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Running head: CRITICAL ARTICLE REVIEW

Critical Article Review Juliet Veronica Medley University of Maryland University College

CRITICAL ARTICLE REVIEW The article Power of Packaging, by Lado Coust, Martos-Partal and Martnez-Ros discusses the impact of new product packaging using multiple claims on a companys market value. Companies are using multiple claims as a marketing strategy to entice customers to buy their products. The researchers used historical and empirical data to support their theory that multiple claims on packaging influence customers selection and increase profit for companies.

The study uses an innovative marketing approach using packaging design with claims to increase product sales; however, the article also indicated from past trends that one claim was sufficient to draw a correlation to financial value of firms. This article summarizes the influence of trends using multiply claims on consumers packaging that impact consumers choice and increase profitability for companies. The three types of claims used on packaging to promote sales were environmental, nutritional, and production. Environmental claims are typical green claims whereas nutrition claim can be positive or negative (e.g., high fiber, or low fat), and the production claim are usually natural or organic. The authors use both historical and empirical data with seven product sectors, and compare various packaging claims with companys values (Lado Coust, Martos-Partal, & Martnez-Ros, 2012). The authors concluded that based on product sectors and type of claim that the firm value can increase. Lado Coust, Martos-Partal and Martnez- Ros compared historical trends using one claim on retail packaging to determine what claims consumers were using to make purchasing decisions. For instance, one trend used environmental claims green or recyclable on retail packaging to lure consumers to buy products. The authors integration of historical information was useful to highlight past trends in packaging used by manufacturers. However, usage of scant advertisement literature alluded to insufficient information to use support to consumers buying

CRITICAL ARTICLE REVIEW decisions were based on manufacturers claim on their packages. The historical research also included empirical data from two different types of product scans. These databases provided information from new product launched that includes date, manufacturer name and claims. The study used a total sample of 18, 512 over a period of ten years along with different food categories to valid the three types of claim investigated. The authors concluded from the first study that claims appear to influence firm value. Next, the authors used linear regression to test their null hypothesis that multiple claims influence a firms value. The linear regression analysis was good indication of trends used in each of the three types of claim made on packaging. The trend analysis compared the variable time various each trend. However, there was not mention of the error associates with the linear method and the independent of error is common when the data compiled from specific time

(Levine, Stephan, Krehibel, & Bernson, 2011). The authors indicated that a positive and negative trend on the linear regression which is a good indicator. However, the authors did not include the alpha level in for the test, which make it difficult to evaluate the p-values given below table 5. Lado Coust, Martos-Partal and Martnez concluded that there is a key benefit to using claims on consumer packaging as advisement produces an increase in a firm value. The benefits were correlated among different product categories and their relationship to multiply claims. Although the authors indicate that additional research was needed to determine the optimal number of claims that would result is the best firm value without confusing customers. Conversely, Table 5 did not indicate that multiple claims were used at a time to predict the results. For example, the article stated beverage products benefited more by using claim that were production and positive nutritional claims. Furthermore, the categories were too broad to conclude that only positive nutritional and environmental on the packaging can increase firm

CRITICAL ARTICLE REVIEW

value. For example, the use of broad category such as beverage that can be juices or other drinks. The type of beverage is an important factor because it can skew the results in towards an increase in the firms sales. The authors choice seems bias from the results because some beverage can only make positive nutrition claim or negative claims. Therefore, the results suggest that beverage used in study to support the increase sales were mainly claimed positive nutrition and that negative nutrition claims were eliminated from the results. Moreover, manufacturers are limited by what claims they are allow to make based on the type of food or it the item is nonfood. The Food Drug Administration (FDA) regulated food and drugs claim made by manufacturers under Nutrition Label And Education Act, which prohibits making of unsubstantial health claims on foods (Cheeseman, 2013). Furthermore, some food items can have both positive and negative nutrition claims, but use one or both on the label. For example, using milk would it be more advantage to use negative nutritional affect or positive negative affect on the milk containers along with different environmental. Therefore, it would be difficult to determine if the multiple claims would benefit the firm value. Another factor used in the study was nonfood products would not be able to use nutrition claim or production claim on their package, which would prevent manufacturer from using multiple claims on these products. Researchers do not indicate what combination used for all the multiple claims in the study. Therefore, it would be difficult to find a correlation on the financial impact on a company that was not using those types of claim on there products. The authors do not indicate it graphic on the packaging was factored out in the study. However, it would be difficult to determine whether both claims affected consumer-purchasing decision or would the consumer buy the product if it only contained the nutritional claim.

CRITICAL ARTICLE REVIEW

In conclusion, the article Power of Package by Lado Coust, Martos-Partal and Martnez examines the influence of manufacturers using multiple claim on the package to increase firms values. The authors concluded that by environmental, production, nutritional claim on their packages can influence firms value. The authors also indicated that historical studies showed that there was a correlation with a single claim. The research had some points using the regression to determine trends; however, the research does not indicate that there are limitations to using products chosen to compare the different claim. The study would be more beneficial if the authors applied the study to smaller categories in the food sectors instead of using nonfood items that cannot only have one claim on the item.

CRITICAL ARTICLE REVIEW References

Cheeseman, H. (2013). The legal environment of business and online commerce (7th ed.). Upper Saddle: New Jersey Lado Coust, N., Martos-Partal, Martnez-Ros M., &, E. (2012). The power of a package. Journal Of Advertising Research, 52(3), 364-375. doi:10.2501/JAR-52-3-364-375 Levine, D., M., Stephen D., F., Krehibiel, T., C., & Berenson, M., L.( 2011). Statistics for managers:Using excel (6th ed.) Upper Saddle: New Jersey.