Importance of managing value

On my return flight from a recent business trip I approached my gate in a hungry state of mind.  Unfortunately my only immediate option consisted of the place that offers the pre-wrapped cold lunch meat sandwiches.  As I thought about that being my first food consumption in ten hours, my stomach rebelled.

My mind traced back to a McDonald's (MCD) that I saw a few minutes prior.  It required a walk past a stretch where the walkway was unusable and then getting on another walkway, ordering, coming back to my gate and eating in 20 minutes, but this seemed preferable to the cold sandwich I was being offered.

Like McDonald's, Private Label brands are consistently among the cheapest offerings in it's industry.  During the recession, Private Label gained considerable strength.  BrandSpark's 2010 Best New Products Awards American Grocery Shopper Survey found that the majority (66%) of shoppers agree or completely agree that that "private labels are usually extremely good value for the money".

With nearly 2/3 of consumers willing to consider Private Label, this means that retailers have the opportunity to both save shoppers' money and increase their bottom line.  Proper brand management of the Private Label brand can drive down consumers' bill if the product is competitive.  Driving down the consumer's bill can create the perception that your store represents a good financial proposition - and thus bring the consumer back.

Why has Wal Mart missed the target in the big Apple?

While viewing CNBC's documentary “Target: Inside the Bulls eye” I found Target's (TGT) growth story to being one of the dominant retailers in the CPG industry really interesting.  In conversations with friends and family, it's interesting to see the difference in perception that shoppers and consumers have of Target compared to Wal Mart (WMT).  

Recently CNBC posted an article discussing Wal Mart's attempts to break into New York City and the failures they have had and how it contrasts with Target's success.  

Although Target and Wal Mart offer very similar products at very similar prices and pay similar wages, there continues to be resistance to Wal Mart's entrance into the city.  Despite the fact that the stores of the two retail giants are highly similar, Target appears to have penetrated the largest urban market in the US more successfully than Wal Mart.  

One can only wonder how much of this is a direct cause of Wal Mart's business practices.  The bigger question is what has created a more favorable public perception of Target compared to Wal Mart and what long term impacts this will have.