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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I think that it's a very good idea if a retailer is big enough to make their own products. This can reduce the costs because the stores will receive the product at the direct cost of the product, no added on costs because it is the same company. However, the bigger Walmart gets the more small businesses it will potentially knock out.
ReplyDelete-Aaron Cho
I think that if Wal-mart were to lessen its distribution channels and into producer-retailer, Wal-mart would be able to lessen to costs. The lesser the handling of the products through the channels of distribution, the lesser the costs would be. This would allow consumers pay less and Wal-mart to profit more.
ReplyDeleteI think it is great to have a store like Wal-mart because it allow people to things that cause less. On the other hand they are destroying other stores nothing can be compare by them. Soon all the stores will be Wal-Mart.
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