Essay on Wal-Mart Marketing Plan
Number of words: 1074
The Bentonville-headquartered giant retail corporation, Wal-Mart, was incorporated in 1969, seven years after its establishment in 1962. The corporation boasts a huge turnover and a leading position among the elite multinational retail corporations globally. The firm operates in over 28 countries across the world with 11,700 retail stores (Kim 2008, p.345). Efficiency, supply chain management and strong logistics have built its reputation over the years. Currently, Wal-Mart does not operate in Germany and that forms the basis of this research paper. In 2006, Wal-Mart closed shop in Germany after they opened business in 1998. A whooping $1 billion loss was reported after the closure of business in Germany after the firm had opened up 85 stores. Failure to change tact and the corporation’s imposition of practices from the United States to German business was attributed as some of the reasons for Wal-Mart failure. Additionally, unions and workers proved to be a challenge to the company. The reasons Germany as a country was chosen is because Wal-Mart has had its past experiences in the country and has an opportunity to right the wrongs that the business failed to address in the lead up to its collapse in Germany (Ghazzawi et al. 2014, p. 9).
Some of the objectives that Wal-Mart needs to implement in order to ease its market entry in Germany include:
- In a bid to attract more customers, the concept of the store design needs to be spruced up.
- The firm needs development of its own brand of pocket-friendly yet new apparel line.
- Product access for buyers across different stores, type products and prices need to be improved.
- Customer satisfaction and retention should be the primary focus of the company.
TARGET MARKET SEGMENTATION AND POSITIONING
Geographic approaches, demographic approaches, psychographic approaches and behavioral approaches represent the tools used in market segmentation and target market selection. Wal-Mart utilizes ethnic group composition, age and gender as far as demographic approach is concerned in order to select a target market. For example, there is a change of buying behavior as well as the ability to buy goods and services as individuals transition across different stages of development. The size of market segments and target markets are measured through geographic approaches. The needs of customers across different geographical locations take center-stage when Wal-Mart offers its products and services. Market segmentation and identification of a target market are commonly through social classes as far as behavioral approach is concerned. Spending rate increases proportionately with the surge in individuals’ income. Values, lifestyle and loyalty are examples of psychographic approaches used by Wal-Mart in the determination of its best customers for certain products (Parnell & Lester 2008, p. 14).
Wal-Mart’s target market
Target market definition is the foundation of every successful marketing strategy. Price, promotion, place, product and people are marketing mix variables that influence the market performance of every product. In order to maximize profits through increase of sales, Wal-Mart has continued to offer products at very pocket-friendly prices to its customers since its inception. For a long time now, this has remained as the firm’s marketing strategy. The popularity of this strategy has profoundly attracted the society’s poor and middle-class that can satisfy their needs by purchasing products at Wal-Mart. Generally, if one (Whether male, female or children) is interested in saving money, then the individual represents Wal-Mart’s target market.
Wal-Mart’s market segmentation
Determination of the best items to stock as well as identification of suitable environments to put up retail outlets are examples of how market segmentation is applied by Wal-Mart. Demographic segmentation and geographical segmentation are the two strategies largely applied by Wal-Mart. Physical location is a basis for Wal-Mart to group its customers under geographic segmentation. For instance, snow shovels cannot be stocked in locations where snow is hardly experienced. Customers’ age in a certain location is the basis of stocking products at Wal-Mart under demographic segmentation (Lee et al. 2014, p. 91).
MARKETING PLAN RECOMMENDATIONS
There are other businesses that provide what Wal-Mart does and this represents the company’s direct competition. Biggest competitors for Wal-Mart come in the shape of Amazon, Target and Costco. Environmental issues, legal disputes and workers’ strike are additional problems that Wal-Mart could face.
A pricing strategy of EDLP (Every Day Low Price) is utilized by Wal-Mart. The firm records bigger profits despite their lower prices due to high sales volume. Product sales are driven by complimentary products through diversification. Wal-Mart keeps the prices low through negotiations with affordable suppliers which are allowed by outstanding procurement strategies.
The intensive distribution strategy is utilized by Wal-Mart. This strategy means that all Wal-Mart employees have the same roles and responsibilities across all their stores in the world as well as all the stores carry identical products.
Consumers are effectively assisted in looking for their desired products by Wal-Mart’s sales personnel. Convenience is assured for the consumer since the stores carry diverse products.
Personal selling, public relations, advertisements and sales promotion comprise Wal-Mart’s promotion element (Chen & Green 2009, p. 30).
Social responsibility is reflected by the purchasing choices of shoppers with more disposable income. However, with regard to other individuals, the ability to stretch a small paycheck supersedes other things; in these cases, the strategy of low-pricing by Wal-Mart carries the day.
Chen, H.C. and Green, R.D., 2009. Marketing mix and branding: competitive hypermarket strategies. International Journal of management and marketing research, 2, pp.17-34.
Ghazzawi, I.A., Palladini, M. and Martinelli-Lee, T., 2014. The Wal-Mart stores, Inc.: An American dream that touched the world. Journal of the International Academy for Case Studies, 20, p.9.
Kim, R.B., 2008. Wal-Mart Korea: Challenges of entering a foreign market. Journal of Asia-Pacific Business, 9, pp.344-357.
Lee, M.Y., Atkins, K.G., Kim, Y.K. and Park, S.H., 2006. Competitive analyses between regional malls and big-box retailers: a correspondence analysis for segmentation and positioning. Journal of Shopping Center Research, 13, pp.81-98.
Parnell, J.A. and Lester, D.L., 2008. Competitive strategy and the Wal-Mart threat: Positioning for survival and success. SAM Advanced Management Journal, 73, p.14.