Magazine article Marketing

When Price Cuts Can Make Sense

Magazine article Marketing

When Price Cuts Can Make Sense

Article excerpt

Procter & Gamble's decision to bring its everyday low pricing policy to the UK could change the balance of power between retailers and suppliers. For years, manufacturers of branded goods have accepted the growing ability of store groups to influence, or even control, their marketing activities.

As Andrew Seth has said in these pages, the channel has taken over from the consumer as the real focus of business activity in too many companies. The question has become not, 'what does the consumer want?' but 'what will persuade the retailer to give me more facings?'.

Perhaps the single biggest contributory factor to this uncomfortable state of affairs has been the rise and rise of own-label.

By cutting the price of its branded goods, P&G is at last fighting back. Price cutting can often seem like a counsel of despair - the last weapon in the armoury of a struggling brand. But in this case it's a sound, strategic, decision. It cuts away the ground from beneath the feet of retailer own-brands, and makes it very difficult for the retailer to respond.

If a supermarket opposes price cutting by brand owners, what does that say to the consumer, used by now to the idea that the retailer is a friend with their best interests at heart? …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.