Britain's biggest supermarkets spend a lot of advertising money telling the consumer they offer great value. But an investigation by Panorama (tonight BBC1, 2030) will reveal that not all "bargains" are quite what they seem. (detailed examples) The deals at Asda, Tesco, Morrisons and Sainsbury's might seem to be everywhere, but strip away the jargon and catchy promises of "huge savings" and "special offers" and you are just as likely to find tactics that experts say range from a bit cheeky to others that could lead to prosecutions for breach of consumer protection regulations. However, the law is a way of dividing up what remains of an asset, after the event, rather than a means of preserving its value. Legislation is not intended as a means of preserving brand equity. In fact, by the time the authorities resort to legislation, the ‘crime’ will have already have caused irreparable damage to a consumer’s perception of a brand, be it product or store….making the savvy consumer more cynical as they attempt to second-guess the brand-owner, and possibly causing the cautious shopper to suspend the purchase.
It could be said that everyone should make their own minds up on value, but surely the whole idea of branding was originally about giving value-assurance ‘every time you open the box’ i.e a tube rattling around in carton is already speaking for itself and eroding brand equity…
In other words, by the time the authorities act the damage to brand equity has already been done…
Leaving the legalities to the lawyers, it is perhaps more productive to explore impact on brand equity
Impact on brand equity
Savvy consumers enjoy unprecedented access to price comparison facilities and are buying a combination of Product, Price, Presentation and Place when they purchase a brand. This gives the consumer a basis for comparing brands in a category, and diluting price credibility thereby undermines the shoppers perception of value of this ‘package’ possibly making the competitor’s package more appealing in terms of value, resulting in a compromise on fit with consumer need. In other words, another opportunity handed over to the opposition...
Impact on retailer equity
Whilst retailers have already absorbed insights from ‘brand experts’ and run the store like a supplier’s brand, with some success, it might be to their benefit to reflect on the fact that a shop is more like a house-brand than a single product brand. In other words, shoppers are buying the ‘House of Tesco/Asda/JS/Morrisons’ in terms of store brand equity and not individual brands.
Suppliers of house brands are doubly careful in the marketing of their products when offered under the Company name i.e. a bad product failure can negatively impact the entire product portfolio. So too retailers should not underestimate the difficulty in restoring shopper-trust following ‘misleading’ promotions associated with the entire store...
Whilst retailers may feel that individual brands will absorb the negative impact of ‘misleading’ offers that are technically within the spirit of the law, it may be worth bearing in mind that shopper-perception may be more important than reality, especially when shoppers are unwilling or unable to analyse the offer and make a like-with-like comparison of value. It can be easier for the shopper to simply allow one extreme example, or TV programme (!), to represent the entire shop, and switch allegiance to an alternative, more trustworthy retailer…
Either way a loss to brand and shop, and ultimately a waste of brand investment.
Action:
Both brand team and NAMs need to monitor execution of pricing and promotional mechanics instore. Whilst the short-term sales uplift may boost short term performance in these unprecedented times, brands owe it to the consumer and trade partner to think like a shopper and help them make like-with-like comparisons that benefit brand equity, long term…
