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Brand Price lower the price for energy drinks under a new psychological threshold 

24/04/2012 12:40

Launched about three years ago, the brand Price remains a discreet presence on Penny Market stores shelves. Positioned, as the name itself suggests, on entry level segment, Price did not display an aggressive price strategy. There were situations when Price products were even more expensive for some categories than other Penny Market brands.


The retailer recently launched a new product under this brand, in the energy drink category: Price Energy drink in 250 ml cans. The shelf price proposed by the retailer is lowering the level of price for cans energy drink category under a new threshold. We talk about 0,89 lei while during the more recent years the minimal level of price was situated around the 0,99 level.  And, attention: the present price of 0,89 lei is a normal shelf price, not a promotional one. Made in Romania, the item is destined exclusively for the Romanian market, the package is missing any label for other countries where Penny Market is also present.  


Penny strategy: securing a category able to generate volume

This new item increases to three the number of Penny Market brands listed in the energy drinks' category. The retailer strategy thus targets the covering of all the segments even coquetting with positioning towards premium of Race brand. The appearance of the new Price product is also repositioning the brand Vibe towards mainstream category. Vibe represented for years the Penny Market first price offer for energy drinks. By monitoring the promotions performed by them during the last three years, we can find an almost unchanged price level. So, in September 2009, the Vibe energy drink appeared on the cover of Penny Market magazine at 0,99 lei, being thus reduced with 28% if  compared with 1,39 lei the normal price. We can again find it out two years later, at the same price, in February 2011 magazine. This time the reduction is only 26% of the initial price of 1,34 lei. Practically, in spite of the evolution of the economy and of the annual inflation, the product remained for about three years at unchanged promotional price. And let us not forget that in the meanwhile, as from July 2010, the shelf price was also including the 5% difference coming additionally from VAT increase.

Repositioning of this product on mainstream segment is explicable if we take into account its package labeled in Bulgarian and Romanian languages. The item is to be found from some time in Penny Market network South of Danube. Continuing an aggressive price policy on an item whose price can be anytime compared with the price in the neighboring country does nothing else but to reduce the margin source. By launching the new Price energizing, the retailer got an item which can anytime attack the entry level price, while Vibe and Race products are left as item generating margin.

Florin Frasineanu


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