a real pickle for Vlasic

Topic Post 1

This is the best article I have read so far on the subject of Wal-Mart. It demonstrates clearly through the pickle example how Wal-Mart has taken supply chain management thing to an extreme. This is a great example of the power of and administered vertical marketing system. (Kotler and Armstrong p407) Vlasic painfully demonstrates the pitfalls of becoming a Wal-Mart supplier. While they can certainly sell more pickles, they are now at the mercy of Wal-Mart's demand. Using a loss leader to attract attention is not a new trick, however it is usually done at the expense of the retailer. In this case, Vlasic not only has to supply these pickle jugs at a reduced rate, but they also loose the ability to command a premium price in every other store. This was a poor brand management choice for Vlasic. (p297) To preserve their brand equity, Vlasic should have relabeled the pickles as a store brand and kept the Vlasic name as small as possible.