
Launching a new product during a recession can pay off, study shows
Researchers find fewer competitors and lower manufacturing and marketing costs contribute to product-launch successes during a recession.
CONSUMER HEALTH
By our News Team | 2023
It is not sufficient for consumers to want to decrease sugar intake. Brands should offer appealing products that help reduce consumption.
Researchers from University of North Carolina in the US and University of Amsterdam in the Netherlands have conducted a study that examines how sugar-reduction strategies affect new-product sales.
The article, published in the American Marketing Association’s peer-reviewed Journal of Marketing, is titled ‘A War on Sugar? Effects of Reduced Sugar Content and Package Size in The Soda Category’. It is authored by Kristopher O. Keller and Jonne Y. Guyt.
Photo by Gustavo Santana from Pexels
In the US alone, research shows that reducing sugar in consumer-packaged goods by a modest 8%–10% could lead to nationwide savings of more than US$110-billion in health care costs.
Keller explains: “Despite clear evidence of the negative consequences of sugar consumption, consumers’ intake has steadily increased over the years. This suggests that it is not sufficient for consumers to want to decrease their sugar intake. Companies need to offer appealing products that can help reduce sugar consumption.”
Manufacturers such as PepsiCo have been reducing sugars in their products for some time and are increasingly launching smaller package sizes of well-known sugar products to appeal to health-conscious consumers.
However, these companies must strike a delicate balance between sugar reduction and protecting and increasing their sales – two motives that will conflict if consumers reject reduced-sugar alternatives.
Sugar reduction or package-size reduction?
The researchers examine two sugar-reduction efforts:
The study examines the direct effects of these sugar-reduction strategies, while also proposing that their effectiveness depends on three sets of product-related strategy decisions involving labelling, branding and packaging. These decisions have important moderating effects on how the sugar reduction strategy affects sales.
Health vs. enjoyment
The analysis of almost 130,000 product additions by nearly 80 brands over 11 years in the US soft-drink category shows that, on average, sugar-content reductions perform comparable to similar, non-reduced products, while smaller package sizes perform better than regular sizes.
It also finds that sugar-reduction efforts work substantially better if they do not overemphasise the reduced sugar content in new additions. That is, sugar reductions perform better without a dedicated sub-brand and with enjoyment-oriented claims rather than health claims.
As an example, Coca-Cola’s Zero Sugar product was redesigned in 2021 to closely resemble regular Coca-Cola rather than the earlier Coca Cola Zero sub-brand.
Package-size reductions perform better if presented as a fun, high-quality product rather than a stern, healthy alternative. Using single items rather than multi packs further supports this positioning.
Find out more about the study here.
Researchers find fewer competitors and lower manufacturing and marketing costs contribute to product-launch successes during a recession.
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