Wal-Mart Stores, Inc. is the leading American Public Corporation that has the biggest chain of Public corporation and the largest departmental stores chain in the world. The corporation was founded in 1962 by Sam Walton (March 29, 1918 - April 5, 1992). He was an American businessman born in Kingfisher, Oklahoma. On July 2, 1962, he opened the first Wal-Mart store It is also among the world's largest public corporation in terms of revenue. Also in the recession era, this corporation was the Biggest Employer in 2007-2009 in the world that employing 2,055,000 people. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business, as well as the largest toy seller in the U.S. It also owns and operates the North American Company, Sam's Club. Wal-Mart is at present enjoying an evidence year in which they have domed to the top of the Fortune 500 list. Though, they have not implemented their strategy in the most efficient possible way; particularly in regards to public relation (en.wikipedia.org/wiki/Wal-Mart)
The Walmart Mission Statement is
"To help people save money so they can live better."
A mission statement states the reason why the company is in this retail business and how they will conduct this business and what they stand for. This statement addresses to what they are going to do for their stakeholders and customers - suppliers, employees, and communities.
Salient Features of Wall Mart
The only corporation to provide the goods and services at the cheapest mode possible.
They have their own Broadcasting Satellite and are able to solve queries very easily.
They always hire proficient drivers so that no violation of traffic occurred and the goods transported safely.
Wal-Mart has continually intended at increasing sales through its very friendly prices. This corporation has wedged with the image for a very long time. Not only is the company associated with low prices, it has an assortment of goods under one roof. These persona favor the rural clientele
Integrated Marketing Communication Goals and Objectives
Wal-Mart's integrated marketing communication strategy involves retailing high quality and branded goods at the lowest price possible. In order to maintain low prices, the corporation reduces costs by using latest electronic technology and warehousing. It also negotiates for merchandise directly from manufacturers, eliminating the middleman.
Wal-Mart has three essential beliefs:
1) Respect for the individual
2) Service to their customers,
3) Striving for excellence.
The success of the giant retailer relies upon successful marketing communication depending upon sound management decisions regarding the integration of the various elements of the promotional mix. For marketing communication to be successful, though, sound decision must be made managing the three are from the marketing mix: the product, service or the idea itself; the price at which the product will be offered; and the places through or which customers will buy the brand. The powerful promotion cannot overcome poor product quality, unordinary high prices, or inadequate retail distribution. The objective of selecting the elements of proposed integrated marketing communication is to create a campaign that is effective and consistent across media platforms (Staff Writer, 2007)
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In Walmart, IMC is enforced by developing comprehensive databases on current and potential customers, segmenting these customers into groups with certain common awareness levels and behaviors, and developing media strategies and communications that direct the communication tactics to achieve marketing objectives. In doing this, IMC builds and strengthens mutually gainful relationships with customers and additional stakeholders and generates synergy by amalgamation all elements in the promotional mix into a program that possesses consistency, clearness and maximum impact (Byrnes, 2004).
Wal-Mart's integrated marketing communication objectives
Wal-Mart's marketing strategies are based upon two main objectives that have guided the firm to their years of growth. The customer is focused in the first objective; "Customers would be provided what they want, when they desire it, all at a worth". Team strength was featured in the next objective, "Treating every other as we would like to be treated". Wal-Mart's customer objective includes giving the customer what they want at a reasonable value. The second object covers the foundation of the company; its employees. Workers are the basis for achievement of the company and drive the day-to-day operations (MSNBC, 2006).
Cognitive theory and integrated marketing communication of walmart
Cognitive Response Theory More recently, researchers have been developing theories of cognitive response which suggest that communication, particularly persuasive messages, are mediated by the thoughts generated by the receiver as the communication is processed. This reflects the interest in more individualistic cognitive theories based on a receiver-oriented model, rather than the mechanistic sender-oriented perspectives associated with traditional communication models and the effects research tradition. Message recipients to treat 'stimuli' as problems to be understood and solved rather than as overpowering shots from cannon against which no defense but surrender was possible
Luckily, the vision that Sam Walton left behind still has its roots in WALMART STORES. Wal-Mart's IMC strategy is based upon the concept of perceiving consumer's thoughts, understanding, analyzing thoroughly and treating them. If any of their consumers is faced with any inconvenience at walmart stores, it no longer remains the individual's problem instead it is treated as the corporation's problem. This relationship between walmart and its customers is strong enough to let the consumers rely on walmart and handle their 'family problem'.
To develop its IMC plan walmart uses cognitive response theory to measure the thoughts and feelings of its customers, catering to them in the best possible manner and therefore managing t establish itself as a giant retailer that the world knows, employees take pride to be a part of it and consumers enjoy shopping with their 'family'(walmart.com)
CHALLENGES FACED BY WALMART TO IMPLEMENT THEIR MARKETING COMMUNICATION STRATEGY
Wal-Mart is at present enjoying an evidence year in which they have domed to the top of the Fortune 500 list. Though, they have not implemented their strategy in the most efficient possible way; particularly in regards to public relation. Public relations is distinct feature as a management process which identifies, establishes, and maintains mutually caring relationships between an association and the public upon which its success or failure depends. Many in retail see the company as a bully and a tyrant. They present the impression of a corporate tyrant that destroys communities and clamps down on employees rights. Groups have all accused the retailer of abusing its employee's rights. They declare that Wal-Mart discourages its workers from participating in trade unions. Employee rights groups argue that the company's particulars package does not reflect the rich profit margins that the company enjoys at present. Additionally, some groups have been formed to specially give anti-Wal-Mart comments. For example Walmart protesters assert that Wal-Mart's advertisements on their business responsibility efforts point to that Wal-Mart wants to trick the eyes of the American community. Such an image might damage the company's public relation and this could drive away certain precious clients. Alternative strategies available to Wal-Mart are to take on a friendlier corporate attitude. Although they display a cheery approach in public, off the camera they are quite violent. Coming to compromise with organized labor is needed. They must ease their way into overseas markets, instead of barging in and buying companies. By doing so Wal-Mart will not merely be the largest retail chain in the market, it could become one of the most popular stores in history (Zimmerman, Ann; Hudson, Kris, 2007).
Comparison and contrast of the marketing communication strategies
Used by WALMART in the USA and JAPAN
Tools and Mediums Used
Wal-mart's motto 'everyday low prices' do not perform very well everywhere. In markets similar to Japan people associate low prices with poor quality. Numerous consumers are willing to pay a higher price to satisfy their conscience that they are purchasing high quality products. While on the other hand in walmart caters a huge market segment of the US market. It's a discounted store that people love to shop at. It is pleasant and enjoyable experience for all those who enter the store. While in the US Wal-mart negotiates with large suppliers and makes deals to reduce prices. In other words walmart has establishes a monopoly in discounted retailing.
The Japanese distribution system has two distinct features: besides a lot of very small retailers and layers of wholesalers. Japanese customers prefer to pay cash for fresh, high excellence foodstuff and have the tendency to purchase goods in small amounts and at recurring intervals. Since real estate is very expensive in Japan, people live in very small apartments and they are not accustomed to doing big shopping, as there is not much space to store items. The majority of small-sized food retailers are run as family associate businesses, and there are special tax treatments given to these small businesses. In addition, there are regulations imposed on large-scale food retailing business.
Public Relations
Though Wal-Mart always claims that its retails are cheaper, the prices are not so dissimilar. If the customers desire to buy a small quantity of goods, they favor a convenience store that is quicker and easier. Japanese customers are going back to smaller area shops when the price difference between Wal-Mart and convenience store is only 5% to 15%. They also find it difficult to navigate through a large store, without a consumer service representative who often cannot asked Japanese, for a little grocery item. Also, most of cheaper goods are of Wal-Mart's manufacturing goods. The appearances are similar but different in quality. Nevertheless, a number of house brand products cannot go through local customer since they are imported from the United States and has just English language on the labels. This creates inconvenience for the Japanese customers and they do not find it easy shopping at walmart.
Whereas in US there the bond between the European company the English customer is stronger in the home country. Walmart also participates in the charity events which earn it a good reputation among public (Kirklin, 2006).
The corporation takes part in charitable proceedings and has marketed itself as an institution that takes part in charitable events but it has not helped it to clear itself from image that does not protect its employee's rights as such a successful and profitable organization does. There have been numeral accusations in the media that Wal-Mart exploits its workers. Such an image devalues the company's name in the eyes of it's consumes as well as other important stakeholders. This destroys the most important IMC tool of public relations
The following issues have been pointed out in an advertisement posted in Wake-Up of Wal-Mart's corporate responsibility
The retailer is the nation's largest manager
Its offers affordable plans starting from $ 23
The corporation contributes close to 245 million dollars in generous events yearly(MSNBC, 2007a)
Instead of advertising in such a way as shown above shown above, Wal-Mart is supposed to place more effort in enlightening their staff management policies. The complexity with such advertisements is that they take so long to change customer opinion. As a matter of fact, they might engrain negative perceptions because customers will see that the corporation wants to improve a marked image. Instead of expenditure millions on such advertisements, the corporation could direct that money to improve their systems. A good manager does not need to promote their employment practices as they will talk for themselves. The corporation should boost its health cover plans because other companies present better health programs though they may be up till now they earn less than Wal-Mart. This will leave a long way in creating better picture for the company (MSNBC, 2007a)
In this argument, the Company does not need to convince the public that its employees are in fact happy to work for the corporation. These employee opinions are not supposed to be communicated to the community by walmart itself but through the employees. Wal-Mart asserted that, it has been found that a whooping eighty one percent of the company's employees would recommend one of their friends to turn out to be Wal-Mart employees. This type of approach will not produce good image for the company because this way corporation is adopting a defensive strategy
Direct marketing
Direct marketing involves the media which directly conveys the message to the target market. It involves television, radio, magazines, sponsorships and newspapers. Fortunately enough walmart uses all these mediums to convey its message of 'everyday low prices' to its customers. It advertises in the television at peak viewing hours to target the greatest segment of the market. New products with any technological innovation are shown in commercials with their newest feature. Walmart sponsors sports and charity events to earn a respectable reputation as a giant retailer that people appreciate. Newspapers and magazines are also used for the same purpose. New products with its pricelist are offered in magazines that do not aim to target a niche market since walmart targets middle and low-income earners. Direct mailing is also one of wall mart's important medium to update its existing customers about new events that take within the premises of walmart, for example theme for the month is pet food; all pet foods will be displays in manner to catch the eyes of every person who keep pets.
The mediums used by walmart by direct marketing are same throughout JAPAN as it is in US.
Sales promotion:
Walmart uses following methods to create awareness and interest in consumers to purchase from walmart
Competition: this is used to boost sales, where customers are entering for a monthly prize draw offering a variety of prizes. With high priced products, the value of the price is often very high such as continental holiday.
Point of sale: new product range is decorated in an attractive manner to catch the customers' attention and persuading them to buy. If the product s single and occupies a smaller space it is often placed at the counter table.
Free samples: free testing of the product is done by walmart whenever it introduces a new range of product.
Gifts: gifts are offered at certain time periods of the year, usually when sales are low, to encourage spending. These gifts can take shape of 'buy one get on free' , 'shop for $500 and get a gift voucher free etc'
Exhibitions and trade fairs: Walmart take part in exhibitions and trade fair but not very often as it is a departmental store and does not specialize in a particular item that could be emphasized.
Japanese customers are also offered the same promotional schemes.
Similarities between the two countries' IMC strategy
Advertising media used to communicate with the target segment is the same, that is television, radio, magazines, posters and newspapers etc(message however differs according to the cultures of the two)
Method used for sales promotion is identical. Money back guarantee and after sales services apply to both the countries
Sponsorship of the sports and educational events. Takes part in charity events to gain popularity
Differences between the two countries' IMC strategy
No direct marketing in Japan
Is difficult to operate without offering proper health and safety programs in the employment contract of the human resource. In Japan. It quickly earns Walmart an image of the organization with corporate irresponsibility
Products have details printed on it in English, consumer-brand relationship is not stronger(Japanese customers)
'Every day low prices' is not an effective mission statement in Japan. People use small stores located nearby for purchasing when here is little difference in the prices between small shops and Walmart
No friendly relationship with suppliers in Japan as they are not ready for negotiate for lower prices.
CONCLUSION
Walmart has dealt with marketing and promotional elements successfully to quite a good degree in its home state,
The corporation has a commitment to business excellence. This is seen by the quality and care accorded to the customers once they account to their retail store. This is ensured by motivated participation of workers in this business object. The company has refined a culture of excellence in that they always desire to be on top. The Walmart marketing manager has said that Wal-Mart's main business objective is to make sure that their sales are constantly increasing. It is the culture to get to the top. The company ensures their growth rate does not stagnate. Other companies usually attempt on developing their performance and once they have reached desired targets, they tend to relax. Though, this does not apply to Walmart; the company ensures that they always search for ways of sustaining their competitive benefit.
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Innovation and creativity is another goal of the company. Through the efforts of their employees, the corporation aims at maintaining their market positions by brainstorming and looking for now ways of attracting potential customers (MSNBC, 2007b). The corporation also values being considered as a strategic community associate. The company's slogan is 'saving money to live better'. This is an image that the corporation has worked on very well. Walmart uses the feature of availability as another business objective. The Company has opened up a sequence of locations in many parts of the state. This means that clientele are not inconvenienced when trying to locate them (Pamela, 2008)
PART2
Introducing New Idea:
WALMART EXCLUSIVES
The corporation puts the idea of altering its marketing objectives in such a way that they can attract a different market segment. In the history, the company has been associated with the middle class or low-profits earners. Affluent clients tend to shy away from the retail giant due to the fallacy that Wal-Mart's goods are of lower excellence. Most of them shop the store for pharmaceutical and grocery shopping and pay no attention to the store when it comes to other options.
Competing with other organizations and to achieve its new goal of targeting new market segment for the affluent clients, the retail giant needs to make product excellence as part its major business strategy. Quality in this aspect refers to both the customer service and the nature of the items in its stores. The company needs to reinforce an impression of a community based association. This means that its employee practices are be supposed to be enhanced.
Strategic marketing objectives and justification for selection of the introduction of the new brand identity:
Wal-Mart's competitor- has managed to draw affluent consumers. Consequently, Walmart must attempt and give these buyers a reason for shopping at their outlet. Affluent shoppers appreciate excellence and need to be certain that they can get it at Walmart. The grounds why the company went unsuccessful in its 2006 efforts to target these customers are because it went implementing this objective in the wrong way. Primary of all, the company needs to improve the look of their stores through new store displays. This is particularly important for store allocated in branded and affluent neighborhoods.
Integrated marketing communication plan for the launch of the new corporate brand name for the affluent population namely 'WALMART EXCLUSIVES'
TOOLS AND MEDIUMS USED
TELEVISION: Walmart will use television to introduce its new brand to its new market segment. These advertisements will be run on the TV during the peak viewing hours
MAGAZINE: lifestyle and fashion magazines that target these affluent customers will be used to create awareness about its new corporate brand name
POSTERS: those places where most of the high class group of the society visits for leisure activity shall be used for advertising on billboards. The leisure clubs where rich people spend their holiday's hall be chosen for placing the advertising posters.
INTERNET: Walmart will use walmart.com to introduce 'WALMART EXCLUSIVES' target customers will also be informed via email about this new range of branded and quality products
PERSONAL SELLING: Door to door personal selling shall take place in residential areas occupied by high income groups. This will aim to create awareness and explain the technical and qualitative aspect of its new brand. Through this personal contact walmart will be able t obtain orders and receive detailed feedback from the consumers. This method of INTEGRATED MARKETING COMMUNICATION will prove expensive but outcomes will be very useful
SALES PROMOTION
After sale service: WALMART will provide after sales services on every product that comes under this corporate brand name. Wt will provide WALMART warranty of one year.
Money back guarantee
Free sampling: Walmart will also use the method of free sampling on its selected item that may not cost it too much
Gifts: A gift voucher is available with every product you purchase listed under WALMART EXCLUSIVES.
LOSS LEADER: Here walmart will lower the price of one or two items to such a point that there is little or no profit. The idea behind this is that the consumers will be attracted by the price reductions and walmart will be able to maintain its slogan of 'save money, live better'. While the consumers will shop at walmart they will also buy a number of other items and so Walmart will cover the profit it needs.
ONE YEAR TACTICAL PLAN FOR WALMART TO ESTABLISH ITSELF IN THE NEW MARKET:
The process of attracting the affluent customer should be done in sequence and not drastically. The Company had introduced Metro 7 stalls in 1,500 stores. These stores offered jewels, expensive wine and additional expensive commodities. The reason why this strategy this did not work very well was that the change was introduced rather radically. The company should bring in expensive products only in stores situated in affluent neighborhoods (Pallavi, 2007).
Moreover the company needs to work out selectivity in the types of goods chosen. The company should be supposed to stay away from designer clothing or organic stores since these did not yield high-quality results in the history. The focus must be on electronics.
The company needs to insert more uniqueness in its product offerings. The company should associate with other brands for family unit items and electronic companies. By securing well-recognized suppliers, the corporation can offer better quality goods thus attracting the look at of the affluent customers who are particularly interested in these products.
As the Company has already saturated the home market, the focus should be on global markets. However, admission into those international markets is supposed to be done tactfully. Walmart should choose economically secure countries. The stores established in these areas require to be located carefully (Pallavi, 2007)
The pricing feature of Wal-Mart's marketing mix is part of the cause why the company has competed so well so far; this is its winning formula. The company is supposed to maintain their low pricing strategies although they should combine this with diversification of product choices. They require improving on the excellence of service and their substance in order to create themselves more appropriate in this scenario.
Budget
In the existing budget Wal-Mart would not be easily able to acquire new business objectives and will not be able to attain its new goal of targeting the affluent customers. 10% increase its promotional budget needs to be increased owing to an increase in prices in the following year. Wal-mart already carries an image of successful organization therefore financial outsourcing should not be a problem for Wal-mart
Conclusion
Wal-Mart has competed a lot in the history in order to secure and maintain its safe position as a retail market leader. These comprise offering low prices, offering good customer service and steady innovation. However, recently the company has grappled with low customer traffic. Market diffusion in the middle income market segment, poor global performance and bad public relation as a consequence of their employee practices. The company is supposed to adopt strategies in order to ensure future enlargement; adopt penetrative strategies to enter global markets, introduce high-quality product correspond or associate it with products favored by rich clients and improve health insurance plans within its organization. It should also facilitate labor unionization and avoid putting barriers or other annoying practices that would bring relations with employees at stake, no doubt motivated labor force is firm's greatest asset and the ladder to success
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