Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that

have value for customers, clients, partners, and society at large - American Marketing Association. Marketing mix has been defined as the controllable variables the company puts together to satisfy this target audience (McCarthy, 2004) American retailing market has grown considerably and china is the fastest growing market with 8.68% yoy registered growth. In 1995 Wal-Mart owned stores in all 50 states of U.S with a combine 2784 stores globally. In 1996 china had total number of 700 stores which were engaged in organised retail Additionally, predicted annual growth rates of 8% to 10% would increase Chinas annual retail sales to US$ 2.4 trillion by 2020, thus making it a major market in the future

** Marketing Mix 1. Product 2. Price 3. Place 4. Promotion 5. People 6. Process 7. Physical evidence ** Compare and Contrast Marketing Mix of Wal-Mart Wal-Mart China

Product: - No difference in product portfolio offering US

1. Frozen foods, Electronics, Merchandise are fast moving consumer goods/durables. 2. Bulk buying is done use of cars

China
1. Fresh foods (fresh as alive) are high in demand. Merchandise, electronics are still not catching up as Chinese consumers still shopped for basic commodities 2. Daily/frequent buying was preferred use bicycle or walking 3. Impulse purchasers (eager to spend growing middle class) 4. Brand Conscious but little/ no loyalty towards a brand.

 Price:US
1. 2. 3. 4. Not too sensitive about price more focus on quality and customer service. Income groups relatively by and large same. Able to keep the product price below 20% market price Sales per square foot was at US $413 (highest in the industry compared to US $222 of its nearest competitor)

China
1. 2. 3. 4. Diversity in consumption pattern pertaining to the social strata individual belongs. Highly price sensitive customers. Willing to spend hours searching for the best price. Huge income disparity among people Urban and rural population, ranging from US $500 to < US $20000 p.a, richest 10% had disposable income 11.8 times the poorest 10%. 5. Product prices more or less at par with other stores due to varying reasons like government bureaucracy, shoplifting, inefficient distribution, high real estate prices. 6. Customer psychographics - Huge difference in Coastal land and hinterland 7. Average spend per visit is just US $6 to $10 result average cost to serve a customer grealty increased

Place:US
1. Location of stores strategically placed in centralised location, high number of customer foot fall. 2. Over 80% of the American household shopped from Wal-Mart (convenience is cited as the primary location for shopping by non-Wal-Mart shoppers in American market). 3. Cluster of stores, Different formats of stores to support and boost sale (discount stores, super centre, neighbourhood market etc.) 4. Good infrastructure equipped with excellent inventory management supported Wal-Mart. 5. Liberal Government policy.

China
1. Stores located only in upmarket areas which already have high density of organised retail stores. 2. Doubts about low income rural areas of locating stores forced to refocus in urban/expensive areas further escalating prices. 3. Underutilisation of existing distribution centres, government bureaucracy further impeded the process of entering the main city Shanghai, opening up of multiple stores to bring economies of scale. 4. Fragmented and poor infrastructure. 5. Promulgation

 Promotion Us Attracting customers through key initiatives like :

EDLP a key communication propagated by Wal-Mart throughout the year Offer/schemes (such as special Buy, roll back) emphasis on discount, bulk buying Averaging around 20% less prices than their competition. Close watch on the competition (monitoring competitors store to keep the lowest price of any product available in the market) 5. Positive Image Word of mouth promotion All these factors helped to Wal-Mart to retain and attract American customers 1. 2. 3. 4.

China
1. Not able to come up with a uniformed national merchandising or marketing strategy because of chinas widely dispersed consumption pattern in term of both scale and variety. 2. Price the most important criteria in buying process 3. Intense competition coupled with distribution, economies of scale issues resulted to Identical/similar pricing 4. Easily swayed by promotion campaigns

People US
1. Motivated employees excellent customer service 2. ESOPs shifting focus from Employee to Owner of the company, from salaries to stock performance. 3. Job rotation involvement and knowledge of different functions of the company 4. Building trust by sharing of information 5. No unionisation formation China 1. 2. 3. 4. 5. 6. Poor working condition Low wages No ESOPs High Management turnover Unionisation Internal Shop Lifting which resulted to 5% of sales compared to international standard of 0.3%

 Process US
1. 2. 3. 4. 5. Cost control Technology infusion Implementations of Electronic Data Interchange (EDI) Bar codes to understand customer shopping habits. Efficient inventory management centralised large warehouse, half day inventory,
optimum utilization of distribution centres

6. Excellent distribution system hub & spoke distribution system China 1. Lack of IT network, poor infrastructure 2. Not able to implement the web based system which allows hourly tracking of sales and inventory and pricing of goods which was a critical success factor in the US, 3. Wal-Mart large scale project to link suppliers electronically to its system, less than 30% had been connected so far 4. Rest 70% supplier relied on the obsolete conventional system of Fax.

Physical Evidence US
1. 2. 3. 4. Convenient location Freebies offered like free parking Ample Space to shop(super centres) One Stop Shop catering to all the needs of the customer

China
1. Poor infrastructure

2. Due to Chinese living in small and noisy places, they stroll in malls for spending leisure time 3. What worked in US had no impact in Chinese markets as the Chinese psychographics and consumption pattern vastly varied with America.(in terms of free parking etc.)