Assessing Walmart's Marketing Strategies and Growth Recommendations

Introduction

MSNBC (2007b) reported that Walmart, the largest retail store in the United States with over 3,700 stores nationwide and a global footprint, must introduce fresh concepts to sustain its market leadership. This essay aims to assess Walmart's current marketing approaches and propose recommendations for future growth strategies.

Walmart's strategic business goals and objectives

Walmart has always prioritized increasing sales through affordable prices, a reputation deeply ingrained in the company. Along with its reputation for low prices, Walmart offers a wide range of products conveniently located in one place, which benefits customers in rural areas.

The company's commitment to business excellence drives their dedication to exceptional customer service at retail stores, where employees actively contribute to this objective. Walmart has created a culture focused on pursuing perfection and maintaining their position as an industry leader. The marketing manager emphasizes continuous sales growth as the primary business goal. Unlike other companies that may become complacent after reaching performance targets, Walmart actively seeks opportunities to sustain its competitive edge and prevent stagnation in growth rate.

Get quality help now

Doctor Jennifer

Verified writer

Proficient in: Advertising

5 (893)

“ Thank you so much for accepting my assignment the night before it was due. I look forward to working with you moving forward ”

+84 relevant experts are online

Hire writer

The Company is focused on pursuing technological improvements and utilizes new technologies for service delivery. Additionally, creativity and innovation are important business objectives that drive the company. The employees play a crucial role in brainstorming and seeking new strategies to attract potential clients, which helps maintain the company's market positions. (MSNBC, 2007b) Furthermore, the company highly values being regarded as a strategic community partner. Its mission of 'saving money to live better' has been meticulously cultivated, making Walmart widely recognized as a consumer-friendly retailer.

The company has employed various approaches to establish this positive image.

Walmart employs customer-friendly pricing, satisfactory customer service, and convenience as its business objectives. To achieve availability as another objective, the company has established numerous locations throughout the country. This ensures that customers face no inconvenience in locating Walmart stores and makes it nearly impossible to disregard the company's presence nationwide. Availability has greatly contributed to Walmart's past success. (MSNBC, 2007b)

Examining the current state of Walmart

Walmart is being criticized by various stakeholders in the retail industry, including trade unions, human rights organizations, and former employees. These critics claim that Walmart violates employee rights and discourages union participation. Employee rights groups argue that Walmart's compensation package does not adequately reflect its high profit margins. In 2006, Maryland enacted a law mandating that Walmart spend a specific amount on health insurance; however, this law was later overturned by a federal court.

One of the groups criticizing Walmart is WakeupWalmart protesters who have specifically formed to question the company's corporate responsibility efforts and accuse it of attempting to deceive the American public. This negative perception could harm Walmart's public relations and potentially drive away valuable customers. Given its vast number of retail locations across the US, encountering a Walmart store has become nearly unavoidable in most towns.

The company may encounter significant obstacles in its expansion procedures, suggesting that it would be prudent for the country to explore other regions such as China and India. However, attempts to replicate this success in other countries have proven unsuccessful as the country's endeavors in South Korea yielded low profits, leading to the closure of its subsidiary in Germany. To maintain a competitive edge, the company had to sell this subsidiary at a significantly reduced price. Therefore, expansion strategies should be approached methodically (MSNBC, 2006). Additionally, the corporation faces the challenge of consistently attracting customers to its stores. Walmart's clientele has already made their purchasing decisions and it is challenging to persuade new customers to join. As a result, the company experienced a decrease in client traffic during 2007.

The company is struggling to persuade individuals to continue with them in the saturated US market. Walmart is faced with the challenge of improving convenience in its stores. The company's representatives have stated their intention to potentially reduce store sizes in the future as navigating them for a single item is difficult. To remain competitive, Walmart needs to transition from its large rural base to smaller, urban stores that are more convenient. This shift is already being embraced by its major competitor Tesco, which operates small stores specializing in specific products

Walmart has set strategic goals to drive its future growth.

Walmart should target external markets by changing its market entry techniques and customizing its business objectives within each country. The retail giant needs to prioritize product quality as a major business strategy, focusing on both customer service and the nature of its products. It should also reinforce an image of a community-based organization by enhancing employee practices and maintaining its low price offering. (MSNBC, 2007a) In terms of strategic marketing, Walmart needs to change its marketing objectives to attract a different market segment. In the past, the company has been associated with the middle class or low-income earners, causing affluent clients to believe that Walmart's products are of lower quality.

Most customers primarily use the store for pharmaceutical and grocery shopping and pay little attention to other options. The company previously attempted to introduce this concept by opening stores in 2006. These stores offered a diverse range of sophisticated products like jewelry, electronics, a sushi bar, and various electronics. Attracting the affluent market is crucial for the company to penetrate new markets, as they have already saturated current ones. While Walmart is preferred by almost all middle-class shoppers, Target (Walmart's rival) has successfully attracted affluent consumers. Consequently, Walmart must find a way to entice these shoppers to choose their stores. To do so, they need to provide assurance to affluent shoppers that they can find quality products at Walmart. The failure of their efforts in 2006 was due to an incorrect implementation of this goal. The company's first step should be enhancing the appearance of their stores through creative displays, which is particularly significant for stores located in affluent neighborhoods.

Walmart's need for improvement lies in the quality of its products, a concern voiced by certain affluent customers. To rectify any misperceptions, the company can enhance its marketing strategy by highlighting the superior quality of items favored by affluent workers. However, caution must be exercised in selecting the products to sell. In 2006, Walmart attempted to emulate Target's product lineup, particularly in their apparel section, by introducing designer labels. This endeavor proved challenging as designer items are subject to constant seasonal fluctuations, making it difficult for Walmart to stay up-to-date with the latest trends. A more prudent approach would have been to focus on electronic items, which are less susceptible to change. Furthermore, any transition should be implemented gradually. Despite targeting affluent consumers, Walmart should heed the advice of successful entrepreneurs: if a team is already achieving success, it is unnecessary to make significant changes.

In order to retain current clients, it is essential for Walmart to carefully implement changes without causing alarm. To attract affluent shoppers, the company should conduct a comprehensive market analysis to determine the most suitable approach. Other successful retail stores have spent centuries building their reputation among this demographic, so Walmart should not expect instant results. (MSNBC, 2007b) Furthermore, Walmart should expand its operations into other countries. Despite its poor international performance, with one out of every three overseas stores closing down, there is still value in pursuing global growth. However, the company must exercise caution and choose countries wisely. The closure of the South Korean outlet was partly due to using the same marketing strategies as in the US.

Different countries have different preferences, so the company's strategy of saving money to live better may not work in all places. Instead of entering foreign markets directly, the company could collaborate with local leaders in those countries to find a successful approach. Another option is to start with a few small stores in an international market and expand if the response is positive. It is important to choose economically stable countries for expansion, such as China and India. However, this process should be done cautiously and after extensive research. (Pallavi, 2007)

Marketing program

Product

The company should maintain its focus on attracting affluent clients, but should do so gradually. Initially, the company had implemented Metro 7 stalls in 1,500 stores, offering high-end goods such as jewelry and expensive wine. However, this approach proved unsuccessful due to the sudden and drastic change. To rectify this, the company should only introduce expensive products in stores located in affluent neighborhoods. (Pallavi, 2007) Furthermore, careful product selection is crucial. Avoiding designer clothes or organic foods, which have previously yielded poor results, is recommended. Instead, the focus should be on electronics.

The company should enhance its product offerings by incorporating more creativity. It demonstrated this intention by forming a partnership agreement with Canopy furnishings. In March of this year, the company introduced a collection of furniture items from Canopy and has high hopes for their success. The company should continue to adopt this strategy by collaborating with other brands that specialize in household items and electronics. By aligning with reputable suppliers, the company can offer superior quality products, which will appeal to affluent customers who have a specific interest in these items.

Place

Considering that the local market has already reached its limit, the Company's attention should now be on global markets. Nevertheless, entering these international markets requires a careful approach. Walmart should select financially stable countries and strategically position their stores in those areas. (Pallavi, 2007)

The text below, including the HTML tags and their contents: "

Price

", can be paraphrased and unified as follows:

Price

The pricing element is a key factor in Walmart's successful marketing mix. Maintaining their low prices is crucial, but they should also focus on expanding their product selection. By enhancing the quality of their services and merchandise, Walmart can better position themselves in this market.

Promotion

Walmart utilizes public relations as a key promotional strategy, showcasing itself as a community-oriented establishment through engagement in charitable events. However, media outlets have raised allegations of worker mistreatment, leading to lawsuits and a tarnished reputation. To rectify this perception, Walmart has initiated a campaign that emphasizes fair employment practices, such as providing comprehensive health insurance to employees. An advertisement promoting Walmart's corporate responsibility program addresses these concerns:

The retailer is the largest employer in the nation and offers affordable health plans starting from $23. The company also contributes nearly $245 million to charitable events annually (MSNBC, 2007a).

Instead of relying on advertisements like the one displayed above, Walmart should focus on enhancing their staff management policies. The issue with such advertisements is that they are slow to alter consumer perception and may even solidify negative opinions, as customers may view them as an attempt to mend a tarnished reputation. Instead of investing millions in such advertisements, the company can allocate those funds towards enhancing their reward systems. A good employer doesn't need to promote their employment practices since they will speak for themselves. The company should also enhance its health insurance plans, as other companies with lower earnings provide better health programs. This would greatly improve the company's image (MSNBC, 2007a). Considering this viewpoint, it is unnecessary for the company to convince the public that its employees are genuinely content working for Walmart.

Walmart prioritizes maintaining the privacy of employee opinions and discourages public sharing. The company discloses that a notable 81% of its employees would recommend working at Walmart to their friends. However, this defensive strategy may not effectively address the allegations against the company. It is recommended that Walmart enhance its organizational policies and leverage these accusations for its benefit. Furthermore, Walmart should contemplate establishing collaborations with hospitals for its retail clinics. The company has already declared intentions to increase the number of in-store clinics from 55 to an impressive 400 by 2010.

Despite having the potential to enhance its reputation as a community-focused organization, Walmart has certain areas that require attention. The company has received negative publicity for multiple reasons, particularly due to their insufficient employee health insurance plans. This contradicts their status as industry leaders and necessitates efforts to improve this perception. A possible solution could involve offering employees access to in-house clinics, which would greatly enhance their employment practices (Pamela Lewis Dolan, 2008).

Conclusion

Walmart, a leading retail market player, has implemented various measures in the past to secure its position. These measures include offering competitive prices, delivering exceptional customer service, and consistently innovating. However, the company recently faced challenges such as reduced customer traffic due to market saturation in the middle-income segment, underperforming international operations, and negative public perception related to employee practices.

To ensure future growth and maintain its status as the top retailer in the United States, Walmart should pursue several strategies. These include aggressively expanding into international markets, developing attractive product bundles for affluent customers, and improving health insurance plans for employees. By adopting these strategies, Walmart can sustain its prominent position as a retail leader in the United States.

Target market segmentation

After extensive marketing research, Wal-Mart has discovered that its 200 million customers can be classified into three distinct groups. The first group is made up of "brand aspirationals" - low-income shoppers who have a strong desire for well-known brands such as KitchenAid. The second group consists of "price-sensitive affluents," who are wealthier customers that prioritize finding good deals. Lastly, Wal-Mart still caters to its traditional "value-price shoppers," individuals who appreciate low prices and have limited financial means.

During recent interviews, John Fleming and Stephen Quinn, executives at Wal-Mart, provided further information about new customer categories. The first category is known as "brand aspirationals," which refers to low-income shoppers who have a strong desire for well-known brands such as KitchenAid. The second group comprises of "price-sensitive affluents," who are wealthier customers that prioritize finding good deals. Lastly, Wal-Mart continues to cater to its traditional customer base known as "value-price shoppers," who are individuals seeking affordable prices as they have limited means.

The categorization of customers is important as it helps the retail giant's marketers gain a deeper understanding of their shopping behavior. This study will enable the marketers at the $345 billion retailer to organize their product decisions based on these three groups.

Under the leadership of Mr. Fleming, Wal-Mart has already made various changes. These include deviating from their sole emphasis on low prices and venturing into new endeavors. For instance, they have established a design office in Manhattan, organized fashion shows, advertised in fashionable magazines such as Vogue, and entered the organic food industry.