Running head: Walmart marketing plan

Wal-Mart Stores, Inc. Marketing Plan

Oluyemisi Banwo

MKT570X

Instructor: Dr. Bob

Submitted on June 8, 2015

Sullivan University, Louisville

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Walmart marketing plan

Table of Contents:

Marketing Mix...page 3

Internet Strategy....page 4

Global Strategy....................................................................................................................page 6

Customer Relationship Management Strategy .page 7

Financials............................................................................................................................page 7

Sales Forecast....page 8

Conclusion.........................................page 9

References.page 11

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Walmart marketing plan

Marketing mix

I would be analyzing the marketing mix of Wal-Mart by going through the 4 Ps of marketing

which are: price, product, promotion and place (distribution).

Price: Walmart has always been known for its low prices. Its slogan says Save Money. Live

Better. This has helped in all the major decisions at Walmart including the use of technology,

marketing, and distribution. According to Ortega (1998), Walmarts mission was to offer the

lowest price to its customers, cut costs, and keep cutting so that it can offer the lowest price.

Ever since inception of Walmart, their goal has been to price the products at the minimum so

that more and more consumers can buy from Walmart and as a result, the concentration can

be made into volume sales rather than margin. According to Walton By cutting price, Walmart

can boost their sales to a point where they earn far more at the cheaper retail price than you

would have by selling the item at the higher price. In retailer language, Walmart can lower their

markup but earn more because of the increased volume (Walmart, 2010).

Some people however have a different opinion about the pricing of Walmart. According to

Cowgill of Zenith Management Consulting, Walmarts strategy is not low price. Rather

Walmart has been called as Master of Manipulating Perception. Walmart creates a

perception in consumers that the prices of its products are lower and they become stuck in a

self-reinforcing loop that keeps them shopping at Walmart. A very low-priced, high-velocity

item is placed at the opening price point spot in each store section. As a result the customer

perception is such created that since the staring item is less priced hence all other items are

low-priced. (Cowgill, 2005).

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Walmart marketing plan

Product: Walmart has not been known for following a product differentiation. Walmart has a

remarkable effort in trying to increase the quality of its products for its consumers. The

company has its own brands (house brands), under which the products are sold. These house

brands account for 40% of total sales, and the most popular one is the brand called Great

Value. This one in particular sells groceries in the shields of baking, breakfast & cereal,

beverages, canned goods & soups, condiments, sauces & spices, meal solutions, grains & pasta

and snacks, cookies & chips.

Promotion: The main promotion strategy of Walmart is to offer consumers the lowest price

always. Walmart is known for spending less money on advertising than the rest of its

competitors. Wal-Mart has invested a lot of resources on social media campaigns. The

advertising launched includes circulars, newspaper ads, website publicity, commercials, yellow

pages, mass mailers and electronics newsletters. The Promotional strategies followed by the

Walmart include discounts, coupons, samples, Weekly deals which is a set of products sold with

a great discount that varies every week, Ad match this is when a client finds a cheaper price at

any other competitors advertisements Wal-Mart matches prices to lower the cost of identical

products, Coupons this is when a customer combines an item on rollback or everyday low

prices with a manufacturer coupon. Wal-Mart accepts manufacturers coupons both, if the

coupon is printed by the company or by the client, Black Friday this is a day after Thanksgiving

when Walmart offers special promotions and open early to draw in customers. Wal-Mart

always sees an upward spike in sales and considers this to be the start of the holiday shopping

season.

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Place: Walmart as a lot of physical stores (discount stores, supercenter, neighborhood markets

and express stores) has well as online store (e-commerce format). Its store operations are

categorized into following. The only store of Walmart website is www.walmart.com in which

the client can find the weekly discounts, download the manufacturers coupons, read

customers reviews, sign-up for a newsletter, find the closest store and the most important one,

the customer can buy online. Shipping is free if the cost of the purchase exceeds $50.

Internet strategy

The internet strategy has changed customers behavior from store shopping to home

shopping. Customers can save a lot time by easily shop online this change led to operational

changes for retailer. Online store will become the mainstream of global business model.

Comparing Walmart and amazon, Walmart is way behind Amazon in the area of online

shopping. To catch up, Walmarts huge organization inertia will be a barrier for them to

respond quickly m (Banjo, 2013)

The use of the internet and information technology also affects Walmarts human

resources. Technology could replace some employees of Walmart, and for the rest of their

remaining employees, Walmart needs to invest in constant training for them to be competent.

Changes in human resources will be a challenge for Walmart, because laying off could lead to

some social issues such as unemployment, and training would cost Walmart financially.

Technology could lower Walmarts profit margin the use of the internet as enabled

people to surf the web and find all the information they need about a product online, this

would enable competitors to find and compare the prices of a product with other competitors.

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In addition, technology could also lower the competitors cost which includes communication

costs, labor force costs, purchase costs, infrastructure cost and searching cost, so that they

could provide the products with lower price because Walmarts core competitive advantage is

low price.

With the use of the internet, Stores location is no longer important. Traditionally, the location

for Walmarts store was important, because it affects customer flow and sales directly. In the

information era, network technology break through the geographical limitation and Walmart

can expand their market globally and make more sales and profit. Therefore, Walmart cannot

purely rely on the location anymore, but to focus on market-based management of innovation.

Global Strategy

Globalization evolves around everything we do, the rise of globalization cannot be

ignored and the effect it has had on company processes, from supply chain to target consumers

(Physioc, 2013). As a multinational Fortune 500 company, Walmart is also facing the challenges

by globalization. Firstly, there is a challenge from the suppliers of Walmart. When Walmart

expands to other countries, they should have different suppliers, because of the different

market they are targeting. In this situation, supplier relationship management is an important

issue for Walmart. In addition, understanding the culture where Walmart operates is crucial.

Culture can influence Walmarts operation in different ways, especially in the beginning, such as

there are language problems, pricing difficulties and culture collisions (Hasim Dear, 2013).

Walmart must be able to handle these difficulties in a way that is satisfying also for the other

part.

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However, there are also well-known retailers who failed in their expansion in certain

global markets due to regulatory, legal and cultural challenges, competition, and attempting to

change local shopping behavior (Cox, 2011). Another reason for retailers to expand into the

global markets was because the domestic market was highly saturated. For example, Sears,

Kmart and Walmarts most successful expansion was into Mexico and Canada. Multinational

retailers like Walmart expand into culturally diversified markets chose to have joint ventures

with local retailers in the country to help them learn more about the country (Sternquist, 2007).

Walmart indeed has been a good example of a successful retailer that has successfully

expanded and survived in the international markets. This had proved that there is potential for

retailers in domestic markets to expand their business into the international arena through

appropriate marketing strategies and entry modes. However, Walmart should also have

sufficient information on the markets to overcome entry barriers. Walmart had been a

successful retailer in the United States and today, and they are still growing across the world,

mainly in United States, Canada and Mexico. Walmart used different types of marketing

strategies and entry modes to dominate the markets, and this had given the large retailer a

huge competitive advantage over other retailers in the market with the philosophy, Every Day

Low Price, which had been successfully applied throughout the world

Customer Relationship Management Strategy

CRM is an approach to the better, faster and more effective organizing of any business'

interactions with their customers based on a customer-centric foundation. It is an entire

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discipline, not a single activity or project. Customer relationship management allows businesses

to execute relationship marketing at an enterprise-wide level (Winer, 2001).

The building of sustainable successful relationships with a large customer base with

CRM is not an easy task because CRM has a direct impact on many core business operations,

especially on the processes therein. The issue here is not exclusively a technical one. It is not

only about software implementation. And it is not about sales either. It is more about the

resulting interaction of entire business processes with customers.

CRM is about creating a competitive advantage by being the best at 3 understanding,

communicating, delivering service and developing existing customer relationships in addition to

the creating and keeping of new customers. There are several ways in which CRM can be

described simply because, in action, CRM means different things to different organizations. To

best address CRM from a holistic viewpoint, the following definition is likely to be the most

appropriate for the purpose of the current research: Customer relationship management

(CRM) is a business strategy to select and manage valuable customer relationships. CRM

requires a customer-centric business philosophy and culture to support effective marketing,

sales and service processes. CRM applications can enable effective customer relationship

management, provided that an enterprise has the right leadership, strategy and culture.

(Thompson, 2001).

According to a Gartner study, up to 80 percent of organizations do not understand how

customer relationship management (CRM) creates value in their customer base (Kirkby, 2002).

Because of this lack of understanding, organizations have failed to develop good CRM strategies

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for their maximum benefit. This high rate of CRM failure has provoked experts and researchers

to dig into the causes of this problem. According to Caulfield (2001), CRM initiatives usually

involve a number of departments wherein poor and insufficient understanding among the

management and employees of the organization of the CRM initiative become reasons for

failure. Data quality issues contribute to a 55-70% failure rate for CRM initiatives (Dubois, 2002)

Financials

Source: Statista 2015

Conclusion

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Walmart marketing plan

In an attempt to propose a marketing plan to the worlds largest private employer made me to

draw a few concrete conclusions about the company. The company showed a steady

performance even during the financial crisis and it turned out to be the top out of the

competitors.

The working culture, the customer-oriented focus and its steady aim in achieving its vision has

made it different from rest of the competitors. Its pricing and cost leadership strategies coupled

with the effective use of technology has helped transform Walmart to a huge corporation.

Wal-Marts enormous success can be traced to effective firm strategies in particular economies

but also to the evolution of its concept and resources under the rules that govern firm

investment in the USA. While there are many individual features of this governance regime,

they can be encompassed in one concept:the ability to continually experiment to find the

optimal ways to reduce costs and increase profits. A major portion of the cost of this

experimentation is borne outside the firm, by the workforce, and by the communities in which

Wal-Mart locates

Walmart invests in providing a better shopping experience to customers. The new product lines

such as energy saving products, advancements in healthcare, pharmacy and efficient

implementation of IT systems to control the operations all over its stores has paved the way to

experience a sustainable growth in the future.

Walmarts decision to expand globally has been successful as seen in Walmarts domination in

the markets. Walmarts success is a glorious story in the business world for being able to

sustain their businesses not only domestically, but also globally. The business strategies and

entry modes used were wisely chosen as they ensured profitability on a long term basis.

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Even though Walmart faced challenges in the foreign markets, they penetrated these markets

successfully as they overtook their competitors in the retail industry. Walmart also

demonstrated strong strategic management skills because Walmart chose their locations and

targets countries carefully. Walmart success can also be credited to their efforts in

satisfying their customers from all social classes through offering a wide range of products

using a low pricing strategy and attracting brand loyalty through repeat purchase. Another

notable success was that the firm was able to survive the tough recession periods where the

slower economy contracted business cycles, slowed down business growth and lifted

unemployment rates. Notwithstanding, Walmart continued its business operations during the

recession years and became a successful retailer in the industry beyond the borders.

Reference

Banjo, S. (2013, June 19). Walmart's E-Stumble with Amazon. Retrieved from THE WALL

STREET JOURNAL:

http://online.wsj.com/news/articles/SB100014241278873235668045785533010177028

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Ortega B. 1998. In Sam We Trust: The Untold Story of Sam Walton, How Wal-Mart Is

Devouring America. New York: Times Business. Retrieved from

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http://michellemchristian.weebly.com/uploads/1/3/3/1/13314081/christian_-_wal-

mart_ars.pdf

Walmarts Live Better initiatives are making a difference. (2010). Retrieved from

http://www.wal-martchina.com/english/walmart/rule/everyday.htm

Cowgill, R.,2005, Case Study: How to Exploit Walmarts Weaknesses. Retrieved from

www.zenith-consulting.com/research/walMart/Wal-Mart-Strategy.pdf

Physioc, F. (2013, April 12). The Top 5 Strategic Challenges of 2013. Retrieved from WOBI:

Retrieved fro http://www.wobi.com/blog/challenge/topO5OstrategicOchallengesO2013

Hasim Dear, V. K. (2013). Effects of cultural differences in international business. Vaxjo

University. Retrieved from http://www.sfu.ca/~sheppard/478/syn/1137/G_6_1137.pdf

Cox, K. A. (2011). Learn to expect the unexpected in global retail expansion. Graziadio Business

Review, 14(4), 1-7. Retrieved from

http://www.researchgate.net/publication/234167019_WALMART_SUCCESS_IN_MEXI

CO_CANADA_AND_CHINA_GLOBAL_EXPANSION_STRATEGIES_ENTRY_MO

DES_THREATS_AND_OPPORTUNITIES.

Sternquist, B. (2007). International Retailing, (2nd Ed.). New York, NY: Fairchild

Winer, R. S. (2001) A Framework for Customer Relationship Management, California

Management Review, 43, 4, pp. 89-104. Retrieved from

http://gvoss.cox.smu.edu/CRM.pdf

Thomson, B. (2001) What is CRM? The Customer Relationship Primer [Online] Second Edition.

Retrieved from http://www.crmguru.com

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Caulfield, J. (2001), "Facing up to CRM", Business 2.0 Retrieved from

http://faculty.mu.edu.sa/public/uploads/1361961106.3509customer%20relationship74.

pdf

Dubois, L. (2002) Ten Critical Factors for Successful Enterprise wide Data Quality What Works

[online], (May) Volume 13 Retrieved from

http://www.tdwi.org/research/display.aspx?ID=6341

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