Marketing Plan: Walmart Analysis

Walmart’s Brand Description

Walmart is one of the largest publicly traded retail corporations in the food and staples industry specializing in consumer staples. Walmart has a global presence considering that it operates in 27 countries and serves 10 others through its e-commerce websites, which together yields more than $500 billion. Apart from the financials, Walmart is considered the largest private employer in the globe with over 2 million employees spread across its stores.

Walmart’s Core Products and Services

Walmart offers a wide array of products and services most of which are meant to meet their consumers' everyday needs. In particular, this retail giant can be considered to sell about anything from beverages, pharmaceuticals, toys, sports goods, foodstuffs, and health and beauty products among others (Washington, 2017). In addition to these products, Walmart is renowned for its photo services, where customers drop off their photographs for development. Apart from the photo services, Walmart boasts of an extensive financial services section which is concerned with the processing of debit cards, credit cards, bill payments, and money transfers. Walmart has been able to tap into this financial venture by collaborating with MoneyGram a giant international money transfer platform. Under this collaboration, Walmart customers can send money through MoneyGram starting at $4.75 (Washington, 2017). This form of corporate collaboration is also witnessed between Walmart and T-Mobile, which has allowed Walmart to invest in wireless phone services. The Walmart Family Talk Wireless is a product of this collaboration where Walmart clients get communication plans that include unlimited phone calls and text messages for as little as $45 (Washington, 2017).

A Brief History

Walmart Inc. has a long history as it dates back to 1962 when Sam Walton opened the first store in Rogers Arkansas. Prior to the opening of Walmart Discount City store, Sam Walton had worked at J. C Penney and in time, he acquired one store from Butler Brothers, which formed the foundation of Walmart Inc. By 1969, this initial store had given rise to other 24 stores in Arkansas and it was time to change its name from Wal-Mart, Inc. to Wal-Mart Stores, Inc (Farfan, 2018). In 1970, the company achieved its big break as its stocks were listed on the New York Stock Exchange. By 1975, Walmart had expanded o seven states with its total sales amounting to over $340 million and about 7500 employees. At the turn of the millennium, Walmart had risen to become a multinational company as it expanded to Mexico, Canada, Europe, Brazil, and Argentina (Farfan, 2018). Over the years, Walmart has adopted new business models to appeal to a wider and diverse clientele. In spite of these achievements, Walmart has had its challenges, which have led to the closure of some stores across the globe. Nonetheless, Walmart has weathered these challenges to meet the needs of their clients.

Current Competitors

Walmart just like any company has competitors who are keen on benefiting from the vast and profitable retail industry. The most notable competitor is Target, which like Walmart thrives in the retail distributors' industry. This means that Target gives Walmart a run for its money considering that they target consumers with similar demographics and market needs. Target rakes up to $75 billion in sales annually meaning that it has managed to cut a significant market niche for itself (Pratap, 2018). Kroger is another of Walmart’s competitors as it is considered as one of the largest food retailers in the world. According to Pratap (2018), this retailer boasts of up to $122 billion in sales in its convenience stores, supermarkets, and multi-department stores.

Walmart has another competitor in Amazon, which is considered a fast-rising online retailer, which thrives on convenience and well-coordinated supply chain. Amazon is a significant competitor considering that Walmart is yet to grow its presence in E-commerce. Apart from Amazon, Walmart faces stiff competition from Costco a fast-rising multinational company with sales passing the $125 billion mark. Home Depot, a company that provides home improvement goods and services and building supplies is another Walmart’s significant competitor. The company that boasts of about 2284 stores in the US is capable of making sales that amount to over $100 billion (Pratap, 2018). Home Depot is most certainly a threat to Walmart’s business success considering that it offers similar products and services. Other significant and notable competitors include Home Depot, Best Buys, and Lowes, which are fast rising as they are getting good reception, which will help them expand even further.

SWOT Analysis

Strengths

The largest retailer in the world boasting of the unmatched scale of operations as well as significant influence over competitors and suppliers

Walmart stands out as the largest retailer in the world owing to its unmatched scale of operations, which are crucial in cutting back its operation costs. Its 2.3 million employees ensure that more work is done in shorter times thus helping Walmart to hit the $500 billion mark in sales (Jurevicius, 2019). At $500 billion, Walmart’s revenue exceeds that of Amazon, Costco, Carrefour, and Tesco combined making it feature in Forbes most valuable brand. Walmart’s economies of scale are crucial, as it is able to spread its fixed costs to a larger array of products, which translates to cheaper products. The cheaper products mean that more customers can afford to shop in their store, which in turn translate into, increased traffic and sales volumes. Apart from the economies of scale, Walmart has managed to have a significant influence over its competitors and suppliers owing to its global presence. In this case, Walmart can require lower prices from its suppliers owing to its size or even sell selected items at a loss to affect competition. As a result, Walmart’s competitors are kept at bay, which ensures that Walmart maintains its market niche.

International Presence

Walmart is definitely one of the largest retail stores in the world going by its penetration and sustenance of international store across the globe. Walmart has taken an initiative to operate using different brand names depending on the country of operations, which gives it a chance to offer tailor-made products to meet the international market. For instance, Walmart operates as Walmex in Mexico, ASDA in the UK and Seiyu in Japan. According to Hunt, Watts, and Bryant (2018), international stores play a significant role in raising Walmart’s revenue considering that they bring in up to $119 billion in 2018 alone. This form of global expansion not only helps Walmart in fostering its growth but also strengthens its leadership position in the retail business by gaining new and valuable experience. Of importance is the fact that this form of expansion helps this company in exploiting further benefits that are associated with economies of scale.

Efficient Logistics System and Global Supply Chain 

Walmart is one of the many stores that have managed to make inroads into foreign markets with the hope of tapping into the endless opportunities. Walmart has succeeded in making a name for itself owing to its vibrant and efficient logistics system and global supply chain. The company ensures that its customers who are spread in 27 countries get products that are consumer specific. Of importance is the fact that Walmart has adapted Information technology systems to enhance efficiency in monitoring performance of all stores (Hunt, Watts, and Bryant, 2018). In this regard, the company can track down ho products are performing and thus make adjustments to enhance flawless business operations.

Weaknesses

Working Conditions and Employee Treatment

In spite of boasting as the largest private employer with over 2.2 million workers, Walmart is yet to boast of satisfied employees. The main reason for this internal strategic issue is the fact that Walmart is accused of inadequate healthcare plans, low wages, and poor working conditions. These inconsistencies mean that most of Walmart’s employees are demotivated which is compounded by numerous lawsuits from disgruntled employees (Farooq, 2019). As a result, Walmart’s profit margins may go down, as the employees may no longer own the company’s vision. Moreover, Walmart may miss its competitive edge especially if its competitors treat their employees’ right.

Extensive Span of Control 

As established, Walmart is a giant retailer with stores in 27 countries across the globe and expanding. The extent at which Walmart has extended may be associated with vibrant business growth but with this acceleration comes challenges. In particular, Walmart may not be able to develop all the stores in a uniform manner considering the diversified demographics (Hunt, Watts, and Bryant, 2018). The extensive span of control then means that Walmart may be spending much of its profits in uplifting stores that do not contribute to its financial growth.

Risk of Imitation

Walmart is not a unique business organization considering that its competitors do just what Walmart does. In fact, most of its competitors are the ones that copy its business model and make it better to build a significant market niche. The only thing that makes Walmart stand out is the fact that it has a sizeable business, which is not a guarantee for its continued existence. It is possible that Walmart will be forced to close most of its stores especially with disgruntled employees and extensive span of control.

Opportunities

Expansion of its Scope

Walmart stands to gain financially and retain its competitive edge if it expands to the unexplored territories. As it is, Walmart is visible in North and South America and Europe meaning that there is room for more expansion. Being the multinational company that it is, Walmart can expand into Latin America, the Caribbean, Middle East, Asia, and Africa (Hunt, Watts, and Bryant, 2018). Considering that it is a renowned brand, Walmart stands to gain immensely if it considered tapping into these markets by meeting the clients’ diverse needs.

Formation of Strategic Alliances

Walmart has the opportunity of enhancing its business growth by forming strategic alliances and partnerships with the existing firms and retailers. In particular, Walmart has the chance of acquiring small companies and turning them into profitable and global business ventures. By doing this, Walmart will have an accelerated global penetration as well as lowered costs of operations as it will not require to build businesses from scratch.

Improvement of the Existing Human Resource Practices

Walmart understands that it cannot achieve its objectives without the input and dedication of its two million-plus employees. In the past, Walmart has received negative criticism owing to its poor labor practices that work against it as it demotivates its employees. However, this trend can be reversed if Walmart improves on its human resources practices. In particular, Walmart has the opportunity if bringing in innovative human practices that ensure that employees are motivated by remuneration packages

Threats

A primary Target for Competitors

Walmart has a reputation of being the largest retailer gong by its numerous stores across the world as well as its annual revenue that surpass the $500 billion mark. These factors make Walmart the primary target for companies that would like to secure the Walmart’s market niche. As such, the competitors are always on the lookout for weaknesses on the part of Walmart so that they can capitalize on them. This is the case with Target, one of Walmart’s competitors, which offer the same products as Walmart, but Target’s products are considered of higher quality (Farooq, 2019). The capitalization on Walmart’s weaknesses is an asset that Costco another of Walmart’s competitors uses in that it allows its customers to buy products in bulk. Apart from these unique provisions, Walmart’s competitors have chosen to meet their employees more fairly something that Walmart is struggling with currently. As a result, more clients would choose to do their shopping in stores that offer quality services and treat their employees in a better manner.

Rise of Small-Scale Online Companies

Walmart is experiencing a threat from the increase in the number of small-scale online companies. The problem with these small-scale online companies is the fact that they offer similar products at similar prices. If Walmart does not compete effectively against these companies then it risks missing its market niche. The reason for this could be that customers would want to deal with small companies without bureaucracies.

Technical Hitches

Walmart just like many other organizations has invested heavily in information technology to reach out to its customers, advertise, and follow up on sales and purchases. Walmart has had its own fair share of technical issues as its customers have complained about the slow traffic on its websites. Additionally, when compared to other websites like Amazon, Walmart’s website is not as organized which affects the quality of online shopping. These factors mean that customers would opt for other companies that are more organized and those that boost the customers’ shopping experience.

Marketing Plan Focus

Walmart should consider upgrading its website so that meet the customer's preferences and expectations. In particular, Walmart needs to understand that the market is shifting rapidly with more people preferring to make their purchases online as it is hassle-free and quick. Apart from the online platform, Walmart should consider its human resource practices to make them more employees friendly. In this regard, it is important to note that motivated employees are more likely to own the company’s vision and work towards achieving it. Finally, Walmart should tap into the opportunity of expanding their operations in new territories by creating mergers with local brands and forming strategic partnerships. In this way, Walmart will manage to beat off upcoming competition and maintain its competitive edge.

Segmentation Approach and Rationale

Walmart can benefit if it is aware of its customers' demographics, psychographics, and purchasing behavior considering it has made international inroads. One of the approaches that Walmart can use in conducting market segmentation is location-based targeting. In this case, Walmart can apply geo-fencing a proximity targeting tactic to understand their customer's location patterns. On finding their locations, Walmart can then send related advertisements in the hope that they will visit the store. This market segmentation has been proved efficient considering that Walmart achieved 35 to 43 percent increase in-store visitation.

Target Market Definition

The target market in Walmart’s market and business plan include the exiting customers as well as new customers from all ages and income brackets. To the degree, proximity targeting sparks an interest into the customers to visit the store or its online platform to find out about the advertised. Once the clients are in the store they are likely to make a purchase or an order, which will improve Walmart’s business growth and development.

Positioning Statement

For price-sensitive customers, Walmart should be considered as the best retailer brand providing a convenient one-stop shopping destination for everyday products and services. Walmart prides itself on operational excellence, logistics infrastructure as well as inventory management to satisfy clients shopping needs.

Marketing Mix

Product

This marketing plan focuses on several products ranging from foods, household goods, and electronics among other products that Walmart sells in its stores. The core idea is to enlighten people about the available discounts that are offered in Walmart stores depending on their locations. These products are inexpensive yet of high quality meaning that the customers are guaranteed to get value for their money. Customers can visit their nearest Walmart stores and enlist for their top-notch financial and communication services at lowered and discounted prices.

Price

Walmart’s pricing strategy can be seen as competitive as compared to its competitors who sell similar or substitute goods. For instance, a study that was conducted to compare prices of 50 items among target, Amazon and Walmart established Walmart as indeed offering lower prices. In particular, Walmart’s prices were 1.79% cheaper as compared to Amazon with Target being 0.97% more expensive as compared to Amazon. In particular, a 64 GB Apple iPad Pro cost $849 at Walmart while the same iPad cost about $949 charged by Amazon which translates to 10.5 percent in prices differences (Hetrick, 2019). However, it is important to note that Walmart did not have cheaper prices in all products as its kitchen appliances and utensils cost more as compared to similar products at Amazon. In the same breath, Target seems to charge lower prices on food and beverage as compared to Walmart.

As part of this marketing plan, Walmart should consider leveraging its prices s that they are lower as compared to other stores. It would not be good for business if customers only bought specific items from Walmart and then buy other products in other stores. However, if Walmart brought down costs on all their goods then it is likely that customers will do all of their shopping in Walmart stress. The increase in traffic will, in turn, translate into more sales and thus business sustainability and profitability.

Promotion

Walmart has been a success story considering that it has managed to beat competition from time to time. However, the situation may change considering that there are new entrants who are using different and innovative strategies to get their product out there. It is for this reason that Walmart should have an innovative team that is dedicated to promoting its product and presence across the globe. One way that Walmart can use in advancing this cause is by use of proximity advertising where individuals get promotional messages based on their historical and current location. That promotional channel is new but is considered as the future of advertising as customers get real-time advertising, which plays a central role in their purchasing decisions. In particular, a customer would want to get into the nearest store to countercheck on the offers and even make purchases.

As for the media, Walmart may consider using social media as opposed to traditional mass media platforms, which are falling out in favor. For this promotion to have positive impacts, the target market should feel that the adverts resonate with their needs and that they are personalized. Walmart can base the social media platforms such as Facebook, YouTube, Twitter and Instagram and websites adverts on the potential clients’ search history so that it resonated with their shopping needs. For instance, a website user who has been searching for electronics may receive Walmart advertisements that concentrate on electronics. In this way, the customers will connect with the advertisements, more which may influence the decision to shop at Walmart.

Place

Walmart’s promotion would occur at specific stores across the US to act as a pilot undertaking and would relate to drive-through as well as in-store purchases. The findings of this promotion would inform the management on whether to roll out the promotion to the remaining stores. The store would also consider promoting particular products most especially foods and beverages in all stores to create a harmonious marketing campaign. Together these two promotional campaigns will appear as strategic and innovative strategies to maintain Walmart’s competitive edge. It would be important for Walmart to create a microsite where customers could be redirected to check the promotion schedules as well as to redeem their prizes

Potential Success Metrics

There are various metrics that could be captured analyzed to establish whether this marketing plan is effective or not. The most obvious success matrix is definitely the dollar sales as well as the customer’s counts during the promotional period as compared to the pre-promotional period. Apart from this, one would consider checking whether the company social media pages and website have attracted extra followers or visitors. An increase in followers or website traffic would indicate that the public has gotten wind of the promotion and has taken initiative to learn about the promotion. Finally, one could monitor whether there has been an increase in promotion codes entries for customers who are keen on redeeming their prizes. A comparison to the pre-promotional phase would indicate the rise in promotional codes entries.

International Considerations

If Walmart’s marketing plan was to make sense in its global stores, it would important to make several considerations. First, the promotion would need to standardize prices so that all shoppers received similar prices, which are inclusive of the shipping costs. Secondly, the promotion would ensure that the products that are offered meet ethnic, religious, and cultural aspects. Finally, it would be important for the promotion to use promotional platforms that are cognizant to the target market’s needs. For instance, some areas may have low internet coverage, which means that Walmart would want to consider traditional promotional channels such as cable television and newsprint.

Conclusion

Walmart’s marketing plan should be approved and funding considering that it has captured in detail crucial business aspects including opportunities and ways of dealing with challenges. Walmart will benefit from changing its business model so that it stands considering that it is easy to imitate which interferes with its competitive edge. However, all this can change if Walmart took upon itself to change tactics to improve its business standing. The marketing plan will help Walmart in addressing its weaknesses and threats by coming with better human resource practices to retain its employees. Moreover, Walmart will be able to harness the existing stores to create the chance for a uniform span of control in all of its stores. Overall, the marketing plan will help Walmart to build a brand affinity and thus maintain its competitive edge now and in the future.

References

Farfan, B. (2018, December 30). Overview of Walmart's history and mission statement. The Balance. Retrieved on 27 August 2019 from https://www.thebalancesmb.com/history-of-walmart-and-mission-statement-4139760

Farooq, U. (2019). Walmart SWOT Analysis. Marketing Tutor . Retrieved on 27 August 2019 from https://www.marketingtutor.net/walmart-swot-analysis/

Hetrick, C. (2019, July 12). How a price comparison of 50 items fared for Walmart, Amazon, and Target. The Seattle Times. Retrieved on 27 August 2019 from https://www.seattletimes.com/explore/shop-northwest/how-a-price-comparison-of-50-items-fared-for-walmart-amazon-and-target/

Hunt, I., Watts, A., & Bryant, S. K. (2018). Walmart’s international expansion: successes and miscalculations. Journal of Business Strategy, 39(2), 22-29.

Jurevicius, O. (2019). Walmart SWOT analysis-5 key strengths in 2019. Strategic Management Insight . Retrieved on 27 August 2019 from https://www.strategicmanagementinsight.com/swot-analyses/walmart-swot-analysis.html

Pratap, A. (2018). Who are the main competitors of Walmart? Notes Matic . Retrieved on 27 August 2019 from https://notesmatic.com/who-are-the-main-competitors-of-walmart/

Shabbir, M. S. (2016) Why manufacturers are less powerful than retailers in trade circles? A case study of Wal-Mart retailing business. Journal of Global Economic s, 4(1), 173.

Washington, T. (2017). What kind of service does Wal-Mart provide? Bizfluent . Retrieved on 27 August 2019, from https://bizfluent.com/info-8296998-kind-service-walmart-provide.html