Five-Year Strategic Marketing Plan Wal-Mart Inc. A Marketing Plan Presented By: Justin Ravari Table of Contents Page 1. Company Description1 2. Strategic Focus and Plan2 Mission2 Goals2 Competitive Advantage2 3. Situation Analysis4 SWOT Analysis4 Industry Analysis6 Competitor Analysis6 Company Analysis7 Customer Analysis7 4.
Market-Product Focus8 Marketing and Product Objectives8 Target Markets8 Points of Difference9 Positioning9 5. Marketing Program9 Product Strategy9 Price Strategy10 Promotion Strategy10 Place Strategy11 6. Financial Data and Projections11 Past Sales Revenues11Five-Year Projections12 7. Organization13 8. Implementation Plan13 9. Evaluation and Control13 Possible Deviations14 Possible Solutions14 10. Bibliography Appendices Appendix A: Wal-Mart Money Saving Coupons17 Appendix B: Wal-Mart Customer Survey18 1.
Company Description After graduating from the University of Missouri in 1944, Sam Walton began his career in retail with a chain of stores owned by the Butler Brothers. Just after three years, Walton increased the annual sales from $80,000 to $225,000. It was only a short time later he had to relocate due to the landlord not renewing the store lease.On May 9, 1950, Walton purchased a store in Bentonville, Arkansas, where he opened his first Walton’s 5 & 10.
This would later become the headquarters for the largest corporation in the world. It wasn’t until the mid 1960s that Walton changed the name of his chain of stores to Wal-Mart. It was his assistant, Bob Bogle at the time, that had came up with the name. Wal-Mart believes they are the number one provider of retail and food services in the United States, and expanding globally increases their chance of becoming the world’s leader as well.The company believes it can not only provide local retail and food to its customers, but also offer it to their consumers at the lowest price possible. 2. Strategic Focus and Plan This section will briefly show an overview of aspects that affect the marketing plan positively: (1) the mission, (2) goals, and (3) core competence/sustainable competitive advantage of Wal-Mart Inc. Mission Since Wal-Mart does not formally have a mission statement, they usually use the “Save Money Live Better” as their customer luring slogan.
Their gaining mission is to attract as many consumers as possible, leading them away from their competitors, by offering multiple selections of services at the lowest price possible. They feel they can relate to the ordinary citizen when it comes to saving money and living a better life. Goals For the upcoming two years, Wal-Mart plans to achieve the following goals: * Nonfinancial Goals 1. To keep its current position as the number one retail and food service company in the United States.
2. To work with suppliers who are committed in being socially and environmentally responsible. . To become more transparent within the supply chain.
4. To improve higher standards or product safety and quality. 5. To not only become more energy efficient in more of their local stores, but as well as their supplier’s factories and stores. * Financial Goals 1. To open more Wal-Mart MoneyCenters for customers who are inaccessible to local banking services.
2. To provide more customers with the Wal-Mart MoneyCard system, a reloadable Visa card, for customers who visit Wal-Mart each week for their services and are not able to receive services from banks. . To acquire further competitive retail stores globally to increase the chances of becoming the number one retail service internationally. 4. To increase their truck fleet with more energy efficient services that will save billions of dollars in spending. Core Competency and Sustainable Competitive Advantage In the aspect of core competency, Wal-Mart seeks to provide a better services for the average consumer by (1) offering more bargain brand clothing such as “Athletic Works” and “Centear Clothing Ltd.
(2) offering more bargain brand foods that are price reduced compared to the competitive brands such as “Great Value” (3) provide better categorized locations of these products to make the shopping at ease for every customer. Wal-Mart plans to work closer with their local and national suppliers to provide a direct access to their products as well as to help the under budgeted consumer afford the necessary needs for their families. Throughout the United States, Wal-Mart has went under plenty of reconstruction in order to help the customer feel comfortable shopping while they are looking for their specific needs.Heavy relocation of multiple products helped categorize their services to enhance the consumer from not searching everywhere for certain items. Wal-Mart provides such products as Great Value for the average consumer’s budget. Great Value has over 100 different products located in Wal-Mart stores. 3. Situation Analysis This situation analysis begins with an overlook of Wal-Mart’s current position in the environment by providing a brief SWOT analysis.
After this review, the analysis shows the different levels of detail in: industry, competitors, company and consumers. Figure 1. SWOT Analysis for Wal-Mart Internal Factors| Strengths| Weaknesses|Management| Very experienced supervisors with state of the art training provided| Accused of being bias toward male gender when promoting to management level| Offerings| High and low quality products and services offered at low prices| Safety of the low quality products increases returns| Marketing| The Every Day Low Price campaign is a success for Wal-Mart| Intervenes in smaller communities where they are not wanted because the people don’t want their local smaller stores shut down; people believe they are forcing their stores into areas| Personnel| Excellent workforce with thorough background checks of hired employees| Accused of overworking some employees with little or no pay increase| Finance| Largest US corporation now and since 2000 their revenues have only constantly risen and never fell| The earnings per share ratio is low compared to the industry since they are not earning as much money for each shareholder| Manufacturing| Uses the strategy of cross docking; which is a way for them to constantly deliver goods and services to their warehouses where they are sorted and distributed within a day| Less checkouts lines vailable for customers to achieve ease of shopping; results in more and more people wanting to shop there| R&D| Continued efforts in R&D to get more involved with communities before opening future sites| Very low researching when locating a future store site| External Factors| Opportunities| Threats| Consumer/Social| Provides ease of shopping for consumers| Wal-Mart fights back against theft by spending more money of anti-theft devices| Competitive| Since the value of money is weakening, it reduces the chance of foreign manufacturers to offer discounts| Does not follow the consumers tastes and while Wal-Mart expands in urban areas, more people move to cities| Technological| Increased internet shopping; after introduction of Wal-Mart. om results in sales increase| New technological advances makes some products they offer obsolete| Economic| Free trade zone allows them to offer foreign products in demand from consumers| Economy is in a recession which results in consumers spending less and Wal-Mart losing revenue| Legal/Regulatory| Asian countries like China untapped by retail services; allows Wal-Mart to step in and spread globally| China imposes regulations on foreign markets operating in their country and since they have no accounting principles, it results in corruption| In Wal-Mart’s positive internal strengths are from their finance and manufacturing areas. Becoming the number 1 corporation in the United States has proven that retail services can compete against black gold companies such as Exxon/Mobil and Shell. Their annual revenue exceeding $404 billion grants them the opportunity to be accepted among leading competitors.Utilizing the strategy of “cross-docking” enables Wal-Mart to cut prices even more due to the fact that they use their own distributing centers. Products are pre-sorted and distributed directly to their shopping centers to achieve faster deliveries of services.
Some external opportunities that benefit this company are the competitiveness of money throughout the world and their technological advances. Even though the United States is suffering from a gradual recession as we speak, this allows Wal-Mart to alleviate pressure off themselves from foreign marketers. It allows them to lower prices to an extent where their foreign competitors can’t. The introduction of Wal-Mart. om has proven to be a success; ease of shopping for consumers who are tired of waiting in lines, when they can order their product by a click of a button. Among some adverse internal factors are their promotion of employees to a managerial position. Wal-Mart has been accused multiple times of becoming a bias corporation towards men in higher positions.
Countless lawsuits have been upheld against the company for avoiding to promote suitable females to a higher level management position due to their gender. Factors that impose a threat to Wal-Mart are such cases from the consumer/social and legal/regulatory factors. Wal-Mart spends excessive amounts of revenues to enhance their security abilities in order to avoid theft.Multiple kinds of anti-theft devices are emplaced in products electronically; in return costs them millions of dollars. Becoming a worldwide leader in retail gives Wal-Mart a chance to open their markets in untapped countries such as China.
Problems that occur there are strict regulations from the country can create corruption among civilians there, since accounting principles are not implied. Industry Analysis Since Wal-Mart holds the majority of the market share, it allows them to offer a lot of their business to other manufacturers and wholesalers. It gives the company a lot of power since they can threaten their suppliers with scare tactics such as switching to other suppliers.
Wal-Mart is in the business of selling everything customers need in their everyday lives, which allows them to opportunity to vertically integrate. They can achieve this primarily from their newly substituted product of Great Value. Great Value products are increasing in not just the quantities, but also by their variety of products.
They are generally the baseline substitute of overpriced name brand items. Dealing with large suppliers restricts the chances of Wal-Mart using their bargaining power, so they limit themselves from dealing with such companies as Proctor & Gamble and Coca-Cola. Their purchasing power enables them buy large amounts of supplies at rock bottom prices and pass the savings onto its customers.For example, 28% of Dial Corporation’s goods are supplied directly to Wal-Mart; Dial Corporation would nearly have to double its price of its goods to consumers in order to make a bargaining profit. Wal-Mart’s lower prices not only benefits the company and customers, it provides a safe zone for multiple suppliers; knowing they will generate minimal profits. Competitors in the Retail Services Respectively, 28% of consumer’s annual expenditures are spent on retail and groceries. Wal-Mart accounts for 7.
5% of that alone. Currently, there are three main competing companies that exist in the same market as Wal-Mart; Target, Sears, and K-Mart. Of these three, Target is the strongest. Target has experienced a tremendous growth in their domestic markets and has defined their position quite efficiently.Since the recent drift of Sears and K-Mart from the marketplace, it has slowly become a less challenge to Wal-Mart from these two companies. Due to this effect, it has given Wal-Mart a safer and more secure industry life cycle. Unfortunately, the marketplace for retailing gives companies such as Krogers and Randalls the opportunity to expand their grocer services, as Wal-Mart did over 50 years ago.
One key role that separates Wal-Mart from the rest of the local United States competitors is the issue that they operate globally as well. This is an effective, but at the same time, a complicating strategy. They not only have to worry about companies competing against them in the US, they have to maintain their status internationally too.
They have successfully accomplished this by purchasing such global competing retail stores like ASDA in Europe and partnering with Lojas Americanas in the country of Brazil. Company Analysis The company operates through three segments, namely the Wal-Mart stores, Sam’s Club, and the International segments. The Wal-Mart Stores segment includes supercenters, discount stores, and neighborhood markets in the United States, as well as walmart. com.
The company was founded in 1945 by Sam Walton and their headquarters is based in Bentonville, Arkansas. Wal-Mart provides one of the largest workforces in the United States covering over 2. 1 million people. Since 2007, they have ranked first in the top Fortune 500 companies.
The company works closely with large and small suppliers to offer the best known product available for consumers as well as the best bargaining price available. Their main focus is to provide families of America and its international operating countries the overall best standard of living. Customer Analysis In reference to a customer analysis, this area describes (1) the customer’s expectations (2) piece of mind while shopping online.
Customer Expectations. Wal-Mart believes the reason they’re still in business is due to all of their customers, and knows they should be treated with upmost respect. Offering quality merchandise at the lowest price and providing the best customer service helps influence these expectations positively.They look for every chance to improve on these expectations, whether they are lacking it or not, and once it’s reached, then Wal-Mart knows they are at their very best. This means doing everything they can to please the customer; repair, exchange or refund any product with a smiling “thank you”. Wal-Mart believes its job is to make the customer feel like they are the most important part of their business, in which they are, by meeting the consumer’s needs and fulfilling their expectations. Sam Walton established a great saying that would become a backbone of what Wal-Mart stand for: “Exceed your customer’s expectations. If you do, they’ll come back over and over.
Give them what they want, and a little more”.Online Shopping. With the growth of technology and the vast amounts of changes it encumbers, Wal-Mart knows they need to enhance their online shopping stature. During the busiest shopping day of the year, Black Friday, more and more customers are logging on to complete their shopping needs at the lowest price available. Instead of waiting in long lines in the early mornings of Black Friday, and even sometimes waiting in line on the day of Thanksgiving, consumers can complete multiple transactions through different websites and avoid standing in the cold weather. Offering these deals online, instead of just in the shopping centers gives customers the pportunities to receive the same deals that they would have to wait in line for. A heavy price war is continuing between Wal-Mart and Amazon. Even though the two giant companies are somewhat different in the marketplace, Amazon poses little threat to Wal-Mart.
This fight is more about the future and the high-tech landscape. Wal-Mart has proven to control the region in retail by brick and mortar; they will continue to strive at becoming the leader in online services as well. 4.
Market-Product Focus This section describes the marketing and product objectives for Wal-Mart and the target markets, points of difference, and positioning of such products as Great Value. Marketing and Product ObjectivesThe retail giant is planning to take full advantage of its private brand label of Great Value as its tallied sales are soaring pass such top competing mega brand companies as Coca-Cola, Tide and Ocean Spray. The four areas below describe the brand and its focus. * Current markets. After the successful remodeling of numerous Wal-Mart stores across the nation, the newly opened space will allow for more shelf space as well as floor space for continuing Great Value products. This will also provide easy access for customers to continue their price conscious shopping. * New Markets. Changing formulas for over 750 different Great Value items such as; foods, beverages and household products will help consumers understand what they are exactly buying.
Also, the newly developed packing will help promote appearance of the product. * Food Services.Reconstructing its nutritional facts will benefit the private brand of Wal-Mart by attracting the healthier living styles of people. It not only helps in nutrition, but helps in the pocket books for the average customer; saving them approximately $2,500 per year. * New products. Great Value will be introducing more than 80 new products which will include; thin crust pizza, fat free caramel swirl ice cream, strawberry yogurt, organic cage-free eggs, double stuffed sandwich cookies, teriyaki beef jerky and plenty more.
All these and still at an unbeatable price. Target Markets The primary target market for Wal-Mart is to increase its profits by saving people money.This sounds backwards compared to most marketing strategies, but due to recent job losses and the nation suffering from a recession, the retail titan understands that the most important thing to people is to budget their assets and provide for their family. The recent revamping of their private label of Great Value has allowed the retail store to provide these services for the communities and its people.
As stated above, the newly introduced products will prove to be healthy for families of America as well as healthy for their checking accounts. Points of Difference There are numerous characteristics that define Wal-Mart and separate them from their competitors: Wal-Mart is not only the largest retailer in the world, it’ private label “Great Value” surpasses sales records compared to most other competing top label brands. Wal-Mart is the only company who has proven to not just be on top of other organizations, but also provide a service from their private label that excels any other brand.
* Wal-Mart offers variety of brands throughout its store to suit the needs of its customers. * The unique price differential compared to their competitors proves that Wal-Mart can offer better quality and quantity of services to its consumers. * The outrageous money saving promotions offers a better peace of mind for customers who are constricted to their budget. * Wal-Mart’s research and development team enhances better eco friendly services for its communities; ew tires to provide better mpg for their fleet trucks, recycling of old tires, energy saving lights inside and outside the stores, and labels on all their products indicating how eco friendly the products is to the environment. Positioning As Wal-Mart continues to rekindle their growth, they continue to seek new measures to provide convenience and quality to their consumers.
Offering multiple amounts of products in the budget range of customers and continuing to open new stores around, gives the retail store the opportunity to position themselves as a better servicer for the communities. Customers can obtain vast amounts of goods that are needed for their family and not spend an arm and a leg to receive it.Having numerous stores in the local communities reduces the amount of time travelled for its customers as well.
5. Marketing Program The marketing mix strategy of Wal-Mart is primarily based on their private label of Great Value. The introduction of this line has helped influenced growth in sales as well as family savings.
Product Strategy The product line is described in this area as well as the quality and packaging of the product. Product Line. Great Value offers multiple types of products to help support the everyday needs of the average family. They range from food products like pre-cooked meals and desserts to household products such as laundry detergent and personal hygiene. Product Quality.
Wal-Mart has revamped testing of their private label to ensure equal or better quality of assurance. They have tested over 5000 Great Value products with customer feedback to compare flavor, aroma, texture, and color. Current economic conditions have influenced the retail giant to change the outcome of Great Value so families can not only afford the items, but enjoy them as well. Product Packaging. With the addition of the product testing, Wal-Mart has redesigned the packaging graphics to create a consistent look so customers can easily find their favorite product.
The new packaging offers a new easy to read label so people can view the contents of what they are buying; nutritional information, recipes, and basic food photography.As part of the company’s sustainability goals, they have reduced some packaging of some Great Value items. It not only saves the company revenue, it helps the organization veer more towards an eco friendly corporation.
Price Strategy The retailer’s Great Value brand provides families with affordable groceries and household items compared to national brands. A 3 lb bag of Great Value Chicken Breast sells for about $5. 99 a bag, while competitive brands like Tyson Chicken sell for approximately $6. 99 a bag.
The $1. 00 savings seems small, but the value adds up when multiple Great Value products are purchased as a whole compared to competitive products purchased as a whole.Promotion Strategy Promotional programs are featured in daily newspaper ads for easy cut outs as well as internet based coupons to print off.
Some of these coupons can be printed out and brought directly to the Wal-Mart supercenters for instant savings. Food samples and cleaning demonstrations are offered in the supercenters to demonstrate the product’s satisfaction. Food recipes are shown on some food products under the nutritional labels. Supercenter Promotions. The supercenter offers firsthand experience for the consumers to try their products. The customers are provided free samples of foods as well as shown demonstrations of certain cleaning products.This helps keep the customers known to the overpriced competitive products that they are use to buying and shows the quality of Great Value products at a lower price.
Food Recipes. Some of the family dinners, like the family size lasagna, offer friendly and easy recipes to spice up the outcome of the dinners. The recipes are shown on the label of the products and sometimes on a small note card in the aisles. Coupons. To help customers consistently purchase the products, Wal-Mart offers savings coupons. * Ads are shown in daily and weekly newspapers for easy cut outs of instant savings. * Some of the products Great Value produces; such as their cereals, offer in package coupons to dig right out of the box.
These are used for the next amount saved when consumers re-purchase the item. * Some of the famous “Mail Shopper” coupons provide Great Value savings on different items. It’s not always guaranteed to receive the item you want or need, but since Great Value is constantly introducing new products lines, it increases the consumer’s chances.
Place (Distribution) Strategy With the largest distribution centers in the world, over 1 million square feet, Wal-Mart can conduct their logistics at a steady rate. The centers are opened 24/7 and the fleet trucks are on a constant move. Over 53,000 trucks are on a constant move to deliver products all over the country.The private distribution centers also packages and labels their own products to save money from imports, in which generally saves the consumer more money. 6. Financial Data and Projections Past Sales Revenues With the outstanding record of earning in the 2009 fiscal year of $401. 1 billion, the retail giant proves to outdo any of its competitors in the retail market. Even though they’ve dropped to rank #2 in the Fortune 500, from their previous rank #1, their sales still show a remarkable trend.
The sales are continuing to rise, but with the recent market tragedies and store closures will show some negative effects. Figure 2 shows the revenue earned in the past 10 years for the corporation. Figure 2. Past 10 Year Revenue earned from Wal-Mart Five-Year ProjectionsBelow is fluctuation in revenues that I am predicting based on the previous year of sales and based on the percentage that each area of market Wal-Mart sustains. This ranges from their US Wal-Mart stores, International Markets, and their Sam’s Club membership market. Figure 3 shows gross revenue for each of the three market areas and then a total combined that the Wal-Mart Inc. receives per year.
Figure 4 is the same data, but in a graphical representation. These were based on the percentage of revenue contributed from each market area. Wal-Mart US holds about 63.
7% of the overall corporation’s generated sales, while the International market contributes about 24. 5% and Sam’s Club provides about 11. 7%.As you can see, the next two years shows a decline in revenue for the organization, based on the recent recession the US is undergoing as well as the 10 Sam’s Club closures within the past month.
Even though the membership clubs were losing revenue, the decision was made to close the stores and revamp between 60-80 ongoing Sam’s Clubs. The loss is not solely based on the closures though; it is affected from a majority of events too. Along with the store closures comes layoffs; over 1500 employees to be exact. This will again add to the negative aspects of the US recession.
Also, the International market Wal-Mart contains, receives this bitterness since the value of the American dollar is declining.In time, the store will continually show a more positive profit gain. Figure 3. Five-Year Projected Revenues for Wal-Mart (In Billions) Projections| Financial Market| Actual Year | Year 1| Year 2| Year 3| Year 4| Year 5| Wal-Mart US| 255. 7| 242.
8| 238. 9| 244. 8| 254. 1| 258. 4| International| 98.
6| 93. 2| 91. 9| 94. 2| 97. 7| 99. 4| Sam’s Club| 46.
8| 44. 4| 43. 9| 44. 9| 46. 7| 47. 5| Total| 401. 1| 380.
4| 374. 7| 383. 9| 398. 5| 405. 3| Figure 4. Five-Year Projected Revenues for Wal-Mart (In Billions) Graph 7.
Organization 15 Member Boards of Directors President and CEO (Mike Duke) Wal-Mart International (President and CEO Doug McMillon)Sam’s Club (US) (President and CEO Brian Cornell) Wal-Mart (US) (President and CEO Mike Duke 8. Implementation Plan Below is an implementation plan for the Great Value product of Wal-Mart. The following schedule should be conducted according to their relative date as well as maintained in their weekly, bi-weekly, or monthly events. Type of Implementation| Date| Newspaper Advertisements| Bi-weekly starting on April 2010| Showcases and Samples| Weekly event beginning May 2010| Recipes on Food Products| Weekly event beginning May 2010| Parking Lot Flyers| Monthly distributed starting July 2010| Conduct Customer Surveys| Monthly evaluations starting October 2010| 9. Evaluation and ControlIn any situation that Wal-Mart endeavors, there will usually come a time where problems may occur. These issues should not halt the overall outcome of reaching their goal. There are some issues that will possibly arise in the timeline and problem solving actions to neutralize them.
Possible Deviations 1. Customers stick to products of their likely. 2.
Customers experience bad reputation with one product. 3. Competitor coupons decrease overall cost of their product. Possible Solutions 1.
Customers tend to rely on specific products that they have purchased over and over within their lifetime. The consumer trusts this product since it has worked for them and guaranteed them satisfaction.At this time and for the next couple of years, due to the recession, it is our progressive goal to slowly, but surely lure the consumer to our private label of Great Value primarily because of the cost related issues. At the same time, we are revamping a majority of our food products to suit the tasteful needs of the customers. This will also include restructuring the ingredients of our everyday household items that get used. 2. During the process of changing the customer’s needs to our product line, it is important to guarantee success of our items. If the customer does not have a happy liking to any of the items, they are capable of returning the product at no cost to them.
Conducting a short survey on why the item was not agreed with would be beneficial as well.The survey will help in evaluating a product and come to a conclusion on how to solve the problem. 3. Coupons are important to shoppers. Even though our product is already at its lowest cost, our competitors can still offer money saving tags to substantially decrease their item lower than ours.
It is crucial to offer these savings for our customers to save them even more money. Bibliography Announcement of Sam’s Club Closures. (2010, January 11). Retrieved February 16, 2010, from http://pressroom. samsclub. com/News/9591.
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Retrieved February 16, 2010, from http://thestockmasters. com/node/581 List of Wal-Mart brands. (2010, February 21). In Wikipedia, The Free Encyclopedia. Retrieved 03:04, February 22, 2010, from http://en. wikipedia.
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html Walmart’s Revamped Great Value Brand . (2009, March 16). Retrieved January 22, 2010, from http://walmartstores. com/FactsNews/NewsRoom/9028. aspx Appendix A Wal-Mart Inc. “Save Money Live Better” FREE Garlic Bread with Purchase of Great Value Family Size Lasagna Buy 1 Get 1 ? Off On Any Great Value Cleaning Product 10% OFF Your Next Store Purchase $1. 00 OFF Great Value Family Size Lasagna Appendix B Wal-Mart Customer SurveyWal-Mart Stores offer many varieties of products to their customers, but the very most important product they want to guarantee and never accumulate profit from is their excellent customer satisfaction. Assuring every shopper is happy when they leave the Wal-Mart Store will generate a profit of smiles for the corporation.
Circle 1 through 5 on the survey below, 1 showing a poor service while a 5 shows the highest service of excellence. 1. How did the employees treat you today? 12345 2. How easy was it to find your shopping needs? 12345 3. How accessible was it to find an employee on the floor for assistance? 12345 4. How happy are you when you leave Wal-Mart after completing your shopping? 12345 5. How often do you visit Wal-Mart each week? 1-2 Times per week3-4 Times per week5+ Times per week