Marketing perspective factory ( Brand trust)

Brand trust likes a huge man in the marketing

Yan Zhang February 2016


Tesco is one of the most famous brands among the supermarkets. However, the BBC new reported that Tesco knowingly delayed payment to suppliers. The purpose was found by supermarket ombudsman that Tesco in term of improve its financial position. (Simpson, 2016) At the same time, there was £ 250m black hole in the accounts in 2014. These kind of scandals could damage the reputation of the brand and lose customers’ loyalty. Laith Khalaf, a senior analyst said “The company is not out of the woods yet, but has at at least started on the slow path of recovery.” Facing a difficulty, Chief executive of Tesco Dave Lewis said that Tesco will focus on changing the relationship with suppliers and customers and adopting the recommendations positively from public.

Tesco suffered a huge challenge after crisis. Competition is not only rife in wholesale supermarkets but also in retail. Lidl is one of the UK’s fastest growing retail chains and win the lots of customers from Tesco. Because retailers pay more attention to the consumer loyalty and trust. The customers perhaps doubt the quality of the products because of the mistakes made by top of the company. Although the quality of the products is not relevant to the scandal. These scandals will damage the trust from customers and lose a plenty of the potential customers. (Clark, 2014)

                                                                                                       

From the picture, Tesco shows the clear slogan “Never pay more for your branded shop” and guarantee the price lower than rivals. And in the March 2016, Tesco announced an own-label rebrand fresh food. (Hobbs,2016) It promoted the new products with great discounts for customers. Tesco in order to regain more customers from the discounters, reducing the prices by 3% over a year period. (Hobbs, 2016) After all the price of the products is an important factor will influence the decision by customers. The price war is first step of the strategy to regain the trust of the customers and competitiveness. As Lewis said: “I set out three tasks- regaining competitiveness, rebuilding trust and gaining greater transparency in areas such as price.”

The most companies have been suffered scandals and result in losing customers’ trust. They try best to rebuild the brand trust.  But why the companies care about the brand trust strongly? First of all, Brand trust as a valuable intangible assets of the brand. (Rao et al, 2004) The data from a survey on Word-of-Mouth marketing, it takes up 58% of the respondents that they were willing to recommend the companies which gave the positive experience for them to friends. It means that a company may lose more than half potential customers if it had a low brand trust.  Moreover, brand trust also like a tool to help company beat the rivals. For example, people had a good experience from the British airway before then they will deem it as first choice. (Williams, 2014)

Reference

Clarke, M. (2014) how can Tesco rescue its brand reputation and restore customer loyalty. Retrieved from: http://www.mycustomer.com/experience/voice-of-the-customer/how-can-tesco-rescue-its-brand-reputation-and-restore-customer

Hobbs, T. (2016) Tesco says brand trust is ‘returning’ as it posts first quarterly sales growth in three years. Retrieved from: http://www.marketingweek.com/2016/04/13/tesco-says-brand-trust-is-returning-as-it-posts-first-quarterly-sales-growth-in-three-years/

Simpson, E. (2016) Tesco Knowingly delayed payments to suppliers. Retrieved from: http://www.bbc.co.uk/news/business-35408064

Williams, S. Three Reasons Why Trust is Important. Retrieved from: http://blog.logogarden.com/branding/3-reasons-brant-trust-important/