Price Marketing
How retailers are changing shopper's perception of
price and the tools they use internally to manage their
price position
Sam Sudlow, Commercial Director Brand View
Agenda
1. Price Promise Spectrum
2. Sainsbury’s Brand Match
3. Customer-Led Price Promises
4. Fixed Basket Price Promises
5. Name and Shame Price Promises
1
1. Price Promise Spectrum
Spectrum of Price Promise Programs
Impact
Sainsbury’s Brand Match
Asda Price Guarantee
Fragrance Shop’s Promise
Waitrose’s Price Match
Marks & Spencer’s Simply Range
Superdrug’s Super Price
Boots’ Insult Pricing
Sophistication
3
2. Sainsbury’s Brand Match
Sainsbury’s Price Perception Problem
 Perceived high price versus Tesco and Asda
 Perceived high quality
 Perceived as low value for money
 Strong in fresh and chilled
 Weak in center store
 Low basket spend
 Losing customers to Tesco and Asda
5
Perception Different to Reality
6
Shopper Transaction Website
7
Customer Relationship Management and Marketing
8
Impact in May 2012
“Sainsbury’s triumphs over rivals as Brand
Match helps deliver 7.1% profits growth.”
“The group said that overall sales excluding VAT rose 5.6% to 23.3
billions pounds, taking its market share to the highest level for
nearly a decade at 16.6%.”
Impact in November 2013
“Sainsbury’s overtakes Asda to become
second-largest UK supermarket as
profits soar 9%.”
“Company now account for 16.8% of the
market.”
Mike Coupe’s View on Brand Match
11
Justin King’s View on Brand Match
“We spent $100mms on price
reduction with no impact before Brand Match.”
“Brand Match has fundamentally
changed perception.”
“We have had our best trading
year in over a decade.”
“Brand Match has positioned us as an
innovator in the market.”
12
Asda’s Price Communication
 2008 Advertising campaign communicating price position
 First price communication campaign versus competitors in UK
 Highest number of lowest priced items
 Winner of Grocer Awards
13
Tesco’s Big Price Drop
 September 2011 in response to Asda and Sainsbury’s price promises
 Reduction in price of 3,000 “staple” items
 Removed promotions
 Three times as many items reduced than “typical” week
 Savings were lower than a typical week
 Prices higher than previous year
Brand Match Versus other Coupon Programs
Launch Date
Oct ’11
Oct ‘13
The Promise
Match
Match
Apr ‘10
10%
cheaper
Competitors
Tes, Asda
Asda, JS, Morri
Tes, JS, Morri,
Wait
Redemption
Real-time
Real-time
Website
Inclusions
Branded
All comparable
All comparable
Minimum Spend
30
10 items
8 items
Maximum Payout
10
10
N/A
3. Customer-Led Price Promises
Fragrance Shop’s Price Match
 All Prices
 Weekly Frequency
 12 Competitors
 Shopper Evidence
 Lowest Price Granted
17
4. Fixed Basket Price
Promises
Waitrose’s Brand Price Match
 Focused Item List
 Weekly Frequency
 Vs Tesco
 1,000 Item Price Points
 Mass Advertising
 In Store Advertising
 Supported by price intelligence
19
Marks & Spencer’s “Simply” Range
 Private label
 Weekly Cycle
 Competitive Pricing
 Simply M&S Line
 Mass Communication
 In Store Communication
 800 lines (up from 500)
20
M&S Vs Tesco
Impact in December 2011
“M&S Food sales up 3% after new lines and
Price Promise.”
“Marc Bolland, CEO, said that the last week before Christmas
was a record for food sales. ‘Our food business performed very
strongly as customers enjoyed our new and traditional
Christmas products’.”
“Like for like sales in the 13 weeks to December 31 saw food
rise 3% after the company introduce 600 new lines.”
5. Name and Shame Price
Promises
Superdrug’s Super Price
 All lines
 Rolling 12 week comparison
 Pricing Checked Weekly
 Cheapest price
 Branded Items
 Boots, Tesco, Sainsbury, ASDA
 In Store Communications
24
Superdrug’s Super Price
25
Boots’ Insult Pricing
Thank you