In 2014, oven chip brand McCain was struggling. Cash-strapped shoppers were switching to cheaper brands and own label. Promotions were delivering short-term volume, but depressed revenue and margins.
To reduce price elasticity, McCain committed to a sustained investment in brand advertising. Sales immediately increased, and kept growing, despite rising costs, fierce competition, and macro-economic shocks. Over nine years, the advertising strategy worked to reduce price elasticity by 47%, which helped raise base sales by 44%. At the end of this case, profit ROI was at £1.50 and on an upwards trajectory.
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