How do you measure the ROI of a package design even before building it?
This was the problem that was given to us and we worked for solving it.
The output is a framework that is an end-result of the research project carried out at Aalto University, in collaboration with Package Testing & Research Ltd. and other Finnish industry partners.
Problem Context
Our objective is to showcase and communicate the larger role packaging plays, and what goes into making it succeed, while enabling stakeholders to think of packaging right from the beginning of the product research and development lifecycle.
Packaging is one of the most important investment brands and businesses make. This is because it is the face of the product, it serves a function purpose and appeals to the consumers. Yet, most of the brands and businesses think of packaging as a last minute activity to put the product out in the market. This undervalues the role packaging plays, and is an inefficient way to utilise packaging.
“Our client has a very consumer-driven organization, and they believe that packaging creates added value. However, to what extent they measure the ROI of packaging is hard to say”
– Tomas Rosenquist, Kuudes
How we did it
Our Approach
Handpick the best of your offerings and let them do the talking. Try to showcase the theme from the best possible angle.
going from discovery to creating the tool
Triangulation approach to define the framework
Understanding the Different stakeholders
Building the Framework
In building our framework we started with the value network. In mapping the network, we repeatedly found two stakeholders to have central roles: the brand owner and the consumer. These two
stakeholders are intimately linked, and all the other stakeholders in the packaging industry were connected to them in some way. From these two keystone stakeholders, we began considering
their motivations: what do they require from packaging?
Paper Prototyping the Framework
Concentric rings spoke to the hierarchy of the categories. With logistics, branding and sustainability being influenced by their outer concepts of feasibility, desirability and viability, the relationship between these two rings was locked. countless drawings were made, and many different existing frameworks were examined and tested, but never influenced our outcome directly. Several brainstorming and working sessions were held, and multiple paper prototypes produced before reaching this first prototype
Solution
Strategic Tool for measuring ROI
The Packaging Value Cycle contains three levels of logic, with the logic being that each ring informs the inner rings within it.
1.
Drivers of Packaging
The outermost ring describes the forces that drive the decision making:
- to enhance Viability
- to increase Feasibility
- to enable Desirability
2.
Attributes that drive value
These attributes exist at the meeting points of the design thinking forces.
- Operations
- Responsibility
- Brand Value
3.
Value Creation Process
The innermost rings describe how packaging is made and used
- the stakeholders
- the key activities
- resources required
Why are we developing the packaging?
1.Drivers of Packaging
This forms the outer ring of the framework. This serves as a starting point for any new packaging development. There are 3 main focus areas for a packaging development:
To improve the viability of the product and business.
This means that the business wants to leverage the product and its packaging to increase its market presence and thereby its market share to compete in the category.
To optimise the costs and feasibility of product of the packaging.
Packaging involves cost and investments in terms of machines, resources and labour. Many organisations look to keep optimising their products and packaging to make it more cost-effective and compete in the market.
To enhance the appeal and desirability of their product.
Packaging is meant to be brought, and consumers buy if they desire them. Most often packaging becomes outdated or no longer relevant for the evolving consumer needs, and requires to be upgraded to appeal to the target audiences’ senses.
What value does the packaging create?
2.Attributes that drive value
Once the key drivers for the packaging development are identified, we need to evaluate what attributes the package should have. This is the focus for the middle ring. By prioritising on the attributes required for the packaging, brands and stakeholders can dive deep to specify the characteristics of the packaging and what are the key metrics it needs to adhere to. Through this step stakeholders can already define the KPIs for the packaging, and who / what the requirements are for the development.
Usability
This is focused developed easy to use, convenience focused characteristics that increase the usability of the packaging
User Experience
Packaging is the first interaction consumers have with the product and it needs to create the best experience before, during and after the product purchase.
Brand Communication
Most consumers become aware about the product through its packaging and it needs to impress them and appeal to their beliefs and values.
Logistics
Packaging is not only aesthetically pleasing, but it should also be functionally useful during transportation, storage and handling by the different hands in the value chain.
Production
Packaging is resource intensive and businesses are always concerned about delivering high quality at the lowest cost possible. This optimisation mandates a delicate balance between cost and appeal
Sustainability
Increasingly sustainability is a major point of concern for consumers, brands, and manufacturers. This is to reduce the impact packaging has during, and after its lifetime.
How are we developing the packaging?
3.Value Creation Process
Once the attributes are identified, then the packaging development process begins. This involves lots of collaboration, iterations, and cooperations between the various stakeholders involved in the process of creation, distribution, and disposal of the packaging.
At the core of the value creation process is the Brand and the consumer who are looking to build trust and relationship – where one is fulfilling or looking to exceed expectations on providing what the other needs by appealing to their senses. This is captured and translated into designs by the packaging design agency.
Apart from these three stakeholders there are many others who are involved and play a key role in the realisation of the packaging and ensuring it’s success.
Material Sourcing
This is focused developed easy to use, convenience focused characteristics that increase the usability of the packaging
Manufacturing
Packaging is the first interaction consumers have with the product and it needs to create the best experience before, during and after the product purchase.
Converter
Most consumers become aware about the product through its packaging and it needs to impress them and appeal to their beliefs and values.
Finishing
Packaging is not only aesthetically pleasing, but it should also be functionally useful during transportation, storage and handling by the different hands in the value chain.
Retailer
Packaging is resource intensive and businesses are always concerned about delivering high quality at the lowest cost possible. This optimisation mandates a delicate balance between cost and appeal
Recycling
Increasingly sustainability is a major point of concern for consumers, brands, and manufacturers. This is to reduce the impact packaging has during, and after its lifetime.
Capturing economic value
Thus drawing a straight line from the center of the Packaging Value Cycle to the outside will describe the stakeholders involved with packaging, what they are considering, and why it matters. The result is that different perspectives are included in one framework that can be understood by all. We can see that consumer, for example, are interested in usability and experience, but not logistics or production. However, a package must fulfil both functions in order to be successful. By providing a method of understanding packaging from all perspectives, a holistic tool for evaluating packaging investments is created.
Packaging attributes on the left side of the framework are concerned with production. Attributes on the right side address packaging consumption. As such we can see that increasing packaging investments can lead to improved customer experiences and increases in brand value. As such, the framework provides a way to evaluate packaging investments and their potential returns
Packaging Value Toolkit
Why should you use this framework?
This is a framework that serves multiple purposes – each focused on helping businesses rapidly assess the value and impact of the product on their operations. This is available as part of the Packaging Value Toolkit offered by PTR Oy.
Identify Key Investments
This tool is helpful to identify areas of investments, resources and partnerships required to creating and launch the product in the fastest and most efficient manner
Estimate ROI early
Through rapid testing and prototypes businesses can easily evaluate the desirability and viability of the packaging, which helps estimate returns and refine the strategies as required.
Collaborate with Partners
As a communication tool, this brings all the stakeholders in the value chain to the same page and discuss the most optimal way to launch this without compromising on the outcomes