Milking it for all it’s worth

Today, a silent battle is being played out across the supermarkets of Australia. It is the age old fight for the hearts, minds and credit cards of the every day man and women. I say silent because the real hostilities are not obvious to the public but well disguised as a war between the food moguls, using the staple necessity of milk as a weapon.

According to the supermarket gurus, the consumer thinks it’s a no brainer; cheaper milk is just what’s needed in a cash strapped society. Marketing has always held a sacred place for food manufacturers and resellers, who actually believe they’re good at it, and major supermarkets are now indulging in a strategy which is based on a long held assumption that the Australian consumer is price fixated.

The idea that cutting the price of milk will win them favour and with it garner a greater share of the market place is predicated on a belief that we, the Australian public are driven by some sort of greed and that we’ll buy anything if it’s cheap.

I know it is true that price shoppers exist, how many I cannot tell. However, I also know that no matter what motivates the buyer, this latest strategy of selling cheap milk has very little chance of achieving its ultimate objective for any organisation. The goal has always been to win the loyalty of more customers and thus garner a greater marketing share. What the supermarket giants want to do is buy the consumer’s loyalty and that’s fine, but the milk tactic has a huge left hook.

If, and I stress the word ‘if’, the consumer can be bought, then it’s simply a matter of your competitor buying them back! That would be a floored strategy and it is here that the real, silent battle is taking place.

Somewhere amongst all this left brain logic, created at the Boardroom table, is the little guy, the producer. The local farmer with kids and a family who work their butt off and the only reason their strides are shiney is because they can’t afford another pair. We know they are there and many consumers don’t like what’s happening to them – so much so that the guy who’s cutting the price is fast becoming the bad guy.

Silently, some of us are beginning to wonder if paying an extra dollar to keep our farmers from going belly up would not be a cheaper and more human exercise.

My experience tells me that price is not the number one consideration for many consumers. In the 1990’s as the Marketing Director of a major food producer we engaged in a survey to discover the power of generic brands – The Black and Gold label, the white plain wrap, cheap food and goods, packaged by the supermarkets. The findings were amazing. The research showed that the majority of people would willingly purchase generic labels providing they were non-consumables. Even toothpaste couldn’t get a berth, anything that went into the body was a ‘no no’, they’d stick with the brands they trusted. And more amazing yet was the finding that over 70% of consumers preferred branded goods over generic foods when it came to feeding their pets. So price didn’t come before trust, nor did it matter that the supermarket put their name to it. It wasn’t fair dinkum food and the average person determined the death of plain packaged cheap goods.

Price is a logical proposition but it is our emotions that guide us and the giants need to understand that. The only unemotional factor in this whole sad marketing exercise is that we professionals know that if you improve the service, create real friendliness, develop shopping as an experience instead of a chore and concentrate on delivering value for money, you can have the lion’s share of the market because you’ll be alone.