Marketing Across Boundaries BU7752

A Critical Analysis of Walmart and its Competitive Marketing Environment

Word Count 1353

Table of Contents

1.0 Evaluation of Walmart in a Competitive Environment2

2.0 Micro Environment2

3.0 Macro Environment5

4.0 Marketing Strategy7

5.0 Conclusion 8 6.0 References 107.0 Bibliography 12 Appendix A Walmart Overview 13Appendix B Figures List 14

1.0 Evaluation of Walmart in a Competitive Marketing EnvironmentWalmart is the worlds largest retailer, a brief overview of Walmart is given in appendix A. Walmarts vast diversity it has a long list of competitors. These include indirect competitors selling similar products and direct competitors, such as Kmart and Target in the US and internationally, Metro in Germany and Tesco in the UK. Walmarts popularity and ability to retain customers is attributed to its low prices. Their slogans position the low price subject in customers minds. This way Walmart attracts its main customer base, conservative people with low budget income. This is interpreted in Walmarts marketing concept practices. The production concept; where its marketing efforts are channelled into creating low cost items, selling concept; where marketing efforts are directed to educating customers of its goods and the marketing concept; were efforts are channelled into identifying customer satisfaction. Walmart constantly needs to adapt to the effects that the competitors have within the market environment.2.0 The Micro environmentWalmarts Micro environment is motivated by immediate local matters. It would study how to convert, maintain and deliver products and services to customers. It would pay close attention to direct competitors and other stakeholders, for instance trade unions and employees (Tim Friesner, 2014). It can better be understood by using the Porters 5 Force method:

Threat of Substitution

Rivalry amongst CompetitorsThreat of Buyers Threat of Suppliers

Threat of new entrants

Figure1. Porters 5 force module

Threat of SubstitutionWalmart is positioning its focus on low prices, which customers are normally affected by. So Walmart has a very low threat of substitution due to its cost advantage along with its vast range. They have a sound market strategy of how to retain their market position and maintain their brand promise.

Threat of BuyersWith thousands of customers visiting everyday Walmart has a great opportunity to carry out primary research, such as questionnaires, with this Walmart can constantly adapt new marketing strategies in accordance with changes in behaviours and different demographics. Walmart identifies different consumer behaviour so needs can be accommodated to retain brand loyalty and customer satisfaction. There are so many buyers that threat is negligible. Walmarts vast variety satisfies a wide range of consumer needs.Threat of SuppliersSuppliers that work with Walmart follow the basic principle of marketing buying behaviour. Walmart has a large range of suppliers both locally and internationally and having a considerable part of the market share so suppliers pose little threat. As Walmart positioned itself in the market as a bulk buyer it may create a scare tactic of changing the supplier.Threat of New EntrantsWalmart has expanded their business, in doing so Walmarts marketing department have to segment these new markets to choose the best locations and ways the brand image is observed and perceive risks. When opening a new store Walmart has found resistance from local businesses as they tend to go out of business, the ability to enter the retail business although very easy is very saturated. Walmarts size makes it very difficult for new entrants to compete. Rivalry amongst Competitors As Walmart has a variety of products, its more product concentrated competitors have a slight benefit. Marketing needs to identify and implement a strategy to address this problem. Walmarts direct competitor (e.g.) Target and Kmart, although hold their own in the market, are catering for a whole different segment. Walmart stands alone in providing the best possible prices in the market, which is how it differs from its competitors and why they just cannot keep up.

3.0 Macro environment The Macro environment is beyond the organisations operating situation. It cannot be controlled although can be adapted to or used to. Walmarts benefit-PESTLE can be used to explain this:

Social:Catering for different, demographics.( Reuters 2009)

Walmarts retail culture. (Andrew Fanno 2012)

Political: Laws involving selling of firearms Local laws restricting money transfers (Bill Simon, Walmart 2014)

Economic: Currency exchange rates (Walmart 2014)Slow recovery in economic conditions, (Bill Simon, Walmart 2014

Ecological: 24% of Walmarts electricity comes from renewable sources. (Walmart, 2014) logistics system reduces carbon footprint (Walmart, 2014)LEGAL:Legal proceedings, including Wage and hour Class action, Gender discrimination, (Walmart, 2014)

Technological:The way stores track inventory and restock their shelves, cutting costs and passing the savings along to customers(Todd Traub, 2012)

Figure 2. Walmart PESTLE analyses

PoliticalLaws enable retailers to sell firearms in the US. Walmarts Marketing department who has already evaluated its Marketing Segment knows that Walmart provides for low income earners who are pro-firearms and caters for this consumer. Similar laws do not apply for the UK. Walmart in the UK are also low income earners but do not have a gun culture so luckily Walmart is not affected by this. Walmarts competitors in the US (e.g.) Target, do not accommodate for Gun sales as it does not meet their market segment which is younger customers who have completed college and are not in to the Gun Culture. EconomicSlower sales growth and fluctuations in currency exchange rates, contribute to the Economical effect in the macro environment. Marketing needs to identify with all geographic areas it operates in and their respective Economic cycles. There is a need to identify when there is demand for established products and less expensive products. During recession periods Walmart poses an advantage to its competitors as they are focused on low-priced items rather than higher value products. SocialWalmart Marketing must constantly develop its segmentation internationally, to respect adapting culture, ethnic diversity, family values, age, education, income also lifestyle and must cater for them all. In The US Walmart has opened Supermercato de Walmart to cater for it Hispanic community. (Reuters 2009)

Technological Marketing research helps on what Walmart is most well-known for; its supply chain and logistics Management. Understanding what the customer needs and when he is able to purchase that item, helps management to determine required stock levels and retain low prices. EcologicalConsumer behaviour trends are moving towards companies who are environmentally friendly. Walmarts marketing team understands this and are creating a quarter of its energy from renewable sources. 4.0 Marketing Strategy Walmart needs to constantly evaluate its Market strategy and changes its position in the marketing plan. It can change its existing marketing mix to better translate its consumers needs or to enter into a new position or market. Its appeal too many (product and price)Walmart provides products of all kinds with unbeatable prices. Walmart appeals to a wider set of personality types as everybody could find something they have use for. (This increases the overall customer base and puts the company in a safer place).Social Media Campaigns (promotion / advertising)Walmart, focuses a lot of on social media via blogging, video sharing and through you tube having over thousands of people viewing and seeing posts and the use of celebrities.Figure3.Walmart advertising featuring Pitbull (Source:http://www.adweek.com/adfreak/pitbull-faces-alaskan-exile-walmarts-facebook-promotion-hijacked-141614)

Easily Accessible (place)Walmart locations, unlike its competitors are less metropolitan to reach its Market segment with thousands of stores, but you can also easily purchase Walmart items online. Its easy to market and do business with Walmart due to its accessibility. Customer satisfaction is increased with 24 hour accessibility.

5.0 ConclusionWalmart is a consumers Market, it has segmented its consumers as; low-income earners obsessed with brands, price-sensitive effluents and value priced shoppers. Walmarts marketing has a traditional approach as the production concept is still given importance. Walmart has been involved in a number of disputes due to lack of cleanliness in the stores, bad customer service, and unpleasant working conditions, although not even this could stop Walmart. It defused such issues by taking a more modern approach in marketing, which is based on customer satisfaction by meeting the clients needs and demands. Walmart offers vast product lines to accommodate as many people possible; it also satisfies its worldwide customers by giving them unbeatable prices anytime, anywhere even from the comfort of our homes This keeps Walmart competitive in todays marketing environment.Walmart Marketing Philosophy is still driven by the belief of its unshakeable foundation The Lowest Prices, Anywhere, Everywhere (Walmart, 2014)

6.0 References 1. American Marketing association, 2014. Definition of marketing. American Marketing association. retrieved from. https://www.ama.org/AboutAMA/Pages/Definition-of-Marketing.aspx2. Andrew fanno, 2012 External Analysis Wal-Mart retrieved from: https://andrewfanno.wordpress.com/2012/02/23/wal-mart-part-2-external-analysis/3. Benjamin Atuma, 2011 Micro and Macro environment business. CBI business.com. retrieved from http://contemporarybusinessideas.blogspot.com/2011/11/micro-and-macroenvironment-of-business.html4. Bill SimonPresident and CEO Walmart US, 2014 Walmart Annual Report 2014 retrieved from:http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf5. CIPD, 2013. PESTLE analysis Resource summary. CIPD. Retrieved from: http://www.cipd.co.uk/hr-resources/factsheets/pestle-analysis.aspx6. CGMA, 2014 Chartered global Management Accountant Porters Five Forces of Competitive Position Analysis. CGMA retrieved from: http://www.cgma.org/Resources/Tools/essential-tools/Pages/porters-five-forces.aspx?TestCookiesEnabled=redirect7. Datamoniter, 2014. Walmart stores inc. EBSCO. Retrieved from http://connection.ebscohost.com/c/company-reports/65542399/datamonitor-wal-mart-stores-inc8. Farfan .B. 2013. Another day, Another Wal-Mart Class action Employee lawsuit- How U.S Retail Employment Is defined By Wal-Marts Ethics (WMT, RAD,WTSL). About Money. retrieved from http://retailindustry.about.com/b/2013/05/27/another-day-another-walmart-class-action-employee-lawsuit-hw-u-s-reatil-emplyment-is defined-by-wal-mart-etheics-wmt-rad-wtsl-.htm9.Gabriel Beltrone, (2012 July 5) Pitbull Faces Alaskan Exile as Walmart's Facebook Promotion Is Hijacked. ADWEEK. Retrieved from http://www.adweek.com/adfreak/pitbull-faces-alaskan-exile-walmarts-facebook-promotion-hijacked-141614

10. Jim Rily, 2012. Marketing Concept & Marketing Orientation . Tutor2U. retrieved from: http://www.tutor2u.net/business/marketing/marketing_concept.asp11. Jurevicius, O, 2013. SWOT analysis of Walmart retrieved from:, http://wwwstrategicmenagmentinsight.com/swot-analysis/Walmart-swot-analysis.html>

12.Khade, S.A., and Lovaas, N., 2009 Improving supply and chain performance: a case of Wal-Marts logistics. International Acadamy of buisness and economics. Retrieved from http://www.freepatentsonline.com/article/International-Journal-Buisness-Strategy/208534987.html13. Mallon, C., n.d. Porters 5 force Analysis. Street Decorations. Retrieved from: http://www.streetdictionary.com/travel guild/1376/business _and _finance/porters _five _force analysis.html14.Tim Friesner, 2014 Marketing Environment. Marketing teacher .com. retrieved from http://www.marketingteacher.com/marketing-environment/15. Raymond Catala, (2014) Wal-mart SWOT Analysis. Communication, Cooperation, Collaboration. retrieved from: http://www.raymondcatala.com/wal-mart-swot-analysis-2/16.Tim Friesner, 2014 SWOT Analysis Wal-Mart. Marketing teacher .com. retrieved from http://www.marketingteacher.com/walmart-swot/17.Todd Traub,(2012) Wal-Mart Used Technology to Become A Supply Chain Leader. Arkansas Business. retrieved from: http://www.arkansasbusiness.com/article/85508/wal-mart-used-technology-to-become-supply-chain18.Walmart, (2014) Walmart annual report 2014. Retrieved from http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annual-report.pdf19. Walmart, (2014) Truck Fleet retrieved from: http://corporate.walmart.com/global-responsibility/environment-sustainability/truck-fleet20. Walmart.com, 2014. Our story. Retrieved from http://corporate.walmart.com/our-story/

7.0 BibliographyJim Blyth, (2008). Essentials of Marketing. Essex, England: Person EducationGraeme Drummond, John Ensor, (2005) Introduction to Marketing Concepts. : Taylor & Francis Ltd

Appendix A

Walmart OverviewThe first Walmart store was opened in 1962 in Rogers, Arkansas by Sam Walton. Sam Walton can be considered as an early Marketer, a direct quote from Walmart CEO Doug McMillan in the (Walmart Annual Report 2014) is . For Sam, the customer was always the boss, and the improvements he made to Walmart were customer-driven he was a man that was always asking customers what we can do better, which is what marketing is all about to deliver offerings that have value to customers. This ideology remains today which is key to Walmarts success.Walmart sells an array of items that include groceries, toys, jewellery, cosmetics, sports and fitness gear, clothing, baby items, house hold appliances and electronics. Their main target is to Save people money, so they can live better (Walmart 2014). Thats what contrasts Walmart from its competitors is its everyday low prices (EDLP) and huge selection.There are 11,000 stores in 27 countries, Walmart now employs 2.2 million associates worldwide it is the worlds largest private employer and last years fiscal years sales were $473billion(Walmart.com,2014).

Figure 4. Walmart organizational Chart (Walmart,2014)Within the retailing world Walmart is best known for its logistics and Retention of Stores inventory, which on such a global scale is extremely difficult to comprehend. It is also well known and caters for its own brand items. For one to better understand Walmarts size it actually owns its own electric company in Texas Texas retail energy so that it can sell energy to its stores cheap so that it can maintain its Everyday low price promise. (Rayes Sonia, 2006)

Appendix B List of FiguresFigure1. Porters 5 force Module Figure2. Walmart PESTLE analysesFigure3. Walmart advertising featuring PitbullFigure4. Walmart organizational Chart

Page | 1