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 products information and the manufacturer. Where, a prodcut 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, labelling is also an important element to make products more easily identifiable and make marketing efforts more acceptable. Hence, between branding, packaging, and labelling there is a close relationship.

You can see, that some products label 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 prodcut label is an important part of the packaging and branding and itself 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 to influence 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 prodcuts 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 label for Lipton tea.

Informative Label

The informative label means provides various information related to the prodcuts. It describes various aspects of the prodcuts. 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 prodcut label, the labelling 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 messages however make sure the brand name should be readable and memorable.

Product Information

Product information includes all the significant information that enables a prodcut 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.

Language

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.

UPC/Barcode

UPC – universal product code/barcode is now also an important part of labelling 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 labelling is to make products more identifiable. It enables customers to clearly know what particular product they are buying by rightly adding product information. As such customers do not confuse between substitute products.

Grading

Labelling helps to categorize different products in different grades. Simply, the product can be graded as A grade, B grade, and 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

Labelling 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 labelling 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 labelling also enhances 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 makes more sales for the firm.

Importance of Labelling

The labelling adds different importance to prodcuts branding and 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.