Significance of labels for Grading of Products:

A label may be part of the package or it may be a tag attached directly to the product. Another important function performed by labels is to help grading the products into different categories. Sometimes marketers assign different grades to indicate different features or quality of the product. When a product has different qualities, labeling helps to find out which pack contains what type of quality.

For example, Hindustan Unilever Ltd., manufactures three types of tea and to differentiate the each type of tea, the company uses Green, Red and Yellow colored labels. Another example, a popular brand of Hair Conditioners comes in different categories for different hair, say for ‘normal hair’ and for other categories. Different type of tea is sold by some brands under Yellow, Red and Green Label categories.