). In this study, printed information refers to all

the information related to the product quality.