According to an article in today’s Grocer magazine, Coca Cola have admitted that they were slightly caught on the hop by rivals’ strong, Olympic year promotional activity, which has contributed to a slump in sales.
Their response – to simply pull rank and out promote them in 2013.
Simply put – Coca Cola has upped the ante. During February 2013, it ran 208 price promotions. (which is 184.9% increase on the 73 it ran in February 2012).
To put this into perspective, Cadburys ran 318 promotions, across it’s entire range.
So did it work?
In a nutshell – yes, or at least in the short term. Coca Cola have already claimed it has helped them to grow market share in 2013 Premier Foods & Fox’s biscuits are also hot on the heels with enormous leaps in the volume of price promotion offers.
So the message is simple – if you want to beat your rivals – out discount them, out offer them and shift SKU’s with as many 3 for 2’s and BOGOF’s as you can.
But there are plenty of brands with the required financial muscle to join in with this game. The problem, is what might you lose and giveaway in the quest to become the ‘market share’ leader?
What would the shelves of our supermarkets and convenience stores look like if every brand concentrated on out promoting one another?
Apart from the fact we might eventually all need to transform the spare room into a storage facility for our ‘freebies‘ How would we continue to feel about our favourite brands if they all relied on price promotion to gain the loyalty of our wallets?
First of all – if every brand embarks on an out and out price war – the shelves would suddenly become a sea of yellow hued, price tags. Each offering us something slightly different and yet, the same.
Our purchasing decisions would increasingly be based upon getting the most bang for our buck and with this, brand loyalty itself would likely dissipate. Calculators and apps would become an ever more integral part of the experience. Eyeballs firmly placed on the LCD rather than the SKU.
Eventually, if every brand adopts the same strategy, there will be little to differentiate any of them from one another. There will be no standout, no uniqueness and scant opportunity for any kind of communication cut through on the shelves.
Once this happens, we are back to square one – a level playing field where the winning becomes a fleeting moment before your rival chops a further 20p from their offering.
If price promotions become the primary reason to buy a product, do brands effectively start lose their identity? Do we even really care who we buy from?
And of course constant price promotions effectively mean less profits. With this, brands may need to look at how they can reduce their own costs to continue to be competitive – Horse lasagne anybody?
Brands that can set themselves apart from the crowd and create meaningful conversations with an audience away from the aisles will still prevail in the war of the supermarket shelf. Consumers still want to feel good about the brands they buy and develop relationships that give them more than just a few more pennies in their pocket.
Because a brand that competes on their terms, instead of the competition will always have the edge. Nobody has ever enjoyed a truly meaningful brand experience picking a product from the aisles – The supermarkets are simply a price torn battleground whereas the war will be won by the brands who can capture the hearts and minds of the consumer with integrity, innovation and inspiration.
Hotcow is a multi-award winning Experiential Marketing agency. We get brands in front of consumers in ways that persuade them to buy. We fully implement our ideas; nothing needs to be farmed out. For more information or free consultation, contact us.