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260 • Part IV Implementing the Performance Leadership Framework
marketing purposes, and also buying patterns throughout the week, for
media advertising reasons.
Local Suppliers
Often supermarkets make use of local suppliers for nonbranded perish-
able products such as vegetables, bread, and dairy products, or for spe-
cific local brands connected with local traditional foods. As their products
do not really have a brand value, the supermarket can easily switch to
another supplier that offers a comparable quality for a lower price. It is
in the local supplier’s best interest to create an added-value relationship
by investing in logistical and administrative value-chain integration.
It can be a competitive advantage for local suppliers to be very trans-
parent in the production process of the goods they deliver, in terms of
the ingredients or materials used, or the food preparation techniques.
This helps to build competence trust, and allows supermarkets to be
confident that they are selling healthy foods and environmentally
friendly products.
Also, it is important for local suppliers to invest in integration with
the supermarket, for order receipt, invoicing, and tracking and tracing.
Putting an electronic tag on every product aligns the supply chain so
that it has almost perfect real-time information, very much like the just-
in-time delivery mechanism in the automotive industry. An aligned
supply chain is a large driver of supermarket profitability.
Private Label Suppliers
Having their own brand, or private label, is of paramount importance
to many supermarkets. The margin on private label products is bigger,
and they also have strategic importance in changing the power dynamic
to the CGP suppliers. If the supermarket’s name is an A brand, it can
develop its private label to have a certain brand value as well.
Supermarkets can have all types of relationships with the private label
suppliers. Sometimes these suppliers deliver a standard product, with
standard packaging, that has space for the label of the supermarket. This
represents a classic transactional relationship. Sometimes packaging can
be codeveloped, so that it matches the brand experience of the super-
market. This would be an added-value relationship from the private-label