It Happens in Italy: Three Different Promotional Offers for the Same Coffee

Articles
December 28, 2015

It Happens in Italy: Three Different Promotional Offers for the Same Coffee

This Italian case shows that comparisons on food expenditures are used to grasp what lies beyond the conventional communication.

Antonello Vilardi, ITALY - RETAIL WATCH (www.retailwatch.it)

KIMBO Coffee (consisting of 250 grams in packs of two pieces) has been part of the institutional promotion of COOP by November 26 (Thursday) to December 9 (Wednesday), of CONAD from November 26 (Thursday) to December 2 (Wednesday) and even ESSELUNGA from November 30 (Monday) to December 12 (Saturday).

The area in question is that of Tuscany (the beautiful region located in north-central Italy), where in addition to ESSELUNGA and others retailers are working actively CONAD DEL TIRRENO and UNICOOP TIRRENO.

Our analysis presents clear aspects to make reliable comparisons. In fact it applies to:

1. promotional periods which coincide;

2. the same territory, with competitors located a short distance from each other;

3. three of the most famous and important signs of italian supermarkets (COOP, CONAD and ESSELUNGA);

4. the same well known article of the vast field of food products (KIMBO Coffee). 

The following data highlight a specified parameter, represented by the cost per kilogram of product (*), which allows to measure on an objective value the variety of types of promotions. 

The comparison between the prices sketches the situation according to which the three different operators invest their resources to encourage customers and especially emphasizes how, in purely hypothetical, CAFE' DO BRASIL, which owns the KIMBO brand, allows it depending of its partners.

  

CAFE' DO BRASIL SpA, despite the name, is an Italian company linked to Naples and entrepreneurship family (Rubino Family), which produces coffee brands KIMBO and KOSE'.

The Brazilian name evokes clearly the land of origin of the beans, the management and the production criteria aim to ensure culture and tradition of the Neapolitan coffee.

KIMBO is now a well known brand, it follows LAVAZZA in terms of quality and market leadership; KOSE' is instead the brand designed for less demanding consumers, those oriented buying coffee at the lowest prices.

Our graphic evidence suggest in Esselunga the competitor more happily placed in convenience.

The analysis reveals some aspects that are not “insignificant” to those who move regularly in supermarkets (retailers and consumers):

1. none of the three competitors are using the product,inside the campaign, with the same procedures promotional: Esselunga grants a "discount only for loyal customers" of 50%, Conad recognizes the “2x1” which essentially is intended to mean "take 2 but pay for 1", COOP launches the article on the front page of the leaflet with a net price of € 2.99 (the three retailers so not allow the consumer the opportunity to make a clear and immediate comparison of the same product in the same range of promotional period);

2. both COOP that CONAD propose the article on the front page of their promotional catalog, but are precisely the ones that offer less convenience in comparison;

3. discount Esselunga worth half the amount in full, but necessarily requires the ownership of "loyalty card";

4. the advantage admitted by CONAD is realized only if the consumer lays in the shopping cart at least two products;

5. values, in relation to the kilogram, show how Esselunga is cheaper than Conad seven cents;

6. the same values indicate how Esselunga is cheaper than Coop nine cents;

7. trying to get back, with the data available, to the prices of the product, without any promotion, KIMBO coffee 250gx2 should cost in Esselunga about € 5.89, in Conad € 5.96 (positioning seems to favor Esselunga for seven cents);

8. Coop presents a net price of promotion, devoid of framing, that does not provide information on the scope of convenience in relation to the usual price: will be appropriate, in the end, since the product stands at € 2.99 on the front page ?  Probably YES, from the point of view of Coop…

in fact, comparing the cost of a product so visible in the dimension of institutional promotion, facilitated by further information, it would not have helped to consolidate the impression of COOP what really convenient;

8. that KIMBO brand, in the same format, appear simultaneously on the leaflets of three major retailers, within a competitive area very troubled as Tuscany, evidently fulfills ambitious industrial projects conceived by CAFE 'DO BRASIL, but raises spontaneous questions about the foresight of promotional calendars of the most important and widespread food distribution.

Everything creeps the opportunity to make honest measurements, and then asks: "confidently make the daily food expenditure where it is solemnly and repeatedly proclaimed the sentence “CONVIENE” (which translated from Italian to English means "that which is cheaper"), also and above all on the first page of the promotional catalogs, it will be inexperienced ?”.