The Institute of Practitioners in Advertising (IPA) fully supports the introduction of the Grocery Supply Code of Practice (GSCOP) published today (4th February), to help prevent retailers from exerting ever greater pricing pressure on brand owners.
In a report published by the IPA today (4th February),
Pricing for the upturn. How can brands fight back?, leading experts from Taylor Nelson Sofres (TNS), the Institute of Sales Promotion (ISP), the British Brands Group and Nick Southgate, the IPA’s Behavioural Economics Consultant, have joined forces to reveal how price promotions are destroying brand strength and brand loyalty, while allowing retailers to win valuable market share at the expense of manufacturers and suppliers of fresh produce.
This latest report is a cross-industry follow up to the IPA’s
Price Promotions in a downturn — shrewd or crude? report, published in June 2009.
Says Hamish Pringle, IPA Director General: “As the Institute of Sales Promotion's research shows, £14.04 billion was wasted on price promotions in 2009 and a staggering 90% of their cost comes from the supply side and not the retailer. So while retailers are winning valuable market share in their war against each other, manufacturers are suffering widespread collateral damage to their brand loyalty and an erosion of brand equity. We are therefore very pleased that in our lobby for fairer play, one of the main aspects of the new Grocery Code will be to scrutinise the level of ordering products at promotional prices.”
Says Janet Hull, IPA Consultant Head of Marketing and Reputation Management: “Price promotions are an extremely inefficient use of a marketing budget that rarely prompt trial but attract promiscuous buyers. We hope the new Grocery Code will help to curtail such detrimental activity, and hope that this cross-industry analysis will prepare the climate for more even-handed brand responsible negotiations."
The report is available at a cost of £25 to non-IPA members. One complimentary copy of the report will be emailed to each IPA member agency, and additional copies can be purchased at £10.