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Market response to elimination of over-packaging on the private label products in Dalian City, Liaoning Province, China

CHAPTER TWO: LITERATURE REVIEW

2.1 Introduction

The chapter focuses on presenting the ideas of other scholars on previous pieces of literature about market response to elimination of over-packaging on private label products. Specifically, studies concerning consumers, retailers, and manufacturers responses to the elimination of over-packaging on private label products would be discussed. Some of the key variables that would be evaluated in the literature include; perceived quality, perceived safety, perceived cost, perceived expensiveness, and environmental sustainability. Further, Theory of Planned Behaviour, and Kano’s Theory of Attractive quality and packaging would also be discussed.

2.2 Consumers Perception towards Elimination of Over-Packaging on Private Label Product

A number of studies have been conducted towards the impact of packaging on the environment, from the perception of consumers. For a start, a research conducted by Elgaaïed-Gambier (2016) sought to determine whether none over-packed products ought not to be associated with the reduction of a product’s quality, or would lead to marketing limitation. It is instructive to note that there is no common agreement among scholars on what constitutes excessive packaging of a product. However, Shekhar and Raveendran (2016) argues that kind of packaging that supplies more than required weight, too large, and too costly could be categorized as being excessive packaging. Concerning the debate as to whether excessive packaging ought to be eliminated on private label products, has attracted sharp debate among scholars. There are those consumers who are conscious about environmental conservation and are therefore against the idea of excessive packaging on the private label products (Elgaaïed-Gambier, 2016).

As illustrated in the background to this study informed consumers are an important stakeholder group that can sway retailers to either adapt or ignore over-packaging depending on their perceptions. These consumer perceptions are especially critical when it comes to over-packaging elimination in favor of eco-friendly options that foster sustainability. Magnier and Crié (2015) found that consumers considered structural, graphical and informational cues to identify eco-friendly packaging which influenced their preference for products. Consumers were increasingly considering the ethical choices that brands made in their production processes before making purchases.  However, the study had a weakness of being entirely qualitative and reliant on a small sample pool of stakeholders. To determine whether visual appearance and verbal claims of sustainability on packaging had an influence on consumers, Magnier and Schoormans (2015) investigated two samples of consumers with high and low environmental concern using a detergent product and an edible nuts product.  They found that consumers who have low environmental concern were negative to contradictions in the visual appearance and verbal sustainability claims, conveying perceptions based on the fact that honesty was lacking among retailers or manufacturers. Consumers who had high environmental concern were indifferent to contradictions in the visual appearance and verbal sustainability claims, satisfied that retailers and manufacturers were telling the truth. They concluded that brand ethics mediated the association between visual appearance and verbal claims of sustainability. 

Female consumers are more likely buy products in larger packaging and prefer glass bottles over plastic because this approach reduces garbage (Je┼╝ewska-Zychowicz and Jeznach, 2015). Environmentally sensitive individuals also prefer not to purchase products in plastic or paper packaging which pollutes the environment, with a special concern for food packaging which constitutes one of the biggest sources of garbage and pollution.  Lindh, Olsson and Williams (2016) further examined the subject of food packaging and its influence on consumer perception. They found that most consumers almost exclusively consider food packaging with respect to its impact on the environment, ignoring the important function of food protection from contamination. Many have a preference for paper packaging over plastic and metal which are not environmentally degradable. However, Rajendran, Wahab and Singh (2019) were of the view that consumer knowledge of packaging impacts on the environment is still low with most focused-on packaging design rather those ecological considerations. This leaves visual elements as the dominant consideration, especially with non-food products.  Furthermore, a study conducted by Aydinliyim and Pangburn (2012) indicate that most of the consumers who are in favor of elimination of over-packaging argue that it would simplify recycling for them. This is because they would no longer have disposed of excess packages that are also being viewed as being convenient.

Conversely, there are other consumers who are against elimination of excessive packaging on the private label products.  Beuthner and Ramme (2018) posit that excessive packaging holds and protects products from damages that may occur during transit, storage, and sale. Furthermore, Beuthner and Ramme (2018) points out that over-packaging of products prevents products from being contaminated, hence ensuring their safety and quality. A study by Elgaaied-Gambier (2016) showed that consumers would most likely base their decision making on purchasing on the mode of packaging. Elgaaied-Gambier (2016) postulates that most the consumers are of the view that over-packaged products are of high quality and they would not mind whether the product is expensive or not.

2.3 Perceived increase or Decrease in Cost of a Product when Over-packaging is eliminated

Sevadec (2015) argues that manufacturers favor the idea of elimination of over-packaging on the private label products. Sevadec (2015) argues that elimination of over-packaging would enable manufacturers to save more money on the cost of packaging. Over-packaging is estimated to constitute up to 65% of the total cost of producing a product. This is because more often than not a huge percentage of costs involved in producing a product are from packaging. Ketelsen, Janssen and Hamm (2020) also argue that manufacturers that are concerned about conservation of environment or sustainability of the environment are in favor of elimination of excessive packaging of products. They argue that excessive packaging would result into piling of wastes, of which some none-biodegradables are hence affecting the quality of soil.   

However, there are other manufacturers that are quite skeptic about elimination of over-packaging of products. Martinho et al. (2015) posit that there are some manufacturers that are doubtful regarding potential negative effects of over-packaging on the environment. Martinho et al. (2015) further state that manufacturers that are against elimination of over-packaging find it to be quite costly, since they would have to incur other expenses to test new packaging designs before launching them to the market. In fact, Martinho et al. (2015) pontificates that elimination most of the manufacturers are quite concerned about the possible reaction of consumers or buyers towards elimination of excessive packaging. Arguments by Martinho et al. (2015) are also in tandem by the views of Ma, Park and Moultrie (2020). Ma et al. (2020) is of the opinion that most the manufactures are quite skeptical about eliminating of over-packaging as they do not know how the market would react. This is due to the fact that there are some consumers or buyers are of the belief that properly packaged products are of high quality. Therefore, if a product is not properly packaged, they would most likely shift to the competitors’ products (Ma et al., 2020). In addition, Ma et al. (2020) improper of inefficient product packaging could result into higher costs as a result of difficulties in handling and could also lead into reduction in sales revenues due to damages of the product. According to a study that was conducted in Iran concerning the damages on cargo, the study indicated that most of the exported cargos are wasted as a result of low-quality packaging or improper packaging (Mai, Symmank and Seeberg-Elverfeldt, 2016). Another study conducted in developing countries, indicated that improper packaging results into wastage of 30-35% to products within the supply-chain (Poulter, 2010). Based on discussion above, it seems there are varying opinions concerning elimination of over-packaging on private label products.

2.4 Perceived Quality decrease when over-packaging on products eliminated 

Majority of scholars are researchers have arrived into a conclusion that quality of a product or a product plays a key role in formulating business strategy. Ma et al. (2020) points out that firms put a lot of concentration on quality; since competition in the market is based on quality, customers look for quality, and markets are transformed by quality. Therefore, Ma et al. (2020) opines that how consumers or buyers perceive quality of a product is closely dependent on if their expectation is continuously met by the manufacturers and retailers. Ma et al. (2020) opines that quality of a product is basically perception of a consumer; therefore, quality is subjective as opposed to being objective; because quality is perceived. Fayrene & Lee (2011) define perceived quality as an estimation of a buyer’s cumulative excellence of a product or brand.  Further, Fayrene & Lee (2011) pontificate that perceived quality is a fundamental variable that informs consumers’ decision making to purchase a product; and perceived quality is considered to be a crucial determinant of customers’ buying behavior and choice of product.

A study conducted by Aydinliyim and Pangburn (2012) indicate that most consumers face uncertainty about the benefits and quality attributes of the products they intend to purchase due to imperfect and asymmetric information common about most of the products in the market. However, companies or manufacturers are quite informed about the quality of their products, as such, firms can become opportunistic. Therefore, for customers to overcome the uncertainty that they have towards products’ quality, companies ought to inform their target consumers and offer them cues concerning products’ quality (Aydinliyim and Pangburn, 2012). Mishra, Malhotra and Saxena (2020) extrapolate that Cue Utilisation Theory is based on the argument that products are made up of a set of indications that are used as surrogate indicators to show the consumers the mode of products’ quality especially when inference about quality is made. It is instructive to note that cues are based on a various attributes related to the product that is being assessed by the consumer. It is also worth noting that these cues about a product are either extrinsic or intrinsic. Extrinsic cues of a product are not necessarily close to the product itself. Extrinsic attributes of a product include packaging, brand names, and product communication. On the other hand, intrinsic attributes of a product, for instance; ingredients used in preparing foods and/or technical components of a computer (Cutler, 2011).

Cutler (2011) posits that consumers would more often than not rely on extrinsic attributes of a product such mode packaging to make purchasing decision. Further, Cutler (2011) posits that consumers form perceptions towards various products based on how they comprehend the visual stimuli on packaging that would attract their attention. Sevadec (2015) argues that more often than not, consumers would make their purchasing decision based on the how a product is packaged. It is instructive to note that through packaging consumers would get information about a product such as; price, ingredients, and colour (Saxena, 2020). In addition, perceptions that consumers have towards a product directly affect their purchasing decision in the market, which further emphasises on the importance having attention capturing messaging or attributes on packaging (, Shekhar and Raveendran, 2016). A study conducted by Ajzen (2020) indicates that during early years, packaging constituted only 10% of products’ value. Which later then reached 50%, and currently it constitutes 70% value of a product. Therefore, it advisable for the manufacturers and retailers to use good materials that can protect the product from external damaging, store the value of product, and enhancement of sales for the product. A study by Fayrene & Lee (2011) showed that branded packaging such as colour, font style label, and packaging structure are some of the attributes that the consumers would consider about a product, to decide whether it is of quality or not. Therefore, it suffices to conclude that consumers would perceive the quality of a product based on the mode of packaging of a product, and, as such, producers to emphasize on the packaging mode. However, quality of a product is only perceived by the consumers based on the mode packaging, but it does not necessarily mean that the product being packaged is of high quality.

Conversely, a study by Parguel & Reniou (2015) indicated that excessive packaging of a product has some adverse effect on the environment. Ciasullo et al. (2017) posit that a study conducted in the United States indicates that although packaging plays a key role in protecting a product, it has contributed in the destroying the environment. Out of the 237 people interviewed by Ciasullo et al. (2017), it was revealed that 57% of respondents indicated that over-packaging of a product destroy environment, and that packaging of the product does necessarily show that the product is of good quality.

2.5 Perception on Environmental Sustainability due to elimination of over-packaging

A number scholars and researchers have shown that absence of over-packaging on products is a sign of environmental friendliness. However, the influence of absence of over-packaging on products depends on the consumers’ decision to purchase the product depends on their consciousness to environmental protection (Elgaaïed-Gambier, 2016). Parguel & Reniou (2015) underscores that manufacturers, retailers, and consumers who are environmentally conscious would act in a way that is geared towards protecting ecosystem. For instance, environmentally conscious buyers or consumers would be focusing on green products, or better still those products that are ecologically-packaged (Reniou, 2015). A study conducted by Elgaaied-Gambier (2016) indicated that manufacturers, retailers, and consumers are increasingly becoming aware of the ethical implications of products and as such, they have started adapting their purchasing behaviour to suit environmental sustainability. In addition, it is instructive to note that environmentally conscious consumers and manufacturers are not only concerned about the impacts the purchased product have on them, but also on the ecosystem (Elgaaied-Gambier, 2016). Specifically, environmentally conscious manufacturers and consumers more often than not would consider mode of products’ packaging, and may be against excessive packaging that would generate a lot of wastes to the environment, despite their valuable technical importance (López et al., 2015). Also, a study conducted by Lindh et al. (2016) have shown that the benefits such as ensuring environmental friendliness as a result of absence of over-packaging, outweighs possibility of being rendered as being of low quality. Therefore, consumers and manufacturers who are conscious about environmental friendliness would most likely view over-packaging as a means of reducing excessive waste, despite its technical benefits to product (Herbes, Beuthner and Ramme, 2018). As a result, consumers and manufacturers who are environmentally conscious are unlikely to be sensitive about the absence of over-packaging on a product.

Conversely, consumers and manufacturers who are not environmentally conscious would most likely not be influenced by the environmental friendliness of a product Beuthner and Ramme (2018) pontificate that manufacturers and consumers who are not concerned about environmental friendliness are would consider other attributes of a product. For instance, non-environmental conscious is of the view that products not over-packaged are of low quality, and as such they are not good for consumption (Wu et al., 2018). Moreover, manufacturers that are not conscious about environmental friendliness would most likely consider other aspects such as protection of goods from damages, advertisement of the product, and appealing to the buyers’ perception about quality. Consequently, consumers and manufacturers that are not conscious about environmental friendliness are likely to have stronger leaning towards over-packaging as opposed to its elimination on the product (Wu et al., 2018). In general, it is safe to conclude that over-packaging appeals to consumers and manufacturers not conscious about environmental friendliness, and as such they would offer first preference to over-packaged products due to perceived quality and convenience.

2.6 Theoretical Framework and Research Hypotheses

This section presents theories that discuss perceptions towards over-packaging on products. The two theories discussed are Theory of Planned Behavior, and Kano’s Theory of Attractive quality and packaging.

2.6.1 Theory of Planned Behavior

The theory of planned behavior is a psychological theory that is centered on understanding the connection between beliefs and behavior of a person (McNeill and Moore, 2015). The theory was elaborated by Icek Ajzen arguing that there are three main components, attitude, behavioral control, and subjective, that shape the behavior of an individual (Bashir et al., 2019). One of the practical applications of the theory focused on understanding the perception of customers towards sustainable packaging and how the perception influences their behavior. For instance, the elimination of over-packaging can influence customers to act in a given way based on their perception towards sustainability. As noted by Herbes et al. (2018) and George (2004), over-packaging creates two challenges on the environment; firstly, leading to over-utilization of the limited resources on packaging, and increase in waste in the community. The inclination by the customers towards eco-friendly products means that they can support the idea of elimination of over-packaging.

Researchers have conducted diverse studies that apply theory of planned behavior to identify the indicators that influence their behaviors in sustainability. According to Ajzen (2020), the behaviors of customers are influenced by their norms, attitude, subjective, and beliefs on a given action. For instance, customers that strongly believe on the importance of sustainability are more likely to be inclined towards products and actions that are eco-friendly such as reducing the packaging materials used on label. On the same note, Chen & Tung (2014) argues that indicators that influence customer behavior are inherent, and largely guided by self-perception. This means the behavior of customer is influenced by the belief on a given subject, therefore make decisions that reinforce their perceptions. The subjective norm exhibited by the customers is based on the understanding that social pressure is kept under control through personal decision as depicted in the figure 2.1 below. As noted by Hill and Lee (2012), consumers are not always read overcome their personal norms and behavior, therefore, ensuring that their behaviors and action align with their psychological positions. Therefore, with their aim to exhibit positive influence, customer with inclination towards sustainable environment, will tend to go for brands that have under-packaged compared to those that have over-packaged.  

 

Figure 2.1: The Theory of Planned Behaviour.

Source: Ru, Qi and Wang (2019).

In the argument by Ajzen (2020), the theory of planned behavior shows that the independent constructs such as attitude, perceived behavioral control and belief, have considerable influence on the behavior intention of the customers. With regard to limiting over-packaging, the independent constructs can influence customers take measures that are focused on sustainability. However, Ajzen (2020) argues that planned chen and Tung (2014) argue that the independent constructs identified in the theory of planned behavior do not exhaustively explain the connection of a behavior to a given aspect such as environment. This argument is based on the fact that environment consciousness can be triggered by diverse factors that are both internal and external. However, the psychological aspect of the planned behavior theory creates an understanding on the internal factors that influence how customers behave when subjected to different situations.

2.6.2 Kano’s Theory of Attractive Quality

Kano’s theory of attractive quality is based on the understanding there are factors that influence the decisions made by customers, which can be confined into five categories. The five categories, basic, delighters, performance, indifferent and reverse attributes, have ranging importance on the users. According to the observation by Noriaki Kano, there are features of a product that attracts customers especially because they align with psychology aspects (Dauvergne and Lister, 2012). In this regard, the exclusion of these features can lead to dissatisfaction or negative perception of the product among customers. On the other hand, Jin & Bennur (2015) assets that attractive quality theory helps to understand how customers evaluate products before making a decision to purchase. For instance, on one-dimensional quality category, it means that there are specific features that a product should have to satisfy customers. Deliya and Parmar (2012) argue that the categories stipulated in the Kano’s attractive quality are designed to measure the attributes of a brand that influence the perception and the decision of the customers. In this regard, it is a theory that is widely applied in strategic thinking with regard to business planning. With attractive quality the management can make decisions anticipating the possible actions of the customers.

To understand the aspects of quality pointed out in the theory, Kano highlighted some of the quality attributes that guide customers when making decisions (Jin & Bennur, 2015). The attractive quality attributes are features that lead to satisfaction among customers and can results increased inclination towards a given product. A good example is how limiting over-packaging can result into a positive perception of a brand that can help to increase the intention to purchase among customers. Like early argued by Linzner and Salhofer (2014), over-packing can attract dissatisfaction among customers especially when are conscious of the environmental effect of the brand. Meaning that limiting over-packaging of labels is instilling quality attributes. Monnot et al. (2017) argue that the indifferent quality and reserves quality categories create both satisfaction and dissatisfaction among customers depending on the implementation approached embraced by a business. The indifferent quality attributes do not lead to a direct perception by customers as to whether they are good or bad. On the other hand, the reserve qualities are largely dependent on the degree of achievement on a product. These two categories of attractive quality can mean that limiting over-packaging can be perceived differently by customers depending person internal constructs (Hill and Lee, 2012). For instance, environmentally conscious customers are likely to perceived limiting over-packaging as a satisfying attribute. On the other hand, customers that are not conscious of the environment can be indifferent about the packing used on a label.

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