In the marketing process, labelling plays an important role in packaging of the product. Labelling basically provides the information about the product in the form of a tag (in cases of local unbranded products such as rice, wheat, etc.) or graphics (such as a lady applying cream on face for a face-cream).

There are various functions performed by labelling which are as follows:

(i) Description of Use and Contents: The main function performed by labelling is to provide the description about the product regarding its use, application, cautions, content, etc. For example, on the bottle of a shampoo, the contents are written, along with the cautions such as keep away from children below the age of 10. Similarly, on food products such as maggie cuppa mania, a picture of noodles is there describing its appearance. Along with this, the ingredients and procedure of making it is also stated.

(ii) Identification and Differentiation: A label helps in easy identification of the product. It helps the consumers to differentiate their favourable products from other products. For example, in a potato chip product, a man eating potato chips is imprinted for identification. A label also provides other valuable information such as name or address of the manufacturer, net weight, maximum retail price, batch number, etc.

(iii) Standardising and Grading: A label also helps in setting grades for a product. This helps the marketers to classify the product in different categories based on certain specific quality or features. For example, a brand of face-cream comes in different categories such as oily skin, dry skin and normal skin.

(iv) Promotes the Production: An attractive label helps the marketers in promoting the product as well. It helps in attracting more customers towards the product. For example, for maggie noodles, the label says ”Taste bhi, Health bhi”. Herein, label plays an important role in highlighting the product and promoting its sale.

(v) Information Required for Law: Label also provides and mentions the information which are required to be mentioned as per the law. For example, on a packet of tobacco it is written ‘chewing tobacco is injurious to health’.

Sales promotion refers to the incentives that are offered to the buyers so as to encourage them to purchase the product. It included activities such as offering discounts, gifts, free samples, etc. Such activities supplement other promotional activities undertaken by the company such as advertising and direct selling. They increasingly attract the customers and induce them to immediately purchase the product. Such activities are especially useful at the time of launch of a new product. They bring an initial boost to sales. For example, discounts are given in the form of offering the product at a lower price than the listed price. Free gifts are offered in the form of quantity gifts (such as 20% extra or buy 2, get 1 free). Free samples are provided in the form of small packets when launching a new brand. Such incentives are opted by the companies to attract more customers and boost its sales.