Ah, Mr Bond, we’ve been expecting you: Wednesday 9th February 2009

ASDA CEO Andy Bond calls for focus on Value not NPD

In his role as guest Editor of The Grocer this past weekend, Andy Bond told reporters that suppliers must focus on Value and not NPD. Additionally, listings would only be made on a strong business case and a very competitive price.

Will this approach prove successful for both ASDA, and its suppliers?

In many ways, Andy Bond has a point. Today, consumers are incredibly focused on price and value. Evidence is seen in everywhere, with Birds Eye Family Favourites range at £1 and the McDonalds 99p menu, as classic examples of credit crunch offerings.

Short Term
Although there is a strong focus on value today, this is not necessarily going to be the case in 2-3 years time. Much NPD takes anything from 3 months to 2 years to complete, with lots of new ideas being developed for 2010 and 2011. To halt NPD now would significantly harm brands competitiveness in the future.

Re-Pack, Re-Price
Andy Bond also discussed splitting products into different packaging formats, with bulk packs for families and small formats for smaller households. This process can be difficult for manufacturers due to new packaging machines required. With the quantity/ price relationship also changed, research is needed to ensure that the right decisions are being made for today and the future.

Long Term
As is often the case, it’s a question of balance. Over the next 18 months, consumers will be focused on value, and manufacturers will need to consider designing their products to fit motivating price points. However, killing off NPD programmes to focus on value only, would be a recipe to future disaster.

Getting Listings
Building a business case for listings is very simple to do and with the help of research, supporting volume and value data can be built to develop the sales case for listings. The Oxford Research Agency conducts hundreds of such studies every year and can help you identify the performance of your NPD, tailor your price points and maximise packaging to build a strong business case for listings. Speak to us to find out how you can build the string business case needed.

For more information on The Oxford Research Agency, visit www.tora.co.uk

To discuss your next project, speak to Chris Sinclair on +44(0)1865 72 82 72, or email chris.sinclair@tora.co.uk