The OFT’s new standards should help cut unhelpful promo wars – and make marketing more clever, says Becky Munday
With the OFT due to clamp down on seven common promotional tactics (The Grocer, 28 August), brands need to look closely at how they operate pricing strategies. But will manufacturers and retailers benefit?
In one respect, yes. Price promotions do nothing for brand loyalty, they are done for quick tactical gain. In the current climate, where many brands and retailers are caught in a discount merry-go-round, this legislation can't come soon enough.
If handled properly, there are ways to run a successful money-saving campaign and create lasting customer relationships. For example, Mando worked on a campaign for Kellogg's last year which the brand is running again offering consumers the chance to collect tokens from three packets of cereal to receive the fourth one for free. That still meets the consumer desire for a reduction in price, and it also has value for the brand. To most people, value is simple: they want their shopping bill to cost less. But from Kellogg's point of view, the value of the campaign comes from driving repeat purchase and gaining information about their customers, who had to register online.
It's vital to create campaigns that build a relationship with the brand and ensure lasting value, as with collector schemes. This particular method develops the relationship in two ways: the brand can communicate with the customer directly; and it can create a permanent presence in the consumer's home.
The recent successful promotion on Rachel's organic yoghurts is another example of a campaign that leaves a lasting impression. The offer allowed consumers to purchase unique Emma Bridgewater bowls at a reduced price when they collected tokens from special packs of yogurts. The synergy between these brands has put thousands of hand-painted bowls into households where the association with Rachel's will last as long as the bowls. This was achieved through a managed fixed fee.
Promotional campaigns are not just about slashing costs, and if the new legislation brings a more intelligent approach to promotional marketing, all well and good.
Becky Munday is CEO of promotional risk management business Mando.
With the OFT due to clamp down on seven common promotional tactics (The Grocer, 28 August), brands need to look closely at how they operate pricing strategies. But will manufacturers and retailers benefit?
In one respect, yes. Price promotions do nothing for brand loyalty, they are done for quick tactical gain. In the current climate, where many brands and retailers are caught in a discount merry-go-round, this legislation can't come soon enough.
If handled properly, there are ways to run a successful money-saving campaign and create lasting customer relationships. For example, Mando worked on a campaign for Kellogg's last year which the brand is running again offering consumers the chance to collect tokens from three packets of cereal to receive the fourth one for free. That still meets the consumer desire for a reduction in price, and it also has value for the brand. To most people, value is simple: they want their shopping bill to cost less. But from Kellogg's point of view, the value of the campaign comes from driving repeat purchase and gaining information about their customers, who had to register online.
It's vital to create campaigns that build a relationship with the brand and ensure lasting value, as with collector schemes. This particular method develops the relationship in two ways: the brand can communicate with the customer directly; and it can create a permanent presence in the consumer's home.
The recent successful promotion on Rachel's organic yoghurts is another example of a campaign that leaves a lasting impression. The offer allowed consumers to purchase unique Emma Bridgewater bowls at a reduced price when they collected tokens from special packs of yogurts. The synergy between these brands has put thousands of hand-painted bowls into households where the association with Rachel's will last as long as the bowls. This was achieved through a managed fixed fee.
Promotional campaigns are not just about slashing costs, and if the new legislation brings a more intelligent approach to promotional marketing, all well and good.
Becky Munday is CEO of promotional risk management business Mando.
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