Price-marked packs have developed into one of the main merchandising and promotional tools available to convenience retailers. PMPs are now used across virtually all product categories. In this update we look at some of the thinking behind current PMP activity in drinks, soft drinks, biscuits and cakes, and snacks.
PRICE-marked packs have grown in importance generally in c-stores in recent years and it’s fair to say that soft drinks has been one of the categories where they are used extensively.
• Soft drinks manufacturer and Irn-Bru brand owner AG Barr says the positive sales effects of PMPs in soft drinks are significant.
Quoting HIM research, Adrian Troy, the company’s head of marketing said: “Retailers are seeing the benefit of price-marked packs, with 65% reporting that their sales of price-marked packs have risen in the last 12 months, while 76% think that PMPs improve a store’s price image.”
And, citing Nielsen Scantrack Data for the 12 months to mid-July this year, he said the £788m Scottish soft drinks market sees half of all the growth in impulse being driven by price-marked packs. However, that varies significantly by category, with the biggest growth (60%) being seen in carbonates.
But the firm reckons it’s important to vary the mix and introduce new deals to maintain consumers’ interest. In some of its latest PMP activity, for example, it also features a multi-buy element.
The firm tried the multi-buy offer last year on Rubicon one-litre cartons which were offered with a £1.29/2 for £2 flash on the packs. The firm judged the trial a success, has since used the tactic on Irn-Bru and Barr flavours and is using it again on Rubicon and on Sun Exotic and KA cartons.
And when its Rockstar range of energy drinks was moved from plain packs to 99p price-marked packs a study of the effect in one retail outlet showed rate of sale increased by 800% on Rockstar itself and also increased on energy drinks overall.
• Coca-Cola Enterprises stresses that consumers are very keen on PMPs. Dave Turner, trade communications manager at CCE, said: “Shoppers are often conscious that there tends to be a premium associated with purchasing goods in convenience stores and want to feel confident that they are receiving a good deal.
“PMPs help to reassure shoppers they are getting good value for money and they in turn are more likely to make a purchase. Shoppers tend to respond well to PMPs as they see them as special offers.
“We updated our PMP range this year in order to strengthen our offering for independent retailers and help drive sales. Our PMP range includes a wide variety of soft drinks, such as the popular £1 Coca-Cola 500ml range. Most recently we have launched an 89p PMP which is available in the Capri-Sun Orange variant making the drink a great, cost-effective solution for people on the go.
“After the hugely successful ‘Share a Coke’ campaign in 2013, we have made it bigger and even better than last year. One of the biggest pieces of feedback from our customers was that we needed to include price-marked packs in the campaign.
“We’ve listened to them and this year we have put names and nicknames on 500ml £1 PMP of Coca-Cola, Diet Coke and Coke Zero to help drive sales.”
• At Vimto UK, Vimto Soft Drinks marketing manager, Emma Hunt said: “PMPs in soft drinks have become an important factor in purchase decisions for convenience retailers and to recognise this we’ve significantly grown our PMP offering across our brands.”
Quoting Nielsen findings to March this year, she added:
“In the Impulse channel, PMPs are growing across all soft drinks categories and, in particular, enjoying a 96% growth within RTDs. They are more common in carbonates, making up a 43% share of the total flavoured carbonates market.
“Within the Vimto range alone, PMPs account for over 74% share of both the RTD and carbonates sales for the brand.”
• The team behind energy drink No Fear reckons soft drinks in c-stores are especially suited to PMP activity.
“The soft drinks category continues to be a driving force in PMPs,” a brand spokesperson said.
“The category is perfect for the impulse buyer. This customer can often make a snap decision on their purchase based on the product’s perceived good value. Soft drinks and energy drinks are perfect for on-the-go lifestyles and are often purchased as a single item.
“Value for money, visibility and packaging often then become a key contributor in this type of purchase allowing the PMP to succeed and drive sales.”
• For major juice and juice drinks company Refresco Gerber consumer confidence and consumers’ continuing trust in brands both play a significant part in the appeal and success of PMPs.
“Quality and price are two of the key influences on consumer purchasing decisions, said the firm’s commercial director James Logan.
“PMPs on known brands are popular because they offer both … trusted brands at value-for-money prices. Today’s shoppers are increasingly price-conscious and less prepared to pay over the odds to shop in convenience stores.
“Price-marked packs account for a significant number of soft drinks sales.
“We have seen evidence of the success of PMPs with Just Juice which is exclusive to convenience stores. The popularity of the one-litre PMP 2 for £2 range and 500ml PMP £1 range, sold through wholesalers in 8×1 litre and 6x500ml PET formats contributed to the brand finishing 2013 with 8% growth on the previous year, which is out-performing the juice category,” he said.
Amanda Grabham, marketing director – soft drinks at SHS Drinks, whose portfolio includes big-selling adult soft drinks brand Shloer, said: “Price-marked packs are undoubtedly very popular with both convenience store shoppers and retailers, and they have certainly had an impressive impact on Shloer’s presence and sales performance in the impulse sector.”
It’s two-and-a-half years since SHS Drinks introduced its two top-selling Shloer variants – Red Grape and White Grape, which account for around half of Shloer’s sales – in £1.69 price-marked bottles in the wholesale/cash & carry/independent/convenience store trading channels.
When they were launched sales of the brand in cash and carries jumped by more than two-thirds, she said.