Chapter 8-Segmentation and targeting markets

Originally, WalMart's target shoppers were lower income Americans. Next, bargain shoppers were enticed with constant advertisements heralding price "roll-backs." The way the United States economy has suffered in the past decade has driven most lower to middle class Americans to this store- myself and my family included with the masses.

Chapter 11-Developing ang managing products

WalMart’s competitive advantage is a result of several key strategic choices. First, WalMart’s choice

of geographic location in rural/small town locations that were not being served by competitors

allowed it to establish itself as the sole discount retailer in these areas. As Sam Walton describes “the

key strategy was to put good-sized stores into little one-horse towns which everybody else was

ignoring…. If we offered prices as good or better than stores in cities that were four hours by car,

people could shop at home.” This key strategic choice of location was completely different from

what competitors had done and gave WalMart a first mover advantage in markets that had not

previously been served by discount retailers. A second key strategic feature is WalMart’s inventory

management strategy. From the onset, WalMart has been a leader in implementing new and cost

effective methods to manage inventory. Merchandise is tailored to local market demand via “traiting”

where a product’s movements are indexed over a thousand store and market traits. In addition, store

managers are given local control over which items to display based on customer preferences and how

to allocate shelf space based on local demand. Therefore, each store is fine-tuned to best meet local

needs rather than follow a general corporate policy. In addition, WalMart’s pricing strategy allows

more local control again based on geographic demand. Store managers can price to meet local

demand, to maximize sales volume and inventory turnover and to minimize expenses. Pricing varies

by geography and by proximity to competitors. This flexible pricing policy allows WalMart to

achieve maximal strategic pricing, whereby it remains most price competitive in regions with higher

concentration of competitors yet avoids pricing too low in areas where it is the sole discount retailer

Chapter 21-Customer relationship management

Suppliers involved in the formation of the enterprise value chain, operating efficiency of enterprises have a significant influence on the establishment of strategic partnership is the focus of supply chain management,
 Wal-Mart and Procter & Gamble’s marketing alliance is such a win-win model. Harmonious relationship with the supplier company, so that Wal-Mart has always been able to maintain long-term stability of low-cost supply. At the same time, these products will not be cheap and lead to lower quality, because Wal-Mart’s personally involved in helping enterprises to reduce production costs. The one hand, suppliers of products sold to Wal-Mart as long as you do not need slotting allowance and the margin, and simple procedures, commitment agreement; other key suppliers to Wal-Mart store to arrange an appropriate room for the vendors themselves design layout of their product display area to create a more attractive store and more professional shopping environment; another Wal-Mart suppliers will be free information management system software support. For suppliers to provide the necessary help and support at the same time, Wal-Mart suppliers also developed a series of regulatory and urge them to comply, including Wal-Mart’s own remuneration, working hours, discrimination rights, working conditions, environment issues and confidentiality aspects of standards and requirements.

Wal-Mart proved, retail businesses and its suppliers are not always in between the irreconcilable struggle between interest among suppliers and retailers in establishing symbiosis between the prosperity of the partnership to achieve mutual cooperation long-term development objectives of both sides is possible.

walmart

Strengths

• Wal-Mart is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.
• Wal-Mart has grown substantially over recent years, and has experienced global expansion (for example its purchase of the United Kingdom based retailer ASDA).
• The company has a core competence involving its use of information technology to support its international logistics system. For example, it can see how individual products are performing country-wide, store-by-store at a glance. IT also supports Wal-Mart's efficient procurement.
• A focused strategy is in place for human resource management and development. People are key to Wal-Mart's business and it invests time and money in training people, and retaining a developing them.

Weaknesses

• Wal-Mart is the World's largest grocery retailer and control of its empire, despite its IT advantages, could leave it weak in some areas due to the huge span of control.
• Since Wal-Mart sell products across many sectors (such as clothing, food, or stationary), it may not have the flexibility of some of its more focused competitors.
• The company is global, but has has a presence in relatively few countries Worldwide.

Opportunities

• To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe or the Greater China Region.
• The stores are currently only trade in a relatively small number of countries. Therefore there are tremendous opportunities for future business in expanding consumer markets, such as China and India.
• New locations and store types offer Wal-Mart opportunities to exploit market development. They diversified from large super centres, to local and mall-based sites.
• Opportunities exist for Wal-Mart to continue with its current strategy of large, super centres.

Threats

• Being number one means that you are the target of competition, locally and globally.
• Being a global retailer means that you are exposed to political problems in the countries that you operate in.
• The cost of producing many consumer products tends to have fallen because of lower manufacturing costs. Manufacturing cost have fallen due to outsourcing to low-cost regions of the World. This has lead to price competition, resulting in price deflation in some ranges. Intense price competition is a threat.

Chapter 16

Walmart are strategically a low cost strategy store to
attract customer . But this is not enough as they have to contend with
fierce competition from rivals like Target and K-Mart . In order to
survive , Walmart has set up a very competitive marketing and
communication strategy that is integrative and distinctive from all the
other market competitors.Wal-Mart 's Marketing Communication Strategy
The Walmart marketing communicative strategy is solely built
around the company 's low cost strategy . Unlike its competitors , Walmart
does not concentrate its marketing communication strategy to issues like
hygiene in store , aesthetics and quick service . Walmart is instead focused
on marketing communication around daily prices and advertisements mixed
with wide product choices .

Chapter 16-Integrated marketing communications

Walmart uses an integrated marketing communication system to gain
competitive advantage over its strong competitors . This marketing
communication involves various mixes such as media and networks which
are regularly reviewed to conform to the changing business environment .
Walmart Communication is very effective in order to achieve a conversion
to product sales . Walmart is keen of ethical communication as a core
marketing responsibility and for ethical reasons .

Walmarts product concept

Chapter 10-product concepts

Walmart has been promoting new concepts and designs for small packaging worldwide.
With smaller packages, we become more efficient and it helps to improve the efficiency of the factories where the products were made. It will also benefit our customers. In the US, Walmart made a commitment to work with its suppliers to reduce the energy that flat televisions consume.

Chapter 10-product concepts

The implication of the marketing concept is very important for management. It is not something that the marketing department administers, neither is it the sole set of the marketing department. It is adopted by the entire organization. From top management to the lowest levels and across all departments of the organization, it is a belief or way of doing business. The customers' needs, wants, and satisfaction should always be most important in every manager and employees' mind. Wal-Mart's motto of "satisfaction guaranteed" is an example of the marketing concept. Whether the Wal-Mart employee is an accountant or a cashier, the customer is always first.

Chapter 18-Sales promotion and personal selling

Wal-Mart is promising aggressive price discounts, which means pitiful profits for everybody else. For example, Wal-Mart will be selling a Hewlett-Packard Pavilion ze2308wm notebook computer for $398, an HP Photosmart E317 digital camera for $98.88; a Lexmark all-in-one printer, scanner and copier for $39.88; and a 12-cup coffeemaker, food chopper or 2 quart slow cooker for just $4.24.

The authors examine incumbent retailers’ reactions to a Wal-Mart entry and the impact of these

reactions on the retailers’ sales. They compile a unique dataset which represents a natural

experiment consisting of incumbent supermarket, drug, and mass stores in the vicinity of seven

Wal-Mart entries and control stores not exposed to the entries. The dataset includes weekly store

movement data for 46 product categories before and after each entry and allows them to measure

reactions and sales outcomes using a before-and-after-with-control-group analysis. They find

that, overall, incumbents suffer significant sales losses due to Wal-Mart entry, but there is

substantial variation across retail formats, stores, and categories both in incumbent reactions and

in their sales outcomes. Moreover, they find that a retailer’s sales outcomes are significantly

affected by its reactions, and the relationship between reactions and sales outcomes varies across

retail formats. These findings provide valuable insights on how retailers in different formats can

adjust their marketing mix to mitigate the impact of Wal-Mart entry.

Week 8 chapter 17

A critical finding shows that Wal-Mart’s current customers along with its necessary growth segments are becoming increasingly less inclined to shop at Wal-Mart because of the company’s business practices.
.Wal-Mart is staking its future success in a new advertising campaign, which survey results indicate consumers do not believe is credible.  Consumers overwhelmingly reject the notion that shopping at Wal-Mart saves the average family who shops there enough money to provide any benefits resembling the ads’ claims. Only four percent of survey respondents believe Wal-Mart’s annual savings claims.
.The company’s new advertising campaign won’t help Wal-Mart regain the ground it is losing with existing and potential customers.  On the contrary, it appears that Wal-Mart’s customers neither believe that they are saving more nor living better because of Wal-Mart.




 

Week 8 chapter 17-Advertising and public relations

Wal-Mart has never had a great reputation among its suppliers. For years it has been accused of sourcing goods locally in new markets only as a competitive tactic to drive out other retail customers and then ending the relationship in order to bankrupt the local supplier.
.A recent study by researchers at UC Berkeley's Labor Center has quantified what happened to retail wages when Wal-Mart set up shop, drawing on 15 years of data on actual store openings. The study found that Wal-Mart drives down wages in urban areas, with an annual loss of at least $3 billion dollars in earnings for retail workers.
.The study has been finalized and published, and the published findings produced a different number for the annual loss in retail earnings than the preliminary figure we used in the film. The published study ultimately found that Wal-Mart actually reduced the take-home pay of retail workers by $4.7 BILLION dollars annually. Unfortunately for the retail workers this statistic concerns, Wal-Mart's effect on retail wages turns out to be worse than consumers had anticipated.

Week 7 (chapter 15) Retailing

Wal-Mart is abandoning its one-size-fits-all approach to retailing in an effort to increase sales. Wal-Mart officials are realizing that they need to broaden their low price platform in order to continue to compete in more markets. Wal-Mart's merchandise will now reflect one of six demographic groups, including African-Americans, affluent, empty-nesters, Hispanics, suburbanites and rural residents. The company also plans to renovate its 3,400 U.S. stores over the next year to reflect the needs of these six different groups.

This is risky for Wal-Mart because they're changing a supply chain that was developed on low-cost efficiency for a divided customer relationship management-based chain. It's also interesting from a standpoint of enabling price discrimination. They could potentially charge rural customers due to market power, especially in grocery, which is characteristic of local markets.

Week 6-consumer decision making

The growing pains of many businesses are highly documented by the media as they go from domestic to foreign markets. Because of the company’s enormous monetary value, which is frequently compared to Gross Domestic Products of entire nations, Wal-Mart’s missteps in many countries have been critically commented on by writers and journalists around the world. Cultural challenges have oftentimes been the hallmark of Wal-Mart’s experience around the world

Additional information

These are the top five eco-friendly products that have been on the rise since 2007 according to walmart:

1. Compact fluorescent light (CFL) bulbs – Average adoption rate of 19.7 percent (up from 13.39% in 2007)

• Delaware leads the category with an adoption rate of 25.8 percent

2. Organic baby food and formula – Average adoption rate of 4.12 percent (down from 4.31% in 2007)

• California continues to lead the category with an 8.58 percent adoption rate

3. Organic milk – Average adoption rate of 1.58 percent (up from 1.15% in 2007)

• Virginia has the highest adoption rate of organic milk at 2.7 percent

4. Extended life paper products – Average adoption rate of 67.5 percent (up from 50.77% in 2007)

• Minnesota has the highest adoption rate with 78.1 percent

5. Concentrated/reduced-packaging liquid laundry detergents – Average adoption rate of 76.3 percent (up from 22.86% in 2007)

Week 5

In July 2006, Wal-Mart announced its withdrawal of operations from Germany because the firm was losing some $250 million per year on sales of $2.5 billion. Wal-Mart's 85 big-box stores were sold to German company METRO AG, a much bigger player with 550 stores in Germany. Commentators blamed competitive prices from national discounters as well as German consumer rejection of American-style signature features such as stores outside of town centers, employees required to smile and heartily greet customers, and baggers at checkouts.

Week 5-Developing a global vision

International sales are now responsible for some 20 percent of total company revenues. And sales from stores outside the U.S. are growing faster than Wal-Mart's American retail operations which include walmart.com online stores. Leading the way is Wal-Mart's U.K. subsidiary ASDA, a supermarket chain that generated some 42% of international sales in fiscal 2006.

Week 5-Developing a global vision

Many are surprised that Wal-Mart's operations have contributed to America's growing deficit. One has to consider that very few of Wal-Mart's products are made in the United States. In fact, Wal-Mart imports more foreign-produced goods into America than any other single company. As the U.S. dollar weakens, more money flows out to pay for foreign products thus worsening America's trade imbalance.Some 60% of Wal-Mart products are imported from such countries as fast growing south Korea, Philippines, Malaysia, Cambodia, Thailand and Vietnam. The company's biggest trading partner is China. In 2004, the company's trade with China accounted for about 10 percent of the total U.S. trade deficit with the Asian economic powerhouse.

Walmart being socially irresponsible

Walmart is aggressively anti-union; fails to pay a living wage to its full-time workers, who start out at about $10.11 an hour or $21,000 in annual salary; fails to provide adequate and affordable health benefits to its workers and their families; pollutes the environment; violates child labor laws; and drives mom and pop retailers out of business. Additional alleged or proven sins include supporting foreign sweatshops and constantly squeezing suppliers to reduce their product pricing so that these companies struggle financially or go out of business. Walmart also has been accused of or has lost lawsuits or paid fines for exhibiting discrimination against women and Hispanics, forcing employees to work off the clock, denying workers their lunch breaks, using cleaning contractors that make heavy use of illegal aliens, and locking workers in stores at night.Here are a few specific facts regarding Wal-Mart's dark side. Wal-Mart faces the largest gender discrimination lawsuit in U.S. history. It is the subject of a class action lawsuit involving about 1.6 million current and former female employees.In addition, Wal-Mart's annual turnover of hourly workers is 50%. Some 46% of Wal-Mart's employees' children are uninsured for health care or rely on state-subsidized health care programs. Finally, a 2004 Congressional report found that a typical Wal-Mart store with 200 workers cost federal taxpayers an estimated $420,000 per year in hidden costs, such as Medicaid, children's health insurance, free school lunches, and housing assistance.

Walmart being socially irresponsible

 Wal-Mart Tops List of Most and Least Socially Responsible Companies. When asked unaided which companies come to mind as the most socially or environmentally responsible companies, 7 percent of Americans named Wal-Mart, followed by Johnson & Johnson (6%), Procter & Gamble (4%), GE (4%) and Whole Foods (3%). Wal-Mart also topped the list of the least responsible companies (9%), along with Exxon Mobile (9%), GM (3%) and Ford (3%), Shell (2%) and McDonald's (2%). Interestingly, 41% of Americans could not name a single company that they consider the most socially and environmentally responsible.

Wee 4-The marketing environment

Wal-mart has always aimed at increasing sales through its friendly prices. This image has stuck with the company for a very long time. Not only is the company associated with low prices, but it has a variety of items under one roof. These qualities favor the rural clientele.Wal-mart uses the aspect of availability as another business objective. The Company has opened up a series of locations in different parts of the country. This means that customers are not inconvenienced when trying to locate them. Additionally, it becomes very difficult to ignore the store when one can see it in virtually all parts of the country. This aspect of availability is one of the reasons why the company has done very well in the past.

Week 4-The marketing environment

At present , Wal-Mart was able to
keep off some of its competitors by instituting low price tags for its
products . However , some of its competitors , notably , Dollar General was
able to neutralize the price advantage of Wal-mart by putting its price levels
on the same footing with Wal-mart . Wal-mart should lower its price level just above
the firm 's firm on a new price advantage situation which other competitors , by
virtue of their higher variable costs , would not be able to match . With
regard to economic environment , Wal-Mart is vying to open stores in
China . This is a good strategy since labor price in China is 50 less
than labor price in America . Wal-Mart needs to maximize this opportunity

Week 3-Ethics and social responsibility

Wal-Mart has made some considerable changes to market itself as a company with a strong commitment to being green. For years, the big box retailer has been criticized for underpaying its workers, offering limited benefits, exploiting employees in sweatshops around the world, and engaging in gender discrimination. As the company has pursued a responsible corporate social reputation though, it has realized significant savings.
Wal-Mart adopted a scorecard program to review the way each product is made, its merchandising, and its recycling availability. Vendors have been forced to make changes to their processes if they want to continue to sell to Wal-Mart. For example, the greeting card company American Greetings earns 16 percent of its sales through Wal-Mart, so when the retailer demanded more energy efficient displays, the manufacturer worked to cut back on the large displays that traveled with the cards, which in turn decreased transportation costs. Wal-Mart even began offering promotions and benefits to vendors that scored well on the sustainability scorecard.

Week 3-Ethics and social responsibility

The values that set us apart from others -- respect for the individual, service

to our customers and striving for excellence -- rest on the foundation of

personal integrity and responsibility. Associates in all areas and levels of

our business are responsible for understanding and complying with our

Statement of Ethics. I encourage you to be a champion for integrity by

engaging fellow associates in conversation and setting an example

through your words and actions.

We also expect and need you to speak up if you have concerns about any

inappropriate behavior you observe. It’s important for us to know about

issues upfront so we can work to resolve them immediately. We recognize

the responsibility that comes with that requirement. And we know that the

decision to speak up can be a difficult one. Silence can condone questionable

behavior -- and the actions or inactions of just one associate who makes a

poor choice can impact our entire company. That’s why we’re committed to

sharing the responsibility with you. We encourage you to use the resources

available to you such as the Open Door process and the Global Ethics

Helpline. The Global Ethics Helpline is a tool that is available for you to raise

your concerns confidentially and anonymously, without fear of

consequences.

The history of Wal-Mart

On December 3, 2008, the family of Wal-Mart service worker Jdimytai Damour, who was killed by a stampede of shoppers frantically entering a Valley Stream, New York Wal-Mart store on Black Friday (November 28) , filed a wrongful death lawsuit against the corporation; Damour's family alleged Wal-Mart of encouraging a mass number of customers to come to the store simultaneously. In addition, the Occupational Safety and Health Administration cited Wal-Mart for "...inadequate crowd management following the Nov. 28, 2008, death of an employee at its Valley Stream, N.Y., store. The worker died of asphyxiation after he was knocked to the ground and trampled by a crowd of about 2,000 shoppers who surged into the store for its annual "Blitz Friday" pre-holiday sales event."  The company went on to spend an estimated $2 million in legal fees fighting OSHA's $7,000 fine, because it apparently wished to prevent OSHA from establishing a precedent that would enable OSHA to micromanage Wal-Mart's crowd control measures in the future

Walmart

On September 12, 2007, after 19 years, Wal-Mart introduced new advertising with the slogan, "Save Money Live Better," instead of "Always Low Prices, Always". It commissioned Global Insight for the ads and the report stated that as of 2006, the retailer saves American families $2,500 yearly (up 7.3% from $2,329 , 2004). The new research found that the reduction in price levels due to Wal-Mart resulted to savings for consumers of $287 billion in 2006, which is $957 per person or $2,500 per household.

On June 30, 2008, Wal-Mart unveiled the company's new logo, which lacks the star in the middle. The new company logo contains the word "Walmart".



On February 22, 2010, the company confirmed it acquiring the video streaming company Vudu, Inc. for an estimated $100 million.

the history of Wal-Mart

The history of Wal-Mart can be traced back to the 1940s when Sam Walton began his career in retailing. After being interviewed by recruiters from both Sears Roebuck and J. C. Penney just before graduating from the University of Missouri in Columbia, Sam accepted a job offer from J. C. Penney. In September 1944, Walton acquired, from George Scharlott, the franchise and lease on a Ben Franklin in Newport, Arkansas. The variety store was part of a chain operated by the Butler Brothers, a regional retailer. After three years, Walton increased annual sales from $80,000 to $225,000 by 1948. However, the landlord, P.Karli Holmes, declined to renew the lease on favorable terms and Walton was forced to relocate before the end of 1950. Walton was prepared to purchase a five-and-dime from Jim Dodson in Siloam Springs, Arkansas, but the two were $7,000 apart on agreement on a purchase price. On May 9, 1950, Walton purchased a store from Luther E. Harrison in Bentonville, Arkansas, and opened Walton's 5 & 10. Thus, the Ozark Mountain town of 2,900 residents would become the headquarters for the world's largest retailer.