Goodbye BOGOF, Hello to Promotions That Deliver Long Term Brand Benefits: Wednesday 12th August 2009

To wean your brand off of the BOGOF drug, build equity and a long term sales strategy, we use our OxyGen Promotional Optimisation techniques. Using qualitative in-store research and conjoint promotional execution analysis, we build market models which identify the best strategy for your brand, building in competitor and retailer reaction.

BOGOF’s are likely to be phased out. The Department for Environment, Food and Rural Affairs (Defra) are publishing a series of reports under Food 2030. Developing a sustainable food system is key. The government is worried about:

• Rising prices and commodity shortages in 2008 which highlighted the short and long-term challenges of global food security.
• The 2008 report on food by the Cabinet Office Strategy Unit which highlighted:
  • The pressures of climate change on food production
  • The impact the food chain has on the environment
  • The health impacts of our diets as just some of the challenges which need to be addressed.

So why have BOGOF’s come under the Government’s radar?

A report on food security and sustainability found that BOGOF’s are one of the main reasons why a third of all food is wasted. There are also other waste concerns:

• According to Wrap households throw away 4.1 million tonnes of food each year
• Food waste costs the average household £420 a year
• Single-person households – which now represent almost a third of all homes – waste the most, partly because BOGOF’s encourage them to buy quantities they cannot eat by the use-by date.
• The average person throws away more than their own weight in food annually

Retailers and manufacturers adore BOGOF’s and other free product offers for providing value to the consumer. However, they also damage brand equity and overall brand value. Finding a route to wean consumers off of free product offers is a key brand need.

The Food 2030 paper is the ideal prompt for brands to find the best non-free product route to building sales and brand equity.

Bombarding consumers with a BOGOF offer on a product for a short term ‘blitz’ to raise awareness and boost sales damages brand equity. It has also trained consumers customers into buying offers regardless of the brand. This is a trend which is damaging for the whole industry.

The strongest brands are nurtured and grown over time with longer term promotions on areas such as health, attractions, etc being used to connect and form a relationship with consumers. Areas to focus on are:

Quality: Quality is a key ingredient to any brand and providing a consistent quality is vital. Higher quality brands have been proven to achieve a higher market share and higher profitability compared to inferior competitor products. BOGOF’s fly in the face of brand quality?

Positioning: Ensuring your brand has a clear and unique position in the market is vital. Whether this is achieved through the brand name, packaging, quality, image or service standards do BOGOF’s reflect the position you want for your product?

Repositioning: Over time any brands credentials will need to be reviewed. Re-inventing and adapting your brand to reflect a change in consumer tastes is vital as the market matures and evolves over time. Repositioning your brand using BOGOF’s is probably starting off on the wrong track.

Determining a promotional strategy is a key part of the brand planning process. At The Oxford Research Agency we have developed a suite of promotional excellence tools to help you select, develop and identify the impact of a promotional campaign on both sales and brand equity. It also builds in competitor reaction and alternative competitor campaigns to reveal the best routes for:-

• Sales
• Brand Equity
• Developing a brand platform (e.g. Health)
• Reacting against new launches
• Building consumer loyalty

Incorporating qualitative in-store behaviour with in-store filming and interviewing, along with our OxyGen Promotional Optimisation approach, you can build significantly more impactful campaigns that deliver long term sales and better brand equity.

We will have to wait and see how food manufacturers and retailers will respond to Defra over the coming months and whether brands rise the challenge of weaning their brands off of BOGOF’s. Long term, it’s critical to brands to find other promotional mechanics which deliver brand health and consumer rewards.

For NPD, Packaging and Shopper research expertise to ensure your brand maintains its position within the market (whatever happens), contact Andrew Tharme at The Oxford Research Agency (andrew.tharme@tora.co.uk or call 01865 728272 / 07970 962091).