Packaging is a marketing tool and is related to the performance of marketing function. It is primarily a delimitation of space and setting aside of a product from external environment. Packaging forms the important cost element of the goods and represents 5-30 per cent of the value of the goods depending on the product type. Packaging can be divided into two categories, that is consumer and logistical packaging. The consumer or product packaging is basically done for convenience, market appeal and protecting the product from the effects of natural elements. However, logistical or industrial packaging is a very critical element in the physical distribution process. Product packaging is designed to meet marketing objectives, but logistical packing is designed while keeping in view the distribution objectives.
The primary purpose of logistical packaging is to prevent damage to the product during storage, transportation and handling, when it is moved in bulk quantities for distribution in the market. The packages move through varying storages, shipping and handling conditions at different places on which shippers have no control. Hence, packaging should maximize the protection of the product under different conditions so that it reaches the consumer in usable form. Logistical packaging can considerably enhance the productivity of the logistical system through ease in handling, space utility, damage reduction etc. However, cost is an important element, which gets influenced by the type of packaging (Figure 9.1).
Source: Sople V.V (2013), Logistics Management, Pearson Education India; Third edition.