Labelling: Meaning, Types, Functions and Importance


Meaning of Labelling

Labelling is a process of giving an identification to product by attaching a label to product itself or its container which describes information about it. A label is a small piece of paper, cloth, metal or any other material on which details is either written or printed regarding the ingredients used, weight, price, producer information, expiry date and many other key information that is beneficial for customer. All the details provided on product label need to adhere to Competition and Consumer Act 2010. It is a key component which acts as a means of communicating all necessary information about product to user. Labelling grants unique identity to product which enables it to stand out in market. Customers are easily able to recognize product through the labels attached to them. In today’s era of intense competition, labelling plays an efficient role in promoting sales of a brand by attracting more and more customers toward products.

Concept of Labelling

Labelling is a key component for doing marketing of product. Marketers combine labelling with packaging for grabbing the attention and inducing potential buyers to buy the product. These two parts of branding provide all details to customer about product usage, how to transport it, recycle or dispose of it and its package. Label acts a tool for creating awareness about a particular product among people by displaying all key information on it. It is an important factor in decision making process of consumer as while buying a product they rely on details mentioned on its label. Labels facilitate people to easily do a comparison of a product with other available in market on basis of information provided by them. People can get to know about the features and quality level of products without even using them. Every company should provide fair information to customers and any manipulation of facts would lead to penalty. It should clearly show safety features and any warning in case it contains harmful chemicals or dangerous for children.  

Types of Labelling

Brand label

It is a label which provide details about the brand to which a product belongs. Brand label denotes the name of brand of product and do not mentions any other details except its brand name. Labels denoting the name L.G., Samsung, Whirlpool, Raymond are some of the examples of Brand labels.

Grade label

Grade label are the one which denotes the quality or grade level of a product. These labels denote the features of product and used by the organization for classifying their products on the basis of their quality. For example, USHA brand manufacture different qualities of fan under the category of deluxe, continental and prime. Such label used for classifying products are termed as Grade label.

Descriptive label

Descriptive label are the one which denotes important information about the product. The details provided on such labels are product ingredients, its distinct uses, instruction about usage, precaution needed while using, manufacturer details, date of manufacturing, batch no., weight, size and price of product. It is more commonly used for product which are difficult to grade like medicines, clothes, mechanical instruments etc.

Informative label

Informative label are the one that carry a large amount of information and provides detailed information about product. It is distinct from descriptive labelling in the way that it describes full instruction about product usage and care to be taken. These labels consist of recipes, detailed clearing instructions and various other information of similar nature.

Function of Labelling

Product identification

Labelling provide a unique identification to a product which separates it from other available in market. Customers are easily able to recognize the product through the label attached to it. It avoids any confusion and substitution of competitive products by users. Product of distinct brands Tata tea, Horlicks and Lux are easily recognizable by users through their labels.

Defines the product

Label attached to a product defines features and contents of product. Product labels are informative in nature which consists of all necessary information regarding it. It denotes about its usage and precautions that need to be taken while using it. It mentions all ingredients used, size, quality, weight, guide to use the product etc.

Products assorting

Classifying product into distinct categories as per their features and quality level is another important function of labelling. It enables organization in dividing its item into grades for better understandability of customers. For example, companies may give grade to their products as A, B or C which is meant for rich, average and low income group of peoples. 

Facilitate promotion of products

Labelling plays an effective role in marketing of product. It makes product attractive and grabs people attention by highlighting key features. Labels displays attractive messages on product for inducing them to buy the product. Example, Colgate toothpaste package displays message about free toothbrush with the pack which motivates people to purchase it.

Protection of consumer

Labelling protects the consumer from any cheating or manipulation of facts by manufacturer. It describes fair information about the product which makes customer well-aware about it and facilitates proper buying decisions. Right information regarding ingredients, manufacturing and expiry date need to be mandatory provided on labels of food items, cosmetics, medicines etc. 

Compliance with law

It enables company in complying with all legal laws by displaying all statutory warnings on package of products. Tobacco companies are mandatary required by law to put “Chewing tobacco is injurious to health’’ on pan masala package and “Smoking is injurious to health” on cigarettes packages. Also in case of all poisonous and hazardous products, company need to put a label of statutory warning on their product.

Importance of Labelling

Effective marketing

Labelling can create mass scale marketing of products on its own. It makes product attractive by using appealing graphic designs which grabs people attention towards it. A well-designed label catches more and more peoples which leads to increase overall sales of product. Labelling serve as cost-effective tool which can be used for marketing program. 

Differentiates product

Labelling imparts a unique image to a product which enables it to stand out in market. It differentiates a product from other options available in market by highlighting its key features. Consumers can easily find out the unique features of product in comparison to other products by reading information from its label.

Facilitates product comparison

Product labels serves an important tool for doing comparison in between different products even before using them. It provides all details about product which enables consumer in easily performing a comparison and judging the overall quality of products prior to making a purchase decision.

Easy recognition of product

It assist in easy identification of product by consumer among large number of products available in market. Use of notable large logo and combination of bright colors make product eye-catching which assist customer in recognizing them. Labelling prevents any confusion or substitution of other products by customer via building a well-defined identity.

Provide instructions

Labelling provides complete instructions regarding the safe usage of products. It is an important role played by labelling as improper handling and usage would lead to serious consequences. Consumer must be well aware about using a product in a proper way for avoiding any losses. Labelling describe in depth step-by-step instruction for product usage.

Requirement by law

It enable in displaying all statutory information on products as require by legal laws. Label of tobacco must denote “Chewing of tobacco is injurious to health” and label of cigarettes must show “Smoking is injurious to health”. All hazardous and poisonous product should clearly describe statutory warning on their labels.