SHIFT TO BRAND BUILDING GATHERS MOMENTUM

Posted on Mar 08, 2011 - 10:43 AM

Yet another major FMCG marketer has announced its intention to move away from promotions and focus more strongly on brand building in-store.

Food giant Campbell’s recently reported increases in its soup sales by volume despite a cut in ad spend. However, at the same time its sales by value slumped, in part due to increased use of promotions. Check out the story here.

“We haven’t got the kind of lifts that would have paid for the kind of promotional activity that we’ve done across the first half of the year,” Campbell’s chief financial officer Craig Owens admitted. Owens indicated Campbell’s would now focus again on building its brands.

Among Campbell’s more innovative methods of engaging shoppers is an umbrella ad campaign covering ready-to-serve and condensed soups.

“Looking ahead, we’ll begin to shift our marketing mix from trade to brand building activities, including this advertising and additional consumer spending,” Owens said.

“We recognise that the shift will negatively impact volumes in the short term, but we feel it is the right move toward improved category health.”

This change in strategy follows similar statements by the likes of Procter & Gamble, and comes after a recent study found that the effectiveness of promotions was falling.

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