Walmart Advertising Report

Advertising report4 Girls 2 guys advertising

2

Table of contents

I. Executive summary...................................................3II. Situation analysis ....................................................5III. Focus group interview............................................39IV. Survey......................................................................... 52V. Problems & Opportunities.....................................70VI. Advertising strategy.............................................73VII.Media plan...................................................................75VIII.Flow Chart................................................................106IX. Media summary.........................................................108X. appendix......................................................................110

3

Executivesummary

4

Executive summary Situation Analysis

Walmart currently dominates the market with ¾ market share, and far exceeds its main competitors in sales. Walmart stores are highly concentrated in Southern region of the U.S. with a consumer demographic largely made up of women.

Survey & FGI The two primary research methods focused on usage and attitudes toward the Walmart

brand and advertising. The results provided in-depth insight into consumer perceptions. Media Objective

To reach 75% of primary and secondary target audience, Women 24-35 and African Americans and Hispanics, with a frequency of 15 over 12 months from January 2013 emphasizing the South and Midwestern geographical regions.

Media Strategies The media plan is implemented as a national campaign, with an emphasis on Midwest

and Southern states with DMAs that most effectively reach target audience. The media schedule will be a flighting pattern that will maximize recall and increase insertions during peak seasons. The plan will also seek to increase brand loyalty by reallocating the budget to digital media and below the line media, such as sponsorships and partnerships with charities and social causes.

5

SituationAnalysis

6

Industryanalysis

7

Situation Analysis

Economic policy institute

Industry analysis

• The business practices that keep Walmart’s prices solow have been criticized by supporters of local businesses.

• The wages Walmart pays its employees is low, and drives down wages throughout the retail

sector.

• Walmart is losing market share to online merchants like Amazon.com and the growth of dollar

stores like Dollar General.

issues

8

Walmart represents nearly

10 % of the

$3.8 trillionU.S. retail industry.

ibisworld

The U.S. retail industry experienced a 4% annual growth rate between 2006 and 2011.

Situation Analysis

Industry analysis

9Market share reporter 2010

33%

24%

8%

5%

4%

4%

22%

2008 Retail salesby outlet

Walmart is active in almost all retail outlets.

Grocery Stores

Supercenters

Department Stores

Warehouse Clubs

Drug Stores

Home Improvement

Other RetailOutlets

Situation Analysis

Industry analysis


Dollar General

CVS

Target

Walmart

$9.20

$76.30

$63.30

$378.70

2007 retailer sales totals

(in billions of dollars)

Situation Analysis

Industry analysis

Walmart’s sales performance far exceeds its direct competitor, Target, and more specialized indirect competitors, CVS and Dollar General.


78%

6%

6%

10%

Walmart Supercenter

SuperTarget

Kroger

Others

2007 market shares

Situation Analysis

Industry analysis

Walmart dominates the marketwith more than

¾ of the market share.

12

2008 2009 20100

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

TargetWalmartDollar General

Market share reporter 2010

net income(in thousands of dollars)

Situation Analysis

Industry analysis

13First research

Walmart can also be classified as a

discount department store,a highly-concentrated industry of about

5,000 storeswith a combined annual revenue of

$125 billion.

Situation Analysis

Industry analysis

14

Louisi

ana

Miss

ouri

West

Virginia

New Hampsh

ire

Kentuck

y

Alabama

Kansas

Mississ

ippi

Oklahoma

Arkansas

05

101520253035

19.85 19.87 19.97 20.51 20.97 21.13 21.38 22.24

27.46

30.87

walmart Locations(stores per million people)

Walmart corporate website

785 stores in a 10-state stronghold make up 21% of Walmart’s U.S. stores.

Situation Analysis

Industry analysis

15

target Locations(stores per million people)

Target corporate website

Situation Analysis

Industry analysis

16Mri+

Geographic indices

Walmart is not as prominent as Target in the West or Northeast, but

stronger in the South.

Situation Analysis

Industry analysis


1st 2nd 3rd 4th90,000

95,000

100,000

105,000

110,000

115,000

120,000

99,100

103,000101,200

115,600

2011 Quarterly sales (in billions of dollars)

* Fiscal year ends January 31.

Situation Analysis

Industry analysis

Total net sales for 2011 was$419 billion, a 3.4% increase

from 2010.


Quarter 1

Quarter 2

Quarter 3

Quarter 4

0

20,000,000

40,000,000

60,000,000

80,000,000

100,000,000

120,000,000

140,000,000

TargetWalmartDollar General

2011 Competitors Quarterly sales

(in thousands of dollars)

Situation Analysis

Industry analysis

19

ProductAnalysis

20Brandtags.com

Situation Analysis

Product analysis

Brand image

21

Situation Analysis

Product analysis

• They would be a popular individual.

• Their friends would find them reliable when it came to availability as

well as accessibility.

• Some may view this person as a control freak, but they are just very

involved in lots of areas and recognized by lots of people.

Brand personality

Brandtags.com

22

Advertising

Analysis

23Series1

2011 Advertising expenditures

$2.5 Billion

$1.3 Billion

$234 million

2012 Advertising red books

Situation Analysis

Advertising analysis

24Annual reports

5 Year ad expenditures(in millions of dollars)

Situation Analysis


25

Dollar General

CVS

Target

Walmart

$46.90

$234.00

$1,292.00

$2,500.00

2011 Ad Expenditures(in millions of dollars)

0.8% of sales 2.2% of sales


Situation Analysis


26Advertising age

If Walmart matched Target by spending 2.2% of saleson advertising, the budget would be

$5.72 billion.That amount would be

4 Timesthat of Target and would make Walmart the

No. 1 Largest U.S. Advertiser.

Situation Analysis


27Ad $ summary 2006

2006 Ad expenditures by medium

(in millions of dollars)

Walmart only spends $524 million of its $2.1 billion budget on TV advertising.

Situation Analysis


28

Walmart’s first forms of advertising were 2 signs on the storefront that inspired future campaigns.

“We Sell for Less”

“Satisfaction Guaranteed”


Situation Analysis


29

The “Always” campaign

Always low prices. Always.

Walmart’s prices are always low.What to say:

How to say:Bernstein-Rein

Advertising age

Situation Analysis


30

The “Always” campaign

How to say:

Situation Analysis


31Advertising age

Save money. Live better.

Saving money on the little things helps families live better.

What to say:

How to say:

current campaign

Martin Agency

Situation Analysis


32

Save Money.Live Better.

Expect More.Pay Less.

The competition

Expect Something Extra.

Situation Analysis


33Target corporate website

Life’s a moving Target.

Our products are the solutionto whatever life throws at you.

What to say:

How to say:

Target 2012 campaign

Wieden + Kennedy

Situation Analysis


34Cvs corporate website

Don’t be a money trasher.

The ExtraCare Card saves you money.

What to say:

How to say:

CVS 2012 campaign

Situation Analysis


35

ConsumerAnalysis

36MRI+

demographicsWalmart Target CVS

Age 25-34 25-34 18-24

Gender Women Women Men & Women

Education HS Diploma, No College Graduated College Plus

Graduated College Plus

HHI $30,000-$39,999 $150,000+ $150,000+

Major Region South West Northeast

The main difference between Walmart’s consumers and its competitors’ is a lower household income.

Situation Analysis

Consumer analysis

37SRDS Lifestyle Analysis 09-10

Psychographics

More likely to own Apple products, digital cameras, smart phones & GPS

locators.

Enjoy camping and hiking.

Are single or recently married.May have infants.

Natural resources, Construction & Maintenance

More likely to live an organic lifestyle.

Health conscious.

Enjoy technology and fashion.

Are single and career-driven.

Business Management, Financial, Sales & Office Occupations

Situation Analysis

Consumer analysis

38MrI+

Purchasing cycle

More women than men.Popular among 25-34 age group.Online shopping:

Walmart serves more than200 million customers

weekly worldwide.

Regular shoppers visit5+ times a month

on average.

Situation Analysis

Consumer analysis

3939

Focus group

interview

40

Focus group

objectives• Gain Deeper Insight into the views and attitudes college students have

toward Walmart and it’s competitors.

• Develop a Better Understanding of why Walmart consumers choose Walmart.

• Attempt to Measure and Analyze the reactions and effects of Walmart’s advertising.

Focus group

Methods/procedures

Moderator: Kearsten Howland• Location: Lindsey + Asp, Room 2144• Date: 2/29/12• Time: 4:30 p.m.• Group Characteristics:

• All females• 8 participants• All participants shop at Walmart• Ages: 19-24

Moderator: Christina Hoener• Location: Lindsey + Asp Room 2144• Date: 3/5/12• Time: 4:30 p.m.• Group Characteristics:

• All males• 8 participants• All participants shop at Walmart• Ages: 19-24

Focus Group A Focus Group B

41

42

Focus group

Focus Group A: Attitudes

• Consumers have a negative view of Walmart when thinking of specific words to describe the store.

Participant A: “Cheap” Participant B: “Dirty”Participant C: “Sometimes kind of scary at night”

Summary of findings

43

• College students consider price and variety as major factors when choosing Walmart.

– “Because I can get everything there. You walk into Walmart and they have a wide selection to choose from.”

– “The price of the products is a big issue since we are college students.”

Focus group

Focus Group A: motivations

Summary of findings

44

Focus groupObserved differences

Focus Group A: advertising response• Consumers recall less-recent ad campaigns before current

advertisements.

“I remember the smiley face, but I haven’t heard or seen anything lately.”

45


Focus Group B: attitudes

• The majority of respondents think of Walmart first for buying general merchandise products, but when asked if loyal to the store, most say no.

Respondent A: “Not very.”Respondent B: “Not loyal at all.” Respondent C: “Could care less.”

46


Focus Group B: motivations

• Respondents agree that they prefer Target over Walmart, but convenience and price play a large role for choosing to go to Walmart.

“I go to Walmart because it’s closest, and I’ve grown up with just Walmart so it’s the first thing I think of.”

“I want Walmart’s prices at Target.”

47


Focus Group B: advertising response

• The overall reaction to Walmart’s recent advertising changes, such as their logo, was either unnoticed or dissatisfied attitudes.

“I didn’t notice.” “I like the smiley face better.”

48


Group similarities

• Both groups easily remembered Walmart’s rollback prices ad campaign that featured the smiley face.

• Convenience, location, and price were all criteria that was mention when asked why they go to Walmart.

• Most females and males say they would prefer to shop at Target, but the majority of both groups said they shopped at Walmart the most.

49


Group differences

• Females choose between stores by the variety and quality of products offered (ex: clothes, shoes, household items, etc.), whereas Males focus more on price.

• Males would consider online shopping at Walmart for specific products, females would not consider shopping online at Walmart.

50


problems– The majority of participants in both groups had negative

attitudes toward Walmart.

– Both groups associated Walmart with words like “cheap” and “dirty.”

– Males and females had difficulty recalling recent advertisements for Walmart.

51


opportunities– Modify strategies and budget allocation to improve

Walmart’s advertising relevance and recall.

– Redesigning the actual stores and their brand image will improve their reputation and brand loyalty.

– Offering higher quality products while maintaining everyday low prices will help recapture dissatisfied customers.

5252

survey

53

SURVEY REPORT

• To investigate what factors motivate consumerswhen choosing a general merchandise store.

• To gain insight into consumers’ perceptions ofthe Walmart brand compared to its competitors.

• To determine usage patterns of the general population.

OBJECTIVES

54

• March 26, 2012 – April 4, 2012

• Participants – 200

• Online Survey Host – SurveyMonkey.com

• Sample Collection Method – Share link on social networking sites,create Facebook event, word of mouth

Methods/procedures

SURVEY REPORT

55

26.5

73.5

Gender

Male

Female

68

9.5

5.513.5

3.5

Age

18-2425-3435-4445-5455+

Participant DEMOGRAPHICS

SURVEY REPORTDemographics

56

38

209

9

24

HH Income

$0-9999$10,000-29,999$30,000-49,999$50,000-69,999$70,000+

6

54.513.5

20

6

Education

High School GraduateSome CollegeAssociate's DegreeBachelor's DegreeGraduate Degree

SURVEY REPORT

Participant DEMOGRAPHICS

Demographics

57

Store Rank by usage

35.7% of respondents strongly agree that

they shop at Walmartmore than other

general merchandise stores.

2.3

1.53

3.63.21

4.54

SURVEY REPORTusage

58

Store visits

7%

61%

26%

7%

Visits to #1 Ranked Store

1 or less2-5 times6-9 times10 or more

35%

60%

5% 1%

Visits to #2 Ranked Store

1 or less2-5 times6-9 times10 or more

SURVEY REPORTusage

61% of respondents visit their 1st choice for general merchandise stores 2-5 times a month, and 25% visit

6-9 times.

60% of respondents visit their 2nd choice for general merchandise stores 2-5 times a month, and 34% visit 1

time or less.

Respondents were asked rank general stores by preference and indicate how often they visit their #1 and #2 ranked stores.

59

FACTORS IN STORE SELECTION

“A place I HAVE to go to because of my budget and I can find everything there, but I HATE going there because of the crowds of people and the long lines.”

SURVEY REPORTusage

Price Location Brand Options

Quality Specific Items

Other0

20406080

100120140160180

147 154

5377

51

14

60

87

13

Walmart User

Yes

No

PURCHASING BEHAVOIR

13

38.531.5

17

Average Spending

Less than $25$25-54$55-100$100+

87% of respondents say they use Walmart to buy everyday products, but 43% say they are not loyal to the store they use the most.

SURVEY REPORTusage

61

Attitudes

0.0%10.0%20.0%30.0%40.0%50.0%

Walmart

Target

CVS

SURVEY REPORTperception

Consumers were asked to rank their feelings towards certain characteristics related to their

experience in general merchandise stores.

62

Good Satisfactory Attractive Clean Expensive0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Walmart

Target

CVS

perceptions


Consumers were asked to rank their views of Walmart, Target, and CVS on a scale of 1-5, 5 being the highest and 1 being the lowest.

63

CONSUMER PERCEPTIONS

• Walmart is perceived to be less expensive than Target, but not as satisfactory, attractive, or clean.

• Attitudes toward CVS were largely neutral.


64

Comments for walmart


65

Comments for Target


66

SURVEY REPORTadvertising

Response to advertising

• Responses toward Walmart’s advertising were largely neutral.

• Many respondents easily recalled the “smiley face rollback prices” and “everyday low prices.”

• 18.6% of respondents strongly agree that Target’s advertising is “good,” compared with only 8.0% for Walmart.

67

SURVEY REPORT

Advertising recall

0102030405060708090 82

25.5

14.5 11

81.5

Target

CVS

Kmart

Dollar General

Walmart

Both Walmart and Target advertisements were easily recalled.

advertising

68

SURVEY REPORT

Advertising evaluation

Good Satisfactory Appealing Like2.80

2.90

3.00

3.10

3.20

3.30

3.40

3.50

3.60

3.70

Walmart

Target

Target’s advertising is better received than Walmart.

advertising

69

SURVEY REPORT

Summary of findings

This survey shows that the overall perception of Target is much better than that of Walmart. Target is perceived as a cleaner general store

that is slightly more expensive than Walmart, but also more attractive. Walmart is known to be convenient and cheap, one-stop shop.

Over 80% of respondents were able to recall advertisements for both Walmart and Target, but consumers like Target’s advertising better.

summary

7070

Problems &

Opportunities

71

• Walmart is perceived to be less attractive and dirtierthan its competitors.

• Consumers respond better to Target’s advertising.

• Consumers of general merchandise stores are not loyal to the stores they choose.

problems

P&O Analysis

72

opportunities

P&O Analysis

• Walmart could improve brand image bycleaning or redesigning their stores.

• Walmart could improve their advertising campaigns by using more television and outdoor advertising.

• Walmart could build loyalty in their consumers bypartnering with popular social causes.

7373

Advertising

strategy

74

Advertising strategy

To convince women aged 24-35 and the African American and Hispanic populations to choose Walmart over the competitors by emphasizing the positive

qualities associated with the brand and partnering with popular social causes.

What to sayWalmart is invested their customers by

supporting their everyday lives and local communities.

7575

Mediaplan

76

MEDIA OBJECTIVE75% of the target audience

15 average frequency

12 months

February 2013

South and Midwest regionsand holiday seasons.

To reach

with

over

from

emphasizing

Media planobjective

77

Target audience demographics

Primary target Audience

Secondary target audience

Media planTarget audience

Gender: WomenAge: 24-35

Education: High School Diploma,No College

HHI: $30,000-$39,999South

African American & Hispanic Population

MRI+

Target consumers with high tendency to shop at Walmart.

78

Target audience psychographics

Media planTarget audience

SRDS lifestyle analysis 09-10

More likely to own Apple products, digital cameras, smart phones &

GPS locators.Enjoy camping and hiking.

Are single or recently married.May have infants.

Natural resources, Construction & Maintenance

79

Media planMedia consumption

When it comes to TV consumption, women of all ages spend more time than their male counterparts. On the flipside, men consistently spend more time streaming video online.

M 2-17 F 2-17 M 18-49 F 18-49

M 50+ F 50+ M 2+ F 2+

Traditional TV 113:13 114:29 139:50 151:18 195:15 217:44 150:53 166:20

Online Video 3:04 2:44 7:02 4:57 2:44 2:22 5:25 3:48

Mobile Video n/a n/a 4:20 4:20 2:10 3:37 4:20 4:20

audience composition by gender

(monthly time in hours : minutes)

Nielsen cross platform report Q1 2001

80

Media plan

audience composition by race(monthly time in hours : minutes)

African Americans spend the most time tuned into traditional TV and mobile video,and Hispanics spend more time watching videos on the internet.

White African American Hispanic

Traditional TV 155:33 212:53 135:42

Online Video 3:57 5:52 6:24

Mobile Video 3:37 6:30 4:20

Media consumption


81

African Americans

Media plan

African Americans use more televisionthan the overall population.

7:125:11

Hours of TV a Day

Overall Population African Americans

• African Americans read more issues ofmagazines each month.

• A larger percentage of African Americans own smart phones than the overall population.

• African Americans are 30% more likely to visit Twitter.

Media consumption


82

Hispanics

Media plan

• Hispanic mobile subscribers are the most likely to have a smart phone.

• The availability of Spanish-language channels available continues to drive the increased number of Hispanics who tune into cable television.

• Hispanic prefer to get their information from print media in Spanish.

Media consumption


83

Media planGeographical strategy

Mri+

regional

Walmart Target

South 102 76

Northeast 101 122

Midwest 99 98

West 97 123

Focus on regions with high geographical index.

Walmart has a higher geographical index in the South, and a competitive situation in the Midwest.

84


IllinoisMissouriKansas

OklahomaTexas

ArkansasMississippiAlabama

Focus on states in target regions with large DMAs

and a large number of Walmart locations.

states

Nielsen 2011-2012 DMA Ranks

85

dmas


Chicago, ILDallas-Ft. Worth, TX

Atlanta, GAHouston, TXDetroit, MI

Birmingham, ALMiami, FL

St. Louis, MONew Orleans, LA

Oklahoma City, OKLittle Rock-Pine Bluff, AR

Jackson, MS

Focus on Nielsen’stop-ranked DMAs with

multicultural audiences.

Nielsen 2011-2012 DMA Ranks

86

Target audience

Media planTarget audience size

u.s. Census bureau

Midwest South Total

Total Population 66,927,001 114,555,744 180,154,790

Women 25-34 4,235,200 7,550,135 11,875,335

African Americans 6,969,686 22,022,220 28,991,906

Hispanics 4,382,560 17,247,279 21,629,839

Total Target Audience 15,587,446 46,819,634 62,497,080

87

Flighting schedule

Media planscheduling

• Use a four-week flighting pattern to maximize recall and providethe most efficient use of the Walmart budget.

• Increase amount of insertions during peak times based on quarterly sales.

• Allow flexibility to make creative media buys.

88

Peak seasons

Media planscheduling

1st 2nd 3rd 4th90,000

95,000

100,000

105,000

110,000

115,000

120,0002011 Quarterly Sales

Q1Valentine’s Day

Q2Summer

Independence DayQ3

Back to School/Tax Free WeekendQ4

Black Friday/Cyber MondayThanksgiving

Christmas

* Fiscal year ends January 31.

89

Media selection

Media plan

Network TVCable TV

Digital(Online Newspapers, Search Engines, Social Media, Entertainment, Mobile)

MagazineLocal Radio

OutdoorBelow the Line

Media selection

90

Networktelevision

Media selection

Media plan

Network Program Rating

FOX American Idol (Wed) 10.7

FOX American Idol (Thurs)

9.4

NBC The Voice 8.4

CBS NCIS 8.2

CBS CSI 7.5

CBS Criminal Minds 7.3

CBS NCIS: Los Angeles 7.3

CBS 60 Minutes 6.9

ABC Missing 6.8

ABC The Bachelor 6.7

Advertise during programs with highest ratings.

nielsen

91

Cabletelevision

Media selection

Media planNetwork Rating Consumption

Index for Walmart Users

BET 51.1 118

Bravo 44.55 116

Cooking Channel n/a 202

E! 51.85 118

ESPN 29.3 97

FamilyNet n/a 223

Galavision 46.6 156

MTV 58.15 159

Style 63.25 129

TBS n/a 103

Advertise on cable networks with high ratings, high consumption indices

for Walmart users.

Choose networks with multicultural audiences.

Mri+

92

Media selection

Media plan

Magazine Circulation Ratings

Ebony 1263996 5

Entertainment Weekly 1799494 6.6

Essence 1100000 3.8

Family Circle 3872671 7.9

O, The Oprah Magazine

2380782 7.5

Parents 2200000 7.2

People 3569811 24.1

People En Español 577636 n/a

Woman's Day 3886853 11.4

Women's Health 1575425 4.7

magazinesAdvertise in magazines with

high circulation rates and ratings for the target

audience.

Choose publications to reach secondary target

audience.

mri+

93

Media selection

Media plan

Daypart Average Rating Cost CPP

6am-10am 17.3 $4,134.7 239

10am-3pm 10.3 $2,070.3 201

3pm-7pm 15.2 $3,268 215

7-12am 5.6 $459.2 82

Local radio

Advertise on local radio stations in targeted DMAs duringmorning and evening commute times.

Marketers guide to media

94

Media selection

Media plan

outdoorCity Billboard Type Circulation (000) 4-Week Cost per

Unit

Chicago Rotary 175,593.6 $5,900

Dallas Rotary 123,000 $3,935

Houston Rotary 110,992 $2,800

Atlanta Rotary 88,298 $3,200

Place billboards in target DMAs in South and Midwest regions whose populations are composed of the target audiences.

Marketers guide to media

95

Media selection

Media plan

digitalSearch Volume CPC

Facebook 226 million $0.88

Twitter 7.84 million $1.12

Pinterest 1.5 million $0.16

Yahoo! 55.6 million $0.90

Bing n/a n/a

Google AdWords

37.2 million $3.22

YouTube 68 million $0.61

Hulu 9.14 million $0.13

Pandora 11.1 million $0.11

Mobile Apps n/a n/a

Social Media

Search Engines

Entertainment

Mobile

SEMrush.com

96

Media selection

Media plan

Monthly Unique Visitors Monthly Page Views

Chicago Tribune 3.9 million 102.3 million

Houston Chronicle 4.5 million 59 million

Kansas City Star 3.8 million 29 million

Louisville Courier Journal 1.4 million 19 million

Tampa Bay Times 1.5 million 22.3 million

Online newspapers

Advertise on web versions of top-ranked news publications from targeted DMAs.

Newspaper websites

97

Media selection

Media plan

Below the line

Big Brothers Big Sisters

Teach for America

National Partnership forWomen & Children

Tornado Relief

Strengthen current partnerships by increasing donations to $1 million and above:

• United Negro College Fund– Current contribution $500,000 - $999,999

• Hispanic Association of Colleges and Universities– Current contribution

$250-$499,999

Continued Partnerships


98

Media selection

Media plan

Below the line

National Football League

Corporate Sponsorships

National Basketball Association U.S. Soccer

99

Media strategy

Media strategy

Media plan

To maximize reach and optimize frequency of exposure of the Walmart brand to our target audience through trusted

sources and creative media buys.

100

“bookend” commercials

Media strategy

Media plan

33: Percentage of Households Owning DVR Device

56: Percentage of Owners Using DVR to Fast Forward through

Commercials

7: Number of Seconds of Guaranteed Ad Space

½: Portion of Cable TV Budget Allotted to 7-Second Media Buys

Dvr research institute

101

Reach/frequency

Media planMedia strategy

Q1 Q2 Q3 Q4 Average

Reach 100 99.9 100 100 100

Frequency 90.25 115 90.25 165.25 442

Peak Sales Quarter(Nov-Jan)

102

Budget strategy

Media plan

It is proposed that Walmart reduce advertising spending to

$2 billionby reallocating portions of the budget

from traditional media to

digital media & “below the line” activities.

103

rationale

Budget strategy

Media plan

• Walmart has increased advertising expenditures by 56% since 2006, while Target’s spending has remained constant.

• The target audience prefers to get their information from digital media, which is cheaper to advertise in than print media.

• Extraordinary marketing efforts receive criticism from supporters of local business.

• Walmart must repair an unfavorable reputation by allocating more money for donations and sponsorships.

• Survey shows that Walmart’s advertising is already recalled by consumers at a high rate.

104

allocation

Budget strategy

Media plan

30%

20%

8%

10%

0%

2%

30%

Network TVCable TVDigitalMagazinesRadioOutdoorBelow the Line

105

Budget strategy

Media planMedia Budget Allocation

Network TV $600,000,000

Cable TV $400,000,000

Online Newspapers $100,000,000

Magazine $200,000,000

Radio $1,000,000

Outdoor $40,000,000

Search Engines $20,000,000

Social Media $20,000,000

Entertainment $18,000,000

Mobile $1,000,000

Below the Line $600,000,000

106

flowchart

107

flowchart

108

Media summary

109

Media summary

• A national campaign will focus on the South and Midwest regions.• The total budget has been decreased from last year to $1,999,938,331.• More of the total budget will be allocated to digital media and below the line

activities.• A flighting media schedule allows the flexibility to increase advertising during

peak seasons.• 7” bookend commercials will use a creative media buy to reach the target

audience.• The primary target audience consists of women aged 24-35 with household

incomes under $40,000.• Advertising will also focus on a secondary target audience consisting of

African Americans and Hispanics.• The campaign will attain a reach of 75% or more with and average frequency

of 15 or more over 12 months starting February 2013.

110

appendix

111

• Established in 1984

• World’s No. 1 Largest Retailer

• FY 2011 Sales of $419 Billion

• 2,100,000 Employees

appendixCompany profile


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5 Year Sales trends

2007 2008 2009 2010 20110

50100150200250300350400450

345374 401 405 419

7.3%

1.0%

8.4%

NET SALES(in billions of dollars)

Walmart expects to grow net sales between4% and 6% in the 2012 fiscal year.

3.4%

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$260

$109

$49 Walmart U.S.

Walmart Interna-tional

Sam's Club

Sales by segment(in billions of dollars)

Distribution of sales by segment

26% of Walmart’s sales come from foreign markets.

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Domestic Geographic analysis

Walmart has about

3,804 storesin the U.S. and Puerto Rico,not including its Sam’s Clubfranchise.

U.S. Locations

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International Geographic Analysis

International locations5,366 stores in 27 countries outside the U.S.

International sales increased by 11.5% in 2011.

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Financial summary

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2011Financialsummary

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Brand history

Evolution of the logo

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Walmart gave more than

$378 millionin cash and in-kind gifts in the U.S.

and an additional

$106 millionin international markets.

philanthropy

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Giving distribution

$378 $106

$63

$46

U.S.InternationalSam's ClubCustomers & As-sociates

Giving for 2008(in millions of dollars)

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Fgiquestions

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appendixFocus group questions

IntroductionIntroduce moderator, define group sessions, participant introductions.Where do you go to buy everyday general products?Are you loyal to that store?How do you make up your mind where to go when choosing a general merchandise store?List that criteria in order of importance.Information About Store ChoiceDo you ever shop at a superstore such as Walmart or Target?Which one do you prefer?How often do you visit that store?Information About Shopping HabitsWhat criteria do you use when picking which store to shop at?What type of products do you buy when you shop there?Why do you choose to buy those products from that store?When you shop at Walmart, do you ever buy the Great Value brand?Information About Walmart’s AdvertisingDo you remember any advertising for Walmart?Where did you see the ads?What was the main advertising message?Which ones do you like and what did you like about it?Which ones do you dislike and what did you dislike about it?Were you able to relate to the advertising message?

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Information About Walmart As A BrandWhat words do you think of when you think of Walmart?Describe the Walmart brand.Describe the Walmart logo.How important is online availability to you and your shopping habits?Have you ever shopped online at Walmart.com?

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appendixFocus group B transcript

Does everyone want to go around and say their name?I’m Brady. Do you want my year?Sure.Sophomore.I’m Thomas Law. I’m a junior.Timothy Catcher. Junior. Advertising major. University of Oklahoma.Casey Todd. Junior.Robert Hogue. Senior.Humzah, and I’m a junior too.Okay, my first question is where do you go to buy everyday general products? So that’s like groceries, other random things.Cleaning supplies.Yeah.Probably Walmart.Walmart.Yeah, Walmart.Walmart.Target.It really just depends on what I’m getting.It depends on how close I am to the place.Yeah, and where’s closer.Amazon.com.

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For groceries?Depends on whoever’s going to go for me since I don’t have enough money.Okay, how loyal are you to that store?Not very.Not loyal at all.Couldn’t care less.Okay, well then how do you make up your mind about where to go for those general supplies?How close it is.If I have to get a lot of things, I tend to go more out of my way to go to Walmart, because if I just need to pick up bread and milk then I don’t need to go like 30 minutes out of my way to go get it.Yeah, if I’m planning on getting a bunch of stuff I’d go to Target probably. But usually Walmart’s closer, so I just go there.I just go wherever’s cheaper.Location. I usually go to Target though. I feel safer going there.Why do you feel safer going to Target?Well, when I shop I don’t shop at 3 in the afternoon, I go at like 9 or 10 o’clock. I don’t know. Walmart kind of feels weird. You always hear stories in the news about people getting kidnapped at Walmart, and raped at Walmart, so I don’t have to worry about it.That never happens at Target.So, if you listed that criteria in order, it would be location and then price? Any other criteria you think about? Well, the next question was do you ever shop at a superstore such as Walmart or Target, but you all said yes to that. And which one you prefer. And Casey prefers Target because of safety.Yes.

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How about everyone else? Target or Walmart, which is your preference?We have to pick one of those?Yes.Probably Target.Yeah, I’d like to go to Target.I mean, it doesn’t matter, but if I had to choose one, I’d guess I’d choose Target too.Why?Just because it’s nicer. I feel like.I want Walmart’s prices at Target.Yeah.I go to Walmart because it’s closest, and I’ve grown up with just Walmart so it’s the first thing I think of.I just like Target because of Walmart’s people.How often do you visit that store? Walmart or Target?As least often as possible.Yeah, in college I barely ever go because I don’t have to buy groceries or anything.Whenever I need something.3 to 4 times a month maybe.Alright, what type of products do you buy when you shop there?Groceries.Toiletries, school supplies, toiletries.Everything.Definitely groceries.

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Do you get it all at one store? Or do you go to Walmart for groceries, and then Target for something else?No.God no.All one store.Okay, when you shop at Walmart, do you ever buy Walmart’s brand Great Value?Yeah.Yeah.Occasionally, yes.Sometimes.It depends on what I’m buying and how much money I have. Exactly.If it’s like chips, I usually get the chips. And the milk also.And if its like spaghetti or something, I’ve bought that before.Yeah.Do you remember any advertisements for Walmart?Yeah, Rollback prices back in the day.Rollback prices back in the day.The smiley face.Okay, so just TV ads? Anything else? Print or online?For some reason I remember the Christmas ads the most.

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What was the main advertising message?See, I don’t remember, I just remember seeing a lot of their Christmas stuff. Oh, well the layaway stuff that tied into their Christmas stuff.Oh yeah.Do you guys remember the Rollback prices more?Like when he was dressed up as Zorro?Yeah. Or like the smiley face?Yeah.Yes.Yeah, that’s what I’m thinking of.Are you aware that they’ve changed their branding recently? Instead of the smiley, it’s the asterisk?We’ve been talking, and it’s not cool.I didn’t notice.No. I have never noticed.It’s been a while.I like the smiley face better.He’s still in my head.He’s there forever.They did it to be more like Target, because Target has a symbol that’s noticeable.I don’t know if that’s the difference between Walmart and Target.That’s not why I choose it.

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Yeah, there’s a quality issue.And Walmart, I don’t know, it’s kind of oddly lit. Maybe that’s just me that thinks that. It’s kind of dark in Walmart.Or really bright lighting.Yeah, there’s something unsettling about it. Sometimes.And Target doesn’t have a website called People of Target.That’s true.Well there might be, but I haven’t seen it or heard of it.Very true.Okay, as far as advertisements, what did you like and what did you dislike about the commercials?It seemed to me like, specifically with the layaway being back, they tried to be young and hip with the humor, but then you stop and realize, oh, it’s Walmart layaway. Why do I care about this? Why is this trying to be interesting?Yeah, I feel like it’s a commercial. It needs to get off my TV.Perfect.Alright, so were you able to relation to the advertisement at all? I’m gathering a no.Yeah, no.No.What words do you think of when you think of Walmart?Cheap.Whenever I think of Walmart I think of like, everything.Yeah.Robust.

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I honestly think of the greeters and think, please don’t make eye contact with me.I think of cheap. And $4, because I work at a pharmacy so all I hear all day is $4 plan. So that sticks out in my head.Okay, can you describe the Walmart brand?What do you mean?Well, I guess like the company, or the reputation.I can tell you it’s really plain packaging. That’s what I can tell you about Great Value.Every day low pricing.That’s true.Can you describe the brand’s logo? And I know everyone said the smiley face, but it’s been gone for about 3 years now.Is it that stupid sun sign now?It’s that star-like thing.Yeah, the asterisk is their new logo.It’s relatively recent because they fired their, well we don’t need to get into that.Yeah, but it’s not the smiley face anymore. So were you either unaware that it’s not the smiley face, or did you not care about it?I never really knew. I just thought the smiley face went away. I didn’t realize they replaced it with the asterik.Do you guys know what we’re talking about?Yeah, it’s like the sun.Yeah, everyone knows.I mean, it’s still yellow, but that’s about it.

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How important is online availability to you and your shopping habits?I’ve actually used Walmart’s online to look up prices before. I know that’s kind of lame.No, I do that sometimes.I’ve looked up the price of a television, like bigger buys, but I mean, if I’m going grocery shopping I’m not going to look it up. But I remember I looked up a television once to see how much it was.I’ve even looked up the price of pepper on Walmart, and mineral oil.For schoolwork?For account planning?No, I looked up mineral oil last night for some reason. I don’t remember why. Like, I’ve used it for a few different things also.Okay, anyone besides Tim?It was an air conditioner, that’s what it was.I mean, I’ll look at prices and see if they have certain products, but it’s not worth it to order stuff online really.Yeah, because you can go on and see if they have it in your location.So you use it for location pricing, but you never actually order anything from Walmart.com?I wouldn’t order groceries online, but maybe like a TV or something.I got my mom’s Christmas present online.From Walmart.com?Inside the store pick up. That’s what’s up.Alright, well that was our focus group.I had a blast.Thanks guys.

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Walmart Advertising Report

Education

Transcript of Walmart Advertising Report