A NEW HOME FOR TORCHMEDIA

We'd like to introduce you to the new-look TorchMedia website: www.torchmedia.com.au.

With an integrated site blog (amongst many other exciting new features), we will no longer be updating this blog.

Please update your bookmarks and we hope to see you there!

You can also follow us on Twitter: www.twitter.com/TorchMedia.

The problem with BOGOFs and deep discounting

Grocery competition has become increasingly fierce over the last 12 months – competition with other manufacturer brands, and also increasingly with store brands. Price-based promotions have played a vital role in enabling brands to compete against store brand products. So popular are BOGOFs and multi-buys in the UK, brands currently spend £25.6 billion annually on such promotions according to data released by the Institute of Sales Promotion.

But with BOGOFs, multi-buys and deep discounting inevitably comes consumer waste. Whether it’s a second block of cheese for $2 or a ‘free’ punnet of strawberries, the simple fact is that much of it gets thrown out. According to recent research from IGD, more than a quarter of respondents (26 per cent) say they want to see an end to multi-buys on fresh food. A further 28 per cent said they are concerned about food waste created by promotions.

There are smarter ways to connect with shoppers – price cutting activities will move stock over the promotional period, but they fail to engender long term loyalty or connect with peoples values.One consumer value that has emerged in the global recession is the move away from excessive consumption – consumers don’t want to be associated with waste and frivolous spending. It simply no longer makes the consumer feel ‘good’. But what does?

UK nappy brand Pampers ran a joint promotion with UNICEF to provide tetanus vaccinations for newborns in developing countries. It promised 'one pack = one vaccine' and outperformed a leading competitor BOGOF promotion because shoppers were offered a straight choice between getting an extra pack free, or saving a life. In contrast to the short-term hit of price, these kinds of promotions build brand equity, activate sales and create long term loyalty.