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Tesco Hive Price Promotions

Tesco strategy announcement: Over half of FMCG marketers want a move away from price promotions, says research


By The Drum Team | Editorial

April 17, 2012 | 3 min read

Ahead of Tesco announcing a new strategy tomorrow (Wednesday 18 April), marketers want a move away from the use of price promotions, according to research commissioned by Hive.

Hive, which provides a platform for many UK FMCG promotions, has found that of 200 FMCG marketers, 51% believed that the emphasis placed on price promotion by supermarkets undermined the appeal of their grocery products.

A quarter of those questioned by TNS on behalf of Hive, also said that they believed that price promotions did not drive grocery sales any longer.

It was also discovered that 22% of the marketers interviewed, believed that they would see a move away from price promotions within the grocery section this year, while 27% said they supported loyalty programmes to drive customer loyalty.

12% also said they recognised the value of CRM-based email offers.

Nick Evans, head of customer insight at Hive, commented: “Short-term pricing is such an easy tactic to fall into – especially if it has an immediate effect on sales figures. However, Tesco’s recent experience is a graphic illustration of the pitfalls of an overreliance on price cutting.

“Despite difficult trading conditions, the ‘intelligent promotions’ run by leading FMCG grocery brands are enabling them to overcome the issues resulting from aggressive price cutting by the supermarkets, by building an understanding of and opening up a dialogue with their shoppers.

“It appears,” concludes Evans, “that Tesco is primed to return to a strategy that was deemed in the past to be one of their strengths: that of getting close to its shoppers and understanding their needs and motivations. Deloittes research shows that companies engaged in shopper engagement are growing 50% faster than the categories that they compete in, and we’d support Tescos in such a move.”

Tesco Hive Price Promotions

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