Abstract:
Concerns about obesity are becoming as prevalent as under-nutrion. Obesity is associated with a host of health and economic problems, and as such is becoming a prevelant topic for discussion among academics and the public in general, and is therefore of particular concern to the business world. There is a strong focus on reducing sugar consumption, ans with the announcement of the implementation of a sugar tax in South Africa, retailers have been identified as a crucial element in the value chain in providing healthier alternatives to consumers. They have the ability to utilise elements of the marketing mix to influence consumers' in-store purchase decisions and respond to the demand for healthier, sugar-free products.
This study focuses on the effectiveness of price, placement and assortment as levers of the marketing mix with which retailers can drive demand. Quasi-experimental and experimental event-based time series studies were conducted with a focus on carbonated soft drinks. Quantitative price and sales units data were gathered from a prominent South African retailer. Two separate studies were conducted, one to understand the impact of the presence of promotional pricing as well as the depth of discount, and the second to understand the impact of a shelf format on consumer demand for sugar-free products. Data were analysed using multiple regression analysis in order to gain insights into the impact of changes of the marketing mix on consumer demand.
Key findings of these studies are summarised in a framework that outlines the priority of marketing mix elements for retailers to utilise in order to drive demand for sugar-free products. Assortment was found to be the first requirement, ensuring there is availability of sugar-free variants to meet purchase motivations. Secondly, the presence of a pricing promotion was key, followed by the depth of the promotional discount. It was established that consumers within the CSD category were attuned to pricing promotions, and if retailers take the decision to drive sugar-free products, these products should be prioritised for pricing investment over sugar-sweetened alternatives. Results showed that merchandising the shelf according to sugar content (shelf format) had no impact on the demand for sugar-free products.
The findings of this research built on the literature around marketing mix elements within retail, as well as studies around influencing consumers to purchase and consumer healthier products.
