Many markets are made terribly complicated by government legislation and restrictions that, to marketing people, do nothing but make life difficult. But the P for political/legal in the PEST model won’t go away, so you have to decide whether to go with the flow or do something about it.
Two stories that have recently caught my attention are typical of what feel like random decisions by the “powers that be”. The first involves leading UK energy drink Lucozade, owned by GlaxoSmithKline. To avoid paying VAT (sales tax), they wanted it to be classified NOT as a drink (sorry, beverage), but as a “functional food”. Unfortunately for them, the judge saw round this cunning plan and stated quite clearly, Lucozade, you’re a drink. I don’t find it hard to understand his decision, as I can’t remember the last time I drank a food. Lucozade’s in good company – Jaffa Cakes once asked to be categorised as biscuits, to avoid VAT. They succeeded. Pringles were less successful with their attempt NOT to be called crisps (British English, what others keep calling chips). Sorry Pringles, you’re crisps.
Well, if energy drink makers are surprised to hear they’re not selling food, how do you think water companies feel about a Brussels ruling that “water does not hydrate”? I had to look up the definition of hydrate: “To supply water to (a person, for example) in order to restore or maintain fluid balance.” According to a ruling by bureaucrats, however, water companies must not make this claim about their water. Water does not hydrate you.
I’m sure their marketing people are shaking their heads with disbelief. Though I’m also certain they’ll find a clever way round it, like the makers of beauty creams that “make your skin feel visibly younger”. That strikes the right chords with customers, without feeling watered down.