Reckitt Benckiser seeks promotion “de-escalation”
Reckitt Benckiser (RB) is talking with retailers to try and find ways to “de-escalate” the volume of price promotions on its brands after claiming previous “mad” levels have reduced the effectiveness of wider marketing campaigns.
The Finish, Vanish and Dettol maker says the recession has left customers expecting price and sales promotions on products, particularly in categories such as household. Jérome Lemaire, UK marketing director of RB told Marketing Week price promotion rewards customers and can lead to a “short-term marketing share spike” but does not grow the category.
“Consumers got used to it [promotion]. [The mindset was] ‘if you don’t buy one get one free (BOGOF) you are stupid’.
“It [reducing the levels of price promotion] is going to be a journey with customers. We need to be committed to doing this de-escalation in some categories. There will always be some level of promotion but on some categories we went mad. It is very difficult. When consumers’ only criteria is to do BOGOF or half price then you can do the most engaging campaign but they don’t care. They will buy the competitor if they are half price.”
The imbalance, Lemaire adds, “puts even more pressure” on the rest of the marketing mix .
He acknowledged the progress will be gradual and that the company will see “over the next year whether we managed it or not.”
Media spend will be stable or increased across its brand portfolio this year, Lemaire says, with major activity for Finish, Vanish and Nurofen planned. Last month, the company credited its decision to increase the proportion of revenue it reinvests back into brand building for driving a 6 per cent increase in net revenue in the first-half of its financial year.
Meanwhile, RB is planning to ramp up its e-commerce operations for some its brands or groups of brands over the next two years. Lemaire says e-commerce “makes sense” for brands in categories such as household or healthcare and will be a “top priority” for selected brands.
RB began selling a new Cillit Bang variant exclusively through Facebook in February. However, Lemaire says the “experiment” was “not right” because it was not the right product.
Despite a commitment to e-commerce, e-tailing through partner sites such as Tesco and Boots remains the priority, Lemaire adds:”E-commerce is important and interesting for the future but the reality is e-tailing is the priority. It is a world we know.”
