4. Is the strong consumer loyalty to Scottish salmon, as found by the MORI poll reflected in the marketplace?
According to the latest MORI poll, commissioned by SQS, two thirds of the 1945 people surveyed believed that the best salmon in the world comes from Scotland (although in a major publicity blunder by SQS, the leading food trade magazine "The Grocer", reported that these consumers thought Norwegian salmon to be the best in the world). As mentioned previously, the problem with such surveys is that whilst SQS are happy to provide the answer, there is never any mention of the question posed. This could have been asked in a variety of ways. Three such possibilities are:
i. Where does the best salmon in the world come from?
ii. Does the best salmon in the world come from Scotland?
iii. Which country produces the best salmon in the world, Scotland, Norway or Chile?
The answer will be very different depending on how the question was actually phrased. Additionally, because the survey was amongst British consumers, it is not surprising that Scottish salmon was most highly favoured.
Whilst the SQS are ready to toast their successful achievement with 66% of consumers expressing the belief that Scottish salmon is the best in the world, these results should be compared with another survey commissioned by the Scottish Salmon Board, the forerunner of SQS. A survey conducted by AGB/GFK and used to promote TQM salmon in a magazine advert in March 1996, found that 76% of British consumers preferred Scottish salmon. The current findings would suggest that 13% less consumers would actively select salmon from Scotland. This undermines the view that there is a strong consumer loyalty for Scottish salmon .
5. Is country of origin important to salmon consumers?
According to the SQS MORI survey, 78% of consumers said that it was important to know the origin of the salmon they buy. As previously discussed, the phrasing of the question posed during the survey could have a significant outcome on the response received. For example, the two questions, "Is it important to know the origin of the salmon you buy?" and "What are the most important factors influencing your decision when buying salmon?" could produce very different answers. As such, it is questionable whether the views of these 78% of consumers are reflected when they actuall y buy salmon. This is because only 40% appear to remember seeing a country of origin label when making past purchases. This mirrors the level of pre-packs currently available carrying a Scottish label, as can be seen from the earlier table.
The results of the MORI poll also conflict with the findings of the last market survey commissioned by the International Salmon Farmers Association, of which SQS are members through their sister organisation, the SSPO. The ISFA found that country of origin was the least important factor influencing consumer demand.
6. Why has SQS so openly criticised British supermarkets?
Supermarkets now account for the majority of sales of salmon. PACEC found that the major retailers sell about 85% of Scottish salmon sales in the U K. With such dominance in the market place, it would appear to be a negative move for the industry representatives to so openly criticise the major conduit for sales of the industry's product. Thus, there must be a significant motivation for taking this action, but clearly, only SQS are able to provide a full explanation. Yet, it is possible to draw some conclusions from both the SQS statements and from more general observations of the market place.
The principal tenet of the Scottish salmon industry is that Scottish salmon is the best in the world. As such, it is expected that consumers should be prepared to pay a price premium to obtain the best in the world. This is the overriding message of all Scottish marketing activity. This is clear from the Scottish Salmon Board Advertisement placed in the retail trade magazine, the Grocer. This states that 76% of consumers prefer Scottish salmon to any other and that 72% are willing to pay more for it. This willingness to pay more for a high quality product is echoed by the Tesco in-house survey.
Yet, the expression of a readiness to pay more for Scottish salmon over any other does not appear to be reflected by what consumers actually pay in the market place. The reality is that there is no real price premium for Scottish salmon. This is clearly apparent from the pricing of the pre-packs in the current survey:
Fillets.
Asda - £9.58/kg
Asda Scottish - £7.69/kg
Safeway TQM Scottish - £9.01/kg
Sainsbury's - £7.65/kg
Sainsbury's - £3.30/kg
Somerfield - £11.63/kg
Tesco Scottish - £8.72/kg
Tesco TQM Scottish - £11.95/kg
Steaks.
M & S TQM Scottish - £8.30/kg
Morrisons Scottish - £4.60/kg
Safeway TQM Scottish - £11.96/kg
Tesco - £8.70/kg
Although the most expensive salmon happens to be TQM endorsed Scottish, other salmon, which has no declared country of origin and no TQM endorsement, is only a few pence cheaper. By comparison, the cheapest salmon is labelled as Scottish and whilst not carrying a TQM sticker, was bought from Morrisons, a retailer, which promotes its salmon as being endorsed with the TQM. This salmon was significantly cheaper than any other.
There is no clear trend to the pricing of salmon in the UK and it would appear that individual store groups charge what they think that they can obtain. Yet at the same time, salmon is often subjected to significant pr ice discounting. Just prior to last Christmas, a time when salmon prices are usually higher, salmon was heavily discounted in the UK market place.
Safeway were then selling TQM tagged whole salmon at the same price as Tesco, cheaper even than Asda and Sainsbury's. All were advertised as being half price and thus even before the discounting, there was no price differential. Such observations plainly undermine the claims that Scottish TQM salmon commands a premium price over other salmon in the UK market place.
This failure to generate a price premium for Scottish salmon must reflect on the whole marketing strategy of SQS and the Scottish industry. It would appear that whilst consumers are ready to state a willingness to buy Scottish salmon and even to pay a price premium, their actions are very different. Most consumers buy salmon because of its' low cost, especially compared to other fish species, and because it represents real value for money as an everyday meal option. Most consumers are simply not bothered as the origin of the salmon they buy, preferring to be influenced by the value for money price.
Unfortunately, the consumer response to salmon does not appear to match the expectations of the industry and rather than accept this and adapt their marketing strategy accordingly, the Scottish industry have looked for a scapegoat to explain their failure. In this instance, rather than blame Norwegian competition directly, SQS have redirected their attack at British supermarkets and labelling regulations. The problem for SQS is such a strategy may backfire because as most consumers are quite happy to buy non Scottish salmon, the supermarkets may well oblige.