Thursday, March 30, 2006

Must Read: AdAge on Target/Supplier Frustrations

AdAge has a great article today on the frustrations that marketers are feeling with Target. The article details how the big red one is forcing suppliers to eat costs to drive down prices, partially due to a new online reverse auction system. Man, those systems are bad: they do nothing but frustrate suppliers.

For me, the critical part of the article comes near the end, from the mouth of a supplier who wished to remain un-named:

“Those kind of auctions aren’t taking place on the must-have, traffic-building brands. My experience is it’s in categories where the retailer could carry whomever they want, and if they can do that, then how important was your brand? The only place that is safe is if you have a brand that is powerful enough that consumers will be disappointed enough if a retailer doesn’t have it.”
No truer words have ever been spoken. As manufacturers face increasingly squeezed and strained relationships, the task of brand-building is critically important. A strong brand is the trump card, the secret weapon and the man behind the curtain in all of this. And this is not awareness, mind you. But real, honest-to-goodness brand building and consumer love. You think Apple goes through a reverse auction to get its iPod into Target? No way. Their very presence raises Target up above its competitors.

Brand, brand, brand. When you're done: relationship, relationship, relationship.
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