Marketing unhealthy brands – an analysis of SKU pricing, pack size and promotion strategies that increase harmful product consumption

Figures & data

Table 1. Sample of brand variants and product categories investigated in each retail audit wave.

	Product Category	Brand Variant	SKUs
WAVE 1
Unhealthy products	Beer	Coopers Original Pale Ale	8
	Carbonates	Schweppes Solo Original Lemon	6
	Chocolate confectionary	Cadbury Dairy Milk (block/bar)	3
	Cigarettes	John Player Special (JPS) Blue	8
	Potato chips	Thins Original	3
Comparison products	Essential household	Kleenex Complete Clean Toilet Paper	2
	Personal care	Colgate Total Original Toothpaste	3
WAVE 2
Unhealthy products	Beer	Great Northern Original Lager	8
	Breakfast cereal	Kellogg’s Nutri-Grain	3
	Carbonates	Coca-Cola Classic	11
	Chocolate confectionary	Cadbury Dairy Milk (block/bar)	3
	Cigarettes	John Player Special (JPS) Blue	9
	Potato chips	Smith’s Original Crinkle Cut Chips	3
Comparison products	Bottled water	Mount Franklin Spring Water	4
	Instant coffee	Nescafe Gold	2
	Laundry detergent	Omo Active Liquid	2

Table 2. Cadbury Dairy Milk SKU prices (AU$) by city/state – retail audit wave 2.

Cadbury Dairy Milk SKU	Canberra ACT	Sydney NSW	Darwin NT	Brisbane QLD	Adelaide SA	Hobart TAS	Melbourne VIC	Perth WA	Mean price
Bar 50g	0.90*	1.50	1.50	1.50	1.50	1.50	1.50	0.90*	1.350
Bar 180g	3.50*	2.50*	5.00	2.50*	2.50*	5.00	2.50*	3.50*	3.375
Bar 343g	6.00	6.00	6.00	6.00	6.00	6.00	6.00	6.00	6.000

Note: * Special/price promotion.

Table 3. Brand variant SKU pack options and prices (AU$), ordered by size – retail audit wave 2.

Category – Brand Variant & SKU Pack Type	SKU size/volume	Mean SKU price	Mean price per unit/volume*
CARBONATES – COCA-COLA CLASSIC	ml	$	Litre $
Can single 250ml	250	2.208	8.833
Can single 375ml	375	2.500	6.667
Glass bottle single 385ml	385	3.817	9.913
PET bottle single 600ml	600	3.713	6.188
Glass bottle multipack 4 x 300ml	1200	5.583	4.653
PET bottle single 1250ml	1250	2.269	1.815
PET bottle single 2000ml	2000	3.631	1.816
Can multipack 8 x 250ml	2000	8.271	4.136
Can multipack 10 x 375ml	3750	11.775	3.140
Can multipack 24 x 375ml	9000	22.694	2.522
Can multipack 30 x 375ml	11250	37.100	3.298
CIGARETTES – JPS BLUE	Sticks	$	Stick $
23 single pack	23	34.950	1.520
25 single pack	25	43.950	1.758
30 single pack	30	48.325	1.611
40 single pack	40	65.294	1.632
23 twin pack 2 x 23	46	65.283	1.419
40 multipack 4 x 40	160	256.950	1.606
30 multipack 6 x 30	180	289.238	1.607
23 multipack 8 x 23	184	277.250	1.507
25 multipack 8 x 25	200	335.950	1.680
BEER – GREAT NORTHERN ORIGINAL LAGER	ml	$	Litre $
Glass bottle single 330ml	330	4.300	13.030
Can single 375ml	375	4.333	11.556
Can single 500ml	500	6.00	12.000
Glass bottle single 700ml	700	8.400	12.000
Glass bottle multipack 6 x 330ml	1980	19.643	9.921
Glass bottle multipack 3 x 700ml	2100	21.000	10.000
Glass bottle multipack 24 x 330ml (4 x 6 pack)	7920	51.500	6.503
Can multipack 30 x 375ml	11250	60.00	5.333
CHOCOLATE – CADBURY DAIRY MILK	g	$	kg $
Bar single 50g	50	1.350	27.000
Bar single 180g	180	3.375	18.800
Bar single 343g	343	6.000	17.500
BREAKFAST CEREAL – KELLOGG’S NUTRI-GRAIN	g	$	kg $
Pack single 290g	290	5.350	18.448
Pack single 470g	470	6.693	14.240
Pack single 765g	765	9.036	11.811
POTATO CHIPS – SMITH’S ORIGINAL	g	$	kg $
Pack single 60g	60	1.775	29.583
Pack single 170g	170	2.533	14.897
Pack single 380g	380	5.833	15.351
BOTTLED WATER – MOUNT FRANKLIN SPRING WATER	ml		Litre $
PET bottle single 600ml	600	2.088	3.479
PET bottle single 1500ml	1500	2.444	1.629
PET bottle multipack 6 x 500ml	3000	4.025	1.342
PET bottle multipack 20 x 500ml	10000	8.467	0.847
INSTANT COFFEE – NESCAFE GOLD	g	$	kg $
Jar single 100g	100	10.500	105.00
Jar single 200g	200	12.75	63.750
LAUNDRY DETERGENT – OMO ACTIVE CLEAN	ml	$	Litre $
Plastic bottle single 2000ml	2000	16.500	8.250
Plastic bottle single 4000ml	4000	29.125	7.281

Note: *Worst value SKU (highest unit/volume price); Best value SKU (lowest per unit/volume price).

Figure 1. Wave 1 unhealthy brand ratios of lowest to highest price per volume SKUs (including SKUs with maximum & minimum price per volume, SKU pack size & price).

Source: National mean SKU price based on first retail audit wave prices across the eight locations. NB. Prices are rounded to the nearest cents, and ratios to two decimal places.

Figure 2. Wave 2 Unhealthy and comparison brand ratios of lowest to highest price per volume SKUs (including SKUs with maximum & minimum price per volume, SKU pack size & price).

Source: National mean SKU price based on second retail audit wave of prices across the eight locations.NB. Prices are rounded to the nearest cents, and ratios to two decimal places.

Table 4. Regulatory recommendations for unhealthy product brand SKU price promotion.

Brand SKU marketing dimension	Impact (and example of substantiating research)	Regulatory recommendation
Prominent point-of-sale positioning and merchandising for promoted SKUs	Stimulates impulse purchase (Smillie et al., 2006) Overcomes healthier purchase intention (Metcalfe & Mischel, 1999)	Restrict point-of-sale merchandising and positioning
Large SKU range	Generates more sales than less differentiated products and provides greater opportunity to vary promotional offerings (Kotler et al., 2009)	Limit the size of brand SKU range
SKU differentiated price promotion/special offers	Stimulates sales and increases consumption of price-demand elastic products (Winston, 2014)	Ban brand SKU price promotions and ‘specials’
Dynamic and frequent SKU price promotion/special offers	Maintains increased sales and consumption by overcoming the declining impact of sales promotion over time (Maxwell et al., 2012)
Lower per unit/volume price for larger SKUs	Habituates larger purchase behaviour (Skinner, 1963) Increases consumption (Wansink, 1996) Maximises appeal to low-income consumers, most at risk of NCD (Chandon & Wansink, 2012)	Fixed per unit/volume price across the brand SKU range
Multipack promotion	More effective than single item promotions in increasing sales volumes (Drechsler et al., 2017) Normalisation of excessively large purchases (Wansink et al., 1998) Increases consumption (van der Helm, 2010) and excessive consumption (Roux et al., 2015)
Full SKU range presented with corresponding per unit/volume prices, often with adjacent best and worst value SKUs	Reinforces value seeking, larger purchase behaviour (Skinner, 1963) Capitalises on the price-demand elasticity of unhealthy products (Revoredo-Ghia et al., 2018)

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