It's cool, just don't advertise it

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The go-go dancers zoom across the white background. Cha-cha-cha Choxie ... the Chocolate with Moxie.

In typical Target style, the spot launching the chain's private-label line of chocolate-including champagne truffles and chocolate espresso beans in fancy packages for less than $12-resembles a fashion ad.

Chocolate-loving bargain shoppers took notice, but so did the brand managers, suppliers and marketers regularly knocking on Target's doors to negotiate shelf space and push line extensions of their brands in the fast-growing retailer's 1,418 stores.

Why? Target had crossed a line, breaking what's been an almost unspoken agreement between major brands. Big and small brands alike smile and take it (a brand suit against a retailer is relatively unheard of) when retailers launch brands that rip off their own. Just don't shout it to the world.

Indeed, it's a rarity for a retailer to advertise a private-label brand. So as retailers further consolidate and gain more power to set prices and boost their own margins, Target's ad-backed, premium private-label strategy is being closely watched.

For starters, it is antithetical to that of Wal-Mart. Instead of making cheap, knock-off versions, Target is developing true brands, often at higher prices than national competitors. And in the case of Choxie, advertising it.

"What's unusual with Target is they are taking their own brands to the level where it is the most important on the shelf," said Brian Sharoff, president of the Private Label Manufacturers Association. "Target comes from a department-store mentality. You create a brand in a department and give it the same status as a [national] brand."

The looming question is whether Target can pull off with food what it's done with fashion.

A vendor who works the buying offices of Minneapolis-headquartered Target and Bentonville-based Wal-Mart said Target's recent push behind uber-premium brands like Choxie isn't a good sign. "It's something Wal-Mart doesn't do for now," the supplier said. And by any measure Wal-Mart is the biggest retailer of house brands in the world, from Sam's Choice, a brand banner on everything from cola to cookies, to Great Value and even the nation's No. 1 selling dog food, Ol' Roy.

Yet, with Wal-Mart mimicking Target's ways in advertising, is an Ol' Roy ad truly out of the question? After all, for the first time, Wal-Mart recently appointed a senior director-brand management, Tony Rogers, a former Frito-Lay marketer, and charged him with overseeing all private-label brands. Mr. Rogers will build a Procter & Gamble style of brand management, with directors overseeing each of the retailer's major multibillion-dollar private brands.

Although Target has crossed the line with chocolate, it's unlikely the chain is going to start running ads for its private-label sandwich bags stocked next to Ziploc baggies. But if you're say, Revlon, you're certainly paying attention to Target's recent launch of a cosmetics line branded after makeup artist/designer Sonia Kashuk. Target is running ads for the premium brand that offers such pricey items as a $13.49 eye makeup set.
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