Ralphs, Vons Confused by Their Own Mega-Markets
John Goetze has a Giant headache. And Doug Remp has one the size of a Pavilion. The two men are store managers at competing super-sized supermarkets. Goetze runs a Ralphs-owned Giant store in Anaheim, and Remp is in charge of a Vons-owned Pavilions store in Westminster. It’s tough enough just competing with each other in the rough-and-tumble California market. But the two grocery chains discovered something else since their larger-then-life stores opened over the past year:
They’re also competing with themselves.
It seems that some customers are having one heck of a time deciphering Ralphs from its Giant division and Vons from its Pavilions. As a result, the two firms have made recent advertising attempts to clearly distinguish their smaller neighborhood supermarkets from their discount-priced, mega-sized regional outlets. But store managers say the results of these campaigns are not, so to speak, in the bag. Customers are still walking into Pavilion waving Vons coupons, and carting Ralphs coupons into the Giant.
“We don’t like to publicize it,” said Goetze, the Anaheim store director, “but we’d be foolish not to accept Ralphs coupons at the risk of losing a customer.” Pavilions’ Remp said: “For over a month we’ve been telling our customers that we won’t honor Vons coupons, but it’s hard to say no when they bring them in.”
All of this is but one part of a nagging identity problem that marketing experts say the two chains will grapple with for months to come. For example, although Ralphs stores advertise that they will not accept the Giant coupons, many Giant stores take Ralphs coupons--and even answer the telephone with a cheerful “Ralphs Giant.” And while Pavilions has dropped the Vons from in front of its name, the store is listed in the telephone directory as Vons Pavilions.
Still, the short-term confusion may eventually be replaced by long-term profits. To hang onto market share, grocery store chains are being forced to open stores of all shapes and sizes. Many shoppers, after all, prefer to wheel around the aisles of the mega-stores, where bigger volume and lower overhead result in rock-bottom prices. The supermarket chains are even opening these behemoths near their conventional markets, “because they’d rather compete with themselves than with someone else,” said Les Gilbert, senior editor and retail specialist for Fairchild Publications’ West Coast office.
For Vons, the move into Pavilions has been no picnic. “After months of agonizing,” said Roger E. Stangeland, Vons chairman, “we decided that the store was powerful enough on its own to develop its own draw.” So four months ago, Vons Pavilions dropped the Vons from its name.
Pavilions even hired its own ad agency, key/donna/pearlstein of Los Angeles, which is now producing a fresh set of advertisements that will soon hit the TV screens and newspapers. “Our assignment,” said Leonard Pearlstein, chief executive of the firm, “is to make Pavilions a stand-alone brand.”
Ralphs, meanwhile, has adopted a similar philosophy at the 15 Giant stores it has opened in the Southland over the last year. Although the Giant division has always kept parent Ralphs out of its name, the association with Ralphs was still made clear in the early ads. But that is no longer the case, and Ralphs isn’t even mentioned in most of its current ads. From the beginning, however, Giant and Ralphs have had separate ad agencies and different pricing and marketing strategies. “They’re two different operations,” said Al Marasca, executive vice president of marketing. “We’ve spent the last six months opening the Giant stores. Now we need to establish them on their own.”
Marketing experts do not envy Giant or Pavilions. “It’s really a problem to disassociate from a well-known firm,” said Gary L. Frazier, associate professor of marketing at University of Southern California’s School of Business. “It’s similar to changing the name of a product. Basically, it takes a lot of money.”
Channel 7’s New Line
Archbishop Desmond Tutu said yes. Geraldine Ferraro said no. Cesar Chavez said yes. Peter Ueberroth said no. And Richard Nixon, to date, has said maybe.
These big-name personalities have been asked, not to run for office, but to make personal statements as part of a new ad campaign for Channel 7, KABC’s Eyewitness News in Los Angeles. Although the station is the top-rated local news channel, it is in the midst of abandoning its 10-year-old image campaign--”Because there’s more to life than news, weather and sports”--and is replacing it with a new tag line that reads: “We’ll show you what the world is. Imagine what it could be.”
The $200,000 campaign--which also features spots with the Rev. Jesse Jackson and Dr. Robert Jarvik--was created by the Los Angeles ad firm of Davis, Johnson, Mogul & Colombatto Inc. “We asked news makers how they would make the world a better place,” said Brad Ball, the agency’s president, “but they only have 25 seconds to say it.”
None of the celebrities even mention KABC. Instead, they speak out on their favorite causes. “Much of what makes news is human suffering, “ said John C. Severino, president of KABC-TV. “This is our opportunity to tell another story.”
Indeed, one more story may yet be told--by Corazon Aquino. “She’s agreed to do a spot.” said Ball, whose agency contacted her months before she was named Time magazine’s Woman of the Year. “It’s just a matter of us getting to the Philippines to film it.”
Snow White Turns 50
Her Italian-made porcelain figurines will sell for about $1,500. Her solid gold coins will go for about $1,000 a set. And a set of her silver-plated birthday cake candleholders will sell for a paltry $35.
No, this is not an estate sale at Imelda Marcos’ palace. These are commemorative items to be sold as part of Snow White’s 50th birthday. To cash in on the celebration, more than 100 licensees have lined up to market merchandise that features Walt Disney’s first heroine.
There’ll also be the more conventional Snow White merchandise, like General Electric-made night lights and Milton Bradley-produced video games. But the costly, upscale merchandise--expected to be on the market by spring--is a conscious attempt that Disney’s merchandising group began one year ago “to become more contemporary,” said Jon Lang, marketing manager at Disney’s licensing division.
Other plans include the re-release of the film “Snow White and the Seven Dwarfs,” television specials and special events at Disney theme parks. By the time it’s all over, Disney executives estimate that total revenues from the venture could “well exceed” the $330 million that the movie has grossed since it premiered half a century ago.
“You know,” said Robert Levin, senior vice president of marketing at Walt Disney Studios, “it’s almost as if there’s an American tribal right of taking the children to see Snow White.”
