Dove will see a record Halloween with this promotion! With their entire 500ml range at Morrison's on sale for £2 they are guaranteed to have a strong market share, in return for giving up 38%-46% of the regular sales price and virtually all of the profits.
What is wrong?
Too deep, too broad and too long.
When Dove was launched in Europe it was a premium brand with a distinct proposition: skin cleaning without the aggressiveness of standard soap. Dropping the price by 40% does not reflect this positioning. Loyal shoppers may even start to wonder what’s wrong with their favourite brand? Most importantly, with a 40% discount it is impossible to remain profitable – yes, we got another Halloween cadaver.
Screaming for attention when you do not get any may be the right thing to do once in a while. But putting all your 500ml products on promotion at the same time simply does not make sense. The carefully formulated “Pro Age”, “Silk Cream” and “Pampering Shea Butter” variants are unrespectfully thrown into the game along with the “Deeply Nourishing” variant. We suggest to replace them all and launch the new Dove “Deeply Discounted”.
Most of us will long have forgotten about Halloween, when end of November this Dove £2 promotion is still running! It basically means no profits in November for Dove 500ml. Please don’t tell shareholders, Unions, employees.
Why do companies run promotions like this?
Let’s start with the obvious: retailers demand suppliers to invest in promotions. Suppliers use promotions to steal sales from competitive brands. And then there is the hope – less obvious and less realistic – that promotions will recruit new consumers for a brand. It is also a vicious cycle. Skipping one big promotion leads to negative year-on-year comparison sales figures. And who loves that?
And let's come back to the economics. Margins on many personal and home care products are very healthy. It is not unrealistic that even at a -40% discount the supplier still makes a profit. And buying a £2 Dove bottle is an unresistible offer for many and will keep shoppers in the brand. So perhaps not such a horror story after all?