Marketing and Walmart: Review, Product, Analysis Essay Example
Marketing and Walmart: Review, Product, Analysis Essay Example

Marketing and Walmart: Review, Product, Analysis Essay Example

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  • Pages: 16 (4350 words)
  • Published: April 25, 2018
  • Type: Case Analysis
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Introduction

This article provides a guide on developing a marketing plan for a new product or service within an existing organization. The initial steps include selecting the organization and providing an overview, describing the new product or service, explaining the significance of marketing for success, and analyzing SWOTT factors related to the new offering.

Step five is to conduct marketing research to develop the marketing strategy and tactics for the new product or service (Perreault, Cannon, & McCarty, 2011). For this assignment, Team Charlie selected Walmart as the organization to analyze. Walmart is globally recognized for its effective marketing plans and strategies. Walmart was founded by Sam Walton who opened the first store in Rogers, Arkansas in 1962 (Walmart, 2012).

Walmart currently operates over 10,000 retail stores across 27 different geographic locations wo

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rldwide. These stores operate under 69 diverse banners and serve customers and members more than 200 million times per week. In fiscal year 2012, Walmart's sales reached approximately $444 billion. Sam Walton, the founder of Walmart, had a vision focused on helping customers and communities save money and live better. His personal goals for Walmart included providing great value and customer service. He believed that leadership through service was crucial for the success of his business, and this belief became the cornerstone of Walmart's foundation.

According to Sam Walton, the principle of Walmart is that true leadership depends on willing service (Walmart, 2012). The basic values and philosophy of Walmart include Sam Walton’s personal goals and the organizational principle that established the mission statement: Save money. Live better (Walmart, 2012). The product mix hosted by Walmart contains a wide variet

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of single products and product lines. For instance, the product mix includes books, electronics, movies, music, furniture, jewelry, toys, groceries, health care products, pharmaceutical products, and many more (Walmart, 2012).

Walmart offers a wide range of products to meet household needs and desires, as well as several additional services in their retail stores. Some of these services include photo lab, pharmacy, automobile, financial, vision center, and wireless services. The availability of these services may vary by location and customer demand. The Team believes Walmart should be considered for incorporating a new Express Shopping Service, aligning with Sam Walton's commitment to value and customer satisfaction.

New Service Description

The concept involves creating a convenient and fast shopping experience for customers who are in a hurry and value time efficiency.

By adding an Express Shopping Service to the Walmart shopping experience, Walmart aims to fulfill its mission of saving money and improving the lives of customers in a timely manner. This service allows customers to buy items quickly, addressing the growing demand for expedient shopping.

The Problem:

In heavily populated areas, like those surrounding military bases, high schools, hospitals, and rapidly growing neighborhoods, Walmart customers often have to endure long waiting lines. Even a quick trip to pick up a few essential items and checkout from the express line has become time-consuming. This inconveniences customers who are on the go, such as military soldiers, firefighters, and police officers who need to be prompt in their duties.

The Solution:

Walmart's new Express Shopping Service comes to the rescue.

Customers who visit Walmart are often in a hurry, but they have the option to shop quickly through various platforms like the Internet, phone, and mobile devices. They

can choose a date and time to pick up their items inside the store, allowing them to satisfy their needs even when on-the-go. On the Walmart website, customers can buy up to 10 items and pay with credit, gift, or debit cards. They can then come to the store whenever is convenient for them and promptly receive their items, enabling them to leave right away (Walmart, 2012). Additionally, customers have the choice to pay with cash or check at the time of pick-up.

The Service Structure

The Express Shopping Service is located near the front entrance of the store.

To ensure smooth traffic flow for regular and express shoppers, it is crucial to avoid separating the travel pathway. Immediate response agents should have access to five cash registers and necessary bagging supplies. Additionally, installing an electronic messaging board can notify customers when their items are ready for pick up. To achieve the objectives of the Express Shopping Service, it is essential to incorporate equipment like freezers, holding bends, and handheld scanners for product management.

Assign a daily manager from the service department to control, supervise, and improve the Express Shopping Service experience.

Key Benefits:

The advantages of express shopping include the ability to purchase products or items quickly, rapidly, and speedily. There are shorter waiting lines that move within seconds or minutes. The limited number of items will promote the use of the express service. Customers will benefit from being able to buy on the go when timing is crucial.

Walmart benefits from providing an additional service to meet consumers' wants and needs. The competitive advantage lies in being the first to offer this service compared to other organizations (Kotler ;

Keller, 2012). By upholding Sam Walton's vision of helping people save money and live better through the Express Shopping Service, Walmart can enhance its marketing strategy and tactics. Marketing plays a crucial role in Walmart's success by enabling the organization to achieve its goals, objectives, and mission established by its founder (Walmart, 2012).

In order to stay ahead of competitors, Walmart utilizes first-place marketing as technology and innovation continue to evolve. This involves continuously marketing new products, services, or improving existing ones to meet consumer demands. One advantage of this approach is the ability to market multiple products and product lines under a single strategy, which deters competitors from entering the market before Walmart does (Walmart, 2012). Consequently, Walmart has the opportunity to market new products or services ahead of their availability.

Keeping Walmart successful is their ability to stay informed about the advantages and benefits of marketing.

SWOTT Analysis

The organization will use a SWOTT analysis to determine their strengths, weaknesses, opportunities, threats, and trends (Perreault, Cannon, ; McCarty, 2011). This analysis is essential in deciding whether to implement a new product or service by gathering relevant information for each category. The following details about each category will influence the final decision-making process for this new service.

Strengths

One major strength is Walmart's provision of an additional service for customers. Customers can order and pay online, and then pick up their purchase upon arrival (Walmart, 2012).

Walmart’s ability to provide this service is a significant strength for the organization, as it is known for offering products at affordable prices. The company will continue to match competitors’ prices using its current price match software at the checkout process. With its expanding

customer base, Walmart remains a leader in the retail industry and is well-positioned to introduce and implement the new express shopping service (Walmart, 2012).

Weaknesses

One weakness in implementing the new express shopping service is that one row of current customer parking space will be designated solely for express service customers, potentially limiting parking availability for other customers. Additionally, Walmart will have to establish limits on the number of items a customer can purchase to ensure timely service. The organization also faces uncertainty regarding the success and initial demand for the new service, which may pose challenges (Walmart, 2012).

Walmart's new express shopping service does not allow customers to buy prescription drugs because federal and state regulations require special handling for these medications. If customers need to make any returns or exchanges, they must physically go to the store's customer service department since the orders are prepaid.

Opportunities

The introduction of this additional service presents an opportunity for Walmart to attract new customers or expand its existing customer base. The new express shopping service will be particularly appealing to individuals who have limited time or availability as it eliminates the need for them to enter the store and wait in long lines for purchases consisting of 10 items or less. This added convenience gives Walmart a competitive advantage over its rivals (Walmart, 2012).

Threats
Competitors may imitate the new service to remain competitive. Other organizations may improve the concept by relaxing some of Walmart's restrictions. Additionally, city, state, and federal regulators may become more involved in relation to city planning, zoning regulations, taxation disparities between locations, and potential legal issues concerning customer privacy concerns related

to online orders through the Walmart website (Walmart, 2012).

Trends
The popularity of online shopping is on the rise. The online ordering process is becoming more user-friendly, making it easier for customers to make purchases. Organizations are placing a greater emphasis on security and privacy measures to protect customers and promote online shopping (Walmart, 2012).

Walmart has taken the lead in the initial growth of this new express shopping service as it can lower labor costs and meet previously unexplored customer needs.

By creating this new express shopping service, Walmart will achieve their objective.

Marketing Research Approach

An acceptable marketing research approach to develop the marketing strategy and tactics for the new Express Shopping Service involves utilizing both consumer analysis and market industry analysis. Consumer analysis should include information such as demographics, psychographics, purchasing behaviors, and geographical considerations. The market industry analysis will provide valuable insights obtained from conducting a competitor's analysis (Armstrong & Kotler, 2011).

The marketing research approach will also include statistical data the organization currently uses for forecasting trends and consumer needs. The use of secondary and primary data will be an important part of the market research in the collection of data to analyze (Perreault, Cannon, & McCarty, 2011). Walmart must carefully analyze the data to ensure it is not out-of-date and specific enough for the marketing research. Additionally, Phase II of the marketing plan will explain market segmentation, including identifying the segmentation criteria that will affect the target market. Phase II will also identify Walmart's target market.

The text below discusses the description of organizational buyers and consumers, the factors influencing their purchasing decisions, and how these factors will impact Walmart's marketing strategy. Additionally, it

also analyzes current competitors and defines the competitive landscape for Walmart's Express Shopping Service.


Market Segmentation

Market segmentation is the process of dividing a market into distinct subgroups of buyers with similar wants, needs, and demands that may require separate products or services (Armstrong ; Kotler, 2011). Walmart, when creating a market segmentation plan, must evaluate the market to determine the segment that aligns best with their marketing plan.

Market segmentation is the result of recognizing that potential users of a service are different. The success of Walmart's marketing strategy and tactics depends on their ability to correctly divide the market into subgroups for effective targeting. To accomplish this, market segmentation is broken down into variables and characteristics, which are categorized into four basic strategies: demographic, geographic, behavior, and physiographic. Demographic segmentation involves dividing the market based on variables such as age, family, education, occupation, and income. This is the most popular way to divide groups as it aligns with consumer wants and needs.

Walmart may utilize demographic segmentation because it is easily measurable and attainable. Geographic segmentation involves dividing the market into groups based on location, such as neighborhoods, cities, states, counties, nations, and regions. It is important for Walmart to customize their marketing plan and strategy in order to meet the desires and needs of specific geographic areas. Factors like population density, cultural differences, and regional climate must be considered by Walmart in geographic segmentation. Behavior segmentation involves dividing the market based on consumer behavior towards a product or service.

The target market is divided based on benefits, rate of use, brand loyalty, user status, and occasions that stimulate purchases. Walmart uses behavior segmentation to group potential buyers

based on their knowledge, attitude, uses, or responses to the product or service. Physiographic segmentation involves dividing the market into groups based on consumer's lifestyle preferences such as their standard of living, activities, interests, opinions, attitudes, values, or personality characteristics (Kotler & Keller, 2012).

Walmart has the ability to market their products or services as representations of different lifestyles. Additionally, they can match their offerings with consumer personalities by taking into account factors such as personality traits. The main purpose of segmentation criteria is to divide the market into segments that can be effectively targeted. The fundamental criteria for market segmentation include customer needs and demands (Armstrong ; Kotler, 2011).

The effectiveness of market segmentation relies on specific criteria that the selection groups must meet. The five criteria for effective market segmentation are measurable, relevant, accessible, distinguishable, and feasible (Kerin ; Hartley, 2011). Measurable refers to the ability to measure values of variables in terms of purchasing power and profiles; this is particularly important for Walmart in terms of demographics and geography. Some aspects of segmentation may be challenging to measure, but as much as possible, the process should be achievable (Kotler ; Keller, 2012). Relevant means that the potential size and profit of the market segment should be large enough to economically justify separate marketing activities.

This means that Walmart's marketing activities need to ensure that they cover expenses, generate a larger profit, and justify the resources required to target their audience. If the marketing activities are not relevant enough, they should be reconsidered or eliminated (Kerin & Hartley, 2011). To effectively target a segment group, Walmart should have target group-specific media advertisements, magazines, and website ads

that the target audience likes. This ensures accessibility and the ability to reach the segment through distribution channels and communication (Kotler & Keller, 2012). Lastly, segments must respond differently to different marketing strategies in order to be distinguishable.

Walmart may create and justify separate offerings in its marketing mix based on unique needs. Different market segments may exhibit their distinct characteristics by making slight modifications to products or services compared to competitors (Kerin & Hartley, 2011). It is feasible for Walmart to approach each segment with a specific marketing plan and leverage the advantages they offer. The ability to develop a cost-effective marketing plan for its targeted customers and markets is crucial for Walmart.

The feasibility of the segment has reasonable price with minimum risk (Kerin & Hartley, 2011).

Criteria that Affect Target Market:

Targeted marketing segments can use different criteria and marketing mixes to approach the most profitable markets. However, some criteria may affect Walmart's target market, such as identifiable, accessible, unique, and durable (Perreault, Cannon, ; McCarty, 2011). These are four major criteria that have negative effects on market segmentation. If Walmart targets specific market segments, they must first identify the distinguishing characteristics that make consumers in the segment similar.

These similar attributes will meet the criteria for measurability, which is crucial for Walmart to determine the best marketing strategies and investment amounts. In order to effectively reach the target market and have a positive impact, it is essential for Walmart to have access to the market for communication. Without being able to assess a particular segment, it becomes useless for marketing purposes. Therefore, accessible and serviceable communication is necessary to effectively target specific segmented groups through

media advertisement, magazines, or Internet websites (Perreault, Cannon, ; McCarty, 2011; Kotler ; Keller, 2012).

Every Walmart market segment needs to have its own unique marketing mix in order to justify their separation as different segments. If there is a lack of distinctiveness among the market segments, it will impact the creation of specific messages for each targeted market (Perreault, Cannon, ; McCarty, 2011). Walmart should consider merging segments that have high similarities in order to avoid unnecessary expenses in developing new marketing strategies and tactics for unstable segments.

They must establish themselves for long-term success. Walmart can achieve this by identifying and utilizing segments that are likely to exist in the future. When a market segment no longer exists or decreases in value, Walmart must invest in new market development (Kotler & Keller, 2012). Target marketing involves dividing a market into segments, as mentioned earlier, and focusing marketing efforts on one or a few key segments. The significance of target marketing is that it simplifies and reduces the cost of pricing, promoting, and distributing the product or service (Perreault, Cannon, & McCarty, 2011).

Walmart aims to connect with a specific group of individuals interested in their latest service. This group is Walmart's target market. The target market for Walmart's Express Shopping Service will mainly focus on densely populated areas near military bases in the United States. Walmart strategically opened superstores in these areas to cater to the desires, necessities, and increasing demands of consumers residing there.

Focusing on target markets will further support Walmart's mission of saving money and living better (Walmart, 2012). Walmart targets specific audiences with distinct characteristics that differentiate them as different groups (Perreault, Cannon,

& McCarty, 2011). For the Walmart Express Shopping Service, the main focus is on customers who are on the go, such as military soldiers, firefighters, and policemen. There are similarities between organizational buyers and consumers in terms of their purchasing behavior.

Both organizational buyers and consumers for the Express Shopping Service consider price to be important. They both prioritize quality specifications, customer satisfaction, and service guarantees. In making decisions, both rely on their experiences (Armstrong & Kotler, 2011). The organizational buyers and consumers for the service are responsible for purchasing products and services for personal or organizational use (Web Finance Inc, 2012).

The Walmart's Express Shopping Service is open to all customers, including military soldiers, firefighters, policemen, businesses, corporations, governments, manufacturers, and resellers. Offering this service to a diverse range of consumers will contribute to the improvement of the profit margin.

Factors Influencing Purchasing Decisions

When it comes to purchasing decisions, the pricing of products and services is the most significant factor. Researching and studying consumer buying behavior helps in understanding the factors that influence these decisions. These factors can be categorized into personal, social, psychological, and cultural factors (Perreault, Cannon, ; McCarty, 2011).

Factors that impact Walmart's marketing strategy can also influence their purchasing decisions. This is because Walmart's strategy revolves around understanding customers' needs, desires, and personal characteristics. Before effectively marketing a product or service, Walmart must identify which potential buyers they should target their efforts towards. Failing to do so could result in wasted time and money on customers who are loyal to other brands or services. By analyzing consumer behavior, Walmart can enhance their marketing strategy and tactics. Additionally, conducting a competitive analysis allows Walmart

to identify the strengths and weaknesses of their competitors.

A competitive analysis helps Walmart identify areas for improvement by examining what their competitors are doing. In the general merchandise retail industry, Walmart's main competitors are Target and Kmart. However, because Walmart's Express Shopping Service is focused on the retail grocery industry, their analysis also includes organizations like HEB, Kroger, Albertsons, and Safeway. When choosing where to shop, customers primarily consider price differences between these organizations. According to the analysis, none of them offer an Express Shopping Service. The competitive landscape for this service encompasses both online and offline competitors.

The grocery industry is fiercely competitive, leading numerous smaller grocery stores to either close down or merge with larger chains. Competitive analysis has revealed that several organizations, including HEB, Kroger, Albertsons, and Safeway, pose a potential threat to Walmart. These companies consistently vie with Walmart to secure the highest market share achievable.

The consumer desires specific attributes such as price, variety, selection, and quality to have a favorable shopping experience. Both Walmart and Safeway have online websites that provide an overview of their goods and services. Among the competitors, only these two organizations offer some form of online grocery shopping. Walmart offers customers the option to order a selected list of grocery items online. Similarly, Safeway also offers this service and provides delivery in specific geographical areas.

The population and income target market variables for the organizations are similar. After reviewing the online websites of each respective organization, research shows there is no service provided by any of Walmart’s competitors that matches the new service that Walmart plans to offer. The Express Shopping Service gives Walmart the opportunity

to increase the organization’s competitive advantage and reach an otherwise ignored target market.

Marketing Plan

Team Charlie decided that introducing an express shopping service into the Walmart Corporation will create, establish, and ensure a competitive edge because this type of service is nonexistent in the discount variety store industry. The team’s market analysis reveals a potential and successful marketing opportunity that allows Walmart the advantage before its competitors. The express shopping service will open the doors into a new marketing structure for discount variety stores.

Charlie's marketing team needs to take into account the factors of phase three in the marketing plan in order to create a successful marketing strategy and tactics. It is crucial for Walmart to have knowledge and understanding of service marketing within the marketing plan. Service marketing has transitioned from a focus on tangible outputs to a focus on intangible processes involved in providing services (Kotler ; Keller, 2012). Phase three of the marketing plan begins by providing a detailed description of the attributes of Walmart's Express Shopping Service.

The second objective focuses on the product life cycle and how the service's pace of movement throughout the cycle can be influenced by various factors. It also explores the impact of the product life cycle on the marketing of the express shopping service. In the third stage of phase three, strategies for positioning and differentiating the service are identified. The final stage involves determining an appropriate price strategy for Walmart's Express Shopping Service.

Express Shopping Service Attributes are defined by the American Marketing Association as characteristics that identify and differentiate features, functions, or desired unique elements that provide benefits to the target market (Marketing Power Inc, 2012).

Walmart

recognizes the significance of understanding the consumer's decision-making process when it comes to choosing a store to shop at. This understanding will allow Walmart to gain insights into the specific attributes of express shopping services that customers want, need, and desire. One aspect of the consumer's shopping choice process is the selection of retail outlets, which offer different locations for consumers to buy products. Another aspect is the various shopping modes available, which enable consumers to make purchases locally, out of town, or from home using methods such as mail, telephone, and the Internet (Kerin & Hartley, 2011).

By utilizing the aforementioned examples to explore the consumer's decision-making process when selecting a store for shopping, we can gain insights into the attributes of Walmart's Express Shopping Service. This analysis also contributes to the development of Walmart's marketing plan in phase three. The attributes encompass various elements including features, functions, unique aspects, and benefits that cater to consumers' shopping preferences and methods (Kerin & Hartley, 2011).

In the subsequent paragraphs, we will delve into a detailed description of Walmart's Express Shopping Service attributes. These attributes not only showcase the key features characterized by technological advancements like mobile phone, wireless, and Internet shopping, but also have the potential to influence customer preferences and requirements for diverse shopping choices and methods.

The improvement of technology in communication methods encourages consumer purchasing behavior (Perreault, Cannon, ; McCarty, 2011). Offering up-front in-store pick-up access with designated parking spaces can attract customers to the new express shopping service. One of the most appealing features is the ability to provide customers with updates on service status through electronic messaging boards. These updates will include information

on customers' scheduled pick-up dates and times, as well as the progress of their purchase, such as whether it is in progress, completed, or awaiting final transaction.

Functions

Functions refer to the purposes, roles, or existence of how a service works or performs in relation to its actions and activities (Perreault, Cannon, & McCarty, 2011).

Walmart's Express Shopping Service is designed to provide a faster way for the target market to purchase goods and products when they require them urgently. The service allows customers to order, purchase, and obtain products conveniently, according to their own preferences. The service also offers various functions and features to enhance the shopping experience. Walmart's Express Shopping Service is unique in that it brings a retail service that was previously unavailable to customers. These unique elements, such as rare or difficult-to-find qualities, contribute to the marketing plan and strategy of the service by combining features, functions, and consumer benefits.

Walmart's Express Shopping Service is characterized by unique elements that give it a competitive advantage. The consumer benefits of this service align with Sam Walton's personal goal and belief in helping customers and communities save money and live better. Walmart offers differentiated products, which increase competition and benefit consumers. Additionally, through the express shopping service, consumers can enjoy discounts and savings when shopping via phone, wireless, and Internet platforms.

The customers who use Walmart's Express Shopping Service can enjoy various discounts. They can get a 5% discount on their total purchase, as well as a 3% discount when using a Walmart credit or gift card. Additionally, if a customer's monthly purchases exceed 10 items, they will receive the lowest priced item in their next purchase for

free. Furthermore, customers also have access to attendants who can assist them in carrying their purchased items to their vehicle.

The Walmart's Express Shopping Service attributes encourage positive customer behavior purchasing and sustainability for the success of Walmart's marketing strategy and tactics.

Product or Service Life Cycle Pace

The progress of a sequence of stages known as the introduction, growth, maturity, and decline that a product or service goes through refers to its life cycle. It describes the life of a product or service from development to it becoming obsolete or being replaced with a new version or upgrade (Kotler & Keller, 2012). The pace at which the express shopping service moves through the life cycle depends on the speed of the discount retail industry evolving Walmart. This is because it depicts how long a service will likely remain viable in the marketplace.

Competitive analysis reveals that during the introduction stage, it is advisable to begin slowly so as to allow consumers to become aware of and develop a comfort level with the new service.

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