FAF1 Problem Statement Lindt & Sprüngli

Business Management in Economic and Management Sciences at the

University of Stellenbosch

For:
Group 101

By:
Alexander Johannes Keller, 28031105
Marius Strauss, 27833860

Lecturer:
Ms L Toerien

Date: 11. August 2023

 Marketing Management 344 | Problem statement Lindt & Sprüngli |
Impact of suggested sugar warning labels on consumers’ perceived brand image

According to a statistic from Statista, key markets worldwide, such as Germany, Switzerland and
Denmark, had an average chocolate consumption of over 9 kg per capita in 2021 (Statista:
“Schokoladenkonsum pro Kopf in Europa nach Ländern 2021”, 2021). That’s more than 25 grams per
day. However, according to the World Health Organization (WHO), an adult should not eat more than
25 grams of sugar per day (WHO: WHO calls on countries to reduce sugars intake among adults and
children, 2015). Research by Freeman et al., in 2018 showed that the negative impact of excessive sugar
intake on the body, brain, and behavior of a human being, led to numerous issues, including obesity and
metabolic syndrome. Furthermore, these statistics provide evidence that high sugar is directly linked to
non-communicable diseases (NCDs), with 40% of all deaths in South Africa resulting from these NCDs
(Alex Myers 1, David Fig 2 3 4, Aviva Tugendhaft 1, Jessie Mandle 1, Jonathan Myers 5, Karen Hofman
1, 2015). Therefore, the Department of Health in South Africa wants to implement warning labels for
high sugar products such as those that Lindt & Sprüngli offers.

Secondary research papers show how warning labels have a potential impact on different parts of the
marketing of a firm, such as its products, the brand image, and the preferences of consumers. Bollard
et al. for example showed in a 2016 study that plain packaging and warning labels significantly reduce
young people’s predicted preferences and would strongly decrease the number of purchases. Research
of Allen et al. showed the impact that warning labels have on high-sugar breakfast cereals. The results
show that parents would prefer to avoid a high-sugar product if it carried a warning label on the
packaging. But the brand is more important than the presence of a warning label in most cases. Only
in situations where an individual didn’t have a strong preference between two brands the warning label
would sway them. This is supported by studies from Dodds et al. and Richardson et al. who indicate
that the store and brand name have a positive effect on the consumers perception (Dodds et al., 1991,
Richardson et al., 1994). Another study (Boncinelli et al., 2017) shows that the negative effects on the
consumers perception of warning labels differ from each product and for instance warning labels on
candy bars have no direct influence on consumers perception of the product. The theory on brand image
is a model that explains the perceptions about a brand as reflected by the brand associations in
consumers’ memory. Now the question arises whether the warning label for high sugar products will
have a negative effect on the consumers perception.

Research provides evidence that sugar has a negative influence on body health and the buying decision
of consumers. It also shows that strong brands might be able to avoid it. Given the current data of the
increasing dominance of a sustainable and healthy lifestyle, current marketing research should aim to
look at new trends and, in this case, on the chocolate market and the influence of sugar warning labels,
specifically on the Swiss premium chocolate brand Lindt & Sprüngli.

Therefore, this study aims to investigate how sugar warning labels have an impact on the consumers’
perceived brand image of the Swiss premium chocolatier Lindt & Sprüngli.

Reference List
Allen, S. and Goddard, E. (eds) (2018) The Effectiveness of High Sugar Warning Labels on Breakfast
Cereals. Available at: https://doi.org/10.22004/ag.econ.275885.

Bollard, T. et al. (2016) ‘Effects of plain packaging, warning labels, and taxes on young people’s
predicted sugar-sweetened beverage preferences: an experimental study’, International Journal of
Behavioral Nutrition and Physical Activity, 13(1), p. 95. Available at: https://doi.org/10.1186/s12966-
016-0421-7.

Dodds, W.B., Monroe, K.B. and Grewal, D. (1991) ‘Effects of Price, Brand, and Store Information on
Buyers’ Product Evaluations’, Journal of Marketing Research, 28(3), pp. 307–319. Available at:
https://doi.org/10.2307/3172866.

Freeman, C.R. et al. (2018) ‘Impact of sugar on the body, brain, and behavior’, Frontiers in
bioscience (Landmark edition), 23(12), pp. 2255–2266. Available at: https://doi.org/10.2741/4704.

Malik, A.H. et al. (2014) ‘Impact of Sugar-Sweetened Beverages on Blood Pressure’, The American
Journal of Cardiology, 113(9), pp. 1574–1580. Available at:
https://doi.org/10.1016/j.amjcard.2014.01.437.

Richardson, P.S., Dick, A.S. and Jain, A.K. (1994) ‘Extrinsic and intrinsic cue effects on perceptions
of store brand quality’, Journal of Marketing, 58(4), pp. 28–36. Available at:
https://doi.org/10.2307/1251914.

Roberto, C.A. et al. (2016) ‘The Influence of Sugar-Sweetened Beverage Health Warning Labels on
Parents’ Choices’, Pediatrics, 137(2), p. e20153185. Available at: https://doi.org/10.1542/peds.2015-
3185.

Schokoladekonsum pro Kopf in Europa nach Ländern 2021 (2021) Statista. Available at:
https://de.statista.com/statistik/daten/studie/20040/umfrage/jaehrlicher-schokoladenkonsum-pro-kopf-
in-ausgewaehlten-laendern/ (Accessed: 10 August 2023).

Sugar and health in South Africa: Potential challenges to leveraging policy change - PubMed (no
date). Available at: https://pubmed.ncbi.nlm.nih.gov/26315455/ (Accessed: 21 August 2023).

Teas, R.K. and Agarwal, S. (2000) ‘The effects of extrinsic product cues on consumers’ perceptions
of quality, sacrifice, and value’, Journal of the Academy of Marketing Science, 28(2), pp. 278–290.
Available at: https://doi.org/10.1177/0092070300282008.

Warning labels on junk food: experimental evidence - Boncinelli - 2017 - International Journal of
Consumer Studies - Wiley Online Library (no date). Available at:
https://onlinelibrary.wiley.com/doi/10.1111/ijcs.12312 (Accessed: 21 August 2023).
WHO calls on countries to reduce sugars intake among adults and children (no date). Available at:
https://www.who.int/news-room/detail/04-03-2015-who-calls-on-countries-to-reduce-sugars-intake-
among-adults-and-children# (Accessed: 10 August 2023).

Wijaya, B.S. (2013) ‘Dimensions of Brand Image: A Conceptual Review from the Perspective of
Brand Communication’, European Journal of Business and Management.

Zhang, Y. (2015) ‘The Impact of Brand Image on Consumer Behavior: A Literature Review’, Open
Journal of Business and Management, 3(1), pp. 58–62. Available at:
https://doi.org/10.4236/ojbm.2015.31006.

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Student Name Student Number Signature Date

Alexander Keller 28031105 10 Aug. 23
Marius Strauss 27833860 10 Aug. 23