Marketing is one the functions of an organisation that most connects an organisation to its environment. It maintains relations with the customers. It also involves satisfying needs of the customers. It incorporates hoe a business should be conducted and a set of values and processes that are put into practice(Naylor, 2004, p.525). According to Kotler Marketing can be defined as “a nodal and managerial process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others” (Kotler et al., 1999, p.10).The key ideas in this definition are needs, wants and demands, value and satisfaction, exchange, transactions and relationships and markets. The American marketing association defines marketing as a “process of planning and executing the conception, pricing, promotion and distribution of ideas, goods and services to create changes that satisfy individual and organisational goals” (Kotler, 2002, p.4). There are numerous theories that are part of marketing as a subject. This essay aims at identifying the key concepts of marketing and how are these concepts can be studied and applied to a functioning of an organisation which is Walmart in this case.
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Walmart is an American public corporation that operates a chain of large discount department stores and a chain of warehouse stores.. The company was founded by Sam Walton in 1962. It is publically traded on New York Stock Exchange. The company is the largest private employer with approximately 2.1 million employees. It operates in Argentina, Brazil, Canada, China, Costa Rica, El Salvador, Guatemala, Honduras, Japan, Mexico, Nicaragua, Puerto Rico and the United Kingdom and, through a joint venture, in India. Walmart became an international company in 1991 when it opened its first Sam’s Club near Mexico City.
Two major concepts of marketing are the market orientation a firm has and the marketing mix it follows. Wal-Mart has its own market orientation and a marketing mix that it has adopted. Market orientation is an approach that a business has to run its operations and achieve its organisational objectives. These are the different ways that a business approaches its customers and determines how an organisation carries out its marketing activities. They guide the marketing efforts of an organisation. The different marketing orientations are as follows:
1.Production: Production oriented firm focuses on large scale production of goods that can be made widely available. It also focuses on efficiency issues. There is little focus on customer needs and their wants. It is based on the Says law which says “Supply creates its own demand.”
2.Product: A product oriented firm focuses on the quality and features of the product. It assumes that the customers want the best quality products for their money. Continuous improvement and refinement of products is also a very important factor.
3.Selling : In this market orientation the main focus is on selling and promotion of the products. It is assumed that good marketing efforts will persuade enough customers to buy the product. It tends to ignore what the customers really want or need.
4.Marketing : It is an approach which keeps customers at the centre. It involves doing a market research and identifying the needs of the consumers and thus making products that satisfy the consumer needs in the best and most efficient way. It is assumed that identifying the customer needs gives a firm a sustainable competitive advantage.
5. Socially Responsible Marketing: It involves responding to the ethical issues in a society. It is related to the corporate social responsibility of a business. It informs consumers of the various contributions that the business is making towards the society and makes a good image of the business as a whole.
Different businesses have different market orientations. The two most important aspects of Wal-Mart’s market orientation are product and market. Wal-Mart offers a huge variety of products. Their aim is to satisfy almost every possible need that might arise. Wal-Mart is not a store for people from a specific age group or income group. In fact it serves people from every age group and income level. Wal-Mart also works with its suppliers and uses a testing laboratory called a consumers testing lab. It runs test on food items, clothing ,electronics etc. By doing this it ensures that the goods it delivers to its customers are of highest quality.
The second aspect of its market orientation is Marketing. Wal-Mart uses detailed market research and customer segmentation to better deliver against the customer needs. Wal-Mart’s ability to recognise changes in the retailing industry has given it a huge advantage over its competitors. This has only been possible because of the intensive market research it undertakes before making any strategic decision. Before making any promotional strategy they measure the return on investment. They evaluate everything such as how many customers will see the advertisement, how many will react to it, how many will actually buy the product. They have huge customer data and sales data. They even share the sales data with their suppliers in order to keep the most popular items stocked and to persuade its suppliers to supply goods which are most popular among the consumers. So it changes itself according to the customer needs and sell products which customers want and not what it has to sell. It also promotes relationship marketing and uses one to one relationship marketing tactics. For e.g. a person greeted every customer who came in and said goodbye to each person who left. Wal-Mart has always closely observed its market using different research methods and has always successfully anticipated the change in consumer tastes and preferences and changed itself accordingly so it always keeps its customers at the centre.
Another important theory of marketing management is the marketing mix. Marketing mix is the set of marketing tools that a firm uses to achieve its marketing objectives in a specific target market. The tools can be classified into four categories namely Price, Place Promotion and Product and are referred to as the 4 P’s. Price and advertising costs etc. can be altered in the short run but elements such as product and the distribution channel can only be changed in the long run. .( Kotler, 2002, p.9 )These variables affect the level of demand for a firm’s products. It is a combination of these tools that are used to satisfy consumer and company objectives. The four variables can be explained as follows:
1. Price: Price is an important factor in the marketing mix when the products are not bad. People want to use money thoughtfully and want maximum utility out of their income. Discounts, allowances, payment terms and credit are some of the tools used to attract customers.
2.Product: Product is the top priority in the marketing mix. Some of the strategies that firms may use are quality, design , features, packaging and warranties etc. Using these tools a company can differentiate its products from its competitors.
3.Place: The place element is becoming more important these days. Big retailers make it more convenient for people to buy everything. Locations, inventory and transport etc are areas that are important for a business.
4.Promotion: People should know about the products of a company. Effective way to advertise the products necessary. Sales promotion, sales force ,direct marketing and public relations are some examples that come under promotion aspect of the marketing mix.
We can relate these 4 Ps with different strategies that Wal-Mart adopts. Price is the most important factor for Wal-Mart’s’ marketing mix and is the winning formula for the company. The company has build an image over the years that its name has become a synonym to low prices. The mission of the company is to provide cheapest prices in the market. It is because of its such low prices that it has been able to serve and fulfil the needs of millions of customers. Wal-Mart has the best and the most convenient store locations which its competitors find difficult to beat. This is due to the extensive market research it does before expanding into a new area. Also the stores are strategically located to gain efficiency in storage and transportation of its goods. However the company has saturated the local markets and now has plans to extend its operations in many foreign countries. As Wal-Mart offers variety of products for every segment of the market it ensures that its customers get the highest quality products. Some products are sold under its own brand whereas some other from other companies. Wal-Mart often comes up with packaging techniques that help reduce the cost of the goods sold. Now the company is trying to attract more affluent customers by launching new Metro 7 Stalls which offer jewellery and other expensive items in 1500 different stores. (source: http://walmartstores.com/pressroom/news/5721.aspx).
Coming to promotion the most notable strategy that the company uses is public relations by taking parts in charitable events. It started health plans starting from $23 and also advertised itself as the largest employer.
All these strategies have helped Wal-Mart emerge as the market leader in the retail sector and the key factors being low prices, more customer service and constant innovation in the business.
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