Cost of packaging and product sales price relationship: An example application

As a result of tecnological development and widespread use of the internet quicker dissemination of information and the phenomenon of glabalization have increased. As a result interaction between cultures has forced the world to become a single market. In the meanwhile, marketing approach has also changed from product-based sales to customer-based ones.The packaging in this process along side has also been effective in increasing sales, in terms of the protection of the product, easy storage and portability. Showing and selling the most competitive product on the shelves today is packaging.The importance of packaging in marketing is increasing. Customers also take packaging into consideration along with the product in purchasing process. As the label of the product is placed on the packaging, the appeal is increased through advertisements to differentiate the product from others in the same catagory and from this it is thought to be that the packaging itself is equal to if not more valuable than the contents inside of it. Packaging is considered as a different product and has been given the same if not more thought and time into the processing and design.Packaging is also considerate to be a product and produced in various steps, this makes it as valuable and costly as the product itself. The kind of material used for packaging, its design and production process are the most significant factors to affect the cost. To counter-act this, a policy of cost-cutting is followed, though this causes the packaging to be of poor quality and un-attractive to the consumers, thus causing a negative effect in sales figures.In our study using regression analysis, we have studied the relationship between product price and the cost of raw materials and packaging. We have found out that the increase in the cost of packagingof a product affacts its price more than the cost of the product?s raw material. With the rising costs of packaging, the enhanced effect on product sales has naturally risen. In contrast to the increase in sales prices, sales figures don?t decrease, customers continue to demand these products. Although it doesn?t change the quality of the product contained in the package, it adds to the appeal of the product and grabs to consumers causing an increasing in product sales.Key Words: Package, Cost of Packaging, Cost of Packaging and Sales Price Relationship