‘Less sugar and more sales' - the effects of in-store marketing of diet products during economic expansion and contraction cycles in an emerging market

Zambaldi, Felipe
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In response to consumers’ sugar-related health concerns, as well as high government taxes on sugar products, manufacturers can respond by launching non-sugar carbonated soft drinks. A challenge to soft drink manufacturers and retailers, besides developing these products, is to elaborate in-store marketing in order to generate a better sales response. Even more challenging is selecting the most effective in-store marketing mix according to different economic business cycles (expansion and recession), which often change in emerging markets. This study aims to identify the effectiveness of marketing mix elements – such as price, distribution, promotion communication, and promotion exhibition – for diet carbonated drinks in relation to market share. The elements are evaluated considering different business cycles (expansionary and recessionary), as well as the immediate and persistent effects. The Nielsen database and Brazilian macroeconomic data were employed covering a 47-month period to evaluate market share effects in the short and long term. A panel vector autoregression analysis and impulse response model were employed. The main results showed that the effectiveness of in-store marketing presents different results according to business cycles. In an expansionary business cycle, distribution is the most effective in-store toll for immediate and cumulative response; in a recessionary one, display and price are the most effective approaches in the short term, and display and special offers are the most effective in the long term.

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