Walmart meets its branding match

Back in 2005, a CEO wanted me to meet a business school marketing professor who served on his board, so he arranged a dinner. At the dinner, the professor made an astonishing proclamation: “Walmart doesn’t have a brand. They just compete on price.”

I almost choked on my wine.

The professor’s comment is obviously ludicrous, because it’s clear that Walmart has a very powerful brand, with everyday low prices as one of its key brand values. (Here’s a post I wrote on tompeters.com about this experience, along with about 50 reader comments. This one hit a nerve.) I recalled this conversation with the professor yesterday, when I read an article on Time Magazines’ Business & Money site called “Meet the Low-Key, Low-Cost Grocery Chain Being Called ‘Walmart’s Worst Nightmare.”

The article, by Brad Tuttle (@bradtuttle), focuses on WinCo, an Idaho-based grocery chain with 100 stores, whose business model allows it to undercut Walmart’s prices. Besides minimalist, low-frills stores, WinCo keeps prices low by limiting product variety, cutting out middle-men distributors, not accepting credit cards and asking customers to bag their own groceries.

What caught my attention, as I read this article about a smaller competitor out-competing Walmart on the key brand value of price, was a quote from a consultant named Jon Hauptman, explaining that WinCo “communicates low prices by delivering low prices.”  They don’t do a lot of price advertising, and instead WinCo “convinces shoppers of value based on the shopping experience, rather than relying on smoke and mirrors to convince them.”

What I love about that reasoning is that the best brand marketing (i.e., the best way to create brand harmony) is not to brag about yourself, but to deliver. Customers form impressions of your company as all of the interactions they have with you blend together in their minds. If these interactions blend together in harmony, and cause the customer to think “I get it, I want it, and I can’t get it anywhere else,” then your branding efforts are effective.

In the minds of WinCo’s customers, WinCo is a more powerful brand than Walmart. They’ve done this by delivering extremely well on Walmart’s key brand value, price. No matter what your key brand values are, you too can out-compete your larger competitors, in the minds of individual customers, by creating a better sense of brand harmony in the minds of those customers. Delivery is more potent than bragging.

As for the professor, I haven’t had contact with him since 2005. I’ll admit, I feel bad for the students who’ve studied with him over the past eight years, since they may have been misled about key fundamentals of branding. On the other hand, maybe the students have acted like customers who have switched from Walmart to WinCo, looking beyond the words and seeing deeper into the essence behind the message. After all, in today’s world we communicate with savvy, self-reliant customers, and you can’t fake them out. No matter what you say, they’ll see through it and assess you based on who you really are.

 

Posted in Brand Harmony

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