Between the original “Postioning” authors Ries & Trout, it’s easy to deduce who the smart one is based on their solo writings. Ries waxes moronic in Ad Age, but in a great column on Forbes.com, Jack Trout looks at the big issues facing America’s largest retailer.
I’ve written in the past that once a brand has established itself in the value or price category, it is almost impossible to go up market and attract a group of customers that are already going for fancier brands. Wal-Mart is a mass merchandiser that clearly is all about “always low prices.”
That’s why people shop there.
Target played it perfectly. Rather than go head-to-head with Godzilla, they decided to offer mass with class, or department store type merchandise for less. They used unique designs and nicer store layouts to attract those folks that were a bit more up-market and tended to look down on the down-market, Wal-Mart shopper. Remember, when you walk into a Wal-Mart, you are telling the world you are a price shopper. When you walk into Target, you are telling the world you have a little more taste than a price buyer. When you walk into Neiman Marcus you are telling the world that you have a lot of money and a great deal of taste.
Like everything else in this very competitive world, trying to be everything for everybody just doesn’t work. You are what you are in the minds of your customers and prospects, and leaving that position tends to generate confusion. Higher prices in a low-price store just suggests to your customers that you might be ripping them off.
I said it in my own way a few years back: There are two types of people in America: Wal-Mart people and Target people. But Trout nails it perfectly about Wal-Mart’s current state of confusion.