Simon White (pictured), of Protravel, discusses how brands can differentiate themselves from the competition without lowering prices.
How to catch consumer’s attention in supermarkets is an ongoing challenge for FMCG brands. Money-conscious behaviour that came about because of the recession is now entrenched for many and, as a result, some brands are continuing to promote on price for fear of losing sales. ‘Buy one, get one free’, ‘50 per cent off’, or ‘25 per cent extra free’ all attract the attention of consumers during those few seconds when they are at the supermarket shelf making decisions about what to put into their trolley, but these all cost the brand money and ultimately devalue it.
So what can brands do if they want to attract consumers yet maintain their margins and avoid price-led offers? Added value on-pack promotions can achieve that goal and are one way for a brand to differentiate itself from the competition. Few consumers will remember a slight price discount on their tea bags for very long, but they will remember something like a family day out, or a weekend break. Promotions such as ‘buy this for your chance to win’, ‘buy this and kids get a free pass to…’ or ‘buy three of these and get….’ enable a brand to engage with its customers and potential customers on a level that is not price-related and can be run for a fraction of the cost of giving product away or discounting.
Given the potential packaging issues with some retailers, many brands are opting to use vouchers either as part of the packaging or as a Fix-a-Form® leaflet-label when space for the promotion is at a premium. However, due to cost, timing and space not every brand can run an on-pack promotion. In these situations many will opt to communicate the message near pack on point-of-sale material, directing the consumer to an online or text entry mechanic. Proof of purchase is always desirable and this can be achieved by asking consumers to upload a copy of their receipt, for example. For competitions, entrants should be asked to retain their till receipt so in the event they win the brand gets that link to purchase.
Choosing the correct mechanic for the promotion is paramount, and this varies depending on the audience, the reward and the product or service being purchased. For example, if the reward is a free flight then it is quite reasonable to expect the customer to download a claim form, stick a stamp on and post it in. However, for a competition entry then a text to win or click to win would make more sense. It is still the case that older people are more comfortable using the post, whereas younger people prefer text, email or apps. The use of URNs and an online mechanic allows enhanced communication with the consumer, plus the opportunity to reinforce the brand messages and collect essential data. Collector schemes also remain popular as they increase repeat purchase and allow data collection.
What is vital is to ensure that the mechanic is seen to be relatively quick and simple to do by the target audience in relation to the prize or reward on offer in order to generate a high level of response. To achieve this, many brands are using a redemption mechanic which enables them to take a fixed fee approach. This allows them to budget for the promotion and offer more big prizes or a larger reward for the available budget while allowing somebody else to take the risk on the level of redemption.
An on-pack promotion is a focused marketing tool that is highly effective in influencing purchasing decisions. And for those brands that really get it right, the added value provided by positive PR and social media buzz can boost the impact of a promotional campaign hugely.
