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MARKETING AUDIT WALMART

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Running head: MARKETING AUDIT [Do not use all capitals in academic writing--unless in trade name, an acronym, or the running head ] WALMART

[Make sure paragraph indentation is five to seven spaces or one tab stop] Marketing Audit: Wal-Mart

University of Phoenix


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Your [Eliminate second person (you, your) in academic documents and avoid addressing the reader directly. Use third-person pronouns (he, she, it, they)] name Goes Here

June 16, 2011

[Incorrect indentation] Executive Summary

Sam Walton never could have imagined the success he would attain when he opened the

first Walmart store in Rogers, Arkansas, in 1962. No management expert could have ever

predicted the success of the small-town merchant who opened his store to provide the

community with quality products at lowest price possible. Walmart continues to grow and his

leadership values continue at the core of the corporation many years after his passing and now

["Now" is a difficult word. Because this is being read some time after you wrote it, "now"

is ambiguous--do you mean at the time you were writing? When was that? If you mean "as

of the present time" (Since the revolution, George is now king), you can simply leave out

"now" = Since the revolution, George is king. If the time or date is important, fill it in] are


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globally known and practiced. The company continues to be the innovator of the retail industry,

and having [Writing suggestion--"having" as a transitive verb is vague. Reconsider the

sentence using "possessing," "acquiring," "developing," etc. Often "having" can simply be

deleted] stayed loyal to Sam Walton’s leadership principles and his legacy and adopted state-of-

the-art [Cliché--"state-of-the-art" is an old phrase, seen too often, and marks your writing

as unoriginal. Try to express the idea in another way] technology as well as undergone

continuous [Check spelling: "Continuous" means continuing unceasingly, constantly, all

day and night; "continual" means frequent but not uninterrupted continuance] efforts to

innovate, it has become the bigger retailer worldwide. Currently, with [Remove comma before

"with" (unless beginning or ending a parenthetical phrase)] Walmart's approximately 2.1

million employees and 8970 stores, of which 4557 are overseas, Walmart’s policies and sales

have allowed it to leap forward even during difficult economic times. Even in the United States

alone over the past five years, the number of Walmart stores has exceeded the number of Target

and Kmart stores, which represent its closest competitors, combined. This gap does not limit

itself solely to the number of stores, and in fact ["in fact" is a parenthetical phrase, an aside

made to the reader, a sort of "shared pause." Usually a comma should precede it (and one

should follow it if not at the end of a sentence)] , it becomes even more staggering when

considering Walmart’s sales and operating income. Walmart net sales for 2010 were $405

billion; from that amount, international sales surpassed $100 billion for the first time, a 1%

increase over net sales for 2009. Its operating income is $26.0 billion and its ROI is 19.3% for

2010. All of these numbers and its participation in the global market make Walmart the most

impressive private employer in the world, as well as [No comma before "as well as" (which


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means "in addition to" and is not a conjunction the equivalent of "and")] the biggest, as it

increases its sales and its relationships with communities and its workforce.

Many customers consider that Walmart is more than just a retail chain: it is an American

tradition that continues to play a relevant role in the communities and benefits many working

families around the United States and in the global market. The significance of Walmart’s low

prices is even bigger these days given the global economic downturn. Customers now have a

tendency to exchange their traditional brand names for Walmart’s levels which [Use "that" for

a restrictive phrase (or place a comma before "which")] has increased sales of the General

Value brand. Walmart’s presence in most towns across America has made it omnipresent in

American life: more than 84% percent of Americans have shopped at Walmart. The use of

customer data and the high technology of its inventory have allowed for [This is a phrasal verb,

two words that together mean something different from their individual definitions--

looking up each word in the dictionary would not produce the meaning, which could cause

misinterpretation in an international business communication. Try different wording, such

as simply "allowed" or a form of "provides," "permits," etc.] an increase in segmentation in

serving its customers. The company is using its resources and technology, such as its inventory

system to market to ethnicities, customer age groups, and diverse income levels. Recent studies

concluded that increasing numbers of Walmart shoppers make more than $70,000 a year when

compared to 2007.

Walmart is broadening product assortment by approximately 8,500 items or 11 percent

[Use the symbol with numerals--11%] in an average store. Walmart has achieved its

differentiation strategy by offering unique warranty and brand images; its customers believe that

they are being [Doctoral rule (but good advice for any academic writer)--If not a noun (as


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in "human being"), the word "Being" is hard to imagine; it means "existing." Try to

rewrite this without using "being"--with action words like "attending," "working,"

"living," "experiencing," simply "as"--or even removing "being" completely] supplied

[The passive voice is a form of "be" (being) and a participle (supplied). Over-use of the

passive voice can make paragraphs officious and tedious to read. Try to use the active voice

most often; for example, passive voice = The paper was completed on time. Active voice =

the student completed the paper on time--See Center for Writing Excellence > Tutorials &

Guides > Grammar & Writing Guides > Active & passive voice] with remarkable features

that they cannot find at any of the other retailers competing with Walmart in the market. Experts

continue to point to Walmart as having the most assertive marketing model of the industry.

Walmart thus may have the best marketing strategies; Walmart price rollback tactics reflect its

main objective of making decent brand name items available at the lowest prices in the market.

The adaptability of its forecasting model is relevant as some areas may have customers

with certain needs, preferences, and shopping habits that may differ from other areas, and

this influences its product development in meeting the different stores’ demands appropriately.

Its corporate image is more essential ["essential" is an absolute. Something is either essential

or it is not, so something cannot be "too" essential, "less" essential, "very" essential,

"slightly" essential, etc. Avoid adding a quantifier to an absolute] these days as customers

and employees have become the best advertising for businesses.

Recommendations

Walmart should continue focusing on its average customers: low-income, working families. The synchronizing of [Writing suggestion: remove "The" and "of"] the marketing information system allows the successful store segmentation of local area cultures and ethnicities. The recent


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economic crisis has brought a new group of customers to the store which [Use "that" for a restrictive phrase (or place a comma before "which")] also has made the company adjust its strategies and tactics to attract new clients.

Walmart has enough resources in its budget to continue buying prime advertising time. The company should continue using real [Writing suggestion--"real" or "really" means "existing in actuality"--it adds little to the meaning (and using it to mean "big," "very," or "genuine" is slang); replace it with a more expressive word] employees and customers in its advertising campaigns as this feature makes them more appealing to local communities.

The company’s advertising campaigns should continue adapting to the market circumstances and develop its informational campaigns to educate customers with regard to its simplified return guidelines: Customers do not have to bring in a competitor’s advertisement to have a higher price matched to a lower.

Through public campaigns, Walmart needs to continue to address the allegations brought forth by Walmart employees regarding its human resources practices, environmental issues, suppliers, and Walmart's economic impact [Doctoral rule (although good advice for any academic writer): "impact" is a noun (a hit). It is informally used as a verb (impacting the business), but avoid this in academic writing ] on small business in rural communities. The company should also make public all its community project participations to reflect that they actually [Cliché: "actual" and "actually" are weak words whose meaning is nothing more than "in point of fact." They are often used as intensifiers but usually can be deleted with no change in meaning ] contribute to the community.

In rural communities, it needs to find ways to stop the progress of such chains as Dollar General [A military rank is not capitalized unless it is the first word in a sentence or associated with the name of a person or institution, e.g., Captain John Doe. If not, it is just a label, such as lieutenant, sergeant, colonel, corporal, etc.] and dollar stores.

Walmart needs to allow other demographic groups beside Latinos to feel they also have their needs catered by using its global connections to offer more products related to other cultures.

Walmart must continue placing the customer at the center of what they [Check pronoun agreement--if "they" refers to "customer" (or a singular subject), it should be singular, too (he or she) and perhaps require adjusting the following verb] do; after all, its customers made the corporation what it is now. As Mike Duke, Walmart CEO [Unless this is on the title page or in an in-text citation, spell out the full name before first use of an acronym] , expresses, the corporation needs to get [Doctoral rule (although good advice for any academic writer)--instead of using "get," which can mean many things, more formal is to use forms of "receive," "obtain," "arrive at," "can," "could," "grow," "able to," etc.] ready to serve the “‘Next Generation Customer ‘With Passion and Purpose amid their Priorities Include


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Growth, EDLP and EDLC, Talent, E-Commerce and “Live Better” (Walmart, 2011) [The citation for a direct quote needs the page number] .

Walmart needs to take a new approach to its ethical issues and include all stakeholders in this approach. It is ["It is" is an awkward phrase if "it" is not clearly a thing] hugely beneficial for communities to buy at such low prices as the ones ["The ones" is simpler as "those"] offered by Walmart, but the company needs to take the center of attention from its low prices attracting customers only and also pay attention to other groups, such as its employees, because [Remove comma; "because" is not a conjunction] they are the first word of mouth that the business has.

TABLE OF CONTENTS

SECTION HEADINGS [Incorrect indentation] Page

Page [Typographical error: eliminate duplicate word (if on the same

line)] # Introduction [Avoid using "intro" or "introduction" if this is a subtitle. At the beginning of the essay, the following could be nothing else] 6 [Write out numbers under 10] Strengths 6 [Write out numbers under 10] Weakness 8 [Write out numbers under 10] Opportunity 9 [Write out numbers under 10] Threat 10Customers Perceptions 11Demographics 14Competition forces 15Economic factors 16Marketing Objectives 19Strategies 22Tactics 22Product 25Price 25Place 26Promotion 26Conclusion 27References 29


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Wal-Mart Marketing Audit

The story of Walmart, one of the largest corporations in the world, began when Sam

Walton and his brother, James Walton, opened their first store in Rogers, Arkansas, in 1962. The

goal of the company was to make quality products affordable to customers. The company has

become one of the largest private employers—“Walmart employs more than 2.1 million

associates worldwide” (walmartstores.com, 2011)—and has stores in 15 different countries

worldwide. “Walmart serves customers and members more than 200 million times per week at

more than 9198 retail units” (walmartstores.com, 2011). Walmart Supercenters, Neighborhood

Markets, and Sam's Club warehouses comprise the range of Walmart stores in the U.S.

Walmart’s reputation has grown proportionally to its ability to save money for its customers and

increase its convenience for consumers as a one-stop shopping store. Walmart has grown


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successfully and has experienced global expansion. The company has put in place new strategies

to offer new products and to better its human resource management and the development of its

personnel. To purpose of this marketing audit is to provide a proposal for how Walmart can

approach certain issues that may affect its marketing policies by using the SWOT tool,

considering environmental aspects of the corporation, and examining different marketing areas

that influence the way Walmart does businesses.

SWOT Analysis

Strengths

Walmart’s has various strengths as enumerated below. First, it is an innovator in the retail

industry in the country with stores in almost every town in the United States. It has been on the

list of the most successful companies in America and its stores in more than ten different

countries produce billions of dollars in revenue each year. Walmart benefits from having a high

purchasing power, which allows the store to buy in bulk and beat competitors’ prices. Walmart

makes its products attractive to customers by shifting the low-cost advantage to them, giving

them decent quality at a lower price. The concept of the Walmart Supercenter provides

customers with the ability to satisfy all their needs and wants in one store. The stores have

competently used technology to assist with their inventory system, which tracks all of its goods

and detect its needs for additional inventory in specific areas; once the process is complete it will

also generate orders to suppliers for products that are lower in stock. Logistics is one of

Walmart’s significant strengths; its inventory system provides it the opportunity to utilize the

just-in-time inventory concept. With this, it avoids excessive inventory and saves in the storage

cost for its inventories. This maintains customers satisfied due to its innovative styles, which

meet consumers’ expectations that Walmart be of higher quality when compared to other


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retailers in the market. The company has committed policies towards its employees, which make

its benefit packages of a superior quality when compare with those of the industry. Currently,

Walmart net sales for 2010 were $405 billion; from that amount, international sales surpassed

$100 billion for the first time, which is a 1% increase over net sales for 2009. Economic trends in

the past years where many stores have closed their doors after not being profitable, and growing

throughout recession years when consumers needed to save more than ever, have made Walmart

stores an unquestionable part of the consumer shopping culture for the many products that

Walmart offers. Walmart is the largest private employer in the United States, and the company

has made great efforts to provide decent jobs for many employees who have not been able to

continue their formal education. Walmart has also managed to have its sales grow every year

and, especially in 2010, at an international level. Its incredible sales are mainly due to Walmart's

aggressive growth strategy and its use of multimedia channels to advertise products.

One of Walmart's competitive advantages is its logistics system, as it is able to ship

merchandise from many distribution centers, allowing it to use the cheapest and most efficient

routes, in addition to its alliance with many suppliers that allows the corporation to provide low

prices. Its online orders are even processed through specific distribution centers. Its inventory

system is another great strength since it has allowed Walmart to consistently keep its shelves

stocked with the most sale items. Technology is a strength that Wal-Mart has the monetary

power to continue investing in the store; online shopping has allowed Walmart sales to increase

globally. Providing service for their customers has become easier with the logistical ability

Walmart stores have.

Weakness


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Walmart also has some weaknesses. For example, its employer assessment is conducted on a

regular basis; however, this does not mean that it will take any measures against those employees

who do not meet its performance standards. It needs to update its mission statement; Walmart’s

mission statement needs to be in accordance with the multinational company it has become. The

lower price, decent quality standard is a substantial setback for Walmart customers since some

products are in accordance with these standards though many, in fact, are not. Walmart, as a

result of the economic crisis, is facing complications in its US stores as well as overseas.

Walmart’s suppliers do not benefit from Walmart prosperity since their margins of profit are

exceedingly low. Walmart also faces a need to adapt policies to current marketing situations. In

addition, the corporation was recently subject to severe critics with regard to misleading

advertising of some products (e.g. Walmart was involved in an unethical marketing case due to

some jewelry the Walmart Corporation claimed was eco-friendly and worker-friendly). Because

Walmart’s weaknesses not only affect the corporation’s image but also the lives of many other

stakeholders, most of Walmart’s detractors see the company as a giant that has taken over the

retail industry, especially because its pricing policy has overwhelmed many smaller retailers in

different communities. All this has caused major complaints from ethical shoppers, concerned

with the well-being of small retailers, who consider Walmart a monopoly. Walmart exists a

general store that carries products from various sectors, which puts the company in direct

competitions with more focused competitors in such areas as electronics, where these specialized

stores are able to provide better service in technology and, occasionally, better prices. People

also often have negative stances towards Walmart as a retailing giant because of its continuous

issues with legal actions from its employees stemming from experiencing low wages, sex

discrimination, and inadequate healthcare.


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Opportunity

Walmart’s opportunities lie in continuing its effort to increase the customer’s low-cost advantage

as actual economic crisis has depressed its customers’ spending capacity. To generate more

profits, it should explore more store development in Latin American and Asian countries,

markets previously unreached that could generate substantial profits which allow the opportunity

to diversify its types of stores. It needs to continue to focus on target markets that have made the

corporation the number-one retailer in the United States. Another great opportunity for Walmart

is to improve in those areas its detractors exploit, such as bettering their policies with employees,

especially training for those who are not meeting their performance level, and improving their

suppliers’ contracts to generate more benefits for them, and renovating some older stores.

Walmart has already announced it will increase benefits to its employees. Getting involved in

agreements such as the No Dirty Gold campaign, in which a jeweler becomes responsible for

verifying the sources of the gold it will sell, gives Walmart the opportunity to work on improving

the environment and situations abroad. The company is very concerned with child labor laws,

especially overseas. To improve its image at several levels should be part of its major targets.

Other growth opportunities include areas specifically related to the Walmart culture, as corporate

image is more essential these days as customers and employees have become the best advertising

tool for businesses.

Threat

The threats that affect the multinational store are that its competitors are trying to emulate

its strategy of lower prices, which could reduce Walmart sales. Walmart competitors are trying to

negate the quality of its products nationally and internationally. Its image as an employer has

been tarnished as the result of various law suits for discriminative practices against women. The


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company is subject to criticism by community groups which see it as exploiting its suppliers and

employees. Many small communities had complained that Walmart is a threat for the workforce

in those areas as it arrives in small counties and often drops salaries.

Another threat is the small discount stores in some areas of the country that are able to

open in smaller areas (e.g. Dollar General, 99 Cents stores), taking away customers that would

previously travel to Walmart to do their shopping. The discount offered at dollar stores also

creates a struggle for Walmart. Another threat is its continuous global expansion, which may

have been predicted to be a long-term factor in growth but that currently represents a slowing of

expansion in terms of sales for the corporation.

Environmental Aspect

A marketing audit should be a useful tool for a company to perform a review of its

current marketing strategies. The most challenging marketing functions are not related to the task

to be performed; the actual challenges lie in the constantly changing environment in which most

companies are involved on a daily basis. This is where a marketing audit can be of assistance to

an organization. Reviewing the environmental aspects will provide the prospect to appraise

accurately what Walmart is currently doing, permitting an evaluation of its current performance

and comparing it with past performances. It will provide the basis for taking further decisions

with regard to its marketing policies. Once the company has a summary of its current position, it

can take the proper decisions to adjust its marketing plan to its competition.

Customers’ Perceptions

Walmart serves millions of shoppers every week across its nearly 9000 stores in the

United States and abroad. Walmart also operates some “Stores of the Community” to serve a

variety of local needs and wants for customers located in rural communities. There are many


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different opinions with regard to the Walmart Corporation; it all depends on who one asks. In

some areas, communities consider that Walmart is providing a great service to the community by

providing them with low-price products that benefit working and low-income families far more

than any other economic group. On the other hand, some customers view Walmart as a giant

corporation that arrived to eat up local merchants and destroy the local economy by cutting

prices and cheating employees out of a fair salary. This last group is the one that advocates

against Walmart because it sees the company as lowering workers’ conditions in the United

States. The value of a product or service for a customer is the result of a combination of the

customer’s wants, predilections, prospects, and the economic resources to buy the product or

service when compared to competitors' offerings. This is why most pricing managers are

required to research the market to determine how much the customer values their products; also

they have to compare their offering to those from their competitors to see if they have any

product differentiation advantages to offer to their customers. Walmart policies are clear when it

comes to satisfying the wants and needs of its customers as it a top priority to satisfy them.

Passing the benefit of low prices and services to customers has become a major strategy. During

recent years Walmart has continued to see the trend in its customers to make larger purchases at

the end of their paycheck period. Walmart customers these days are harder to define; the

recent economic crisis has changed Walmart customer’s profile, and many external issues

have contributed to this switch; amid these issues are rising gas prices, unemployment rates, and

inflation. Walmart customers include everybody that needs to save money during these stressful

economic times and every member of the local communities where Walmart is located,

regardless of their income and ethnicity. Essentially, most households in America are familiar

with buying at Walmart; “Consumers across various income brackets are now taking


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advantage of Wal-Mart’s one- stop shopping convenience to purchase a wide assortment of

consumer packaged goods products at low prices” (Walmartstores, 2010).

“According to Bill Simon, president and CEO of Wal-Mart's U.S. division,

the importance of delivering everyday low prices has never been greater, as our customers are

consolidating trips due to higher gas prices” (businessweek,2011). “The paycheck cycle

remains pronounced. During the quarter, we saw continued pressure from ongoing

macroeconomic conditions, as customers continued to trade down to opening price points and

some private-label products ” (businessweek,2011).

Data from comparison studies between Walmart and Target reveal that Walmart shoppers

are mainly adults, and its exclusive shoppers are over 50 years old. Only 12% of Walmart

customers have an income of in excess of $100K annually, and most Walmart customers have

incomes than of about $57K; most Walmart shoppers are retail shoppers who also shop at Dollar

General, Family Dollar, Big Lots, and Target. Walmart shoppers are likely to be loyal customers

of the store. Walmart’s exclusive shoppers are located in midsized and smaller, Southern

markets. Walmart’s exclusive shoppers are also the most likely to be “one-stop shoppers.”

According to Jack Sinclair, Executive Vice President of Food Merchandising for the Bentonville,

Arkansas-based retailer, Walmart is seeing customers “trade downs in all sorts of ways

from brands to cuts of meat” (mlive, 2011). “The reality is our customer base has changed,” said

Sinclair. “Those shoppers are more likely to be young, multicultural, and not college-educated.

Their values are centered on family, finances and community” (mlive, 2011). This encourages

the retailer to start several initiatives to meet the needs of that customer base, from putting

an emphasis on stocking healthier food — with less salt, fat and sugar — to promoting earth-

friendly practices for growing food.


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“Saving people money to help them live better was the goal that Sam Walton envisioned

when he opened the doors to the first Walmart” (Walmartstores, n.d.). However, this does not

mean that customers who are affluent do not shop at Walmart; millionaires are not its ideal

customers, but they also shop at Walmart: “A lot of the US millionaires shop at Wal-Mart. It is

doubtful that they wear 99 cent t-shirts, but that does not mean they do not like to save money”

(knoll, 2011). This means that “Walmart is not necessarily spending time and money making a

brand promise that speaks to people who care more about high-end customer service and less

about price”(openforum, 2010). It already defines who its ideal customer is and Walmart

Corporation will continue adapting its strategies to continue catering to its customers’

needs. However, something that is still clear to the Corporation is that it depends mainly on its

top shoppers, which are the group of customers that make more than sixty trips per year. Other

areas of change Walmart has implemented that has an impact on the customer is the creation of

environmentally-friendly stores. Walmart continues building its Environmental Demonstration

Stores as well as distribution centers, like the ones in Lawrence, Kansas; Moore, Oklahoma; and

City of Industry, California. Walmart’s construction of these stores was its response to criticisms

about its excessive use of energy and its lack of non-recyclable products policies. “The opening

of the Balzac Fresh Food Distribution Centre on November 10, 2010, marked a major milestone.

With pilots of hydrogen fuel cells used to power forklifts, as well as solar thermal and wind

power, the 400,000-square-foot facility serves as a living lab for sustainability” (Walmartsores,

2011).

Demographics

Another way to analyze customers for a company is to study the demographics of the

customers in a particular business. Walmart’s demographics have changed and with it, and the


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fact their products face competition from K-Mart, Target, and other smaller retail stores, have

forced Walmart to customize its offering based on demographic differences. The company is

using its resources and technology, such as its inventory system to market to ethnicities,

customer age groups, and diverse income levels. Marketing to minorities such as Latinos in

many areas of the United States has been used by Walmart to offer products that are purchased

by that particular group, making Walmart centers the store of choice for them as they can find in

Walmart everything they desire for celebrations and their specific grocery needs (e.g., fresh

products, piñatas, Latino music, and several brands from various Latin American countries).

Walmart has successfully adapted its stores in accordance with the United States’

changing demographic composition, which is more diverse every day. Walmart's new challenges

are how to use that diversification in demographics to become more open when it comes to

offering products that are related to other minority groups that continue growing in the States.

Diversity should also be used as an opportunity for Walmart to adapt to the new market demands

and include products that are purchased by most groups at amounts that will purchase

merchandise that can be wasted, because people from other cultures may feel that they are left

out by the multi-chain store.

In a recent study, a shopper panel assisted Walmart in modeling its customer profile. The

study was made with a combination of survey info, demographics, and scanner data. The

study determined that “Wal-Mart shoppers due to gas prices are making fewer trips to the store,

and when they go they spend three percent more” (bnet,2008). The customer’s trend is to

purchase less expensive brands, relying more on coupon savers, and shopping at stores like

Walmart Supercenters to save on gas. The study concluded that the fastest growing demographic

when it comes to Walmart was those shoppers making more than $70,000 a year, when


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compared to 2007. With their low price messages, they are focusing again on the group that

composes 42% of Walmart buyers, customers making less than $40,000 a year. “The average

yearly income for a Wal-Mart customer is only $35,000” (wikinvest, 2011).

Competition forces

Walmart's chief competitors are Kmart and Target. Of the three companies, customers

prefer to buy at Walmart because of its low prices and the more diverse selection when it comes

to groceries and services. Both competitors also have brand name products but if the products

they find at Walmart can be purchased for lower prices, customers will shop at Walmart and

since they are at the store already, they will purchase the rest of their needs. As previously

explained, the demographics and customers income for Walmart have changed considerably the

last few years. Walmart has become more accessible than Target and Kmart, especially since

Kmart closed 110 stores in 1994 with Target having yet to reach many small communities.

Needless to say, neither of the competitors has the global market access Walmart has. In

comparing Walmart to its competitors, there are several differences, the most relevant being

pricing and service differentiation. Walmart’s just-in-time inventory program has allowed the

corporation to reduce its cost and pass that benefit to the consumers, something that Kmart and

Target have yet to do. Walmart and Kmart may be better equipped when it comes to grocery

shopping and more variety of articles; however Target is more attractive to customers when it

comes to clothing. Walmart’s inventory system provides it with the advantage of having the

proper inventory at all times—an advantage that its competitors have not achieved. Although

Target stores are less crowed due to their settings, which made the shopping experience more

pleasant, Kmart stores are in need of much renovation and Walmart stores indeed are usually

more crowded and not easy to shop at. When it comes to savings in these economic times,


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however, Walmart still offers a pricing advantage. When it comes to its employees Target has

adopted the boundary-less corporate style, which allows them to have the best managerial style

of the three stores. Aside from this, there are not as many charges against Target as the many

negative allegations employees make of Walmart. Kmart filed for bankruptcy in 2002, and after

merging with Sears in 2004, it changed its name to Sears Holdings Corporation.

Economic Factors

Figure 1. Number of Stores


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The graph above demonstrates the massive gap that exists between Walmart and its

competitors. Despite the fact that Target and Kmart are the largest discount stores in the world

after Walmart, Walmart’s expansion into international territory, with 4557 of its 8970 stores

abroad, has allowed it to leap forward even during difficult economic times. Even in the United

States alone, however, over the past five years, the number of Walmart stores has exceeded the

number of Target and Kmart stores combined. This gap does not limit itself solely to the number

of stores, and in fact, it becomes even more staggering when considering Walmart’s sales and

operating income, both of which are displayed below.

Figure 2. Merchandise Sales and Services


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Figure 3. Operating Income

Walmart’s dominance in both domestic and international markets is unquestionable. The issue,

then, is not necessarily the unexpected growth of one of Walmart’s competitors that might leave


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it struggling. Walmart faces no real risk of external pressure, at least from the market, that will

undermine its influence. In addition, the company has control in an even more vital area of

influence: employees. Employees are the most important contributors to the success of a

company, and Walmart, with its approximately 2.1 million employees, is poised to take

advantage of this fact in a manner neither Kmart nor Target can.

Figure 4. Number of Employees (2011)

Given these factors, the primary concern of the company, now that it has established its control

over the retail market, is not exerting more influence over world markets; this is expected simply

from its sheer size. Rather, the question is how Walmart can increasingly benefit its employees

and customers using its ability to generate substantial revenue and interest.

Marketing Objectives

Walmart clearly defines its marketing objective by the use of several strategies, though it

appears that Walmart's marketing objective is only to sell products at low prices to their

customers. To Walmart this means “Saving money is a means to helping our customers live

better. By offering the best possible prices on the products our customers need, we can help them

afford something a little extra” (Walmart, 2011). Walmart's mission statement is consistent with


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its marketing objectives. Defining measurable marketing objectives is important because it

brings focus to the marketing plan.

Walmart’s strategies as a company are planning, organizing, leading and controlling. Its

planning strategy is straightforward: sell under its competitors at a lower price. Its organizing

relies on an advanced inventory system that makes information available regarding what

products are low so the store can replenish its supply. In leading, it continues working on

presenting smiling employees to its customers. Its controlling strategy consists of the fact that

most customers of Walmart truly believe in the company’s slogans. The original slogan

“‘Always Low Prices’” (huffingtonpost.com, 2007) was removed after 19 years, when Walmart

launched an advertising campaign to promote its new slogan "Save Money. Live Better”

(huffingtonpost.com, 2007). According to Stephen Quinn, the Chief Marketing Officer,

“the campaign is aimed at personalizing the chain's low prices” (huffingtonpost.com, 2007).

The Marketing Mix is what makes a difference for Walmart’s power in the industry. The

products are sold at the lowest price when compared to the competition; by researching their

prices, they set prices with a comparative advantage. If a product is priced for less than that of a

competitor, Walmart will match it with a simplified process. “Simplified guidelines: Customers

do not have to bring in a competitor’s advertisement. If customers find a lower advertised price,

we’ll match it at the register” (walmartstores.com, 2011). Its products are rarely out of stock, and

it continues to reinvent ways to market and add products. “Walmart is broadening

product assortment by approximately 8,500 items or 11 percent in an average store.

These assortment changes will bring back customers’ favorite local food and consumables,

among other products” (walmartstores.com, 2011). Walmart has enough resources in its budget


24

to buy prime advertising time. Consumers are reached on a daily basis by Walmart

advertisements.

The company uses real people in its advertising campaigns; this feature makes its

ads appealing to common citizens when real customers are telling other real customers how

much they have saved at Walmart. The company’s advertising campaigns are in a

constant stage of adapting to market situations; it uses all media channels to reach the most

customers. An example of this is its new advertising campaign which focuses on educating its

customers on its new strategies, based on adding more products, simplifying the ad matching

process, new store signs, and being more locally-oriented. It also places the customer in the

center of what it does and listens to its customers’ suggestions in order to embrace change and

implement new policies. Its ad campaigns are diverse; it goes from its prescription plan, at $4.00

for generic medications, to the three cents per gallon discount on gas if customers pay for it with

a Walmart gift card. The money customers save can be transferred to the customer’s needs.

Other chains do not have Walmart’s competitive advantage since no other chain offers

the vast array of products at truly discount prices. Walmart is effective in the marketing mix it

uses to achieve its marketing goals and make its marketing decisions, as it takes into

consideration the marketing mix product, price, placement, and promotion, always considering

the need to appeal to a broader target of customers and adjust to the industry market situations.

There are other companies that have been in the market longer, and they have not updated their

policies to their customers’ needs. In today’s economy, the consumer needs to stretch his

budget as much as he can, and Walmart has put customers’ needs at the center of its business, by

being innovators of the marketing for chain stores.

Strategies


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Walmart bases its strategies differentiating based on service because the customer values

better service albeit with slightly higher prices than a bargain price with lousy service.

Differentiating on the basis of service develops into a unique selling proposition for a company.

Any company differentiation strategy should be based on the needs of that business target

market, keeping in mind the customer’s needs wants and preferences, which should be

communicated to clients in terms of benefits that are being provided by the company. Walmart is

a corporation that uses a differentiation strategy to be successful by creating services that the

customers considers unique to customers with regard to the Walmart Corporation simply based

on Walmart's success, whether a person is aware or not that the service differentiation sometimes

does not exist, as others stores like Target or Kmart may offer similar services. Walmart

customers believe that the retailer is the only store where they can get all of those services that

are so unique to it, and the business accordingly markets its products in certain forms, allowing

customers to feel it is restricted to the store.

Walmart has achieved its differentiation strategy by offering unique warranty and brand

images; its customers believe that they are being supplied with remarkable features that they

cannot find at any of the other retailers competing with Walmart in the market.

Tactics

Experts have pointed to Walmart as having the most assertive marketing model of the

industry. Walmart thus may have the best marketing strategies; there are many successful

strategies that the corporation has used in its promotional strategies, including the Walmart price

rollback tactics that reflect its main objective of making decent brand name items available at the

lowest prices in the market.


26

When it comes to Walmart’s tactics, it is also clearly defined and innovative as the store

is no longer focusing on low income families and working families because the recent economic

crisis has brought a new group of customers to the store which has made the company adjust its

strategies and tactics to attract these new clients. The tactics that Walmart uses as part of its

marketing campaigns are fully part of the corporation; however, sometimes, Walmart’s tactics

send the wrong message to its customers. Walmart has forced many small businesses out of the

market and it is complained that they are being left with little if any profit. Many times its

suppliers have accused it of using guerrilla tactics. Walmart should stop applying these practices

as it will end up losing customers, especially those groups that see it as a giant corporation that

has arrived to sweep a community’s economy. The first lesson that is essential in pricing is that

the pricing strategy needs to fit the target market level (e.g., Walmart does not price their jewelry

for a target market that can afford to buy at Gordon’s Jewelers, or to price a Ford Sierra for a

target market that can afford an Escalade). Walmart’s tactics when it comes to its forecasting and

distribution channels is very effective; its investments in technology and greener infrastructure

have given the company in an advanced place in the industry.

Walmart’s forecasting is performed by its management with the use of various sources of

information such as historical sales data, statistical calculations using forecasting models,

economic trends analysis, a review of its inventory fluctuations, requirements and adjustments

for seasonal fluctuations, and an analysis of competitors. In addition, the forecasting department

must ensure that its analysis will match the nature curve of Walmart’s business demand. The use

of these tools allows Walmart’s management to adjust its inventories and sales projections in

accordance with market trends and which external and internal factors may have an effect on

sales.


27

Normally, large retail chains like Walmart, Target, and Kmart use business

intelligence analysis as the basis for its corporations to carry out analyses on existing customer

behaviors, as well as their shopping preferences. Walmart updated its model in 2008 to the

“Oracle® Business Intelligence Suite Enterprise Edition Plus (Oracle BI Suite EE Plus) to

provide comprehensive data intelligence and analysis across Wal-Mart’s operations”

(logisticsit.com, 2008). The system allows Walmart “to administer its logistics, transportation,

category management, finance, human resources, real estate, merchandising, store and club

operations and other business resources, within Wal-Mart and Sam’s Clubs” (logisticsit.com,

2008).

The adaptability of its forecasting model is relevant as some areas may have customers

with certain needs, preferences, and shopping habits that may differ from other areas, and

this influences its product development in meeting the different stores’ demands appropriately.

In coming up with the most accurate results, Walmart mostly faces the difficulty of an economic

crisis that may be affecting different areas where its stores are located, which may skew its sales

predictions. While it uses a general sales record data for its estimates, there are times where

Walmart cannot predict if there will be any external factors affecting its predictions. According

to Walmart US chief executive Bill Simon, “Walmart is not doing a good enough job getting

people who come in for groceries to also buy clothing at its stores, and weather hurt sales of

outdoor goods” (taipeitimes.com, 2011). This was apparently a trend for the industry as Simon

commented that “Wal-Mart is not the only one feeling pressure from bad weather.”

There are advantages to the Walmart model; its inventory is one of them as it uses

technology to assist with the system, and its inventory system tracks all the goods and detects the

need of additional inventory. Once the process is complete it also generates orders to suppliers


28

of lower-in-stock products. Despite the reverses on sales index, it continues to be the number one

retailer in America and continues to exceed its own expectations: “Wal-Mart Stores Inc posted a

-bigger-than-expected jump in quarterly profits” (taipeitimes.com, 2011).

Marketing Mix

The marketing mix for a company is the combination of several tools, which are used to

satisfy the customer needs and the company goals. The marketing mix is controlled by four

variables known as the four Ps: Product, Price, Place, and Promotion. The marketing mix for a

multinational corporation like Walmart is also affected by the four P’s. However, it is a bit

different than for other companies; after all Walmart is not just a regular grocery seller. Walmart

is the largest grocery seller, private employer, and, due its revenue, is considered the largest

public corporation the United States.

Product

Walmart offers its buyers a variety of brand names alongside to its own brand name

products. The corporation is always taking initiatives to take control of sustaining the nutritional

value of its products and use environmentally-friendly technologies. Walmart provides its

consumers with a variety of products that range from electronics, furniture, and clothing for all

family members, sports items, health and beauty care products, prescriptions, toys, grocery,

jewelry, and many others. It also offers products online, with safe and low-cost shipping. It

offers reliable services to its customers regardless of where they purchase its products.

Price

Walmart resells many brands, and its discounts packages for many items make its stores

attractive to many customers. In addition to being the largest retailer, there are none that can

equate their pricing policy to Walmart’s, making it hard for consumers to find better prices at the


29

stores of any other competitor. The corporation uses a universal bar code that simplifies the

products’ transition from the manufacturers to retailers. Grocery prices at Walmart stores are

lower compared to the competition. When it comes to electronic gadgets, they also offer better

pricing than the market. Walmart has a plus one policy that applies to their manufacturers, which

makes it mandatory for the producers to reduce or increase the quality of their products.

Walmart’s price policies welcome high-capacity producers because of the high demand of its

products.

Place

The concept of a one-stop shop has worked successfully for Walmart. A customer can go

to a Walmart store and feel like he is going to several stores at the same time; in one trip to

Walmart, one can purchase groceries for the family, obtain prescriptions, get services done in

their car, pump gas, and many other services offered by the business. The Walmart Corporation

has three divisions: Sam’s Club, Wal-Mart Stores U.S., and Wal-Mart. All are located in

buildings that have extensive shopping areas.

Promotion

There is no other store that uses media better for promotion. Walmart advertises in all

media outlets, and with multiple scheduling, it is able to afford marketing campaigns that target

specific groups (e.g., it offers advertising in Spanish for Hispanic customers). Its basic principle

of discount prices has worked perfectly for it and in addition to its regular discounts; it also

offers exceptional promotions during the Holidays, with prices are set that low that no

competitor can equal them. Its online store is one of its principal sources of sales. Its website is

extremely user-friendly and facilitates the shopper’s search for specific products.


30

Conclusion

Although the low prices policy had worked and had become the Walmart standard for

sales, which has taken the store to be the number one retailer in the global market, the same

fortune they had attracted equals probably its detractors, regardless of the many attacks Walmart

has manage to come forward and face the allegations to avoid being totally discredit with its

stakeholders. Walmart needs to continue on the attack and address throughout public campaigns

all the accusations dealing with Wal-Mart employees, suppliers, Human Resources practices,

environmental issues, and Wal-Mart's economic impact on small business in rural communities.

Its corporate image is more essential these days as customers and employees have become the

best advertising for businesses. Walmart also needs to focus on finding the ways to finally

resolve and correct those problems that continue arising. They are doing an excellent job on their

expansion policies at a global scale as well as creating more environmental friendly stores, and

offering products for several demographics by catering to them with specific products. In rural

communities they need to find ways to stop the progress of chains as Dollar General and 1$

dollar stores. Walmart needs to allow other demographic groups beside Latinos to feel they are

also cater to their needs by using its global connections and offer more products related to their

culture. Wal-Mart must continue placing the customer at the center of what they do after all its

customers made the corporation what it is now.

“Walmart CEO Mike Duke Calls for Serving "Next Generation Customer" With Passion

and Purpose amid their Priorities Include Growth, EDLP and EDLC, Talent, E-Commerce and

“Live Better”(Walmart, 2011). Since Walmart CEO is encouraging his associates to serve the

next generation of customers. The need to look into their Product line, it needs to be reevaluated

especially for the following products that have been the object of several complaints and still are


31

in the news for it. High-End Electronics, they offer brand name products, for times under the

price of $1000.00, the major complaint from Walmart customers is that the sales force working

in those departments at Walmart are not experts on their products which causes that the

Corporation is losing the opportunity to sell these items, with the appropriate training to the sales

personnel in the area the issue can be resolved. Wood Furniture the category of their furniture

has been the subject of many complaints, especially from environmental groups that had “in

2007 an environmental group published a report tracing furniture from Walmart suppliers to

wood illegally logged in protected Russian habitats for Siberian tigers and other

wildlife”( moneywatch, 2011). After the publishing Walmart promised to investigate and has

until 2013 to stop selling the products, this decision may hinder the store, since the phase out

may take even longer if they do not clearance does items and do not carry them any longer. They

should close this chapter sooner than 2013 and reestablish themselves with a brand new line of

wood furniture which allows them the opportunity to recapture their market in those products.

Walmart needs to take a new approach to its ethical issues and include all stakeholders in

this approach. It is hugely beneficial for communities to buy at prices as the ones offered by

Walmart, but the company needs to take the center of attention from its low prices attracting

customers only, also pay attention to the other groups such as its employees because they are the

first word of mouth that the business has.


32

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