Tesco & Unilever: Brexit or a lesson in pricing?
Over the last 24 hours I’ve heard all the debate, yet I still haven’t fully understood why I can no longer order my Marmite online.
As we all know, a Marmite lover will pay over the odds for the black nectar. You either love it or hate it, remember!?
So what’s really going on?
Having helped many clients manage their pricing communications over the years, I’ve decided this is a bold move by Tesco. It will either help their brand perform for future price increases, bluntly positioning them as a defender of value for their customers, or it will crucify their price position for years to come. Especially if it emerges they could simply absorb the fluctuation and manage this more carefully.
Managing brand value in ‘distribution’ is a tricky game. And yes, retailers are distributors of products.
You have to manage costs but the value you offer goes beyond just moving the product. To be truly sustainable your pricing strategy must be about how you make your customers feel, how reliably you service them and how you protect them from the changes the environment brings.
So is Tesco just giving us a master class in how to prepare the customer for a wave of price increases to come? Cleverly using Brexit as an excuse to lay the foundation for their future pricing strategy?
Or is Unilever being unreasonable? I mean, it’s not like they invest a huge amount in managing quality, production, how they make me feel and ensuring our love affair continues. Right?
I might think Tesco is fighting for me, and my love of reasonably priced Marmite? (Or will they introduce a substitute? God Forbid!)
Or will I go where I can get Marmite? Unilever also know me well, and knows I’ll pay over the odds – and walk to another distributor – for their brand.
Brexit or not, branding just got interesting.
Author: Pamela Thompson