Wal-Mart gets drunk.

Nothing like adding a little alcohol into the mix to get the party started. That’s apparently what Wal-Mart, the world’s largest retailer thinks. On the way to store shelves is something new, hard alcohol. What? Alcohol? Yes, that’s right. Wal-Mart, a company that strictly bans alcohol from its headquarters, company meetings and expense accounts is now going to sell the vice. A company headquartered in a dry county and bans risqué magazines and only sells sanitized versions of songs with controversial song lyrics because of its strong belief in family and decency is going against all that to make a buck. Unbelievable, but true. Big powerful brands do unbelievable things every day. So to help you from being a traitor to your own brand values here are some guidelines to help you before you get drunk and do something silly like Wal-Mart.

1. Does the line extension go against the core meaning of the brand?

Clearly Wal-Mart and hard alcohol don’t mix. Wal-Mart stands for low prices but they have also prided themselves on family values sometimes taking tough stands against racy music songs.

Volvo and convertibles did make too much sense either. Nothing is safe about driving a convertible; safety is usually the last thing on your mind while the wind is blowing in your hair. No surprise that the models weren’t big sellers.

2. Does the extension overly complicate your business model?

For Wal-Mart selling alcohol means negotiating complex and Byzantine laws that vary by state. Which include buying from distributors, a layer Wal-Mart typically eliminates to cut costs and streamline its delivery process.

On the other hand, Dell selling printers doesn’t much change its business model or go against its principles. Buy cheap and sell direct.

3. Do focused, successful competitors exist?

When Wal-Mart got into groceries, the big supermarkets were floundering. Trying to compete with Webvan, Whole Foods, Costco and CVS all at the same time by expanding their brands. So Wal-Mart was able to move into and dominate the grocery category.

But Gatorade making energy bars? There are too many successful focused competitors already in the category (PowerBar, Cliff Bar, etc.) that there is unlikely to be any room for such a silly brand.

4. Will extending the line again further complicate your product line to the point of insanity?

32 types of Tide? 13 types of Coca-Cola? When you need extra hands and feet to count the products in your line you are in trouble.

Does Wal-Mart really need to sell everything? What’s next stocks & bonds like Sears tried?

Or talk about crazy line extensions, what is a Bud Select?? I had one last night. I asked the waitress what it was and she said she had no idea. Was it a light beer? Was it low-carb? Was it great tasting? What was it?? If Bud doesn’t even know how are we?

5. Would the extension be better off as a new brand?

Many times a company has an idea that would be better served by a new brand instead of diluting an existing one.

Propel instead of Diet Gatorade.

Lexus instead of Toyota Deluxe.

Old Navy instead of Discount Gap.

Comments

[Laura]

Thanks for your comments. Sorry I did not have time to address all of the comments about LogoWorks. I had some personal and family obligations the past week and have been unable to totally focus on this blog. But with all the negativity surrounding the comments I thought people would cheer that I took my post off.

In reading your comments the simple answer going forward is just to turn off comments and move on. I hope you will keep reading otherwise thanks for the time you have spent here.

[Shawn Porter]

Interesting article. However, when I hear the name 'Walmart' I instantly think of a company that cares only for the bottom dollar with little regard to ethics (or branding for that matter). Adding alcohal to their product line is a smart financial choice on their part when you think that their stores typically reside in low-income areas. Not to sound stereotypical, but it has been remarkably proven that alcohal sales in those kinds of areas is much higher. So, it's a financial decision that will prove profitable I'm sure. The ethics of it, however, are another story completely.

As for the mysterious, disappearing post... I did miss it, but have to agree that it seems a bit shady to have disappeared in such a manner as to not regard the comments (or opinions) within it.

If you're looking for another marketing blog, please feel free to see my new blog about Marketing and Advertising for Small Business. I just started it, but feel free to stop by and offer your opinions (that won't be deleted) and suggestions for topics.

http://www.regalstudio.com/blog

[Laura]

I have talked with LogoWorks and do support the company. I deleted the entry because too many people were posting my link and coming to my site to just to bash the company and write ugly, nasty things about me. I made a comment and fully disclosed my information and used major publications like the Wall Street Journal as reference. This is a blog to post my short articles and thoughts like many authors have. I started it after talking with Seth Godin, who really enjoyed writing his. I guess, if you don't like it or me please don't visit just to write mean things. Debate is fine, but if you hate me already I don't think you read what I say objectively anyway. Thank you.

[Dan]

Wal-Mart currently makes around $1 billion from alcohol. Their goal is to increase sales to around $5 billion a year from alcohol. This does indeed go against Wal-Mart values and could be a PR mess. I would not be surprised if W-M eventually abandons at least part of its current plans with partners like Diageo.

[Laura]

I certainly know about all the wonderful things that Wal-Mart is doing with RFID tags. All I'm trying to say is that they don't need to get involved with alcohol. Especailly since the corporation is so internally against it. Not many companies that I have heard of ban alcohol at all events, meetings and dinners. My husband works for a big company and there is always wine and beer flowing at all events. It is very inconsistent with the brand, will complicate distribution, and raise PR problems.

And by the way when did blogging become so ugly, nasty, mean and personal. It is fine to have differences of opinion and debate. I certainly don't expect everyone to love and agree with my thoughts and ideas. But I feel sad and attacked by the comments after my last post in particular. I am waiting to hear more information from LogoWorks before making any additional comments on that post. For the moment, I stand by my original post. But for the time being I am removing it. Because for some reason, everyone has decided to attack me. I had a good expericence and have read many good things. This is only a blog, my comments are personal. If you really want to complain contact the Wall Street Journal to retract their story or some of the other publications that have also written favorable comments about them. Thank you.

[Eric Rdz]

Hi Laura:

I liked your post as always !
Just one question:

What is the positioning of HEB ?
Is it possible for him to compete successfully against Wal Mart to challenge its domination in the Grocery Business ?

At least, in Monterrey, Mexico, HEB is beating Wal Mart.

Best