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A few 'colour'ful lessons for SME brands

By refining and accentuating the colour palette, and rationalising the number of colours, brands can have a significant impact on bottom line

August 31, 2022 / 09:08 AM IST
Several factors are in play while evaluating a colour palette.

Several factors are in play while evaluating a colour palette.

Several years ago in the USA, PepsiCo had launched a clear cola with enormous funding for marketing it. You might think, “Wasn’t it 7Up?” No, it was not 7Up. After trying hard to make a mark for this colourless cola, the company finally withdrew the product before suffering more humiliation. The product never took off because the customers asked themselves: "How can a cola be colourless?" PepsiCo had lost yet another battle against Coca-Cola.

This example best illustrates the point that it is important to pay special attention to the right colour for the success of a product. It does not matter whether your customer is a commercial entity or an individual. It is not uncommon for even a subtle change in colour to result in as much as a 20 percent change in sales. This is what research has found. A darker shade of red is better for ketchups, a blue in food items spells disaster, etc.

For years, most manufacturers took a pathetic unscientific approach to deciding on product colour, and followed personal preferences of decision makers in the company, paying little attention to market sentiments. Many others relied on outside experts who were perhaps industry savvy but not colour experts to get colour palette recommendations. Worse still, product colour has been viewed as an important aspect of total quality management (TQM). What they all missed out on was that if you chose the wrong colour, you would end up having not much sales and therefore heavy cash flow issues on inventory pile-up.

In many industries, product and packaging colours are being more carefully scrutinised by companies that realise that the right colour can give them a competitive edge. This is true of industry segments like appliances and food. Voltas was the first in India to introduce colour to otherwise “white-only” refrigerators. The world has moved far from the days of the first automobile. Remember what Ford used to say for the first car model? “You can choose any colour as long as it is black!”

Product colours should be reviewed periodically because colour preferences change over time for consumers. These preferences are influenced by a variety of factors including social changes, economic conditions, fashion trends and regional influences. Executives unaware of these subtleties may find colour forecasting to be a tricky business. One of the big automakers forecasted a special green colour to become a hit for one year.  But it proved to be a bad decision in the wake of communal clashes in India and the company had to re-arrange their production schedules.


Several factors are in play while evaluating a colour palette. One early warning signal that a change may be needed in a colour palette is the slowing down of sales revenue. If you have six colours in your palette, sales should be spread fairly across them, with each accounting for about 15 percent of total sales in that category. If there is a significant variation in sales from one colour to another, the palette probably needs to be re-examined.

Other factors include the end use of the product, the marketing strategy, and the competition. As an example, products that are to be used outdoors require a different colour palette from those intended for use indoors. For packaged food products, colour in fact makes or eliminates the product. The colour blue is associated with poison and is a definite taboo for food products. This is not about the packaging but of the actual product colour.

muneer column smart growthProducts that are designed to convey a hi-tech or contemporary image would require a different colour palette than for more conventional products. The type of lighting and the environment the product will be used in also are factors for decision-making. Make a comparison of the forecasted colours with the existing palette with clear baselines of best selling colours. Major shifts in colour preferences are unlikely, as subtle changes will suffice like from almond to beige to make a differentiation.

Going by the trend we see in many FMCG brands, they misconstrue that having more colours lead to better colour selection. By refining and accentuating the colour palette, and rationalising the number of colours, brands can have a significant impact on bottom line. That will reduce production costs and inventory holding costs of multiple SKUs.

It will be good to place colours in relation to each other on a colour card. This will make it easier for customers to choose a colour. Although colour trends vary across product categories, certain trends are expected to be pervasive through the post-pandemic decade. As an example, a strong return to traditionalism and family bonding is expected and will result in the resurgence of traditional colours. We may likely see multiple colour product finishes with better tech innovation.
M Muneer is the managing director of CustomerLab Solutions, a consulting firm.
first published: Aug 31, 2022 09:08 am
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