Introduction
Walmart Store Inc. is the retail giant and also the largest grocery store in the world. When compared with its competitors, Walmart’s sales are more than 50 percent, and this is because of its buying power and giant size. It buys its products at low prices, and it passes the cost savings to its customers. When the economy turns sour, Walmart performs very well in the industry by tailoring its products to meet the expectations and needs of the diverse customer segments (Gielens & Dekimpe, 2012). Therefore, irrespective of the economic situation, customers will continue buying its products. This paper will explain how Walmart manages to protect itself when the economy turns sour.
How Walmart protects itself when the economy turns sour
Walmart secures itself when the economy turns sour by developing commodities that suit diverse consumer segments. The retail company does this in order to improve its image and sales. For example, during the period, the company uses recycled materials to build cheap buildings. In addition, it encourages its customers to purchase more green products, and at the same time, it cuts down on transportation costs and energy usage. The company saves on transport by building stores in the urban areas to increase the efficiency of movement for both the company and customers (Lichtenstein, 2009). All these savings lead to low prices of their products which makes customers continue buying their products.
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The company has built new stores in various areas both within and without the country with a primary aim of increasing its market share value. Walmart has successfully established its stores both in the rural and in the urban areas. The expansion strategy has enabled the company to move their low priced products closer to the customers. The low prices of their products improve the lives of customers when the economy rises (Stankevičiūtė & Bartkus, 2012).
In addition, Walmart deals directly with the manufactures, thus enabling it to obtain the best deals from both the suppliers and manufacturers. It uses its buying power and enormous size to pressurize manufacturers and suppliers to lower their prices. It also buys goods from the manufactures in large scale in order to obtain better discounts. The good thing with the company is that it shifts the cost savings to customers by selling their products at lower prices compared to its competitors (Stankevičiūtė & Bartkus, 2012).
During the recession, Walmart changed its slogan from “low prices” to “save money.” The business uses this slogan to advice itself on commercials, informing customers about the advantage of buying its products. It also provides customers with discounts when they buy their products, thus attracting many customers. This changes the perceptions of customers concerning the products of the company, and it attracts many of them to buy their products. The business also develops an effective communication strategy through experiences and events, sales promotions, personal selling, and direct marketing. The low prices of products sold by Walmart help in building customer loyalty and that is why, during the recession, the customers continue buying products from the company (Stankevičiūtė & Bartkus, 2012).
Conclusion
The mission of Walmart to save money for people and help them live better has helped the business survive when the economy turns sour. The low price strategy enables Walmart to survive in its industry because of the low prices of its products that attract customers to buy its products. In addition, the company has built its stores in various parts of the country, thus improving access for its customers. When the economy turns sour, the company uses promotions and advertisements to make customers understand the importance of buying their products. Therefore, no matter the economic situation, customers will continue purchasing products from Walmart stores.
References
Gielens, K. H., & Dekimpe, M. G. (2012). 23 International entry strategies . Handbook of marketing strategy, 391 .
Lichtenstein, N. (2009). The retail revolution: How Wal-Mart created a brave new world of business. Metropolitan Books.
Stankevičiūtė, E. G., & Bartkus, E. V. (2012). Pursuing a cost leadership strategy and business sustainability objectives: Walmart case study . Economics and Management, 17(3) , 1200-1206.
