Retailer branding of consumer sales promotions. A major development in food marketing?

This article examines retailer branding of consumer price promotions. It discusses the mechanics of price promotions, consumers’ reactions to them and the benefits that accrue to those that use them. It describes how large food retailers can now deploy branded price promotion systems that are fundamentally different to ‘traditional’ price promotions in both their mechanics and their effects on consumer decision processes. The article describes a field experiment that compared the performance of a food retailer’s branded price promotion system with that of a generic (manufacturer) price promotion. The research involved three experiments that covered two food categories (sliced bread and margarine) and two levels of discount (10% and 20%). The results indicate that food retailers are able to attach powerful brands to their price promotion systems, and these brand heuristics can significantly increase consumer purchase intent relative to an equivalent generic/manufacturer promotion. This incremental heuristic effect was stable in both categories and for both levels of price discount studied. These results are consistent with the predictions of alternative, non-cognitive and heuristic based models of food consumer choice that have been published recently in ‘Appetite’.

► The branding of retailer price promotions is investigated. ► The results demonstrate that retailers can brand price promotions. ► The results indicate that these are the most powerful brands in the food industry. ► Consumer response to these brands is non-cognitively, heuristically driven. ► These results are inconsistent with the paradigm of the reasoning food consumer.