Reliance Retail has announced its ‘Big Jackpot’ sale that is ongoing for five days. Beverage maker, Coca-Cola will be sponsoring this sale for Reliance Retail in more than 600 grocery and food stores.
While sponsoring, the beverage company may also promote its rival’s products. Items like shampoos, beverages, fruits, foods, detergents and vegetables will be available on sale.
Gist of the contract
The two companies have signed a contract. According to it, Coca-Cola will provide its products to Reliance Retail at heavy discounts and in-return the retailer will promote the product across all of its stores through ads, front placement and prominent visibility. Sources have also informed that the two companies will conduct co-promotion activities in the future as well.
In a rare instance, a large brand is sponsoring a sale at a retail store and even promoting its rival’s products. The ad-sharing and co-promotion deal that is being run all over the nation at Reliance Retail stores is indicative of the same.
Harish Bijoor, Founder of consultancy Harish Bijoor Consults Inc. feels that in any usual case, if a big company sponsors a weekend sale for a retail store that extends for as long as five days, it does not promote its rival’s products. He also said that when both brand and retailer want to create a feeling of excitement, the brand always tries to avoid competition. Coca-Cola spokesperson said, “While we are unable to comment on the specifics of our partnership terms with Reliance Retail, we do value our long-standing association with Reliance Retail and are always mutually exploring opportunities that are to the advantage of the consumers. We hope that consumers will exercise choice and opt for the best deals and discounts at the Big Jackpot sale.”
Through such agreements, retailers benefit from greater footfalls and the brand benefits from higher visibility. Chief Executive at retail and consumer products consultancy, Third Eyesight, Devangshu Dutta, said, “It is a market-share game and shelf-space game.” Restaurants and hotels have to partner with only one beverage companies while retail stores do not have any such restriction.
The first quarter of the financial year is considered to be the peak season for the beverages. Around 40% of the company’s yearly sales are done in this season. Hence many beverage companies spend heavily on marketing and trade promotions during this period.
Reliance Retail
Reliance Retail is the retail venture of Mukesh Ambani-led Reliance Industries. A total of 616 value food and grocery stores are run by the company. The various formats it operates are Reliance Fresh, Reliance Mart and Reliance Super. It is known to be the country’s biggest retailer. In Financial Year 2014 – 2015, its revenue increased by 21%. On 31st March, 2015, the revenue was Rs. 17,640 crores.