The role of pricemarked packs (PMPs) has been unexplored territory by this column for quite a while. Last time I wrote about them, retailers’ reaction to them was that they objected to being dictated to. And the time before that. And, oh, the time before that, too. Most say PMPs are fine when there is choice (it came number three in our top 10 innovations piece last issue).
No prizes, then, for guessing that the newest take on the subject is negative. Oh my, Manjala Jhangee doesn’t half object. She called just after visiting the Bestway show in Surrey, where a cigarette manufacturer did a presentation on PMPs and afterwards asked if there were any questions.
Manjala made a speech (which got a solid round of applause). She asked why PMPs happened in the first place. The answer included higher duty and the government leaning on the manufacturers. “But your advertising budget has already been freed up,” she pointed out. She added that she is sitting on £15-20K-worth of stock which will earn her next to nothing.
Her main point is: why should retailers have to chase double the goods for the same amount of income?
It isn’t just ciggie companies, she adds. The crisps manufacturers are at it, too. “If they pricemark you make 21% instead of 37%.”
She believes the manufacturer gets its margin and the wholesaler more or less does, too. It all falls on the retailer, who should be able to decide their own margin.
Interestingly, the guys at HIM research emailed just as I was writing this, on their latest subject of ‘Understanding the role of pricemarked packs’.
It suggests that PMPs are a useful tool to communicate value to consumers. But adds: “There appears to be confusion over their effectiveness to drive sales.”
HIM plans to investigate it properly. but for some initial thoughts, see overleaf.