Price Promotion Does Not Work, Claims ITV

According to research undertaken by the ITV Marketing Group and Taylor Nelson AGB, discount marketing does not increase market share.

The survey focused on consumer response to brands which follow a price promotion policy to those that do not. The survey looked at instant coffee, machine wash and yellow fat products which had more than a 5% discount or had extra free packs. Consumers were identified by their volume of purchases of discounted products; Deal Loyal, where 2/3 more than the average is spent on price promotion; and Real Loyal, where less than 1/3 is spent.

The results showed that although price promotion has increased over the last three years, only a small amount of consumers purchase discounted products (15%). With Real Loyal consumers, a proportion rarely bought an item on promotion.

It was also found that Deal Buyers were different from Budget Buyers. Deal Buyers tend to be ABC1 with large households who shop at Sainsbury, Tesco and Safeway. Budget Buyers were C2DE, over 35, not working and shopped at smaller outlets, such as Kwiksave. Real Loyal buyers reflect the population as a whole.

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