Research Walmart Marketing Strategy in the United States - 2200 Words

Research Walmart Marketing Strategy in the United States (Research Paper Sample) Content: ANALYSIS OF WALMARTà ¢Ã¢â€š ¬S MARKETING STRATEGIESby STUDENT NAMEAcademic KnowledgeSample EssayKnoxville, Maine30 January 2016ANALYSIS OF WALMARTà ¢Ã¢â€š ¬S MARKETING STRATEGIESWalmart is considered the largest retail corporation in the United States. It employs more than 1.4 million people in the U.S. and operates over 5,000 stores nationwide CITATION Cor15 \l 6154 (Walmart, 2015). Companies the likes of Walmart reach success through the proper use of marketing strategies. Marketers rely on various tactics to achieve the companyà ¢Ã¢â€š ¬s marketing goals and promote its products. This report will focus on analysing the current strategies implemented by Walmart, and it will offer suggestions for future improvement.When developing a marketing campaign, marketers have an array of weapons they can choose from in order to devise winning strategies. In today's economy, marketing strategies may consist of price adaptation, promotions, advertising, social media, and e-m arketing campaigns. Regardless of the number of tools available, what matters most, is developing the right mix between them to produce positive results.The end goal of a marketing campaign is to persuade the consumerà ¢Ã¢â€š ¬s behaviour through a particular marketing approach. Each tactic affects the customer differently; when combining marketing strategies, one can expect varied results, for example, a marketing campaign may offer product discounts to attract new customers, and at the same time it uses social media to deter customers from choosing the competition. Regardless of the purpose, successful marketing campaigns induce particular outcomes which companies use to their advantage.In the past, Walmart has implemented strategies that have allowed them to gain and maintain their current lead in the retail market. The particular mix of strategies currently used by Walmart is called the "4-P strategy" and has been proven successful through years of rigorous testing. The 4-P str ategy stands for product, prices, promotion, and place. Walmart's overall success is linked directly to the 4-P strategy, due to its positive results, we can safely assume that the strategy will remain unchanged. Taking the companyà ¢Ã¢â€š ¬s current directive into account, Walmart is expected to use its previous marketing approach in the coming years to ensure their ongoing international expansion CITATION Cor15 \l 6154 (Walmart, 2015).Tactics and Target MarketEach company has a particular marketing recipe tailored to their industry. In Walmart's case, their secret weapon is the 4-P strategy CITATION Gra10 \l 6154 (Grant, 2010). Walmart developed the perfect balance between multiple strategies that gave them a competitive edge; they harnessed the power of an effective marketing approach and continue to use it today. To better understand the 4-P strategyà ¢Ã¢â€š ¬s effect on the consumers and how it works, we must first understand the company's target market CITATION Gra10 \l 6 154 (Grant, 2010).Walmart offers a wide variety of products and services. Therefore, they have ensured that most of the public, in one way or another, can walk into their supermarkets and find something they need. They sell products such as office supplies, groceries, toys, clothing, sporting goods, medicine, electronics, and other seasonal items; the variety of products ensures a steady stream of customers.In recent years, Walmart implemented the "Save money. Live better" campaign. Previously, known as the "Always Low Prices" campaign CITATION Gra10 \l 6154 (Grant, 2010). The premise of this marketing campaign points to a customer with a limited budget. Walmart's approach targets clients who are willing to buy from whoever offers the best price. The target market can be interpreted as a middle-class price-conscious customer.Walmart is also known to tailor their marketing campaigns to target specific geographic locations. The MCAPS (Modular Category Assortment Planning System), all ows marketers to analyse purchasing trends, which the company uses to forecast patterns that dictate their marketing approach. MCAPS collects data from each store, and it highlights traits that allow the company to adapt their prices and related strategies to match location-specific criteria CITATION Mic07 \l 6154 (Micheal Hitt, 2007).Even though the company adapts its approach based on the customerà ¢Ã¢â€š ¬s earning potential, they also developed four different types of store formats to match diverse location environments; by controlling the size of their stores (in a specific area), they exert more power over the outcome of any given strategy. The four different formats include:Super Walmart: This is one of the larger sized stores Walmart operates. It is made up of 40 different departments including a full-line grocery market. The stores are located in rural towns and are placed in areas where competition is null. Estimated amount of shops: 1258 CITATION The03 \l 6154 (The Wal l Street Journal, 2003).Small Marts: This format caters to suburban areas where customers have an average income. They are the smaller stores that are limited to groceries, pharmacy, and digital photo processing. Estimated amount of shops: 49 CITATION Cor15 \l 6154 (Walmart, 2015).SAMà ¢Ã¢â€š ¬s Clubs: These stores are focused toward wholesale buyers. It is a large warehouse that offers products in bulk quantities at lower prices. It targets customers whose income is slightly higher, averaging $75,000 per annum. Estimated amount of shops: 525 CITATION Cor15 \l 6154 (Walmart, 2015).Discount Stores: This is the most popular store format Walmart operates. It receives the highest amount of customers when compared to the other store formats. They are placed in areas with little competition. Similar to the Super Walmart, it is made up of 40 departments and a limited grocery market. Estimated amount of shops: 1568 CITATION Cor15 \l 6154 (Walmart, 2015).Now that we have a better underst anding of Walmart's target market, and the key elements the company considers in their marketing campaigns, we can review the 4-P strategy.Pricing StrategyWalmart has established itself as the leader of low-cost retailers nationwide. The company has an edge over their competitors due to the ability to sell products at the lowest possible price. They have accomplished this by creating an efficient, low-cost operation. In fact, Walmart's overhead costs are the lowest in the industry CITATION Eri12 \l 6154 (Erika Stankeviciute, 2012). By maintaining their operational cost substantially lower than their competition, Walmart can sell products at lower prices; as a result, they continue to lead the low-price wars.Researchers carried out a study in 2002, they collected data on 100 products offered in three different markets (with and without Walmart stores), and concluded that Walmart's prices are 17-39% lower than other supermarkets CITATION Hol06 \l 6154 (Holmes, 2006); this data serves as proof that Walmart's pricing strategy is effective.As the second part of the low-price strategy, Sam Walton (Walmart founder) introduced the penny strategy. Walton predicted that consumer habits would change over time if the company offered products at a lower price all the time (by pennies). For example: If a customer went to a Whole-Foods Supermarket and bought a box of cereal, it would cost $4. In contrast, if that same customer bought the same box of cereal at a Walmart, it would cost $3.97 CITATION Eri12 \l 6154 (Erika Stankeviciute, 2012). To increase their momentum, they also implemented "price match" offers. If a customer found a product at a lower price at a competitorà ¢Ã¢â€š ¬s store, Walmart would match that price and reduce it.The price strategy proved effective, and some credit Walmartà ¢Ã¢â€š ¬s success to that particular approach. Walton's theory proved correct. Over time, customers created the habit of thinking that if they shopped at Walmart, they would alway s get the lowest price; it did not matter if the price was lower by a couple of cents, the bottom line was that Walmartà ¢Ã¢â€š ¬s prices were lower than any other supermarket. As a result, Walmart gained more loyal customers, and due to their increased sales, they continuously drove prices even lower.Product StrategyWalmart is not famous for selling products that are different than what their counterparts offer. However, they are known to use basic house brands and generic products. Nevertheless, the company has made tremendous efforts to buy higher quality products from their traditional suppliers, which ensures that customers receive the best quality products while purchasing them for the lowest possible price.House brands are products which are sold under the retailerà ¢Ã¢â€š ¬s label. Walmart credits over 40% ($10 billion) of its sales to house brands CITATION Jac09 \l 6154 (Neff, 2009). An excellent example of a successful house brand marketing strategy can be seen in Walma rtà ¢Ã¢â€š ¬s best seller, the "Great Value" brand. The Great Value brand focuses on grocery items such as snacks, cereals, beverages, canned goods, condiments, pasta, and cooking ingredients. It has become Walmartà ¢Ã¢â€š ¬s greatest asset and product strategy.Promotional StrategyWhen compared to their competitors, Walmart does not allocate a substantial budget to promotion and advertisement. In fact, they spend less than 1% of their budget on advertising. The company's biggest ad campaign is their promise of "Always Low Prices" CITATION Mar11 \l 6154 (Rigoglioso, 2011).Although the company does not spend a substantial amount in advertising, in recent years they have made significant efforts to implement online marketing. Walmart's e-marketing strategy is based on flooding the web with their brand. Through sheer numbers, they can reach most of the e-marketing facets such as e-com...