Tobacco manufacturer brand strategy following plain packaging in Australia: implications for social responsibility and policy

Abstract

Purpose

This paper aims to inform social responsibility and social policy by describing the brand strategy of Australia’s largest tobacco manufacturer, British American Tobacco Australia (BATA), the year following the introduction of plain packaging and other regulation. Tobacco controls are a proven catalyst for reducing smoking, but manufacturers adapt swiftly seeking to minimise the impact of regulatory change.

Design/methodology/approach

BATA’s strategy was determined using 2012-2014 tobacco ingredient reports, recommended retail price lists and a supermarket retail audit.

Findings

The research identified over 70 BATA brand variants, offered in diverse packaging options, with new products and modified names appearing since 2012. In total 14 main brands are highly differentiated by price, with 45 per cent difference between the cheapest and the most expensive. Volume discounting occurs across packaging ranges, with twin packs offering best value and prices up to 10 per cent lower than those of single packs.

Originality/value

The research originality stems from the triangulation of three different data resources to establish brand strategy following increased regulation. The study confirms ongoing market segmentation using highly differentiated ranges, and it reveals the unintended consequences of corporate responses to regulation. Evolving variant names communicate product information and imagery previously imparted by pack design. Pricing strategies enable smokers to offset substantial excise increases through brand switching and volume buying. The research, therefore, reveals the potential for regulating these as yet unrestricted elements to enhance the impact of plain packaging and other tobacco controls, thereby further reducing the social impact of smoking.

Citation

Greenland, S.J., Johnson, L. and Seifi, S. (2016), "Tobacco manufacturer brand strategy following plain packaging in Australia: implications for social responsibility and policy", Social Responsibility Journal, Vol. 12 No. 2, pp. 321-334. https://doi.org/10.1108/SRJ-09-2015-0127