Contents :
  • Meaning and Definition of Labelling.
  • Purpose of Labelling.
  • Types of Labels.
  • Role of Labelling.

What is Labelling ? 

The section of the product which conveys the details of the product and the seller is called as 'labelling'. It specifies the information about the product like its brand name, components, brand logo, instructions to be followed while using the product, promotional messages, if any. A label can be a portion of the packaging or a small sheet may be fixed with the product itself.

Definition of Labelling

According to William J. Stanton :
"The label is that part of the product which carries verbal information about the product or the sellers (manufacturers or middlemen). A label may be part of the package or it may be a tag attached directly to the product."

According to Mason and Rath :
"The label is an information tag, wrapper or seal attached to a product's package."

Many varieties of labels are available in the market consisting of plain tags affixed to the main product or typical graphics on the package. One of the basic roles of label is to give the product identification or its concerned brand. 
For example, Sunkist imprints its brand name on oranges. A lot of information related to the product is displayed on the label including details of
the manufacturer, production location, date of manufacture, ingredients, safety precautions, and instructions for use, etc. It can also be used to promote the product by some attractive pictures and illustrations.

Purpose of Labelling

Label specifies the qualities and other aspects of the product which enables its sale. Following points highlight the purpose of labelling :

1) Brand Identification : 
Labelling is used to provide information regarding the entity, i.e., the manufacturer of the packaged product and who outsources it. It provides the details about the location where the pre-packaged product is produced, processed, or distributed.

2) Description : 
Description about the product contents, expiry date, price, user manuals, etc., is given through labelling. In case of packaged food items, nutritional value is also provided.

3) Promotion : 
Labelling is also required for promoting the product, and brand. New and appealing graphics are useful to advertise and popularize the product. It helps in building brand image.

4) Other Purposes :
  • A specific label of a product will help to segregate the product from other several products available in the outlet It assists the purchaser to make the right choice as per his or her specific requirements. It specifies the quality and level of the product.
  • It creates a sense of assurance about the product and also enables the consumers to determine the standard of the product.

Types of Labels

There are three basic categories under which labels can be classified. These three categories are discussed below :

1) Brand Label : 
In this type of label only the name of the brand is given on the product's package. It specifically aims at advertising and promotion of the brand name of the manufacturer. For example, Dhara cooking oil, Tata salt, etc. No other information about the product is provided on these types of labels. Mainly the manufacturers of consumer goods prefer to use such labels.

2) Grade Labels : 
Many a time the manufacturers produce more than one type of product in same product category; in such cases the grade labels are used. Grade labels describe the type of the product (quality of product, grade of product, etc.). This helps the consumers and the intermediaries to identify the product easily. For example, Green Tea, Tea Bags, Leaf Tea, etc. However, the label does not contain any other information about the product or the producer beside the product type.

3) Descriptive and Illustrative Label : 
Such labels are descriptive and illustrative. They give detailed information to the consumers about the product and its producer. It also contains information, such as date of manufacturing, date of expiry, quantity and quality of the product, ingredients, and directions for use, etc. It is mainly used for the products, such as medicines and cosmetics.

Role of Labelling

Roles of labelling are discussed below :

1) Identifies Product : 
The main role of labelling is to allow the customers to know the product and the concerned brand and thus publicize or familiarize the brand name and the product. The features and other details of the product are given by labelling. It informs the positive attributes of the product, helping it to become a fast moving item in the market.

2) Grades Product : 
The standard of the product is reflected on its label. Division of the product in various grades as per its quality can be done with labelling. For example, classification of wheat can be done in grades; 1, 2, 3 or 4 and respected grades are described on the label.

3) Promotes Product : 
Labelling is also involved in promoting the particular product or brand, Interesting, bright pictures and forms of graphics are used in labelling to grab the attention of customers and encourage them to finally purchase the product. With effective labelling, the customers are inclined towards the buying decision, thus making it a crucial factor for increasing the sales and distribution of the product.

4) Protects Customers : 
The label provides details like maximum retail price, quality, quantity of the packaged product, contents, etc., and thus safeguards the consumers from any kind of malpractices or unethical behavior of the dealers or intermediaries. Consumers can differentiate between real and fake brands with the help of labelling.

5) Provides Information Required by Law : 
To provide necessary information related to the product as required by the law, is also an important role of the labelling. Thus, labelling provides the disclaimer or statutory warning about the product. For example, "smoking is injurious to health" and "chewing tobacco is injurious to health" are the two popular statutory warnings provided on the labels of cigarettes and pan masala, respectively. Similarly, relevant statutory warnings need to be given on the labels of other poisonous or harmful products as well.

6) Facilitates Buying Process : 
A specific label segregates the product from other products offered by competitors. It is very important to avoid such confusion in case of medicines and chemicals where a small mistake in the spelling of the brand name can be fatal to the customer.

7) Encourages Self-Service : 
It is an effective instrument to increase sales as it stimulates self-service in large departmental stores and supermarkets. If the label provides the necessary information like the ingredients, price, quantity, quality, taxes, uses, instructions for use, safety warnings, etc., the consumers can decide and purchase the best product on their own. Thus, labelling assists the self-selling firms in their operations by way of promoting self-service.