Alcohol Marketing Effects
An Analysis:
The Effectiveness of UK Alcohol Marketing
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Preface
The basis of this project is a study by the British Medical Association study entitled, “Under the influence.” It is a study concerning the damaging effect of alcohol market on young people, but on the general population of the United Kingdom as well. It strongly emphasis the damaging effects of alcohol consumption, particularly excessive alcohol consumption, on the health of the public. While it focuses on the young people within the report, it points out that there is little difference in many of the patterns of alcohol consumption in the 16-24 year age group and the 25-44 year age group.
What the underlying nature of the alcohol problem is really about is substance abuse. Alcoholism is simply another form of substance addiction. Drinking, including “binge drinking” is simply a variation of the use of cannabis or other “recreational drugs” as a form of temporary escape from reality – although alcohol is legal, of course. The underlying subject of the study is about another form of ineffective government intervention into problems that are only marginally understood by both legislators and the public. (BMA, 2009) There has been a ban on tobacco advertising in the United Kingdom and several other countries (such as the US) for some years. Many people still smoke, and smoking remains a rite of passage in the minds of many young people on the journey to adulthood. It is difficult to determine how effective the ban on tobacco advertising has been on the total sale of tobacco products, of course, and it should be remembered that correlation does not equal causation anyway. Presumably it has reduced their sales, but it has hardly eliminated them, and many young people still take up smoking.
Henry Saffer of the NATIONAL BUREAU OF ECONOMIC RESEARCH discusses the advertising response function for products such as cigarettes and alcohol. He proposes that the brand level advertising response function to brand consumption increases at a diminishing rate as the volume of advertising increases. This being the case, the response function illustrates a diminishing marginal product of advertising. Ultimately, incremental advertising has no effect on product consumption whatever. Furthermore, the same lack of response to incremental advertising has the same effect on total product consumption as it does on brand consumption. The research also shows that the industry-level response functions differ from the brand-level response function in that advertising-induced product sales must result at the expense of sales of products from other industries. These changes or increases in consumption result from the acquisition of new consumers, often youths, or from increases by existing consumers.
The situation is further obscured by the oligopolistic nature of the tobacco and alcohol industries. This industry structure results in competition for market share with advertising (and other marketing) rather than with price. The fear is that should a major competitor use price competition the result might well be a price war in which all firms will lose revenue – although supermarkets are happy to reduce prices of alcohol and have a ‘price war’ with each other. The Research of Mr. Saffer brings into question the influence of advertising on alcohol consumption among young people. (Saffer, 2004)
The thrust of “Under the influence”
When “Under the influence” is read, the first thing that occurs to people is, “…the sale of alcohol should not be permitted.” It is a toxin that harms the health of many. This can also be said about tobacco, and drugs. The ban on sale of alcohol was tried in the United States during “prohibition”; it was a colossal failure and a major element in the development of organized crime. Drugs from cannabis to cocaine are legally prohibited, but this seems to have little if any effect on their availability. Conversely, there are no advertisements for cocaine or cannabis, but this does not seem to inhibit the sales of drugs at very high margins. What real difference would a TV Spot or a magazine ad about, “Smoke Pot, Get High and Chill Out” make? The “bootleggers,” those who sold liquor during US prohibition, made huge amounts of money for the time, almost as much as drug dealers do today. Prohibition of products that people want arguably only makes the prices higher and the acquisition more difficult, dangerous or both.
The underlying subject article on which this is based focuses on alcohol marketing, not communications channels. In fact, it makes it clear that virtually every marketing channel available, including social media like Facebook are used extensively. The social media are key sources of communication about “parties” and pub/club specials such as free drinks for women or special prices or similar enticements to over indulgence in alcoholic beverages by young people. It includes nothing about the relative efficiency of various marketing communications channels. What it does do is illustrate some of the possible effects and the effectiveness of modern marketing overall to sell products. It also goes into some discussion of target marketing and the targeting of the young in an effort to assure an ongoing supply of consumers. It points out that the total marketing effort involves, “…integrated consumer marketing strategies including pricing, distribution and product design to develop and manage brands, and these also promote consumption.” There are beyond question efforts on the part of many beverage producers to develop products that are attractive to young people and current non-drinkers. Tobacco companies do the same thing by using additives to enhance the flavour of cigarette smoke and make it less objectionable to non-smokers. This is prohibited in the US, the UK and France among others and companies deny they target the young in this way. (Associated Press, 2010)
The study admits that advertising is not the only consideration in the promotion of alcohol consumption. The relatively low prices at which alcoholic beverages are available in the UK (at least in shops), the tax structure of alcoholic beverages, the resulting heavy point of sale and retail promotional use of alcoholic beverages and discounting at the retail level, promote consumption across the population. The liberalization of licensing laws across the country and the pro-alcohol social norms has resulted in a dramatic increase in the number of venues catering specifically for the young. The ingenuity of drink vendors such as pubs and clubs have resulted in the development of novel new drinks such as alcopops and shooters (cocktails served in a shot glass), many of which have a particular appeal to young people and a sweet taste. All this is clearly ingenuous marketing, but has little if anything to do with marketing communications.
The case against alcohol marketing
The BMS study in the introduction to this study makes the statement, “Young people’s drinking, then, is not an aberration; it is a predictable manifestation of an excessively pro-alcohol social norm, and the policy response must recognise this. It has to be broadly targeted rather than focusing disproportionately on the individual or aberrant subgroups.” The study then goes on to say, “In the case of young people, selective targeting is also likely to make alcohol more attractive by reinforcing it’s forbidden and adult nature – and smack of double standards. As with tobacco control policies, reducing alcohol-related harm in the UK requires a comprehensive strategy that promotes individual behaviour change across society as a whole and seeks to remove or mitigate the unhealthy and unhelpful influences on that behaviour.” (Berridge, 2007)
A further allegation against the alcoholic beverage industry’s advertising program is based in large part on a study that included a schemata drawn by the National Cancer Institute and the US Department of Health and Human Services to describe tobacco marketing. It demonstrates the linkage of mass media advertising with wider marketing communications including consumer and stakeholder marketing, other channels of communications such as merchandising, free samples, point of sale, brand stretching, loyalty schemes, product placement, packaging, and product design, distribution and pricing.
Combining all of these marketing techniques into a single package, and referring to it as marketing communications, is not helpful to the professional marketer trying to define communications channels and their effectiveness. It does support the contention of the study that the strong marketing of the alcoholic beverage industry probably does exacerbate the problem of alcohol consumption in the UK.
An analysis of the problem and proposed solutions
It the proposition that alcohol consumption is a national problem in the UK and elsewhere is accepted, then the question becomes what national policies can be adopted to alleviate the problem? The prohibition and criminalization of the product has some appeal, but the experience with this approach is very negative. The US experience with “prohibition” and the present experience with the crimination of cannabis, opiates and other drugs reinforce the objections to this approach.
From the standpoint of this project there are two questions. The first is the effect of marketing in general on the appeal of the product. The second and more specific question is the effectiveness of advertising on the popularisation of alcoholic beverages among young consumers. There is a simple solution to the question of advertising in promoting alcohol among the young; prohibit advertising of alcoholic beverages in any form and in any media. This has been the case with tobacco products for some time in the UK and other nations. Simply apply the same restriction to products that contain alcohol to those applied to product made of tobacco.
The question is the ability of the advertisers to find media not covered. For example, if an alcohol producer wants to sponsor a football team or an F1 racing team is this advertising? Formula 1 management eliminated tobacco sponsors a few years ago. The leading team at the time was Ferrari who had Marlboro clearly displayed on the “wind wing” on the back of the cars. How many football jerseys are sold to young children with the names of beer breweries clearly displayed on the chests of seven year olds? When watching football matches on television what about the signage surrounding the pitch? Clearly, there are attempts and devices available to make total prohibition of alcohol advertising a legal challenge. These are not conventional marketing communications channels, but they are effective.
The real problem is not just advertising and marketing communications, but the efficiency of modern marketing. There must be a systemic approach to limiting or better eliminating the marketing devices available to the brewers and distillers. In the BMA study there is a list of nine potential problem and solutions only the first of which involves alcohol-marketing communications, which include:
- Minimum price levels
- Changes in the excise tax and the current alcohol tax system.
- Changes in rules for operating hours for pubs and sales of alcohol
- “Commission further independent research and evaluation of sales practices, covering all aspects of industry marketing (including that of producers, distributors and supermarkets). This should be used to inform, and where appropriate, strengthen the current regulatory system” (BMA, 2009)
- Reduce the density of alcohol outlets
- Address the changes and liberalization in licensing laws
- Audit the market and eliminate products that appeal more to the young
- “Introduce a compulsory levy on the alcohol industry with which to fund an independent public health body to oversee alcohol related research, health promotion and policy advice. The levy should be set as a proportion of current expenditure on alcohol marketing, index linked in future years.” (BMA, 2009)
Summary and conclusion
The underlying questions presented in the BMA document have little to do with marketing communications. They are concerned with the effectiveness of alcohol advertising and marketing, but the condemnation of advertising as the main villain in the question of alcohol use among the young is not the effectiveness of mass media marketing communications but the morality of the companies involved in brewing and distilling alcoholic beverages. The real question is producing and marketing a product that is harmful to consumers. An interesting comparison is the Associated Press article in today’s news concerning the discovery of cadmium and lead found in drinking glasses. One of the distribution channels for some of the glasses that had pictures of cartoon characters and superheroes on them which appeal to children was Coca Cola. The toxic substances were in the pain used to decorate the glasses and would have had to rub off first on the children’s hands and from there be ingested into the child’s system to do harm. Coca Cola immediately recalled the glasses, and offered refunds to purchasers who purchased the glasses from Coke’s online store who will receive an automatic credit; customers who bought the glasses in retail stores will be instructed on what to do starting Nov. 30. (Associated Press, 2010) There is a lesson in corporate morals and governance in the comparison.
References
Associated Press (21/11/2010) “ Health group urges restrict flavoured cigarettes” Recovered 21/22/2010 from: http://finance.yahoo.com/news/Health-group-urges-restrict-apf-950889546.html?x=0&sec=topStories&pos=5&asset=&ccode
Associated Press (22/11/2010) “AP IMPACT: Cadmium, lead found in drinking glasses.” Recovered 22/11/2010 from: http://news.yahoo.com/s/ap/20101122/ap_on_he_me/us_cadmium_lead_glassware
Berridge V (2007) “Marketing health: smoking and the discourse of public health in Britain,” 1945-2000. Oxford: Oxford University Press.
BMA (2009) “Under the influence; the damaging effect of alcohol marketing on young people.” BRITISH MEDICAL ASSOCIATION Board of Science
NACS (2009) “Certain Cigarette Flavourings a No-NO.” NACSONLINE, National Association of Convenience Stores. Retrieved 22/11/2010 from: http://www.nacsonline.com/NACS/News/Daily/Pages/ND0916092.aspx
Saffer, H. (2004) “The effects of Advertising on Tobacco and Alcohol Consumption.” THE NATIONAL BUREAU OR ECONOMIC RESEARCH. Recovered 22/11/2010 from: http://www.nber.org/reporter/winter04/saffer.html