Like any other market sector, the packaging industry has had to evolve with the times in order to counter the demands of an ever-educated end user whose expectations increase as they become increasingly bombarded with choice.

Surveys continue to suggest customers still demand the same things – quality, service, reliability and convenience, all at a price that’s right. However, one key requirement is still the need for a healthy competitive market.

Why? because a healthy competitive market is a win/win for the customer.

This was highlighted recently with the shake up of the UK supermarket cartel with the introduction of Aldi and Lidl.

There is no mistaking that the rise of Aldi and Lidl has given the big players something to think about. Some would argue that the big supermarkets hadn’t adapted to the changing needs of the end user and Aldi and Lidl seized on the opportunity. Yet, what is certain, is this new competition has forced the bigger companies to sit up, take notice and respond, benefiting the customer in the long run.

The introduction of “small enough to care” providers in any market sector always forces the bigger companies to evaluate and reappraise themselves, which from a customer point of view can only be a good thing. 

With increasing occurrences of mergers and acquisitions, it is always important that the customer has a balanced choice in the marketplace, otherwise potential monopolies can foster complacency and ultimately a lowering of quality and service. The packaging industry is no different than any other where this is concerned.

In many ways Spectra Packaging is a good example of the “Small enough to care” company. Formed less than 8 years ago and growing from strength to strength, the Suffolk based rigid plastics manufacturer had to adapt very quickly in an extremely competitive industry in order to make its voice heard. 

Competing with much bigger businesses from the outset, the company has had to constantly assess and scrutinize itself to ensure they could compete against bigger manufacturers. By constantly looking at themselves, they have tried to look from the customers perspective and it’s the presence of strong competition that makes them do this. 

Spectra’s Sales Director, Jonathan Powell has always seen this as an advantage,

“When Spectra started out we had to hit the ground running because there were some very well established big manufacturers out there. As a result we had to try harder than our competitors simply to gain trust and respect. However, as a result, we’ve never really let up in this approach and it has become an ethos that has been engrained in our company’s attitude”.

Research has shown that a competitive market means companies don’t necessarily have to compete on price alone either. Competitive forces can encourage companies to innovate and offer the consumer something “new” as a way of making their products more attractive and distinctive.

In Spectra’s case, an innovative approach has played a key role in the way the business engages with its customers according to Jonathan Powell. 

“When we started out we were obviously keen to impress the customer in order to gain continued business. We have a young and enthusiastic team who thrive on problem solving projects and this certainly helped us establish a reputation within the industry in the early days. As a result, we’ve almost naturally developed an innovative approach that offers the customer something different. It’s something customers don’t always get from some of our bigger competitors”.

It’s clear that customer’s benefit from the opportunity to have products and services tailored to their needs and competition definitely drives innovation. It can force those suppliers within the packaging industry to think, “How can we give our customer a point of difference in order for them to compete in their market sector?” – benefiting the customer and in turn the end user. In a nutshell everyone benefits all the way down the supply line.

It’s also evident that healthy competition aids quality and choice for the customer too. 

For example, when using choice as leverage, a company may offer a larger product range to compete in the market place. Yet another may focus on the quality of that product or on the use of better quality materials. However, what is clear is with fewer providers in the market there is less of an incentive to improve quality and choice and this can only be a bad thing for the customer in the long run. A complaint that has often been leveled at UK high street banks in recent years for example.

Another factor driven by competition is service and if there is one thing a customer dislikes, its poor service.

As customers become more discerning, the need for excellent service is paramount to a company’s success. Much like having only one rail network or a single mobile phone provider, if service levels drop, the customer has no where to go. Yet with the introduction of several providers, service levels will invariably rise because the customer will jump ship and go elsewhere if they’re unhappy.

When considering service, providers also need to be mindful of authenticity and trust. The ability for a disgruntled customer to use the internet and social media to intensify companies failures makes service all the more important in a modern world where criticism can go viral within seconds and often the competition can take advantage of this, but only if there is an alternative.

Spectra’s Jonathan Powell feels strongly about customer service. 

“Certainly in our case, service plays a massive role in defining who we are. Although it would be easy for me to claim that we may be small enough to care, I feel it’s inexcusable to let service levels drop irrespective of the size of the company. I personally feel one should constantly ask themselves; ‘Are we pushing ourselves to be better tomorrow than today?’ Again, I think a strong, healthy, competitive market will always drive that desire”.

Finally, it should also be noted that competition drives productivity too by determining the level of value a business gets from its inputs. In order to increase productivity, often a business must become more efficient, and healthy competition can force companies to become more streamlined in their operations. Improved productivity will also benefit the customer in the long run.

In conclusion, the packaging industry still plays a massive role in determining the success or failure of a many of today’s products. However, this will only be the case if there are more suppliers out there to drive better quality, service, productivity and innovation.

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