LABELLING

 INTRODUCTION

Research is ongoing on the development of new products and improvement on 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 labelling differently. Label is one of the legal requirements in identifying one company’s product(s) from other companies’

products. 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 labelling.

table of content A

1. personal selling and sales promotion 
2. branding 
3. evolution of management theory
4. organising 
5. planning
6. recruitment and selection
7. advertising and publicity
8. channels of distribution
9. communication
10. control
11. decision-making in business
12. delegation and decentralisation of authority
13. employee training and development
14. introduction to marketing

 OBJECTIVES

At the end of this unit, you should be able to:

1. define/describe a label 
2. discuss its role in marketing 
3. explain various forms of label 
4. explain its legal consideration. 

MAIN CONTENT

Definition of Labelling

Labelling 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. Labelling 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 labelling and packaging, and between labelling and branding.

Functions of Labels

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

1. A label identifies the product or brand, such as the crown in Mercedes cars. 
2. A label grades the product, such as canned peaches are grade- labelled A, B and C. 
3. A label describes several things about the product – Who made it? Where it was made? When it was made? Its content? How it is to be used? How to use it safely? 
4. A label promotes products through attractive graphics. 

 Forms of Labels

Labels are classed as brand, grade and descriptive.

1. A brand label is simply the brand alone applied to the product or to the package. For example, some oranges are brand-labelled (stamped) Sunkist or Blue Goose, and some clothes carry the brand label Sentorised. 
2. A grade label identifies the quality with a letter, number or word. For example, canned peaches are grade-labelled A, B and C, and corn and wheat are grade-labelled 1 and 2. Also, Peak milk is graded Nigeria and Holland made. 
3. Descriptive labels give objective information about the use, 
4. 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, number of servings, other ingredients and nutritional contents. 

Argument For and Against Labelling

Brand labelling creates very little stir among critics. While it is an accessible form of labelling, the severe limitation is that it does not supply sufficient information to a buyer. The real fight centres on grade versus descriptive labelling, and whether grade labelling should be mandatory.
The proponents of grade labelling 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 labelling might increase competition, because consumers would be able to judge products on the basis of both price and known quality. The cost of grade labelling is very low, so it would not place a greater burden on the manufacturer.
However, those who object to grade labelling point out that it is not possible to grade differences in flavour and taste, or in 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 labelling. 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.

Legal Consideration for Labelling

There is a long history of legal concerns surrounding labels, packaging  and generally products. In 1914, the US Federal Trade Commission Act held that false, misleading or deceptive labels or packages constituted unfair competition. The fair packaging and labelling Act, passed by the
US Congress in 1967, set mandatory labelling requirements, and encouraged voluntary industry packaging standards.


For example, in the past, the labelling of clothing, furs and piece goods was often confusing and misleading to the consumer. As a result, three important labelling laws were passed. The Wool Products Labelling Act (1940) provides that a clothing product containing any wool must be labelled to explain clearly what kind of wool is used (virgin, reprocessed, etc.) and what percentage of each type is included in the product. The Fur Products Labelling Act (1951) provides that in identifying a fur garment, the label must state the usual or natural name of the fur and its country of origin. And the Textile Fibre Products Identification Act (1958) provides that clothing garments and household textiles, including rugs, must carry the generic description of the fibre content.

The food and drug administration has also established a set of labelling standards for processed foods to ensure full disclosure of their nutritional content. Labels must clearly state the amounts of protein, fat, carbohydrate and calories contained in the contents of the package. Vitamin and mineral content must be expressed as a percentage of the recommended daily allowance. Also, ingredients must be listed in the order in which they are contained in the product. It should be noted that this is not exhaustive; there are other legal considerations/requirements.

CONCLUSION

Consumers’ desire to satisfy their taste, choice and other marketing mix elements leads to mass production of goods and/or services by

manufacturers. These goods/services must be differentiated from one company to another. Labelling is one way of differentiating these. Labelling is so important that most consumers do not remember brand names of some products consumed, but identify them through labels attached to them. Therefore, a label must be well designed and shaped in order to catch the attention of the target and prospective consumers. The social significance of labelling should be considered as well. Necessary legal requirements in respect of labels were exhaustively examined.