Page 628 - Encyclopedia of Business and Finance

eobf_P 7/5/06 3:18 PM Page 605

Product Labeling

Nonprescription medicine labels shown with warnings printed on them before and after the labeling system changes in 1999. AP
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graphics are needed to allow the product to “pop out” of do so is that consumer groups often publicly protest about
the wide array of products surrounding it on the shelf and the lack of information on labels and request more. Fur-
gain the attention of the consumer. Persuasive characteris- thermore, when a competitor starts including more infor-
tics or attributes of the product, such as “low fat” or “vita- mation or redesigns its label to make it more user-friendly,
min enriched,” may be prominently displayed on the label a company might decide to modify its own label to pre-
to promote the sale of the product. vent losing sales.
Labels may also include a list of ingredients, Univer-
INFORMATION sal Product Code, open dating, nutritional labeling, and
Although some products can be identified adequately by unit pricing. Ingredients are listed in the order of their
brand name alone, many require more complete identifi- prominence, by weight, in the product. The Universal
cation of their nature and use. In short, the purpose of the Product Code is a combination of electronically readable
label is to provide useful and relevant information about lines (the bar code) and numbers identifying the product
the product, as well as to help to market the product. and providing inventory and pricing information for pro-
Processed foods, patented drugs, textiles, and numerous ducers and resellers. Open dating informs consumers
other products are required by law to carry a fairly com- about the expected life of the product so they can avoid
plete list of their ingredients. This specific information is products that may be spoiled. This information is espe-
extremely important so that consumers (for example, cially important for such perishable items as milk, eggs,
those who are allergic to certain ingredients) do not use a and other products with a short shelf life. Nutritional
product that may harm them. labeling specifies the amount of calories, total fat, choles-
Companies may also provide additional information terol, dietary fiber, sodium, minerals, vitamins, and pro-
on their labels that is not legally required. One reason to tein in processed foods.

ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION 605