Labelling, Forms, and Functions of Labelling

Labelling, Forms and Functions of Labelling

Research is ongoing on the development of new products and improvement of the existing ones. These products are sold across the world in different markets to various classes of consumers by different companies. 

These companies have to differentiate their products from other competitors’ products in the market. Companies differentiate their products by labeling them differently. A label is one of the legal requirements in identifying one company’s product(s) from another company’s products. 

A label is an important aspect of marketing. This is because it describes the product, its elements, and other details about the product. This unit examines what a label is, its characteristics, and various forms of labeling.

Read Also: Importance and Reasons for Branding

Definition of Labelling

Labeling is another product feature that requires managerial attention.

The label is the part of a product that carries verbal information about the product or the seller. A label may be part of a package, or it may be a tag attached directly to the product. 

Labeling is a subset of packaging. 

Labels may range from simple tags attached to products to complex graphics that are part of the package. It should be noted that there is a close relationship between labeling and packaging, and between labeling and branding.

Functions of Labels

Labels perform several functions, and the seller has to decide which one to use. They include the following:

A label identifies the product or brand, such as the crown in Mercedes cars.

Label grades the product, such as canned peaches are grade- labeled A, B, and C.

A label describes several things about the product – Who made it? Where it was made? When it was made? It’s content? How it is to be used? How to use it safely?

Read Also: Methods of Segmenting Industrial and Business Markets (Market Segmentation)

A label promotes products through attractive graphics. Before we proceed further, kindly attempt the following exercise:

Forms of Labels

Labels are classed as brand, grade, and descriptive.

A brand label is simply the brand alone applied to the product or the package. For example, some oranges are brand-labeled (stamped) Sunkist or Blue Goose, and some clothes carry the brand label Sentorised.

A grade label identifies the quality with a letter, number, or word. For example, canned peaches are grade-labeled A, B, and C, and corn and wheat are grade-labeled 1 and 2. Also, Peak milk is graded in Nigeria and Holland made.

Descriptive labels give objective information about the use, construction, care, performance, or other features of the products. 

For example, in a descriptive label for a can of corn, there will be statements concerning the type of corn (Golden Sweet), the style (Creamed or in Niblet Romels) and the can size, the number of servings, other ingredients, and nutritional contents.

Argument For and Against Labelling

Brand labeling creates very little stir among critics. While it is an accessible form of labeling, the severe limitation is that it does not supply sufficient information to a buyer. 

The real fight centers on grade versus descriptive labeling, and whether grade labeling should be mandatory.

The proponents of grade labeling argue that it is simple, definite, and easy to use. They also point out that if grade labels were used, prices would be more related to quality. 

They equally argue that grade labeling might increase competition because consumers would be able to judge products based on both price and known quality. The cost of grade labeling is very low, so it would not place a greater burden on the manufacturer.

However, those who object to grade labeling point out that it is not possible to grade differences in flavor and taste, or style and fashion. A very low score on one grading characteristic can be offset by very high scores on other factors. 

For example, regarding Coke and Pepsi, some people claim that Coca-cola is of high quality but has high gas content, while Pepsi Cola is of low quality but has less gas content.

Companies selling products that score high within a given grade would be hurt by grade labeling. It would not be possible for these companies to justify a higher price than that charged for another.

Some people also argue that grades are an inaccurate guide for consumer buying, because the characteristics selected for grading, weights assigned to them, and the means of measuring them are all established on an arbitrary basis.

Labels eventually become outmoded and need freshening; hence, marketing executives should ensure that their labels meet the changes in the business environment.

Read Also: Conditions for Effective Market Segmentation and Bases for Segmenting Consumer Markets

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