Archive for February, 2011

Wal-Mart’s Branding Challenge

February 22, 2011

Today Wal-Mart announced that its U.S. division is continuing to slump. For the seventh consecutive quarter, same store sales declined. This of course is not good news.

There are many factors behind the move, but I suspect one of the primary issues driving the decline is Wal-Mart’s growing focus on private label products.

Wal-Mart grew with a very smart brand strategy: sell well-known brands at incredibly low prices. The Wal-Mart brand stands for cheap. Ask anyone why they go to Wal-Mart and the answer will almost always be the same: “Wal-Mart is cheap.” Of course, low prices also indicate low quality; pricing is a powerful signal. Wal-Mart addressed this problem by selling respected brands. Buying Crest at Wal-Mart is the perfect combination; the quality of Crest at a Wal-Mart price.

This all breaks down, however, when Wal-Mart begins to sell private label products. A product sold under the Wal-Mart brand will presumably be cheap and low quality. This proposition is not all that appealing. Since Wal-Mart has the lowest prices, so one can reasonably assume it also has the lowest quality products.

Wal-Mart can’t easily address this issue. Telling people that Wal-Mart products are high quality isn’t believable given the prices. Increasing prices is inconsistent with the Wal-Mart brand.

In recent years Wal-Mart has dramatically ramped up its private label presence. I’m certain this move looked good on paper. But the move is inconsistent with Wal-Mart’s historical branding strategy and it isn’t likely to work. The more Wal-Mart focuses on private label products the more likely its overall result will erode.

Super Bowl Advertising Review

February 7, 2011

I posted my thoughts on the 2011  Super Bowl ads on the Kellogg Super Bowl Advertising Review blog.  You can see the post here:

Super Bowl Preview

February 3, 2011

We are just days away from the biggest advertising event of the year, the Super Bowl.

The advertising circus is already well underway, as brands try to get their message out ahead of the game. Still, the big event is the game itself.

Going into the game there are several advertisers to focus on.

Chevrolet:  General Motors passed on the Super Bowl last year. The company is now back and will be one of the biggest advertisers this year, running a series of commercials for Chevrolet. This is an important moment for GM; the company is rebounding after a trip through bankruptcy and has a new marketing team in place. Will Chevrolet deliver? There are two particular challenges for Chevrolet. First, will the spots stand out in what promises to be a Super Bowl full of auto ads? Second, will Chevrolet deliver a differentiating benefit?

CareerBuilder:  This year CareerBuilder is bringing back the chimps. The company used the characters in 2005 and 2006 with great success. After trying to recreate the magic with a number of different campaigns, CareerBuilder is returning to the proven equity. Will the chimps work again?

ABInBev: The big name in Super Bowl advertising is Anheuser-Busch, now part of brewing giant ABInBev. Bud and Bud Light traditionally finish at the top of the popularity polls. Will they do it again this year? For the first time, the company is advertising Stella Artois on the Super Bowl. This brand could get a big bounce.

Homeaway: Homeaway is back for a second year. The vacation home rental site is going to run a rather epic and potentially controversial commercial. The challenge with high-production commercials like this is that the message and brand can get lost; Homeaway has to make sure the branding and benefit both come through.

GoDaddy: Once again, GoDaddy is back with the GoDaddy girls. The question: at what point does this campaign wear out? It hasn’t been particularly popular from the start, but it has clearly worked. GoDaddy is the most creatively consistent advertiser on the game this year. Is that a positive or a negative?

Doritos/Pepsi Max:  This year, the Pepsi Max is crashing the Doritos Crash the Super Bowl event. Consumers could create spots for either brand. Doritos had great success with the promotion in prior year. Will it work again, now expanded to include Pepsi Max?

Audi/BMW/Mercedes/Kia/Hyundai/etc/etc: Will any of these car brands stand out this year? Or will they all blur together. We might see a lot of beautiful pictures of cars zooming along curving roads. This won’t be enough to stand out this year.

Groupon:  Last year Google, a new Super Bowl advertiser, finished at the top of the Kellogg Super Bowl Advertising Review. Will another newcomer pull it off this year? Watch Groupon, a new and unexpected Super Bowl advertiser.

There is an interesting story behind every advertiser in the Super Bowl. As you watch each ad, remember that a team of people spent the last six months or more trying desperately to create a powerful spot.

Careers are on the line for both the players and the advertisers. It should be a fun evening.


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