Brands Still Matter

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There's an article in the March 22nd issue of Ad Age that documents a reversal in the stocking and inventory management strategy of Wal-Mart reportedly designed to eliminate some national brands and sizes that had not been performing to expectations.

This elimination of national brands also coincided with a significant increase in the introduction of store brands that allow Wal-Mart to realize significantly higher margins. The article describes how customers reacted with aggravation and fewer trips to Wal-Mart with enough frequency to produce the company's first reduction in traffic and sales in store history during the 4th quarter of 2009.  It appears that 300 brands previously removed will be returning to shelves in the near future. It just goes to show you that brands still play a strong role in the minds of consumers and in their purchasing decisions even in a cost-conscious economic environment. The take away is that it pays to develop a powerful brand for your products and services and that is can cost you money to depend only on low price to drive sales. Read the article in Ad Age.