Integration, not just price promotion!
Posted by Warren Davidson on April 17, 2009 in FMCG, Marketing, Promotions with 0 CommentsLet’s face it – on the whole, we’ve had it pretty easy over the last ten years and after talking about it and speculating whether it will or won’t happen, the downturn presents everyone with new challenges and none more so than branding.
One of the many trends we see in both consumer and business-to-business branding is the drive for value. Whether it's the price wars raging with the major supermarkets or simply being more selective with your media budget, everyone is looking to get the most out of their marketing in these turbulent times.
But is the price promotion the answer to all your sales needs? No doubt price promotion might shift stock albeit at lower margins and many businesses understandably see this as a survival strategy, but what effect does this have on your brand value?
Well, I had first-hand experience of this over the weekend. We are moving house and so off we trot to the local furniture stores, all offering 'massive discounts', 'great savings', 20, 30 and 40% off their winter stock. So has the price promotion got me in the door? Well, it might have helped, but all the stores are offering a discount of sorts, so there is little differentiation between them and we aren't buying because of price; we are buying to satisfy a need. Retail is a very tough environment with everything on sale. There is no great difference between the offerings in the stores we visit and all the prices on the items we look at are pretty much on a par.
The first store I go in. There are a number of items we are interested in so on the way out I ask for a brochure so we can browse at home. The response "We don't have a brochure because we don't know what stock comes in from one week to the next", I am told. Maybe that's the business model or purchasing approach, I am unsure. Never mind, I say, I'll look at the website. The response, "Oh I wouldn't bother, that's not much help either". So now I have to ask for a pen and paper to go back and jot down the names and prices of the items we had seen. So while I understand the need for price promotion, all it has achieved in this instance is a negative experience of the brand. Even if you feel price promotion is the right thing to do, it shouldn't mean the rest of your marketing efforts are ignored, which can, as in this case, undermine your price promotion.
The second store we visit is advertising 50% of all furniture and, despite having a poor range, we do see a couple of items that we like.
The third store has a good range but the two sales staff are both busy with customers and I just lose patience waiting to find out the price of something I was interested in. Some good signage or POS would have helped here.
So does price promotion work?
Well, I must admit to buying some furniture from the second store, but it was the fact that we liked the product, it was good quality and that they delivered, which came above the price in our decision making.
Anyone who watched the BBC's watchdog recently and saw their national survey of the main supermarkets in the UK will have noted that, surprisingly, convenience and quality were just as important for many people as price and 70% of shoppers still hadn't changed where they shopped since the beginning of the downturn.
During a recession when your competition are generally cutting back, in a less cluttered market place it can be an opportunity to get your message out there when everyone else is relying on initiatives such as price promotions. As John Quelch, a professor at Harvard Business School said, "it is well documented that brands that increase advertising and marketing during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good times"
The main advice would be to not take short-term decisions that will impact on the long-term value of the brand and, in addition, run price promotions as part of an integrated campaign so you are making the most of them.
Warren Davidson has a passion for branding and its application to every part of a business. He is an experienced marketing manager who is interested in bringing brands to life for employees and customers alike.Find out more at Warren's Profile. Don't forget to subscribe if you'd like to hear more!
Trackback URL
Enjoy this post? Share it with others.
Comments
About H+A Blog
Our blog was created to educate, inspire, provoke thoughts and generate ideas.
It is a voice of our passionate team who shares its knowledge and views on marketing, PR, branding and new media, while also discussing the latest trends, innovation and technology in the communications industry.
Categories
Recent Entries
- Employees, Social Media and Trust - Oct 27th
- Best of blogs: what we read last week - Oct 17th
- The rise and stall of checking in
- Facebook vs. Google +.....the social media war - 2nd August 2011
- Tips on how to survive the Dragons Den - 14th July 2011