Market Strategy of Walmart Retail Chain Term Paper

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Marketing Strategy of Wal-Mart Retail Chain: An Analysis

Wal-Mart's history is an example of innovation, leadership and success in a company. It began as a single store in Rogers, Arkansas in 1962 and has become the world's largest retailer (Slater, 2003). Wal-Mart is often looked to as the industry trendsetter. The company enjoys annual revenues of over $100 billion, 3,200 stores and nearly one million employees around the world.

Wal-Mart operates each store, from its products to the technical equipment that helps speed up checkout times, with a single philosophy: provide everyday low prices and excellent customer service (Slater, 2003). Its rock bottom prices eliminate the need to spend money on frequent sales promotions, and its sales are more predictable.

Wal-Mart has invested a great deal of money in its unique cross-docking inventory system (Slater, 2003). Cross docking allows the company to achieve economies of scale that reduce its costs of sales. This system allows goods to be continuously delivered to stores within 48 hours and often eliminating inventory processes. As a result, Wal-Mart can stock its shelves much faster than its competition. In addition, Wal-Mart leverages its buying power by purchasing in bulks and distributing the goods itself. Wal-Mart guarantees everyday low prices and considers the company to be the one stop shop."

This paper addresses the success of Wal-Mart's existing marketing strategies, in an effort to determine which areas could be improved and how the company can increase its future levels of success.

Wal-Mart's Existing Strategies

In today's global marketplace, business is more competitive than it ever has been, and if companies want to stay in business, they must consider their business leadership role more often, provide things that competitors don't, and search out for information concerning new marketing strategies (PRIMEDIA, 2002).

Sam Geist, a former national marketing expert involved in the competitive garment industry, and Warren Greshes, a former owner/operator of a nationally recognized sporting goods chain, argue in their seminars that there is no room for error in business strategies and practices (PRIMEDIA, 2002).

Geist and Greshes encourage those who attend their conferences to consider their own business by looking at various industries. They encourage businesses to examine the philosophy behind successful companies' practices and strategies, and ask several self-examining questions (PRIMEDIA, 2002):

1. Do you know, or do you just think that you know, what your business is really about?

2. Who are your real customers?

3. Are you really marketing your total package of products and services to them?

4. Are you differentiating your company from your competition?

5. What is your customer's point of reference?

6. Are you providing leadership to your company?

The speakers frequently tout Wal-Mart as a company that has gotten their marketing strategies down pat. "Thirty years ago, Sears didn't believe in, or even care about, Wal-Mart," Greshes said (PRIMEDIA, 2002). "Today, I wonder if Wal-Mart is deeply concerned about Sears' existence." While Greshes does not say that Wal-Mart's growth came at the expense of Sears, he believes that Wal-Mart's accurate understanding of who the customer is, how the customer makes purchasing decisions, and what services consumers want bundled together, made Wal-Mart a major competitor.

Geist, who also praises the success of Wal-Mart, emphasizes that Wal-Mart has been very successful in defining its customer base. According to Geist (PRIMEDIA, 2002), Wal-Mart moved closer to buyers by building stores on the main thoroughfare in suburban locations. Wal-Mart brings customers more of the merchandise that they want on a daily basis because of its extensive communication and logistics infrastructure. "A penny saved is not a penny earned," Geist said (PRIMEDIA, 2002). "Your pennies have to come from outside the company. That's what growth is about."

Wal-Mart markets itself based on the philosophies of excellence in the workplace, customer service and always having the lowest prices. Walton established three basic beliefs for the company, which are now the core of the company's marketing strategy (Wal-Mart, 2004).

1. Respect for the Individual: According to Don Soderquist, Senior Vice Chairman of Wal-Mart Stores, Inc. (Wal-Mart, 2004): " 'Our people make the difference' is not a meaningless slogan - it's a reality at Wal-Mart. We are a group of dedicated, hardworking, ordinary people who have teamed together to accomplish extraordinary things. We have very different backgrounds, different colors and different beliefs, but we do believe that every individual deserves to be treated with respect and dignity."

2. Service to Customers. According to Tom Coughlin, Vice Chairman, Wal-Mart Stores, Inc.: "Wal-Mart's culture has always stressed the importance of Customer Service. Our Associate base across the country is as diverse as the communities in which we have Wal-Mart stores. This allows us to provide the Customer Service expected from each individual customer that walks into our stores."

3. Strive for Excellence. According to Lee Scott, President and Chief Executive Officer of Wal-Mart Stores, Inc., "Sam was never satisfied that prices were as low as they needed to be or that our product's quality was as high a they deserved - he believed in the concept of striving for excellence before it became a fashionable concept."

Wal-Mart sells a variety of products such as clothing, home furnishings, food items, electronics, pharmaceuticals, and many other products (Mano, 2002). It also sells groceries in some stores. Sam's Club, a division of Wal-Mart, is a warehouse that sells food items and other merchandise in bulk to consumers at a discount.

Wal-Mart's main strategy is to provide good customer service for the customer, whether it is just a question or a problem with the products (Mano, 2002). Wal-Mart's fundamental goal is to provide the selection and customer service that will make customers want to shop at Wal-Mart again. The second strategy of Wal-Mart is to offer very competitive, low prices so that the customer will enjoy great value when shopping at Wal-Mart. The third strategy of Wal-Mart is to expand in global markets for future growth.

Marketing Portfolio

SOURCE: Mano, Nayeem. (May 9, 2002). Wal-Mart. Educational Investment Fund Newsletter.


Wal-Mart sells a wide variety of clothing, ranging from socks and t-shirts to coats and dress clothes. The stores also sell a wide variety of shoes and boots to customers.

Pharmaceuticals, Cosmetics, and Prescription and Non-prescription drugs

Wal-Mart sells both prescription and non-prescription pharmaceuticals including both various brand name and generic varieties. The stores also sell a large selection of personal care products, including soaps, shampoo, toothpaste, mouthwash, etc. Wal-Mart also has a department dedicated to cosmetics including brand name perfumes and make-up.

Food Items and Groceries

Wal-Mart has a full selection grocery store in its Super centers. These departments have their own bakery, meat shop, and deli shop offering consumers the same selection and quality of a large grocery store.

Household Products, Maintenance, and Automotive

Wal-Mart has a large variety of small appliances including items like toasters, blenders, microwaves, and small refrigerators and freezers. It also has household products like detergents and cleaners. Wal-Mart offers household repair and remodeling products including drills, saws, paint and wallpaper for customers who are handy. The automotive department offers a wide array of preventative maintenance and car care products for consumers.

Electronics and Toys

Wal-mart offers various electronic products, including home computers, televisions, radios, and CDs. It also has a good selection of brand name toys in its toy department.

Bulk Items

Wal-Mart sells a lot of bulk-packaged items through its Sam's Club stores. They offer a larger quantity of product for a lower price to consumers and small businesses.

One of main aspects of Wal-Mart's marketing strategy involves understanding who its customers are (Mano, 2002). For the retail store, the customers are mainly working middle class people. They come to Wal-Mart stores to buy the items that they need because they know that the prices are low and the service is good. The retail sector makes Wal-Mart a majority of its revenues and profit year after year.

Sam's Club is a network of warehouses that customers pay a yearly membership fee to be a part of. As a member, customers get discounts on products and can purchase bulk-packaged items at low costs. Sam's Club warehouses are the second largest sales generating operations of Wal-Mart Stores, Inc. Individuals and small businesses are Sam's Clubs main customers.

Wal-Mart has made numerous efforts to appeal to families. For example, the company has installed check-out lanes free of racy magazines like Cosmopolitan, in a recent change in Wal-Mart's marketing strategy (Kleder, 2002). As a result of this family-friendly marketing strategy, all sexually-suggestive materials, like Cosmopolitan and Glamour magazines and the Sports Illustrated Swimsuit Edition, will either removed from check-out lanes or covered with blinders, so as to not offend customers -- especially those shopping with children.

Robert Knight, director of the Culture and Family Institute, praised Wal-Mart's move to respect the concerns of shoppers turned off by the sexual magazines. "Many Wal-Mart shoppers like their check-out lanes fast, not racy," Knight said (Kleder, 2002). "This is a small step to help families, but a very positive small step."…[continue]

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