Product sampling as a medium

Premium grocery brands are under pressure from own-label, budget brands and, recently, hybrid approaches such as Tescos.

Product sampling as a medium

a new promotional approach for established premium brands?

Elaine Hunt and Colin Jupe

Premium grocery brands are under pressure from own-label, budget brands and, recently, hybrid approaches such as Tesco's. Their promotional options have traditionally been advertising, predominantly on television, and in-store promotions. But bo

Premium grocery brands may be hard to define, but are easy to recognise. They enjoy very wide availability, instant brand recognition, a long history of successful marketing, consistently high quality and, in many cases, innovative development. But the dominant position of such brands has been considerably eroded over the past decade. The share of own- label is now of the order of 50 per cent and, more recently, the growth of discounters has boosted the sale of budget brands. This has led some multiples to produce versions of budget brands under their own label, e.g. Tesco Value. Stephan Buck of Taylor Nelson AGB, with others, has shown that these pressures are having a significant impact on the market share of even some of the best known premium brands. However, he reports a strong link between TV advertising (regarding both the product categories which make the greatest use of it and the people who watch it) and loyalty to premium brands. So resolute commitment by premium brand manufacturers to maintain their advertising budgets might hold off the many challenges their brands now face. Unfortunately that policy may prove difficult over the next few years. Exhibit 1 suggests that the fmcg manufacturers accept the importance of advertising. Their expenditure increased by over 60 per cent in real terms between 1982 and 1988. Even in 1992, in the depths of recession, it remained almost 50 per cent above the 1982 level. Moreover, fmcg share of total advertising, which remained fairly stable through the 1980s, increased significantly between 1988 and 1992. Since the great majority of fmcg advertising is on television, where coverage is relatively stable, over the past four years the fmcg companies have been in the happy position of getting more OTS for their money. In a slump, the price of TV advertising falls steeply, which in general favours fmcg, particularly grocery, where demand is not greatly influenced by seasonal factors. As the economy moves out of a recession, however, the price of television advertising tends to rise as steeply as it formerly fell. Thus at the very time when premium brands appear to be coming under most pressure, the cost of maintaining their vital advertising exposure seems set to increase sharply. In the past, such increases in TV costs encouraged premium brands to step up below-the-line activity, especially price promotion. But we have already seen that over the past four years the position of brand manufacturers retailers has weakened. So the real cost of price promotions has increased: more importantly, the competitive advantage they offer at point-of-sale is being threatened. This leaves manufacturers with a dilemma. Both of the marketing interfaces with the consumer, the advertising media and the retail outlets, are likely to become more expensive to use, or more difficult to control. But the need for premium brands to maintain consumer loyalty grows ever more pressing with the increase in competition. Is there any other means by which manufacturers can establish links with consumers? The idea of product sampling is not new. In one form or another it is probably as old as marketing itself. But sampling has usually been used sparingly by manufacturers, mainly as a way of introducing new products. When asked about their comparatively low usage of sampling, manufacturers tend to point to the initial expense of 'donated' product and special packaging. This reluctance has been compounded by past difficulties in targeting recipients, which led to potential waste. The effectiveness of product sampling has increased through improvements in data collection and processing, pre-screening and targeting of recipients, and improvements in field control operations. To what extent does in-home sampling compare with media advertising and retail promotion as a means of generating consumer loyalty? Some interesting light is shed by recent qualitative and quantitative research in this area, amongst both client users of the medium and amongst consumers. User attitudes to sampling seem to be changing quite rapidly. A 1992 survey showed sharply contrasting attitudes, often held by the same people. On the one hand, there were doubts about the ability of the smaller door-to-door companies to carry out anything more than the most basic distribution efficiently. On the other, there was some belief that sampling was a cost effective way of communicating with potential consumers. For sampling to play a larger role in consumer marketing campaigns, the activity would require satisfactory levels of quality control and to be properly monitored in effectiveness terms. Consumers' attitudes to sampling are quite interesting. Past research has indicated a relatively low level of spontaneous awareness amongst consumers about product sampling as compared with other media activities. However, a more detailed 1993 study by ourselves shows that housewives appreciate sampling and indeed find it a more helpful communication in both new and existing products than either television advertising or money-off promotions. Exhibits 2 and 3 compare the perceived usefulness (in the case of a new product) of the different promotional media, and the degrees to which they say have ever acted on one of them. These data of course concern sampling in its most useful role - as part of the launch of a new product. But to what extent may it influence purchase behaviour of established brands, for instance those outside the consumer's established brand repertoire? As Exhibit 4 shows, respondents claimed that receiving and trying a free sample of a product (which they had `known about', but had never found sufficiently attractive to purchase), had broken the cycle of product loyalty, and had led them to include and/or substitute a brand in their purchase repertoire. Neither advertising nor price promotion were acknowledged to have the same impact on existing purchase patterns. The unexpected and enjoyable aspect of sampling, freely acknowledged by respondents, seems to build a bridge between recipient and donor in a way not shared with other forms of manufacturer/consumer communication. This ability to foster goodwill amongst recipients is an important by-product of sampling, although one of which manufacturers have made little use. The 'gift' of a sample smooths the way for cooperation, and creates a desire for reciprocity between manufacturer and recipient. Also, nearly 90 per cent of respondents said that they would be prepared to answer some questions when the samples were delivered. In this way it becomes possible for manufacturers to improve their customer databases and forge closer links with them at the same time. A number of conclusions may be drawn from this research. Not all types of product or campaign are equally well-suited to the use of sampling techniques, but the scope for existing fmcg brands appears much wider than is usually recognised. Similarly, whilst no one would suggest that sampling could completely replace other marketing methods, such as TV advertising or price promotions, there are considerable possibilities for combinations of these various techniques. This seems to be an important consideration for fmcg manufacturers at a time when the intermediaries they deal with for advertising and promotions, the TV contractors and retailers, are likely to be imposing increasing pressure on margins. In particular, sampling is a way of forging a direct link between producer and consumers when competing with own-label. For the future, the distribution companies have to demonstrate their efficiency, using methods which can be , like other media. Equally, user-companies have to learn how best to use sampling, to integrate it within their marketing strategies, and to measure its effectiveness. Nevertheless the great improvements in the use of databases, allied to the unparalleled pressures under which the manufacturers of premium brands are now operating, suggest that the opportunities for product sampling are considerable. The 1993 consumer research studies above comprised: 1. Six group discussions with BC1C2 shoppers, appropriately structured and screened. 2. A quantitative study of 205 respondents, similarly structured. Both were conducted by The Human Factor for MRM Distributions plc. The particulars of these studies, whose investigations extend considerably beyond the 'headline' findings cited in the narrative, are obtainable from the authors.