How to signal product variety on pack: an investigation of color and image cues

Line Extensions are among the most common form of product launch in packaged goods markets. As part of this process, brand managers must decide the visual design of the new variant’s packaging. To inform this decision making, this research aims to empirically quantify the efficacy of using colors versus images as signals of product variety on pack. We compare the use of color on 576 packs with perceptions of 1,853 category buyers across three categories in the USA. We find that for 84% of variant types, marketers use common colors to signal variety on pack, while consumers perceive that only 56% of variant types are represented by a particular color. Of greater concern, the colors used in practice and those expected by consumers align in only 16% of cases. By comparison, images are linked to variant types to a significantly greater extent (39% of cases). This suggests images are a stronger and more explicit signal of product variety than color. There are multiple implications arising from this study. It expands scholarly research on the use of colors in product extensions and, at the same time, provides a series of valuable benchmarks for industry practice in the portfolio management domain.