Design talk with Steve Kelsey: It’s time to recognise packaging’s true value

There is not a lot to do in the early hours of the morning on the cardiac ward and sleeping is not really an option with all the monitors bleeping away – I would have had quieter night sleeping in an amusement arcade – and so I had plenty of time to review recent events and reach a few tentative conclusions.

The right price
One of the biggest issues facing the industry at this moment in time is how we assign value.

Value is inevitably a mix of objective calculation and subjective margin. A designer’s job is to make whatever is being produced work better and deliver greater satisfaction for the user and there is a degree of subjective value added at an appropriate level.

Broadly speaking it may cost as little to manufacture a pair of Nikes as another trainer. Objectively measured there would be little difference between the material content, the manufacturing time and therefore the objective costs. However, that magic swoosh creates a subjective margin that delivers far more value for Nike.

This applies to all industries and products and unfortunately, it can be taken to extremes. As we know to our personal cost, in the US millions of dodgy mortgages were bundled and presented to the markets with shiny corporate brands attached to assure buyers of their quality and as a result attracted huge subjective margins. Clearly, in some markets price lost touch with objective reality in a spectacular fashion.

At the other extreme, we have the packaging business whose price is largely dictated by mass. How does it make sense that a new pack design that has been subject to intense development and demands significant investment should cost less than its predecessor just because it is lighter?

Intangible value
By the same method of valuation a Formula 1 car would cost less than a Mini, an aluminium Jaguar would cost less than a steel Jaguar, an iPod would cost less than a CD walkman. If there is no ability to recover cost from development and investment in new technology, there will be no new technology.

At a time when investment is vital to sustainable growth, we need more rational valuation methods.

The time has now come to sell the technology delivered, not the mass, because mass doesn’t make money any more.

Steve Kelsey is strategic innovations director at PI Global. Send comments for Steve to packagingnews.editorial@haymarket.com