shopperSight News : Issue No. 69 2012-10-24

CPG BRANDS PARTNER WITH TESCO TO GIVE GAS DISCOUNTS

Tesco has launched a co-marketing promotional deal with several brands including Nescafe and Heinz. Unlike typical discounts on gas, which require shoppers to spend a certain amount before they are eligible for cents off, this United Kingdom grocery retailer rewards shoppers with 10p off of a liter of gas for each participating product they buy. The list includes Robinson's Double Concentrate, Nescafe Original, Andrex toilet tissue, Fairy Non-Bio washing powder and a range of Heinz products. The discounts can be combined to offer up to 50p off per liter, a significant savings. Tesco calls it the "unbeatable" promotion since it gives shoppers gas at prices at 2008 levels.

As reported in Marketing Week, Clive Black, an analyst at Shore Capital, congratulated Tesco for "packing a punch into its marketing." Black explained, "50p/liter certainly catches the eye and may gain some customer traction … the relatively high ticket price to gain access to the fuel discount at Tesco may be a little off-putting to many households. However, if Tesco can sell this promotion well, it may lead to additional footfall and so register on the market share dials." On the other hand, Black pointed out the promotion features shelf-stable products that allow shoppers to stock up, thereby potentially lowering future sales and impacting retailers and manufacturers negatively.

WHAT DOES IT MEAN TO ME?

This is a great example of a co-marketing promotion that transcends individual brands in favor of a retailer's need for increased traffic. In particular, the linking of the sale of specific products to the amount of a discount is compelling. The retailer has spread the cost of the promotion across several manufacturers, optimizing the savings to the shopper. Look for ways to pair purchase of your brands to a retailer's objective, perhaps a store-branded product or service. By bringing the power of your brand to a promotion, you are showing the retailer that you are willing to partner up for the good of both companies. In turn, the retailer may give you special consideration as you negotiate trade deals.