Causes of overpackaging

April 29, 2019

This article analyzes the causes of overpackaging from the surface and deep layers. Firstly, it analyzes the causes of overpacking in the three aspects of seller, buyer and society; secondly analyzes the causes of overpackaging from market failure and government failure.

Excessive packaging is the embodiment of the imbalance between the packaging value and the value of the packaged product. It is due to the excessive emphasis and blind pursuit of the added value of the packaging and the halo effect it brings.

First, the surface layer caused by excessive packaging

1, from the seller's point of view, businesses are driven by the interests of excessive exaggerated packaging promotion. Modern marketing has already made packaging an inseparable part of the overall product. Its specific role is mainly in several aspects: First, the protection of goods, which is the basic function of packaging. Secondly, packaging can promote and promote businesses and consumers, use guidance, and establish a brand image to guide and attract consumer purchase behavior. The following is an example of the health care products industry that is experiencing the over-packaging of over-packaging products to explain the causes of over-packaging. Jilin Province, northeast China, is rich in ginseng and participated in the Canton Fair more than ten years ago. It is exhibited in 30 kg packaging. Later, in a small package of 5 kg, the price per kilogram increased by 30%. Health care businesses are focusing more and more on the outer packaging. Each ginseng's waist is tied with a red ribbon, and a box is added. The price will be doubled several times. Slice the ginseng and stick it on a foam box. And open a transparent window; more companies grind ginseng into powder, put it into capsules, seal several capsules on a plate, and then put it into a small carton, and then put a few small boxes into a big box In the end, the big brocade boxes were packed into a brocade bag, which was then packaged and the price was naturally multiplied several times. The value of the goods actually received by the consumers only accounted for a small part of the price, and the company obtained huge profits. With the attraction of huge profits, more and more companies are beginning to compare their packaging with one another and doing surface work.

2. From the buyer's point of view, the social and irrational consumption of residents leads to over-packaging.

Consumer behavior is social. When consumers purchase goods, they not only look at the price, quality, and function of the product, but also intentionally or unintentionally focus on the packaging of the product. The key factor for the same commodity consumer decision is packaging. A well-designed packaging can meet the aesthetic needs of consumers, reflect the social class of consumers, and increase their sense of belonging to their class. If the purchased product is a gift, the packaging becomes more important. Qian Jin, vice president and secretary-general of the China Packaging Technology Association, believes that "excessive packaging" has its specific social and psychological basis in China. Oriental culture values ​​reciprocity more than Western culture. The expensive health care products need to have a decent package to set off their noble. The style of gift giving is displayed, so that the health care products in the "abdomen empty" luxury package are more marketable than the health products in the simple form, so the gift market has become a "hard-hit area" for over-packaging.

3. From a social point of view, relevant laws and regulations are not perfect and enforcement is not enough.

Market economy is a credit economy based on credit. Over-packaging is a company's dishonesty. Under the temptation of economic interests, many companies have chosen over-packaging. This dishonest behavior quickly turns the losers into upstarts. As a result, there are more and more overpacking phenomena in the society. If a society lacks the norms of a corresponding legal system of integrity and lacks a mechanism for dishonest punishment, the failure of those who fail to obtain disciplinary action will result in a higher yield of untrustworthy income than fair income, which will inevitably lead to the proliferation of untrustworthy behavior, deterioration of social credit status, and market order. Confusion and other serious consequences.

Second, the underlying causes of excessive packaging

1, the market failure of packaging

A functioning market is usually an effective mechanism for the allocation of resources at different times and for different purposes. However, the normal operation of the market requires several conditions, including: all resources must enter the market, supply and demand determine its price; complete competition; human behavior has no obvious external effects; the number of public products is small; short-term behavior, uncertainty And there is no irreversible decision. If these conditions cannot be met, the market will not be able to effectively allocate resources and the market will not be able to regulate prices effectively and market failure will occur. In terms of over-packaging, according to the theory of cost and benefits in economics, I think there are mainly the following:

(1) Externality of packaging production The concept of externality was first proposed by Marshall, which refers to when a consumption or production activity does not affect other consumption or production activities through market prices, and such effects are not reflected in market prices. , it generates externalities. It shows that private income and social income, private costs and social costs are inconsistent.

External effects cause inconsistencies between private and social costs, resulting in actual prices that are different from the optimal prices. External effects can be good or bad. An example of a good external effect is that some products that are polluting the environment have objectively reduced the possibility of environmental pollution due to the presence of outer packaging; however, excessive packaging causes more negative external effects. First, packaging requires It consumes a lot of resources, and the production of packaging materials also produces environmental pollution. The pollution generated by enterprises in production not only brings additional costs to the company itself, but also causes damage to the surrounding environment of the enterprise and brings about even more to the entire society. Many additional costs; In addition, a large number of discarded packages pollute the environment while also increasing the cost of social waste disposal. The problem of excessive packaging has increased the cost of society as a whole, but companies involved in packaging do not bear this cost, and they have no incentive to consider this cost. Reducing the use of packaging materials will bring benefits to society as a whole, but why do companies need to do this? Competitive relationships between companies involved in packaging do not allow companies to bear the cost alone. Only all companies bear this cost. The company will not fail in the market competition.

Can the market mechanism naturally produce the above results? The answer is no. Because environmental costs are outside market relations, they originate from technological relationships. A basic assumption of efficient markets is that economic agents are linked to each other through their influence on prices, and technical relationships are excluded. In the development of packaging industry in our country, due to the non-account of environmental costs, some packaging products that waste resources and pollute the environment have lower cost, have price advantages in market competition, and green packaging products generally have higher prices and are at a disadvantage in market competition. . Therefore, although green packaging has good prospects, it is still unable to dominate the market at this stage.

(2) Externality of packaging consumption

Packaging consumer behavior also has the problem of externalities. The positive externality of consumption refers to an individual or collective consumer behavior, a friendly environment, and a friendly environment. For example, people buy and consume appropriate packaging and green packaging products that have a catalytic effect on protecting resources and the environment. The negative externality of consumption means that individual or collective consumer behaviors endanger the environment and endanger the characteristics of others. The concrete manifestations are: Damage to the environment and consumption of excessive resources when consuming, using or disposing of products. White pollution and garbage siege are all related to improper consumption. Excessive consumer packaging, excessive product standards, or products with too short a useful life are wasting resources.

Due to incomplete reflection of consumer spending (cost), the negative externalities of consumption will encourage the consumption of more items, thus breeding and inducing many environmental and resource problems. Taking the consumption of plastic bags as an example, the prices of plastic packaging products generally do not include treatment fees. Therefore, on the one hand, consumers use plastic bags in large quantities to purchase over-packaged products, and on the other hand, they refuse to purchase products that will bear the true cost of packaging. . In fact, the above externalities may be more serious if one considers the buyer’s buying power and the driving effect of consumption on production. In terms of environmental external economics, if the input of resources is too small, the output is low and the price is high, while other enterprises (industries) have too many resource inputs, and finally the entire economic system deviates from the optimal allocation of resources or appears low. The state of efficiency will also have the problem of “market failure” in the packaging industry.

2. Government failure

In the presence of external effects, only the government will come forward and improve through various policy measures. If there is no government intervention and public participation, enterprises are urged to achieve "internal cost internalization" and others and society will suffer losses. In order to solve the “market failure”, the government often intervenes in the spontaneous allocation of resources through various administrative means. However, the role of the government is not omnipotent but has certain constraints. For the selection and supply of public products such as the environment, there must be reasonable procedures in the decision-making mechanism. In other words, since the government and other social representatives directly make decisions on the production of public goods, then the government should make scientific decisions on the arrangement of public goods. The government intervention must take into account both fairness and efficiency. When the government causes problems with “market failures” When intervening or remediating, if the government’s policies or actions are insufficient or excessive, the fairness and efficiency will be undermined, and “government failures” will also arise.

(1) The manifestations of government failure

The main manifestations of failure of government intervention are policy failures and management failures. Policy failures are mainly caused by mistakes in policy decisions, that is, the government is not as effective as the market. For example, our country’s policy encourages the reduction of packaging costs of products, resulting in the heavy use of plastic packaging. The preferential policy for attracting investment has attracted a large number of highly polluting packaging companies to settle in China. This is a manifestation of policy failure. The management failure mainly lies in the existence of management costs, and sometimes even exceeds the losses caused by market failures. When the government intervenes, it must pay for decision-making costs and supervision costs. This cost is often high due to information asymmetry. In the process of production and consumption of external packaging, the government has to intervene to eliminate the governance costs required for an externality, and sometimes greater than the social benefits obtained after the intervention. This leads to management failure.

(2) Specific reasons for government failure in the packaging market

In order to solve the “market failure”, our country has also formulated various related policies to restrict the use of certain packaging materials that severely waste resources and pollute the environment, and the production and sales of packaged products, as well as the recycling and reuse of packaging waste. Big management efforts, but with little success. According to Che Xiangfu, deputy secretary-general of the China Packaging Technology Association, there are four factors that affect the development of China's green packaging industry: 1 Imbalance in investment structure. Waste packaging processing projects rarely enter the "platters" of planning management and investors. 2 The green packaging industry content was not included in the national plan. 3 The country does not have explicit policies on investment and taxation for packaging environmental protection projects and cannot attract large-scale private investment. 4Insufficient investment in science and technology, private and social investment can not meet the demand.

Source: VIP Information

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