‘Asda must drop strategy of blinkered price promos’

Asda’s new marketing director must address the chain’s “blinkered” focus on price-led marketing if it is to compete with rivals, according to retail commentators.

Asda
Asda: Lagging behind competitors

Jon Owen, former director of marketing strategy, has replaced Mark Sinnock and is responsible for Asda’s advertising and marketing strategy.

Experts say Asda is suffering in the face of competitition that are both aggressive on price and strong on quality.

Adrian Watts, chairman of retail marketing agency Live and Breathe, says: “Asda is suffering at the moment due to its blinkered focus on price. Although it’s trying to catch up with rivals like Morrisons and Sainsbury’s but it still has a long way to go.”

Alan Treadgold, head of retail strategy at advertising agency Leo Burnett, says: “Asda is a business that needs a new strategy. There is some merit in a fundamental review of how they present themselves.”

Fred Burt, managing director of branding consultancy Seigal&Gale says: “Asda needs to think beyond price – they need to focus more on the cheerful part of ‘cheap and cheerful’, which has always been at the heart of their brand.”

However, industry insiders comment that Mark Sinnock’s exit after only 15 months signals that his ad agency perspective didn’t fit with Asda’s price led marketing strategy.

Treadgold says that because the perspective is different, “it can be difficult for ad agency people to move into client marketing”.

One ad agency source points out that while Sinnock’s successor Jon Owen, former director of marketing strategy, has a specific responsibility for pricing, “pricing wasn’t Sinnock’s background”.

Jeremy Stern, managing director of independent promotional verification agency PromoVeritas, says: “Retailers move fast, have masses of hard information, many conflicting hierarchies to deal with and advertising is only a small part of the marketing activity.”

Retail marketing experts also remain unconvinced about the strength of the Asda Price Guarantee as a tool to win over customers.

Stern says the Price Guarantee is a form of  “post-marketing” that will do more to provide loyal Asda customers reassurance, rather than to loyal Asda consumers after they have shopped than lure customers from its rivals.

Live & Breathe’s Watts points out that while Asda claims the Price Guarantee has been a success so far and is its rivals don’t seem to be disturbed by its launch.

Recent Kantar Worldpanel data showed the Wal-Mart owned chain dropped market share for the fifth consecutive month and is lagging behind its competitors with 2.5% growth. The supermarket revealed like for like sales fell 0.3% while total sales growth was in the “low single digits” for the 12 weeks ending 31 March.

Wal-Mart international chief marketing officer Rick Bendel says the Price Guarantee is at the heart of Asda’s marketing plans and will help turn around Asda’s slowing growth.

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