Understanding Marketing Responses to a Tax on Sugary Drinks: A Qualitative Interview Study in the United Kingdom, 2019

Background: The World Health Organization (WHO) recommends that countries implement fiscal policies to reduce the health impacts of sugary drinks. Few studies have fully examined the responses of industry to these policies, and whether they support or undermine health benefits of sugary drinks taxes. We aimed to explore the changes that sugary drinks companies may make to their marketing, and underlying decision-making processes, in response to such a tax. Methods: Following introduction of the UK Soft Drinks Industry Levy (SDIL) in 2018, we undertook one-to-one semi-structured interviews with UK stakeholders with experience of the strategic decision-making or marketing of soft drinks companies. We purposively recruited interviewees using seed and snowball sampling. We conducted telephone interviews with 6 representatives from each of industry, academia and civil society (total n=18), which were transcribed verbatim and thematically analysed. Four transcripts were double-coded, three were excluded from initial coding to allow comparison; and findings were checked by interviewees. Results: Themes were organised into a theoretical framework that reveals a cyclical, iterative and ongoing process of soft drinks company marketing decision-making, which was accelerated by the SDIL. Decisions about marketing affect a product’s position, or niche, in the market and were primarily intended to maintain profits. A product’s position is enacted through various marketing activities including reformulation and price variation, and non-marketing activities like lobbying. A soft drinks company’s selection of marketing activities appeared to be influenced by their internal context, such as brand strength, and external context, such as consumer trends and policy. For example, a company with low brand strength and an awareness of trends for reducing sugar consumption may be more likely to reformulate to lower-sugar alternatives. Conclusion: The theoretical framework suggests that marketing responses following the SDIL were coordinated and context-dependent, potentially explaining observed heterogeneity in responses across the industry.


Now we need your help! Please read this briefing and respond to the questions in the covering email.
Taxing sugary drinks is an increasingly popular way to try and reduce sugar consumption. In the UK, the Levy (SDIL) varies by the sugar content of drinks in order to encourage soft drink producers to reformulate their drinks.
However in order to avoid losing profit, soft drink producers may also respond to the Levy by changing the marketing of their products. As there is very little existing evidence to illustrate how marketing may change, we aimed to develop a general theory -a basic articulation for how and why things happen -to help understand the role of different stakeholders and context in processes of change.
To achieve this, we built an initial theory that we shared with you earlier this year: We then conducted 18 telephone interviews with members of industry, academia and civil society, and analysed interview transcripts to elaborate and develop the initial theory. The developed theory. A visualisation is shown below, with further explanation overleaf.

Changes in marketing
Changes to soft drinks marketing after taxation Developing a general theory The initial theory described a linear change process of strategic planning followed by specific marketing responses.
Analysing interviewee contributions led us to believe that changes to marketing are actually circular and iterative.
There are a variety of ways that producers may change marketing in response to soft drink taxation.
The theory highlights the strategy and co-ordination underlying changes to soft drink producers' market and non-market behaviours.
The theory proposes that soft drink firms continuously monitor factors internal and external to their organisation.
Identifying a catalyst like the SDIL in their internal or external context accelerates existing evolution of changes to marketing.

Now we need your help!
In the final stage of this research, we want to check that the theory we have developed is an accurate reflection of your experiences of soft drinks marketing.
To do this, please answer by email to hf332@medschl.cam.ac.uk by 24 October 2019. Please also get in touch if you have any questions about this stage of your involvement in the research.

Processes of marketing change proposed in the theory
Your insight led us to the following observations.
• Soft drink producers continuously monitor their internal and external context, as this affects a firm's decision to change marketing and the options available to them.
• Internal factors for producers include brand portfolio and brand strength, human and physical capital, values. External factors include consumer trends, retailer activity, and other government policies.
• A culmination of trends observed in these contexts combined with a catalyst, like the SDIL, means a firm decides to reposition their soft drink brand. Brand repositioning could involve a combination of various market and non-market behaviours. These behaviours are co-ordinated and strategically selected.
• Market behaviours are those exhibited to the consumer, like reformulation, acquiring products from elsewhere, developing new products altogether, changing a product's price or packaging.
• Non-market behaviours do not directly affect consumers, but work to change the context of a soft drinks firm. Lobbying and using the media are examples of non-market behaviours.
• A combination of these market and non-market behaviours are intended to affect soft drink purchases, which in turn affects the internal and external context of a soft drinks firm, thus creating a cycle of marketing change.