November 16, 2007
Wal-Mart Looks for Co-Marketing Opportunities
John Andrews, senior marketing manager at Wal-Mart, is intent on keeping on-message across all consumer communications with the retailer’s “Save money. Live better.” tagline.
He is also anxious to partner with suppliers that align their brand marketing with that message.
According to a report by The Morning News, Mr. Andrews told an audience at the Bentonville-Bella Vista Chamber of Commerce luncheon on Wednesday, “Theme integration is a must. You’re going to hear that again if you haven’t already.”
Brands, according to an Arkansas Democrat-Gazette article, have gotten the message.
Brent Chism, senior marketing manager Coca-Cola, told the paper, “We still build our brands. But when it comes to Wal-Mart, we made sure that we’re on board with what direction they’re going to go with their big events and find the right items to put in at those events at the right price.”
Mr. Andrews, according to The Morning News, told brands to expect “complete integration from the shelf forward. From the shelf, from in-store communications, from external communications, from operations, from any kind of touch-point that the consumer is going to have with your brand and your product, you can expect us to be committed to how we deliver that with the idea of making the shopping experience better for our customers.”
Carol Spieckerman, president of newmarketbuilders and a member of the RetailWire BrainTrust, told the Democrat-Gazette, “You have these power vendors who are creating their own marketing plans, which they should, way in advance. But Wal-Mart’s message is, those need to be integrated with Wal-Mart’s. They’re not necessarily just going to take your national advertising and your themes and push them into Wal-Mart.”
Discussion Questions: Is the direction or scope of John Andrew’s call for brand integration with Wal-Mart’s thematic messages unusual in retailer and brand marketer relationships? What do you see as the sales potential behind Wal-Mart’s co-marketing message? What is the likelihood of brand compliance?
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If you would like to read our complete blog coverage of John Andrew’s presentation, visit:
http://www.newmarketbuilders.wordpress.com
Marketing 101 tells you that anytime you can be consistent with a brand, it’s definitely a plus. Low cost and live better…who can argue with that message?
I’m not sure this direction is good for vendors or Wal-Mart. WM was founded on the idea of offering a broad scope of merchandise at competitive prices. It seems that WM wants to take it upscale and that is good but you don’t want to scare off your core customer. I can see major brand vendors having the resources to integrate themselves with the new direction but smaller vendors may not and may be reluctant to embrace this new relationship. Bottom line is WM needs to focus on its core business instead and let the customers determine the atmosphere.
In the past, Target has run campaigns where it integrated its company’s image within branded television and print advertising, drawing upon support from its suppliers.
Who doesn’t recall the clever Target ads which incorporated the ubiquitous red/white color and target icon with branded products? Target clearly expected and received Brand Marketing support in these commercials and print ads.
Wal-Mart is taking the same approach; perhaps it won’t be as subtle or clever, but I bet it will be just as effective in tying Wal-Mart’s iconic message of “Save money, Live better” to their brands.
The private comments from large suppliers seem to support the public press references concerning this marketing synergy. At a fundamental level, WM embraced the “Save Money, Live Better” campaign because it had integrity. Key executives believe it to be already true, and a brand promise they can deliver on. Store personnel believe it to be already true. And while a recent study seemed to indicate that consumers aren’t “buying” the claims, I think they were measuring the wrong beliefs. The sheer size and scope of WM in retail are almost impossible to ignore. Indications are that huge sections of our population believe that they do indeed “Save Money and Live Better” by shopping at WM.
WM has also correctly identified that they cannot deliver on this brand promise to its potential without the cooperation of the vendor community. Certainly, by providing WM with the best possible pricing on appropriate quality merchandise, the vendor community is already doing “enough.” This marketing alignment message from Andrews isn’t about getting lower prices. It’s about finding vendors who embrace the fundamental brand promise in reality, not simply in commodity pricing. “Save Money, Live Better” is built on the concept of providing what is needed, and doing it at the minimum cost possible, without inflating prices with features and functions which are not needed. THAT is the message the vendor community should hear. If you can demonstrate in a visible and easily communicated way that your product/brand/organization actually DELIVERS on the brand promise, you will be a valued partner. Period.
Take it completely at face value and see what happens. My bet is that what “happens” is you’ll get a huge increase in WM volume. This is not a “spin” campaign, and it cannot be met with mirrors and smoke. Come to the table with products and an approach which embraces the brand promise with integrity. WM WILL support you.
“Save Money. Live Better” is a Wal-Mart slogan that finally seems to be resonating with consumers, based on its recent improved results. It reinforces the “Always Low Prices” message with a suggestion that saving money can be part of an aspirational lifestyle…without going overboard on the upscale slant.
It’s smart for vendors to align with the marketing strategy of their biggest customer, and it’s smart for Wal-Mart to want alliances with branded suppliers (not just private label) to shore up its credibility with the consumer.
Theme integration sounds cool. Wal-Mart has already shown in the past that they want to synergize their marketing efforts with their suppliers, for example in branded entertainment through the Tele Novela ‘Dame Chocolate’. This will created integrated brand equity for the manufacturer and retailer, so consumer product perception will be tied not only to product experience but also to retailer experience–obviously this has both risks and advantages to the manufacturer.
Question is–how are other retailers going to perceive this and will the manufacturer bear the cost of customizing their marketing communication to each of their major retailers? An extreme case scenario will be where competing manufacturers collaborate with competing retailers, so national brands get exclusively associated with specific retailers. I am not sure of the long-term impact of that for manufacturers.
The benefit to Wal-Mart is clear as they become aligned and validated in more consumers minds by the brands that are integrated with their store brand.
The benefit to the brands they sell is clear only on the surface, and only if they sell those brands at a profit to Wal-Mart and don’t expect their other retailers to pay all their profits.
What does it do for a big brand when they become closely integrated with Wal-Mart and the consumer gets the idea that they should only buy that brand at Wal-Mart?
It just seems like more grabbing strategy straws at Wal-Mart.
This stance may be a bit unusual now but I feel strongly that it will be leading others. It’s extremely refreshing to see that such a behemoth retailer is standing up and being very clear that the CPGs and the retailer need to work together to synchronize the shopping and brand experience for consumers. Vendors, agencies and consultants are also on board with this now that “Marketing at Retail” is becoming an embraced concept and the timing seems right.
Personally, I’d rather see this stance than have them on the street touting the CPM/media value of their store shoppers and selling the advertising exposure with little regard for the store experience. We’ll certainly be watching to see what happens!
The request is not unusual–cooperating on promotion so that consumers at Wal-Mart buy more of a specific manufacturers’ product makes sense and has been part of collaborative thinking for a long time. What is unusual is making this request in a public manner as though suppliers don’t know about it.
If Wal-Mart is collaborating with its suppliers, this should have been an issue in their negotiations over that past 6-9 months, especially if there is a concern about the lead time for developing ideas.
Boy, this one has dark edges! Coach feels that their business is based on delivering “exceptional value” to their customers. Can a $500 bag be exceptional value? Well, relative to Gucci, or in the customer’s mind who loves Coach, absolutely! Is that thematically consistent with Wal-Mart? Is Tide, which sells for (say) 30% more than store brand exceptional value? Is that integrated with Wal-Mart’s brand strategy? How about if Tide is 30% more than store brand but least expensive in Wal-Mart?
I think that manufacturers need to stay in control of their brand strategy and Wal-Mart needs to decide which brands to list but I just don’t like feel of getting Coke, Dove, Tide, Ben and Jerry’s, etc, to somehow modify their brand message, if that is where this is headed.
This is a ‘no-brainer’ actually, and an idea that most companies partake of without saying so anyway.
It’s key that brands that are in such close association–like retailer and supplier–and align in every way…talk and walk together, so to speak…otherwise the disconnects will eventually be damaging to either or both parties.
Wal-Mart’s idea of making values commitments public (which is what this amounts to) is a great one–if you’re going to commit to us, say so.
This is a great idea for Wal-Mart. Wal-Mart is not extending itself to fit other business models, and provide better community support. This program gives them strengths and opportunities to compete in areas that they do not normally do business in (like preferred minority bids, or GSA structured bids for minority-owned business). By thinking in “other” terms, Wal-Mart can extend their reach and increase their community participation with all types of businesses.
This sounds like a decent strategy, and we buy lots of stuff at Wal-Mart, but it sure seems that with flat same-store sales and troubled stock price, Wal-Mart is careening from one new strategy to another, none of which seem to stick.
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If you would like to read our complete blog coverage of John Andrew’s presentation, visit:
http://www.newmarketbuilders.wordpress.com
Marketing 101 tells you that anytime you can be consistent with a brand, it’s definitely a plus. Low cost and live better…who can argue with that message?
I’m not sure this direction is good for vendors or Wal-Mart. WM was founded on the idea of offering a broad scope of merchandise at competitive prices. It seems that WM wants to take it upscale and that is good but you don’t want to scare off your core customer. I can see major brand vendors having the resources to integrate themselves with the new direction but smaller vendors may not and may be reluctant to embrace this new relationship. Bottom line is WM needs to focus on its core business instead and let the customers determine the atmosphere.
In the past, Target has run campaigns where it integrated its company’s image within branded television and print advertising, drawing upon support from its suppliers.
Who doesn’t recall the clever Target ads which incorporated the ubiquitous red/white color and target icon with branded products? Target clearly expected and received Brand Marketing support in these commercials and print ads.
Wal-Mart is taking the same approach; perhaps it won’t be as subtle or clever, but I bet it will be just as effective in tying Wal-Mart’s iconic message of “Save money, Live better” to their brands.
The private comments from large suppliers seem to support the public press references concerning this marketing synergy. At a fundamental level, WM embraced the “Save Money, Live Better” campaign because it had integrity. Key executives believe it to be already true, and a brand promise they can deliver on. Store personnel believe it to be already true. And while a recent study seemed to indicate that consumers aren’t “buying” the claims, I think they were measuring the wrong beliefs. The sheer size and scope of WM in retail are almost impossible to ignore. Indications are that huge sections of our population believe that they do indeed “Save Money and Live Better” by shopping at WM.
WM has also correctly identified that they cannot deliver on this brand promise to its potential without the cooperation of the vendor community. Certainly, by providing WM with the best possible pricing on appropriate quality merchandise, the vendor community is already doing “enough.” This marketing alignment message from Andrews isn’t about getting lower prices. It’s about finding vendors who embrace the fundamental brand promise in reality, not simply in commodity pricing. “Save Money, Live Better” is built on the concept of providing what is needed, and doing it at the minimum cost possible, without inflating prices with features and functions which are not needed. THAT is the message the vendor community should hear. If you can demonstrate in a visible and easily communicated way that your product/brand/organization actually DELIVERS on the brand promise, you will be a valued partner. Period.
Take it completely at face value and see what happens. My bet is that what “happens” is you’ll get a huge increase in WM volume. This is not a “spin” campaign, and it cannot be met with mirrors and smoke. Come to the table with products and an approach which embraces the brand promise with integrity. WM WILL support you.
“Save Money. Live Better” is a Wal-Mart slogan that finally seems to be resonating with consumers, based on its recent improved results. It reinforces the “Always Low Prices” message with a suggestion that saving money can be part of an aspirational lifestyle…without going overboard on the upscale slant.
It’s smart for vendors to align with the marketing strategy of their biggest customer, and it’s smart for Wal-Mart to want alliances with branded suppliers (not just private label) to shore up its credibility with the consumer.
Theme integration sounds cool. Wal-Mart has already shown in the past that they want to synergize their marketing efforts with their suppliers, for example in branded entertainment through the Tele Novela ‘Dame Chocolate’. This will created integrated brand equity for the manufacturer and retailer, so consumer product perception will be tied not only to product experience but also to retailer experience–obviously this has both risks and advantages to the manufacturer.
Question is–how are other retailers going to perceive this and will the manufacturer bear the cost of customizing their marketing communication to each of their major retailers? An extreme case scenario will be where competing manufacturers collaborate with competing retailers, so national brands get exclusively associated with specific retailers. I am not sure of the long-term impact of that for manufacturers.
The benefit to Wal-Mart is clear as they become aligned and validated in more consumers minds by the brands that are integrated with their store brand.
The benefit to the brands they sell is clear only on the surface, and only if they sell those brands at a profit to Wal-Mart and don’t expect their other retailers to pay all their profits.
What does it do for a big brand when they become closely integrated with Wal-Mart and the consumer gets the idea that they should only buy that brand at Wal-Mart?
It just seems like more grabbing strategy straws at Wal-Mart.
This stance may be a bit unusual now but I feel strongly that it will be leading others. It’s extremely refreshing to see that such a behemoth retailer is standing up and being very clear that the CPGs and the retailer need to work together to synchronize the shopping and brand experience for consumers. Vendors, agencies and consultants are also on board with this now that “Marketing at Retail” is becoming an embraced concept and the timing seems right.
Personally, I’d rather see this stance than have them on the street touting the CPM/media value of their store shoppers and selling the advertising exposure with little regard for the store experience. We’ll certainly be watching to see what happens!
The request is not unusual–cooperating on promotion so that consumers at Wal-Mart buy more of a specific manufacturers’ product makes sense and has been part of collaborative thinking for a long time. What is unusual is making this request in a public manner as though suppliers don’t know about it.
If Wal-Mart is collaborating with its suppliers, this should have been an issue in their negotiations over that past 6-9 months, especially if there is a concern about the lead time for developing ideas.
Boy, this one has dark edges! Coach feels that their business is based on delivering “exceptional value” to their customers. Can a $500 bag be exceptional value? Well, relative to Gucci, or in the customer’s mind who loves Coach, absolutely! Is that thematically consistent with Wal-Mart? Is Tide, which sells for (say) 30% more than store brand exceptional value? Is that integrated with Wal-Mart’s brand strategy? How about if Tide is 30% more than store brand but least expensive in Wal-Mart?
I think that manufacturers need to stay in control of their brand strategy and Wal-Mart needs to decide which brands to list but I just don’t like feel of getting Coke, Dove, Tide, Ben and Jerry’s, etc, to somehow modify their brand message, if that is where this is headed.
This is a ‘no-brainer’ actually, and an idea that most companies partake of without saying so anyway.
It’s key that brands that are in such close association–like retailer and supplier–and align in every way…talk and walk together, so to speak…otherwise the disconnects will eventually be damaging to either or both parties.
Wal-Mart’s idea of making values commitments public (which is what this amounts to) is a great one–if you’re going to commit to us, say so.
This is a great idea for Wal-Mart. Wal-Mart is not extending itself to fit other business models, and provide better community support. This program gives them strengths and opportunities to compete in areas that they do not normally do business in (like preferred minority bids, or GSA structured bids for minority-owned business). By thinking in “other” terms, Wal-Mart can extend their reach and increase their community participation with all types of businesses.
This sounds like a decent strategy, and we buy lots of stuff at Wal-Mart, but it sure seems that with flat same-store sales and troubled stock price, Wal-Mart is careening from one new strategy to another, none of which seem to stick.