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Regulation of over-packaging

The Ministry of Environment has presented guidelines for amendments to the rules on the standards for packaging materials and packaging methods of products (Repackaging Prohibition Act), which is a sub-legal to the 'Act on Promotion of Saving and Recycling Resources' for distribution and food companies.

According to the guidelines, it is necessary to purchase at the same amount without purchasing discounts, although purchasing them individually or in large quantities. In the future, we will not be able to look at the 'Sweets Comprehensive Gift Set,' and we will not be able to see the New Year's Day or Chuseok Gift Set. The reason is that excessive packaging due to discount competition is a problem. I understand this, but there is definitely a problem with excessive packaging.​ Interestingly, it has been acknowledged for warehouse-type discount marts and online shopping where large-scale sales such as traders are conducted, and it is said that the overwhelming packaging of online distributors such as Coupang, Market Curly, and 쓱.com cannot even be discussed. Consumer-business 'win-win' economies of scale If manufacturing a car costs 10 million won, producing two cars does not cost 20 million won. This is because the cost of materials, electricity, and labor is higher, but the cost of factory production facilities remains the same. It costs much less than 20 million won when manufacturing two units. It is the principle of economics that the more manufactured and sold, the less 'marginal cost' it takes to manufacture one more. The same goes for selling. When making a lot and selling a lot, companies always calculate to which line the maximum profit will be achieved. Businesses have realized such economies of scale.

The consumer goods industry, such as food and cosmetics, has been applying this principle the most for decades. Bundle discount sales was a common marketing tool that both companies and consumers could 'win-win.' Samyang Ramen sells 5+1 for 2980 won. When you just buy one bundle, you purchase the items for 16.8% cheaper than the price (596 won). Hetbahn is 29.1% cheaper when bought in a bundle of eight than when buying individually. Dumplings have been bundled in two bags and sold 40-50% cheaper. This bundle sale is one of scientific marketing aimed at consumer psychology. Research on 'bundling products' in marketing began in 1979. In the United States, researchers found out that the basis of consumer behavior is that consumers choose the most rational alternative through a complex cognitive process among several bundled products. Classical theory of economics sees consumers as having the greatest satisfaction and achievement when choosing the most effective alternative. "The consumer's assortment is large and diversified, finding and consuming options that fit his preferences, and increased satisfaction among them," has been verified in several behavioral economics papers. I strongly agree with the regulations on overpacking. As long as the world is leading the way to packaging that is concise and less environmentally friendly, we will have to keep pace with this. If you do that, I think that the cost of marketing or other packaging or promotional expenses will be reflected in the selling price, so you can return to the consumer at a lower price. Companies should also actively cooperate with these national policies to create distribution policies in a way that reduces excessive competition between companies and respects consumer choices through appropriate publicity and marketing activities.



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