CH 1- The Rise of Private Labels

http://www.nwaonline.net/articles/2009/08/19/business/082009busprivatelabels.txt



Summary

This particular article is about Wal-Mart and "private label brands". Private label brands are the brands in those stores that are owned and sometimes produced by those retailers. The article is mainly about how Wal-Mart and are re-making their private brands so that they can compete better with "national" brands such as Coca-Cola and Lay's. It also talks about the new products and the expansion of these brands. For example, "Great Value" from Wal-Mart is adding things like vegetable medley frozen pizza and chocolate waffle cone individual ice cream cups.


Connections

First, the article mentioned the re-making and re-flavoring of hundreds of it's products and the introduction of lots of new products. In order to re-flavor something then Wal-Mart would need direct control over production of their products. With Wal-Mart's new strategy, it would move towards another channel of distribution, resulting in Wal-Mart having two channels of distribution for its products. The first one would be the normal channel of distribution with the producer-wholesaler-retailer-consumer channel and the second would be the
producer-retailer-consumer channel.


Reflections

Personally i think that its time that Wal-Mart stepped up its private brands because in a bad economy, people aren't willing to spend more on new things and tend to live more frugally. After all, if a more expensive product with flashier packaging is compared to something with just a white background, people get suspicious and start to wonder if they're paying for packaging. On the other hand, more products means that all the Wal-Marts will probably get bigger which is normally good although there should be limits. I remember one time my family went shopping at Wal-Mart which have huge stores. We split up and my grandparents went to go look for oatmeal and things like that. The Wal-Mart was so big that they ended up getting lost and it took an extra hour to find them.

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