Managing Risk in a Package Redesign_ What Can We Learn From Tropicana

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Managing Risk in a Package Redesign: WhatCan We Learn From Tropicana?June 16, 2009Perception Research Services fights the temptation to art direct and, instead, offers a differentinterpretation of what went wrong and why.

Earlier this year, we witnessed one of the most publicized packaging missteps in recent memory. Indeed,Tropicanas misguided redesign has already become infamous as, perhaps, the most notable marketingdebacle since the introduction of New Coke nearly 25 years ago.

Clearly, a great deal has already been written about Tropicanas gaffe, in both the mainstream media andon countless blogs. However, much of the commentary has taken the form of art-directing, or second-guessing the marketing and design teams.

Were fighting that temptation and, instead, are offering a somewhat different interpretation of what wentwrong and why-and using our experience testing new packaging systems to offer perspective.
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Well also discuss three interesting packaging issues raised by this case study and suggest several best practices that marketers, designers and researchers can follow to avoid similar disasters.

A recap. On January 8th Tropicana North America introduced a revolutionary new look for its flagshipTropicana Pure Premium brand, the market leader with over $700 million in North American sales. Thisdesign change was driven by and linked to a new $35 million advertising campaign that prominentlyfeatured the new packaging.

In fact, both the advertising and packaging were created by the same agency (Arnell) and, according to a New York Times write-up, were launched jointly as:

A historic integrated marketing and advertising campaigndesigned to reinforce the brand and product attributes, rejuvenate the category and help consumers rediscover the health benefits they get from drinking Americas iconic orange juice brand.

The in-market results were immediate and dramatic: Over the first two months, sales of Tropicana PurePremium plummeted 20 percent, translating to over $30 million in lost revenue. Simultaneously, sales of the brands direct competitors (including Minute Maid, Floridas Natural and private label brands) allincreased by double-digits, clearly benefiting from Tropicanas losses.

In addition, there was active criticism in the blogosphere, both from professional design critics and, perhaps more importantly, from bewildered and frustrated customers.

In light of these pressures, Tropicana announced on February 23rd that it would return the old packaging to the shelves. To date, the packaging remains in transition-and its not yet clear what percentage of the brands consumers will eventually return.

As such, its impossible to gauge the full impact of this redesign. However, it is safe to estimate that this packaging decision has cost Tropicana at least $50 million, simply by factoring in immediate lost sales,

advertising expenses and design, production and distribution costs.

What went wrong? In announcing the move back to Tropicana Pure Premiums original packaging, asenior Tropicana executive made an interesting point, saying, We underestimated the deep emotional

bond that our most loyal customers had with the original packagingwhat we didnt get was the passion that this very loyal small group of consumers have

Indeed, this emotional bond was highlighted in the media, including a New York Times article with theheadline Tropicana Discovers Some Buyers are Passionate about Packaging.

But is this the right takeaway? Our experience suggests that Tropicana, and the press, got some pointsright but that they may be misinterpreting the broader issue.

On the one hand, it is certainly wise to focus on core, loyal customers. Across many product categories,we find that a relatively small percentage of shoppers drive a disproportionate percentage of sales.

In orange juice, for example, a parent in a large household may go through several cartons a week-andthus is worth far more to Tropicana than a once-a-month purchaser. Revolutionary packaging changesneed to retain the loyalty of these heaviest users, or they will offset any gains among a new targetaudience.


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Theres also no question that people have an emotional connection with some brands, and that there arevisual cues (colors, shapes, symbols, icons, etc.) linked to these brands. Indeed, effective packagingleverages these cues to provide brand recognition/reassurance and to trigger loyal users positiveconnections with the brand.

However, its somewhat misguided to simply conclude that core loyal customers have a passion for a brands packaging and are angered or threatened by change. Weve found that the powerful negativeemotion that drives sales declines is typically not a resistance to the idea of a packaging change-or

even disappointment with the aesthetics of a brands new look. Instead, it comes when shoppers areconfused or frustrated at the shelf.

This frustration typically takes one of two forms. The first is brand confusion, which typically happenswhen multiple equity elements are changed at once. In the case of Tropicana, the new design removeda familiar visual icon (the straw), changed the main visual (an orange) and, perhaps most importantly,changed the logo and branding emphasis.

Looking at the package, its easy to see how some shoppers may have seen the 100% Orange brand,from Tropicana and wondered if it was still the Tropicana Pure Premium that they knew and trusted.

The second issue is frustration with the shoppability of a brand. This typically happens when there arechanges in the naming of a product or in the visual architecture used to segment different productvariants (e.g., the location of variant descriptors, the use of color-coding, etc.).

In addition to fundamental design changes, the new Tropicana packaging dramatically reduced the role of color-coding and moved the primary flavor or form descriptor (No Pulp, etc.) to the top of the packaging,where it was often obscured in the larger shelf context.

In a complex category with many different offerings, this created significant frustration at the shelf, as perhaps best expressed by one angry blogger, Do any of these people actually shop for orange juice?Because I do and these new cartons stink.

Of course, the reality is that most shoppers dont take the time to voice their frustrations: They simplychoose another brand and walk away. In fact, across hundreds of brands and product categories, weveseen that shoppability concerns are the most powerful driver of packaging-related sales declines.

Can revolutionary changes work? For many marketers, the primary takeaway from Tropicanasexperience appears to be that companies should not make major changes to their packaging. Weve heardseveral familiar refrains over the past several months: Pack testing always favors current packaging,


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There is always a sales decline with a new pack, Shoppers hate revolutionary changes or Revolutionary changes never test well.

But our broader experience directly contradicts some of these assertions and provides a more nuancedview on others. In fact, across hundreds of packaging studies, weve actually found an almost perfect bellcurve, in which roughly 50 percent of proposed packaging systems outperform current packaging.

While an existing packaging system may have built-in advantages on some dimensions (due to

familiarity), this is not the case when it comes to measures of persuasion, which are most predictive of sales. Thus, the first statement (Pack testing always favors current packaging) is simply mistaken.

Similarly, there is limited evidence to suggest that new packaging systems consistently drive significantin-market sales declines. Our in-market validation work suggests that there can be a dip driven byshopper confusion if new systems are rolled out on a soft basis, where both the new and old packagingappear on the same shelf. But these declines are transitory and they are never on the scale of the 20

percent decline seen in the Tropicana case.

As for revolutionary packaging changes not testing well, it all depends on how one defines the term. If revolutionary means an entirely new look that abandons nearly all visual equity elements of a

packaging system (as with Tropicana), then the assertion is generally true: Packaging changes that create brand hesitation and shoppability concerns dont test well (and, as the Tropicana case illustrates, theyalso dont do well in-market!)

However, if revolutionary is defined somewhat differently, perhaps as a change to one or two primarydesign elements, then dramatic changes can indeed work. In fact, weve seen many cases (such as HerbalEssences and Kraft Salad Dressings) in which significant packaging changes have driven sales.

When the Tropicana case is viewed in this larger context, the primary conclusion is that the Tropicanaredesign didnt fail because it was revolutionary. It failed because the redesign effort lost sight of the

primary functional considerations of packaging (brand reassurance and shoppability) and, thus, createdconfusion and frustration at the shelf.

Broader issues and implications. The Tropicana case also raises several broader issues. For one, it brings to light the differences between the disciplines of advertising and packaging. It is notable that thefailed Tropicana packaging was created by an advertising agency and that it was designed expressly tointegrate with an ad campaign.

In advertising, marketers are focused on creating memorable impressions that will be acted upon later.They typically have more time and latitude to be emotional and perhaps abstract. In packaging, thedynamic is quite different. The shopper is closer to the purchase decision and, thus, is looking for moretangible reassurance about the purchase (branding, variant, key information, etc.). In addition, it alltypically happens at a cluttered shelf and within 10 seconds, so clear, direct and more literalcommunication is critical.

This is not to say that there shouldnt be a link between packaging and advertising. Indeed, packagingshould ideally drive recall of advertising and spark that messaging and positive emotional connection.However, it is far more effective to start with great packaging that works on shelf and then incorporate itwithin advertising, rather than trying to transplant an ad campaign on a box. Similarly, its wise to hire adesign agency to redesign packaging, as opposed to an advertising agency, which can be likened tohiring an electrician to do your plumbing


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A related issue brought to light by the Tropicana scenario is the need to understand the shoppers mindsetin your respective category.

If we focus on the fundamentals of orange juice, we know that people shop for orange juice habituallyand automatically. It is a household staple that is typically purchased weekly. Shoppers are not used tothinking at the orange juice shelf, as they might for a more expensive or infrequent item.

We also know that, for multi-serve products like orange juice, shoppers are typically buying for their families and are driven primarily by the desire to avoid making a mistake (e.g., buying something their kids will reject). They are not generally looking for excitement or innovation, as they might with another

product or with something they are buying for themselves.

Its also important to remember that the orange juice category is extraordinarily complex, with a widevariety of variants (e.g., different flavors, pulp levels, ingredient/benefits, etc.). Thus, it can be difficultand overwhelming to shop, with a reasonably high likelihood of buying the wrong product.

When these factors are taken into consideration, orange juice is clearly a category in which continuityand reassurance are paramount, tipping the scales against a radical packaging change. More than likely, asimilarly dramatic redesign would have a higher likelihood of success in a category such as candy, whichis more experiential and more strongly tilted toward single-serve purchases.

Timing packaging changes. The Tropicana redesign also speaks to the larger issue of when and why packaging changes should take place. In this situation, the redesign was driven by and linked to a brandrepositioning, which is certainly typical. However, it was also misguided, as Tropicana shoppers wereclearly not ready for this change.

In our experience, weve seen very few companies that have disciplined, consumer-driven processes for determining when to make a packaging change. Instead, redesigns are typically driven by competitive

activity, by declining sales, by changes in positioning and, perhaps most frequently, by the arrival and(very subjective) opinion of a new marketing person. As a result, some companies wait far too long andfail to keep brands relevant, while others waste resources on unnecessary redesigns.

We also frequently find that changes to packaging are based on misguided assumptions regarding theequities and weaknesses of existing packaging. Weve been called in at the end of redesign efforts to pre-test new packaging, only to find that existing packaging was far stronger than the brand team realized.

Above all else, the Tropicana redesign has dramatically illustrated the power of packaging. And whilethis was clearly a negative example, its important to remember that this same power can and often doeswork in a positive direction. The takeaway for marketers should be an even greater respect for packagingand a stronger commitment to leveraging this brand asset with a disciplined process that will ensure thatshoppers come along for the ride.

SIDEBAR:

AVOID BECOMING THE NEXT TROPICANA!For marketers and designers, the obvious takeaway is to avoid Tropicanas mistakes. And while there arelessons to be learned on many levels, the need for effective consumer research is clearly one major lesson. To this end, we can offer several important principles:


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First, start at the shelf.Packaging redesigns need to be guided by an understanding of how people shop a given category,including their incoming mindset (What are they looking for?) and the visual cues (color, shape, icons,copy, etc.) they use to sort brands and products.

Equally important is an understanding of the realities of the retail environment, how shelving,merchandising, competitive tactics, etc., impact they way shoppers encounter packaging at the shelf.

Next, confirm visual equities. Any redesign efforts should be rooted in an awareness of the two to threekey design elements that your most loyal consumers use to recognize/identify and positively associatewith your brand. It doesnt mean these elements can or should remain stagnant. In fact, many of the bestredesigns evolve and better leverage these assets to make them more powerful and relevant.

Weve learned that having brand users draw packaging from memory is a very insightful tool for uncovering visual equities, while recognition exercises can be valuable in exploring opportunities for evolving design elements and to understand how far shoppers will let us go.

Know your current packaging. A redesign should also be informed by a thorough understanding of thestrengths and limitations of existing packaging. Specifically, marketers and designers should enter aredesign with answers to critical questions: Is the existing packaging competing effectively? Is it consistent with brand strategy? Is it contributing positively to brand imagery and competitive preference? Are we selling because of or in spite of our packaging?

Weve found that a best practice is to test existing packaging against the competition at the outset of major redesign efforts. This provides important information and insight earlier in the process, when it can

be used to inform the design.

Simulate the introduction of new packaging systems. Finally, and most importantly, the Tropicanacase illustrates the absolute necessity of assessing new packaging systems prior to their introduction. Butthe research must be done properly. A few focus groups, far removed from the shopping experience, arenot enough. Side-by-side beauty contests between existing packaging and the redesigned packagingcan also provide very misleading findings.

In our experience, the most important principle is that shoppers initially encounter the new packaging onshelf, as though it had been introduced. The most predictive measures of in-market performance are thosegathered at the shelf, related to visibility, shoppability and purchase patterns.

In short, effective packaging assessment is primarily a matter of simulating introduction rather thancomparing old vs. new packaging-and of documenting what shoppers do, rather than relying solely onwhat they say.

The authors, Scott Young and Vincenzo Ciummo are with Perception Research Services( www.prsresearch.com ), a company that conducts over 700 consumer research studies annually to helpmarketers develop, assess and improve packaging systems. Scott ( [email protected] ) is based inU.S. and can be reached at 201.346.1600, while Vincenzo ( [email protected] ) is based inGeneva and can be reached at 41.22.793.3480.
mailto:[email protected]:[email protected]@bnpmedia.comhttp://www.prsresearch.com/

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Managing Risk in a Package Redesign_ What Can We Learn From Tropicana