Wednesday 30 October 2013

Sainsbury's taking Tesco to court over Price Promise – a definition of like-with-like?

Sainsbury’s move to obtain a judicial review is good in that it is an attempt to distinguish a legal ‘letter-and-spirit’ issue from a true like-with-like comparison of what a consumer gets for the money.

In other words, when Tesco and the watchdog's independent reviewer Sir Hayden Philips focus on function of the product, bottled water in terms of say quenching thirst, they are adhering to the letter of the law ref like-with-like comparability.

In doing so, they are not taking into account the ‘spirit-of-the law’ issues such as provenance or ethics.

However, the consumer places some value on ‘source’ and is prepared to factor some of this value into the offering when deciding that a price is acceptable, compared with available alternatives.

Consumers live by what they take to be the spirit of the law and feelings of being misled arise when a ‘letter-of-the-law’ claim is found to be wanting in practice, as any true marketer will appreciate.

The problem for the judiciary will be in trying to establish a universal value for provenance or ethics….

However, in the meantime, the media coverage will hopefully cause consumers - and retailers - to think a little more deeply about making a like-with-like comparison that goes a little closer to the spirit rather than simply the letter of the law in deciding that a given Product-Price-Presentation-Place combination is better value for money…

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