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Category Archives: FMCG Articles

Cheese Brands need a USP

Cheese Brands need a USP
Sir:  The title of my article is Cheese Brands need a USP as I read your Focus on Cheese with interest (‘The brands ride again’, 1 December, p43). It is intriguing to see that cheese brands are closing the gap on own label. However, in my opinion the value (not volume) growth that is driving this increase in market share has been created largely by the right promotions and the noise made in the Cheddar category.

It is generally accepted that in recession, consumers prefer price reductions to multibuys, due to the lower initial outlay. The Cheddar category is driving value growth by moving towards price reductions and fewer bogofs as it becomes harder for manufacturers to sustain this type of promotion and see genuine value growth.

Having worked in the cheese and dairy category for a number of years, I have seen very little evidence of consumer loyalty towards Cheddar brands or own-label products. Consumers will switch depending on the promotions running.

So what is the answer? I believe it is about creating and focusing on a stronger USP. This could be through packaging, although I tend to agree with Richard Clothier that consumers will not pay extra for better packaging solutions; nor will they switch brands. Perhaps format is the way forward – I certainly believe all usage occasions such as adult snacking have not been fully exploited.

Whatever the solution, the Holy Grail for manufacturers is to create a point of difference that resonates and drives loyalty; a task that has not been achieved to date.
Dave Marston, Category Wins

 

The new Tesco Price Promise – cliche or smart PR

The Tesco Price Promise – cliché or smart PR ? March 2013

The Tesco Price Promise launched this week re-ignited price wars between the supermarket and put the spotlight firmly on Tesco. In October last year Tesco announced its first fall in profits for nearly 18 years, by 11.6% to £1.7bn; a headline; Tesco’s recent performance has also not been helped by the horsemeat scandal, which as the UK’s leading supermarket, meant that Tesco found itself at the centre of the crisis. A crisis which continues and which is having a visible impact on sales and the way shoppers shop.

It is not surprising then, that Tesco have announced a new consumer price deal under the banner ‘Tesco Price Promise’ this week using £10 as its headline grabber. The question is, is will it turn consumers on ? In a recent consumer survey completed in a major dairy category, Taste / Flavour was always considered ahead of Price by shoppers.

However Britain’s major supermarkets still, all continue to push a low pricing agenda. This is perhaps not surprising when 59% of UK consumers consider standard or value private label options when doing their Grocery Shop (although this is lower than the rest of Europe suggesting potential room for  growth) (Nielsen Global Survey of New Product Purchase Sentiment, Jan 2013).

What the promise does do, however is bring Tesco’s value proposition to the for-front of consumers’ minds, which is the gist of what Chris Bush is getting at with his comment ‘More than ever, in today’s climate we know customers want to rely on us to offer best possible prices’ (the Grocer 16th March P.15). Also this message is re-enforced at a key time in the interaction between shopper and the supermarket: at the till. It will also create some re-assurance at a time when consumers are not feeling particularly adventurous (40% of Britons are less like to consider new products in the current economic climate (Nielsen Global Survey of New Product Purchase Sentiment, Jan 2013).

But is there significant difference between the Tesco Price Promise and the other supermarkets offers in the eyes of the consumer; this is where I do agree with the Adam Leyland’s assessment in his editors column that the devil will be in the detail and adding Private Label attempts to create a point of difference but also makes things complicated; especially as Retailers when working with Private Label manufacturers both look for and insist on a tangible point of difference in a product range hence the difficulties when comparing private label across the market.

However with consumers being savvy at the moment and also wanting simplicity (55% of Which? members preferred simple price reductions in its recent report on Britain’s supermarkets), I tend to agree with the Grocer article, in that the Tesco Price Promise wont drive further sales; but I also don’t think it will have a significant impact on customer loyalty, as consumers are bombarded with a great deal of value messages at the moment; but I do think it will help re-enforce Tesco’s credentials with its core shoppers which is the first step in turning around recent woes and driving growth.