When I heard the news of the Asda/Sainsbury’s deal I didn’t initially think much of it. On the face of it big beasts that live in different parts of the jungle coming together – I could see why and over and above increasing pressures on suppliers and concerns over the job security of back room staff, I couldn’t really see why not.
But then my natural marketing instincts took over and I started asking myself all those classic questions, what’s the offer going to be? How will it effect the product and what will the customers be thinking?
And again, typically, I went back to my training, to first principles and four 4Ps.
Just in case you’ve forgotten, it was E. Jerome McCarthy who first suggested the four P's of marketing – price, promotion, product and place (distribution) back in 1960. According to McCarthy they together, made up the most common variables used in the construction of a marketing strategy. And no, I’ve never been a fan of the 7Ps.
From a promotional point of view its perfectly possible to keep these brands apart, occupying as they do different positional offers in the same marketplace. Asda we know major on Value (and quality), Sainsbury’s Quality (and value). And you can see why these primary messages will remain and remain consistent over time. But setting out the position is one thing, getting your customers to buy in to it is quite another.
The issue comes for me when we consider the other three Ps – the place, the product and the price.
Here’s the nub. Say you live, as I do, in a city where there is but a mile between the flagship Asda and Sainsbury’s stores – that’s the place.
Both sell Heinz Baked Beans, Kellogg’s Corn Flakes, Lynx Africa and Warburtons Crumpets etc – that’s the non home-branded selection – thats the product.
My question is simply, at what price will they be sold? Will Asda now be selling identical products to Sainsbury's at the same price or not?
If they do then promotionally there’s a clear disconnect between what they say and what they offer.
If they don’t, are we not in a whole heap of a muddle as to why not?
Clearly the problem here comes from the similarity of the products they offer. Take the obvious example of the airlines. EasyJet and BA. We are all familiar with the place, pricing and the promotional strategies of these two brands and we all understand, and accept, the difference between them. Why, because of the inherent difference in the products. There is no confusion, I can see the price differential and I can understand it because I understand the difference in the product, the flight, the service, the experience.
Here, the product is identical and I simply cannot see a argument rationalised around the difference in the experience, that you, I or the bulk of either stores loyal following would swallow. We park, walk in, pick a tin off the shelf and pay. But at what price?
Whether your Waitrose or M&S, Asda or B&M – in your own world you are what you are and the shelf price is contained in your own home. Well now Sainsbury and Asda are living together. Saying different things but doing very similar things. And how they deal with it, with 4Ps, 7Ps or no Ps will be fascinating to watch.