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“Special promotion (special-price promotion) posters are everywhere, and long queues form outside supermarkets.” Research shows that price is one of the three most important factors in the supermarket-consumer relationship. Thus, in supermarket competition, it’s common to see forced price cuts to win consumer support.
“Your product has been put on special price, and the cost will be deducted from your payment.” Some large supermarket chains, leveraging their channel advantages, often publicize special-price offers without prior notice to manufacturers. Manufacturers whose products are discounted often have no choice but to accept the supermarket’s “act first, report later” approach.
Sometimes, product special pricing means disrupting the price system, even risking the collapse of mature market products. Therefore, manufacturers must take preventive and responsive measures against supermarket special-price promotions to avoid being caught off guard.
Understand the Process and Take Preventive Measures
First, information is the trigger for special promotions.
Before a supermarket conducts a special-price activity, there is a process, and information collection is the most critical step.
Information collection includes both the purchasing and operations staff’s own sources and market research reports. Market research reports are often the trigger for supermarket special-price activities. Unlike traditional retail outlets, modern large supermarkets conduct market research several times a week, visiting specific places such as other stores, convenience stores, local traditional retail outlets, and wholesale markets to survey prices of certain product categories or to track trends and dynamics, so as to adjust their own price systems and product structures in a timely manner. Additionally, purchasing and operations staff have their own information channels to learn about unfavorable information.
However, whether from market research or internal sources, manufacturers can never guarantee that all terminals and channels adhere to the established price system. Thus, differing price information naturally leads to special-price disputes.
Second, coordinate relationships with store market researchers.
Market research is the trigger for store specials, so it’s essential to stabilize relationships with market researchers. Most supermarket market research activities are regular—frequency, personnel, and targets can be identified. Knowing when research occurs, who conducts it, where they go, and which product categories are involved makes it easier to take relevant measures.
You don’t need to ask these researchers to help you avoid anything; just having them inform you when they spot abnormal prices gives you time to check, explain, and handle the situation. Since supermarkets will inevitably run specials, the goal is to ensure your products aren’t chosen.
Third, show your cards directly.
In cooperation with stores, don’t avoid the special-price issue; address it proactively. Directly understand the worst-case scenario and also proactively tell store buyers: “We try to avoid sudden specials in other stores, but we’re not afraid of them either.” This implies, “Don’t use this tactic to scare us; we’ve seen it all as suppliers.”
Being straightforward with store buyers often works well. Facing an experienced and capable supplier, store buyers generally won’t provoke them.
Fourth, maintain a positive attitude.
Supermarkets often don’t play by the rules, and manufacturers must fully recognize this. Price promotions are inevitable in cooperation with supermarkets; the key is to face them positively.
If you don’t get advance information, be mentally prepared and have countermeasures ready.
If you get advance notice, actively communicate with the supermarket, analyze the impact of the special promotion on the product price system, and recommend an alternative product for the special price.
Generally, the substitute product should have attractive packaging, a price close to the mature product’s selling price, and ideally have been sold in that store for some time. This gives the supermarket a way out, meets its need for a special promotion, and protects the mature product’s price system.
Change Perspective: Wield the Double-Edged Sword of Special Promotions
After a supermarket issues a special promotion notice, manufacturers can plan promotion formats based on the product’s life cycle, create on-site sales atmosphere, and purchase favorable positions for displays.
Additionally, if manufacturers can quickly shift perspective and develop counter-strategies during supermarket special promotions, they can achieve unexpected results. Supermarket specials are a double-edged sword for manufacturers: the selling price in supermarkets serves as a price benchmark. Poorly executed specials not only hurt short-term profits but, more importantly, can disrupt mature product price systems. Conversely, if used well, they can increase sales and boost product awareness.
Counter-strategies:
If a mature product is confirmed for special pricing, quickly adjust the activity format. For example, change it to a lucky draw and give away fashionable, novel promotional items that match the product’s cultural connotation.
Use special promotions to expand the market and increase sales. However, it’s best to choose products in the growth stage, launch the activity half a month before the peak sales season, and keep the activity period within 7–10 days. Too short a period means limited reach; too long means it’s not a promotion but a pure price cut.
To counter the wave of supermarket specials, companies can use “strategic products”—products with some market sales and known prices but lukewarm market performance—for promotional activities.
For example, a certain Anhui liquor company’s ×× old wine sold in a market in Anhui for a year but didn’t perform well, with annual sales under 6,000 cases. During the 2005 Spring Festival supermarket specials, the company launched a “buy one, get one free” activity. Since consumers had accepted the 24 yuan/bottle price, a buying frenzy formed from the 20th day of the twelfth lunar month. During the Spring Festival, sales of that single product exceeded 30,000 cases, and the product dominated white liquor sales in the 15–30 yuan/bottle range in large stores.
- If you know your product is on the special-price list and the supermarket has heavily promoted it, communicate with the supermarket as soon as possible to try to substitute a new main product for the special price.
If communication fails due to time constraints, simply amplify the special promotion atmosphere: create eye-catching product displays, hang promotional decorations, and find an appropriate promotional theme, such as winning an award or company honor. If no reason exists, say it’s the product’s anniversary or that sales in that store have exceeded a certain number of bottles. In short, “have a just cause.”
Additionally, during the special promotion, station promotional staff in the store for one-on-one communication with consumers, explaining the purpose of the promotion. Use prominent posters to inform consumers of the promotion period, especially clearly stating the date when the product returns to its original price, to reduce consumer sensitivity to the special price and prevent misunderstandings about the price cut. If the reason for the special price isn’t explained, consumers might think the product is expired or defective, harming the brand.
While the supermarket runs the special promotion, communicate with wholesale and retail channels, clearly telling them that the special price is not the manufacturer’s intention but forced, that the large store didn’t notify the manufacturer in advance, and that the product will soon return to its original price, as indicated on the posters. Ask channel partners to help communicate with consumers.
- If a supermarket requests a special promotion in advance, companies can offer slow-moving products. This satisfies the supermarket’s need and clears inventory—killing two birds with one stone.
Take the Initiative to Change the Passive Situation
Passive marketing reflects a company’s lack of competitiveness. Instead of waiting for supermarket special-price notices, turn yourself into a market weapon and take control of promotional initiatives to win resources and market share. From the supermarket’s perspective, a supplier that cooperates so well is a quality customer, deserving policy preferences in future activities, turning a tense relationship into a good partnership.
First, every supermarket’s promotions follow patterns. Generally, promotions occur during holidays, festivals, weekends, new store openings, anniversaries, etc. As a supplier, discern these opportunities, prepare promotional plans in advance, and ensure an orderly market system.
Second, co-plan marketing activities with supermarkets. With insight into promotional timing, turn the tables: combine your single-product promotions with the supermarket’s overall promotional activities. This not only shows support for the supermarket’s activities and secures a head start, but also allows you to request promotional support, such as in-store displays and prime positions, for greater returns.
Third, take the initiative to capture market share in your category. If your brand isn’t a leader locally and has low market share, failing to proactively use supermarket promotions to let more consumers know your brand, try your products, and accelerate market capture will lead to elimination. Therefore, proactive action is key to brand marketing; only then can the brand grow.
Fourth, if multiple products are in the same supermarket, proactively offer one product for the special price while intensifying promotion of other products. This can be seen as product promotion, using the special-priced item to drive sales of others, and may also become a profit center.
Fifth, proactively conducting promotions helps coordinate relationships among multiple supermarkets. Conceive a theme, communicate with several supermarkets, and if possible, roll it out comprehensively to create a large-scale promotional effect in the local market, winning a chance for brand promotion and sales growth. ■
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