What is Labelling? Definition, Types, Components, Importance, and Examples

The product itself is not identifiable about what it is, who made it, what benefits it provides, etc. Labelling has an important role in making the product more recognizable and identifiable.

Let’s understand what labelling is, its types, functions, and importance.

What is Labelling?

A label is any tag or identification mark attached to a product directly or its package. And, the process of putting an identification mark either on the product or its package is called labeling.

A label may be a symbol, design, tag, graphic, or means of recognition that is attached to a product. The label includes a great deal of information about the product and its manufacturer.

Labeling makes it easy for consumers to be aware of what products they are buying and whether or not it is suitable for them. For example, in medicines, it is written not for the age below 16, and in cigarettes, smoking is injurious to health.

Labeling is an important part of branding which aids in the identification and differentiation of the products. There is a close relationship between branding, labeling, and packaging. One affects the performance of others.

Objectives of Labelling

The following five are the main objectives of product labeling.

• Make products recognizable.
• Differentiate products or brands from competitors.
• Provide convenience to consumers.
• Make products more attractive and desirable.
• Fulfill the legal process.

Types of Labelling

Product labels are of three types – brand label, grade label, and informative or descriptive label. Each label has a significant role in influencing the buying decisions of consumers.

Read Also: What is Augmented Product?

Brand Label

Brand label is when companies use their brand names or logo as labels. Under this, companies brand name is a label and brand name too.

The brand label can be a brand name, logo, trademark, etc. Companies do not include other information on the products or their packages. Take the example of cars – in which, the logo or brand name of the manufacturer is attached to the car.

Grade Label

As the name suggests, a grade label is a process of adding quality grades of the product to the packages. The product’s grade may be shown in terms of numbers or letters.

The grade label showcases the category of the product so that consumers can have an idea of its quality and price. Take an example of products like clothes which can be graded as low quality, medium quality, and high quality.

Informative Label or Descriptive Label

The informative product label is also called the descriptive label. It provides various information about the product such as manufacturer name, place of making, usage, ingredients use, how to use, when to use, benefits, warnings, and so on.

Related: What is Brand Equity?

Functions of Labeling

The following are the main functions of labeling.

• Product Identification – The main function of a product label is to make the product easily identifiable and recognizable.
• Product Information – It further provides complete information about the products which aids easiness to consumers in knowing what they are buying.
• Helps in Grading – While packaging products labeling further adds the grades of the products. As such the products can be labeled in different grades.
• Legal Fulfillment – Giving a label on the product is compulsory in every nation. It makes companies free from legal obligations also.
• Aids in Marketing – With good labels companies further easily market and promote their products. As it includes different information about the product, such information acts as self-serving marketing and promotion for the companies.
• Consumer Protection – Good labeling further protects consumers from any deception or fraud from the sellers as it provides complete information about the product.

Components of a Product Label

A product label can be a piece of paper or any printed information attached to a product or on its package. It has usually six components. They are mentioned below with a template of a product label and example.

Brand Information

Brand information includes information about the company or producers. It usually aligns with the company’s guidelines and includes its logo, trademark, message, etc.

Legal Description

Companies should add a label on their products about following the legal standards of their countries. Countries have made it compulsory for companies to add legal information on the product label that may include nutrition information, allergy information, product grades, etc.

Related: What is PLC in Marketing?

Product Information

It includes information about the product. This includes the actual information about the product. Such as what inside the package is, usage, ingredients used in the product, usage limits, benefits, and so on.

Marketing Information

Similar to packaging, a product label also plays an important role in the marketing and promotion of the product. This component of a product label includes the information or message that acts as a marketing strategy for the company.

Company Information

As the name suggests, company information – includes information about the company such as what is its parent company, company location, and contact information.

Identification Marks

UPC codes and bar codes are an essential part of a product label. By scanning the product online or offline, it is simple to determine the product’s costs, manufacturing dates, and other crucial information.

Importance of Labelling

Labelling is an important part of the branding and provides numerous importance to the company as well as consumers.

Also Read: What are the Levels of Product?

Differentiate Product

Product labels make it easy for consumers to identify and recognize the products. As such, consumers can easily differentiate products from one brand to another. This further aids them in selecting the right product for them.

Helps To Grade Products

Labeling is an important aspect for companies to grade their products. With this, companies can grade their products based on quality and countries’ legal requirements. This showcases the company’s transparency and customers become confident about what products they are buying.

Reduce Legal Pressure

Giving a product label to a product is now compulsory in almost all countries. Thus, by adding a proper label to a product companies can be free from legal pressures.

Increase Sales

Product labeling is also supportive of companies’ sales and profits. With attractive label designs and by adding effective marketing messages on the product’s packages companies can attract more customers just by labeling.

Convenience To Consumers

Product label 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.

Examples of Labelling

Let’s look at some examples of labeling.

Rolls Royce

Rolls Royce label is permanently attached to the product i.e. car. Its logo or symbol called The Spirit of Ecstasy and two RR is a good example of brand labeling.

Medication Label

Medication labels are a good example of grade and descriptive labeling. The packages of medicines include all the necessary information about the products including but not limited to name, date, instructions, grades, and manufacturer name.

Read Next: What is Product Line?