business news in context, analysis with attitude

We got a number of emails about yesterday’s story about a Fast Company article profiling Jim Wier, who owns the company that makes Snapper lawn mowers, and who decided not to sell to Wal-Mart because he felt it would hurt brand equity.

MNB user Dan Raftery wrote:

There's another facet to the Jim Wier article in Fast Company. Many medium-sized suppliers anguish about the size of their business with any large customer, not just Wal-Mart. For example, the trend in the housewares industry shows an increasing share of business going to a company's top three customers. It's up to 43.4% now (Source: 2005 IHA State of the Industry Report). Some deal with it by walking away from one of the big retailers, but they usually end up tied very strongly to others. Diversity in the customer base is also viewed positively by venture capitalists on the hunt for acquisitions. This is a tough issue for suppliers and ultimately for retailers and consumers.

Another MNB user wrote:

I wonder how many other companies have done a detailed “customer profitability” analysis of their sales to Wal-Mart, as well as a brand impact analysis. The President of one consumer goods company once told me he could not afford to be “supplier of the year” again at Wal-Mart. When I worked in the supermarket business, supplier executives were continually asking for better shelf position and promotions, etc. I once asked the CEO of one supplier why if he was positioning his brand as a premium, high performing product he put it in to Costco where the appeal at the time was price only. Is this inconsistent with your brand strategy, I asked. Could you not put “X” your other brand there and let us sell “Y” your premium brand? He looked at me like I was from Mars and did not answer. He lost his job a year later for declining volume and profitability. The lure of volume is great but 0% of high volume equals $0. And a premium brand ruined by a faulty channel strategy cannot be restored.

Responding to our story about a lawsuit planned to stop cereal companies from advertising sugared cereals on kids’ television networks, MNB user Mary Shird wrote:

What happened to the days when parents just said no. Parents need to be educated on making good decisions for their children and in turn educate their children. It is the responsibility of the parents but parents just can't say no-so why not sue the parents for buying it in the first place. Would you buy your 4 year old a handgun if he/she wanted it?

Parents have a big influence on the eating habits of their children and what is being put in the shopping cart.

Children should learn at an early age about temptation. Maybe more would be able to say no to drugs if their parents could say no to cereal. Children learn what they live.

There’s one thing to keep in mind about these lawsuits. Yes, they are filed by consumer groups. But many of the people who run those organizations are, in addition to being activists, parents.

So it isn’t as if they are abdicating their responsibility as parents. It can be argued that they are embracing that responsibility and trying to be as effective as possible on as many fronts as possible.

Responding to yesterday’s story about Wegmans merchandising wines by breaking them out by food pairings, one MNB user wrote:

Funny. I just wrote down a similar idea pairing wines with meals. Meals-in-a-box. Providing customers with the non-perishable ingredients for a meal in a box. The box also serves as a mechanism to provide a fresh foods shopping list (co-marketing opportunity for Tyson and others), and recommend a wine pairing.

I think people are interested in solutions that are not just open and microwave. They actually may want to cook/prepare their meals. Wegmans not only provides this wine pairing solution, they provide recipes that they prepare in store as samples. They are providing knowledge that is helping their consumers be smarter, healthy shoppers.

It has been our experience that if a store treats customers as if they are intelligent and discerning, customers will be intelligent and discerning. Treat ‘em like cattle, and they act like cattle.
KC's View: