What is Labelling? Definition, Types, Functions, Elements, and Importance

What is Labelling (Labeling)?

Labelling (Labeling) is the process of assigning a label to a product to make it more recognizable and identifiable by adding product information and the manufacturer. Where, a product label may be any tag, symbol, small piece of paper, wrapper, or means of recognition directly attached to the product.

A label consists of valuable verbal information about the products such as the product’s manufactured date, producer name, address, ingredients used in products, product’s benefits, product expiry date, how & when to use the products, and other necessary information customers seek to know. As such the important information is attached to the product by labeling – it makes customers feel blessed while identifying and making a purchase decision on what they want to buy.

Just like branding and packaging, labeling is also an important element to make products more easily identifiable and make marketing efforts more acceptable. Hence, between branding, packaging, and labeling there is a close relationship.

You can see, that some product labels are attached to their packages, some are directly imprinted to the product, and some need additional label tags. It depends upon the nature of the products, such as the matchstick’s label is attached to its cardboard box (package), for shoes, the label is directly attached to it, the additional label tags are not part of the products or packaging though they are used such as fancy clothes tags.

Types of Label

A product label is an important part of the packaging and branding and also carries various important marketing information. Generally, the major types of labels are three – brand, grade, and informative label. Each label has a significant role in influencing potential customers. They are:

Brand Label

Brand label is the level that is used in the packaging of the products. A brand label is a brand in itself and labels too. It is when a company uses its brand name in the packaging of the products.

The brand label consists of the brand name, logo, and trademark, and it does not consist of any other information. For example, the logo of Honda.

Grade Label

Grade label is when the quality of the products is shown in grades such as numbers or words. The grade label of the products is determined by company production standards and legal requirements. The product’s quality grade can be in terms of A, B, C, D, or 1,2,3,4, or good, better, best, etc. For example, grade labels for Lipton tea.

Informative Label

The informative label provides various information related to the products. It describes various aspects of the products. It provides information on aspects like – who made it. where it was made? when it was made? what ingredients are used? how to use it? when to use? and so on. Since an informative label describes the products, it is also called a descriptive label. For example,

Essentials Elements of a Label

To be a good product label, the labeling needs to have at least six essential elements. They are:

Brand Name

While labelling the product the brand name is vital. The brand name is what makes your offerings different than others. The brand name may include a logo, trademark, special character, symbol, or any brand message however make sure the brand name is readable and memorable.

Read More: What is Brand Equity? 

Product Information

Product information includes all the significant information that enables a product identifiable. The product name, ingredients used in the product, packaging, description, manufactured date, expiry date, usage instructions, size, weight, etc. As such labeling enables it easy to know from the outside what product is inside.

Manufacturer Information

A good product label also includes proper information about the product manufacturers. The label should include the company or manufacturer’s name, address, contact details, country, zip code, and other information that enables customers to make contact if the company becomes the default.

Legal Information

From country to country, the legal requirements for the product label may be different. Thus it is necessary to study the concerned country’s product label guidelines before attaching anything to any labels.


While labeling the languages used must be readable and recognizable. If the language used in the product label is ununderstandable by the customers it becomes meaningless. Though the languages vary from country to country and area to area the languages should be used by considering the target market languages.

Read More: 13 Importance Of Branding


UPC – universal product code/barcode is now also an important part of labeling products. This makes it easy to identify the product’s prices, manufactured dates, and other product essential information and makes payment billing easy just by scanning. If the product is selling in the store barcode is necessary.

Quality Certificates

If the product you are selling has certificates such as No GMO, No Toxic elements, 100% Natural, and any quality certification marks, it should be included in the label.

Functions of Labelling

The significant functions of product labels can be mentioned below:

Product Identification

The primary function of labeling is to make products more identifiable. It enables customers to know what particular product they are buying by rightly adding product information. As such customers do not confuse between substitute products.


Labeling helps to categorize different products in different grades. Simply, the product can be graded as A grade, B grade, C, or D by one could stand against the other products in quality and customers can also know what level of quality products they are buying.

Consumer Protection

Labeling helps customers to get informed about accurate information about the products before making a purchasing decision. A good product label protects customers from any deception or fraud from the sellers. If the seller attaches anything other than the manufacturer’s label the customer can file against him if he had been involved in the deception activities.

Legality Fulfillments

An unforgettable function of labeling is that it makes firms free from legal obligations. Product labeling is compulsory in every nation. Here, the company may include legal information such as product quality grade, quality certifications, allergy information, statutory warning (e.g. smoking is injurious to health), etc.

Enhance Marketing Programs

Product labeling also enhances the marketing programs of the firm like branding and packaging. As an important element of marketing, it makes more identifiable the product in the market and promotes different sales promotional tools by easing customers’ understanding of products. An effective product label may attract more potential customers and make more sales for the firm.

Read More: The Marketing Mix

Importance of Labelling

The labeling adds different importance to product branding, packaging, and marketing activities of the firm. It can be also understood from the point of view of marketers and customers as below:

From the marketer’s point of view, labeling is important for the following:

  • It makes the marketer’s product different than those of competitors.
  • It makes marketer’s products more identifiable and memorable in the market.
  • It helps to make products attractive and attract various potential customers.
  • It helps to apply marketing campaigns more strategically, hence increasing the number of customers and sales.
  • It helps him to grade products.
  • Helps him to be free from legal pressures.
  • And, also increase sales and generate more profits.

From the consumer’s point of view, the importance of product labelling can be;

  • It helps customers to easily identify products.
  • It helps customers to get information regarding the products and know whether the product is right for them or not.
  • Since they easily identify the products their purchasing decisions become more functional.
  • It helps customers to get various facts about the products they are buying such as nutrition facts, usage benefits, allergic information, brand messages, how to use, when to use, and so forth.

Read Next: An Ultimate Guide to Product Life Cycle (PLC) Strategies

1 thought on “What is Labelling? Definition, Types, Functions, Elements, and Importance”

  1. Labelling is an important part of data management. It allows us to easily identify and track the data we need. There are many different types of labels, and each has its own function and importance.


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