The recent news that Asda will be ramping up its price cuts has serious implications for its image, not to mention its sales performance.
Just a few weeks ago, Tesco announced a substantial drop in market share due to its relentless focus on the ‘Big Price Drop’. Tesco failed to meet consumers’ appetite for quality and value. I would therefore strongly advise that Asda does not follow in its footsteps. Today’s customers are aware of the issues that come with dramatic price cuts - all too often it means pressure on farmers, terrible conditions for producers in developing countries, or a lack of regard for quality.
Asda must be mindful of how it chooses to engage with the majority of customers that not only want value for money but value-added extras. Consumers want to believe in a brand’s beliefs and values. Consequently, it’s not just the price war supermarkets are fighting, but the escalating battle to maintain customer loyalty.
Tesco has since promised to plough millions into improving the quality of its fresh food, the choice of products it sells as well as its customer service. At least it has recognised the importance of up-weighting emphasis on quality. But is this enough to rebuild consumers’ perceptions of the brand? The likes of Asda and Tesco need to embed beliefs into their marketing strategies.
The key to a successful strategy lies in the brand’s ‘beliefs’: the positive, human convictions that form its foundations. Accessing and successfully using these beliefs can fuel the higher purpose that differentiates them from others in the minds of consumers. This can be a source of much-needed growth, rather than a philosophical exercise.
A brand that stands up for its values is wholesome Waitrose. During the Christmas period, Waitrose was able to provide price cuts but did not forgo emphasis on customer service and quality. The 2012 UK Customer Satisfaction Index highlights Waitrose as achieving one of the highest customer satisfaction ratings across retailers, also making one of the greatest gains in market share over Christmas.
To take the lion’s share of consumer confidence, Asda must switch focus from the monetary value to consumers’ values in order to take the brand deeper into the hearts and minds of those that matter.