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What is alcohol marketing? The four Ps

The term Marketing is defined as “the action or business of promoting and selling products or services”.

Marketing is a broad term that covers a wide range of activities and disciplines including, but by no means limited to, advertising in traditional media outlets such as print, television and radio, promotional activities in online and social media, and sponsorship of sporting and music events. A common term used to define the key aspects of marketing is the “marketing mix”, which is made up of the “four Ps” – namely Product, Price, Place and Promotion.

 

Alcohol marketing utilises all four Ps of the “marketing mix”. Alcohol marketers are able to exploit large-scale opportunities arising from the design of the product itself – for instance sweetened beverages or ‘alcopops’; use price promotions as a means to drive sales; applying tactics at the place of sale, for example attractive supermarket promotions and employ a wide range of sophisticated promotion tactics across new media and through sponsorship of sporting and cultural events. Examples of the four Ps are discussed in further detail below.

Product

Research has shown that the design of certain alcoholic drinks appeal more to adolescents than they do to an adult audience. The packaging used for ‘alcopops’, designer drinks or Ready to Drink (RTD) beverages were shown to have higher palatability amongst adolescents than adults in an Australian study, which also showed that alcopop packaging had a higher palatability amongst females.[1] In a more recent Australian study, one third of adolescents reported they would be more likely to purchase an alcohol product with energy ingredients, and almost half would be more likely to purchase a product that looked like a soft drink.[2]

A study carried out for the UK regulatory authorities in 2004 suggests that alcopops make alcohol taste reliably pleasant and, therefore, make it more accessible to adolescents. While there have long been drinks that include mixers which effectively mask the taste of alcohol – rum and coke, gin and tonic, etc. – alcopops give such mixes a more unitary identity and link them with brand images which are appealing to adolescents in their own right. For example, Bacardi is perceived as signalling sophistication. The report also suggests that the brand values of alcopops are strikingly attuned to adolescence: they celebrate mocking the older generation and getting away with things, and that the packaging is designed to appeal to teenagers and young people by using animals and animation.[3] The aim to appeal to this market is illustrated in this quote from Jo Sykes for SHS Drinks: “We want to make the RTD fixture look inviting and exciting again so that 18 and 19-year-olds are inspired to shop that part of the long drinks aisle.”[4]

A report from the University of Stirling has suggested that with the advent of social media, product packaging features may become a more potent advertising platform for brands, by their potential to encourage user-generated content.[5]

Glassware has also been highlighted as marketing channel which remains outside traditional marketing controls in the UK, despite it being noted that it can influence sales and consumption.[6]

Price

Price discounts and promotions can be a key marketing tool for alcohol producers and retailers. It is well established that consumers purchase greater quantities of goods when they are subject to price discounts on volume based offers. A study conducted by Alcohol Focus Scotland found that supermarket promotions and discounts on alcohol increased sales by 20 – 25%.[7]

There is evidence to suggest that when people purchase greater quantities of alcohol through volume-based price promotions, they increase their consumption levels,[8] and that point-of-sale promotions may be associated with higher quantities purchased rather than simply switching between brands.[9] Research from the University of Sheffield research indicates that a ban on multi-buy promotions would increase the efficacy of MUP: Modelling shows that MUP combined with a ban on off licensed trade discount bans in Scotland would show greater reductions in levels of alcohol consumption, alcohol-related hospital admissions and deaths.[10]

In response to such evidence, Scotland has attempted to implement MUP, passing the Alcohol (Minimum Pricing) (Scotland) Act in June 2012. However, due to a legal challenge led by the Scotch Whisky Association, this has yet to be implemented. Recent research has shown that were the Act to be implemented, after twenty years when it has achieved its full effect, it would account for an estimated 121 fewer deaths and 2,042 fewer hospital admissions each year.[11] After hearings in the Court of Session and the Court of justice, the case returned to the domestic court (Court of Session) where the proposal was ruled not to be in violation of EU law.[12] The Scotch Whisky Association have confirmed they will launch an appeal on this decision.[13]

From 2014, there has been a ban in England and Wales on businesses selling alcohol below the cost of duty plus VAT.[14] However, whilst this may appear a positive step, it has been demonstrated that this strategy would have little substantive impact, and that MUP approaches would be more effective in reducing excessive consumption (please consult the Price factsheet for more information).[15] 

Place

The place where alcohol is sold can have an impact on the number and volume of alcohol purchases. We know that more and more outlets selling alcohol for longer periods of time throughout the day has increased the availability and accessibility to alcohol, which has had an impact on consumption levels. It is also likely that the placement and positioning of alcohol products within stores, such as front of store and end of aisle promotions in supermarkets and shops encourages people to buy more drink than they intended to.

Evidence that came to light in 2014 highlighted the substantial impact instore placement can have. End of aisle displays were found to increase the purchase of alcohol by up to 46%.[16]

Promotion

The promotion of alcoholic beverages covers a wide range of activities, including advertising and sponsorship. In the UK, alcohol drinks companies were the second largest source of sponsorship funding from 2003 to 2006, behind the financial services sector.[17]

Increasingly, alcohol is being promoted more and more in new media and online social networking sites. For example, in 2011, drinks giant Diageo signed a multimillion-pound deal with Facebook to advertise on the social networking site.[18] Celebrity sponsorship, PR-generating activity and ‘viral’ marketing are also tools alcohol brands can deploy outside current advertising restrictions.[19]

Figure 2 outlines how integrated marketing tactics can be used to promote alcoholic beverages.[20]

 

 


Next: Alcohol marketing: The debate

[1] Gates, P., et al (January 2007)., ‘The influence of product packaging on young people's palatability rating for RTDs and other alcoholic beverages’, Alcohol and alcoholism, 42: 2, pp. 138–142 <http://alcalc.oxfordjournals.org/content/42/2/138.full.pdf+html#_blank>

[2] Metzner C., and Kraus L (October 2007)., ‘The impact of alcopops on adolescent drinking: A literature review’, Alcohol and Alcoholism, 43: 2, pp. 230–239 <http://alcalc.oxfordjournals.org/content/43/2/230.full.pdf+html#_blank>

[3] Cragg Ross Dawson: Arnold Cragg (July 2004), ‘Alcohol Advertising and Young People: RESEARCH REPORT’, for Independent Television Commission [ITC], Ofcom, the British Board of Film Classification [BBFC], and the Advertising Standards Authority

[4] Green, M. (August 2016), ‘WKD brand revamped to tap into young adult market’, Off Licence News <https://tinyurl.com/znrr3hk>

[5] Purves, R., Stead, M., and Eadie, D. (December 2014), ‘“What are you meant to do when you see it everywhere?” Young people, alcohol packaging and digital media’, Institute for Social Marketing, University of Stirling, p. 5

[6] Stead, M., Angus, K., Macdonald, L., and Bauld, L., (January 2014) ‘Looking into the Glass: Glassware as an Alcohol Marketing Tool, and the Implications for Policy’, Alcohol and Alcoholism, 49: 3, pp. 317–320 <http://alcalc.oxfordjournals.org/content/alcalc/49/3/317.full.pdf>

[7] Institute of Alcohol Studies [IAS] (2006), 'Supermarket promotions and discounts on alcohol increase sales by 25%', Alcohol Alert, Issue 1

[8] University of Sheffield (2008), 'Modelling alcohol pricing and promotion effects on consumption and harm', Independent Review of the Effects of Alcohol Pricing and Promotion, Part B

[9] Jones, S., Barrie, L., Gregory, P., Allsop, S., Chikritzhs, T., (August 2014), ‘The influence of price-related point-of-sale promotions on bottle shop purchases of young adults’, Drug and Alcohol Review, 34:2, pp. 170–176 <http://onlinelibrary.wiley.com/doi/10.1111/dar.12181/full>

[10] Meng, Y., et al (January 2012)., 'Model-based appraisal of alcohol minimum pricing and off-licensed trade discount bans in Scotland using the Sheffield Alcohol Policy Model (v.2): Second update based on newly available data', ScHARR, University of Sheffield, Sheffield Alcohol Research Group

[11] Angus, C., Holmes, J., Pryce, R., Meier, P., Brennan, A., (April 2016) 'Model-based appraisal of the comparative impact of Minimum Unit Pricing and taxation policies in Scotland: An adaptation of the Sheffield Alcohol Policy Model version 3', ScHARR: University of Sheffield.

[12] The Guardian (October 2016), ‘Scottish court rejects appeal against minimum alcohol pricing’, accessed October 2016 <https://www.theguardian.com/society/2016/oct/21/scottish-court-rejects-appeal-against-minimum-alcohol-pricing>

[13] The Guardian (November 2016) “Scotch whisky body accused of arrogance over minimum pricing” accessed December 2016 <https://tinyurl.com/hkwjadc>

[14] Government response to the alcohol consultation', Secretary of State for the Home Department, p. 3; 'Banning the sale of alcohol below the cost of duty plus VAT

[15] Leicester, Andrew (November 2011), 'Alcohol pricing and taxation policies', Institute for Fiscal Studies, p. 3 / Gov.uk, 'The Government’s Alcohol Strategy', Secretary of State for the Home Department, p. 7

[16] Nakamuraa, R., Pecheya, R., Suhrckea, M., Jebba, S., Marteau, T., (May 2014),

“Sales impact of displaying alcoholic and non-alcoholic beverages in end-of-aisle locations: An observational study”, Social Science and Medicine, 108, pp. 68–73

[17] www.parliament.uk, ‘Alcohol First Report of Session 2009–10, Volume I’, House of Commons Health Committee

[18] Bradshaw, Tim (September 2011), ‘Facebook strikes Diageo advertising deal’, Financial Times <http://www.ft.com/cms/s/2/d044ea24-e203-11e0-9915-00144feabdc0.html#axzz2TLmvtNNk>

[19] Guy, D., (March 2016) ‘How to market alcohol where alcohol marketing is banned – Focus’, retrieved October 2016 <http://www.just-drinks.com/analysis/how-to-market-alcohol-where-alcohol-marketing-is-banned-focus_id119700.aspx>

[20] Hastings, Gerard, Anderson, Susan, Angus Kathryn, 'The devil doesn’t just have all the best tunes – he has the best symphony', Institute of Social Marketing, Stirling and the Open University <https://tinyurl.com/grpuhg4>