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Wal-Mart Marketing Audit - Essay Example

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The paper "Wal-Mart Marketing Audit" discusses that Wal-Mart is a discounting super retailer shop. It should follow different strategies to keep the present customer and introduce a new market. It should give more emphasis on marketing information systems…
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Wal-Mart Marketing Audit
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Order 204610 Topic Wal-Mart Marketing Audit Wal-Mart Marketing Audit: A Strategic View Submitted to Submitted By 09 February 2008 Order#: 204610 Topic: Wal-Mart Marketing Audit Executive Summary Wal-Mart is the world largest retailer super shop. They sell a variety of products and provide services. The study analyzes the environmental aspects including customer, market and stakeholders with respect to Wal-Mart. The study also intends to discover the wide-ranging market coverage of Wal-Mart and its popularity to the customers' for improved services in case of household commodities. Besides, uncovering the reasons behind the popularity and prominence of Wal-Mart as a customer-oriented super-shop has also taken a significant place in the present study. The study also attempts to erect an entire organogram of Wal-Mart concerning its transaction process dealt between the Stakeholders in the Wal-Mart business Shareholders, Suppliers, Distributors, Dealers, transportation, Bankers, Advertising/Marketing/Market research agencies and impact upon them arising out of its business. Table of Contents Executive Summary Table 1 4 Market Data 4 Hale, Todd. 2004. Understanding the Wal-Mart Shopper. Consumer Insight Magazine. The Nielsen Company. Retrieved 06 Feb 2008 from http://www2.acnielsen.com/pubs/2004_q1_ci_walmart.shtml 12 1. Environmental Aspects 1.1. Market Market of a company means the present and future customers of its goods and services. Wal-Mart's market indicates its actual and potential buyers. Apart from United States of America, Wal-Mart market is gradually expanding in some other regions of the world; such as, UK, China, USA, Maldives, Nepal, Bhutan and Russia etc. Wal-Mart has a favorable stock- market in some regions by means of which the company avails the advantage of selling out their shares at the significantly increased rate. Some stockholders contribute professionally-managed funds that widely help in buying and selling huge numbers of shares for pension plans, unions, and other large groups. Others are individuals who are saving for their retirements, children's college funds or other needs. In both cases, the goal is to buy the shares when the stock is low and sell is high. Neil Currie and Svetlana Sukhanova states that "Wal-Mart may follow its past practice of using a joint venture or acquisition to enter the market" (Ermakova, 2008). Table 1 Market Data Current Information Last Close 31-Jan-2008 $50.74 Price/ Sales Ratio 0.53 52-Week High $51.44 Price/ Book Ratio 3.12 52-Week Low $42.09 Price/ Earnings Ratio 16.06 60-Month Beta 0.1 Price/ Cash Flow Ratio 10.09 Market Cap (mil.) $203,204.0 Return on Assets 8.0% Shares Outstanding (mil.) 4,004.8 Return on Equity 20.6% Dividend Rate 0.44 Current Ratio 0.84 Dividend Yield 44.0% Long-Term Debt/Equity 0.75 # of Institutional Holders 1,232 % Owned by Institutions 42.0% Latest Short Interest Ratio 2.61 Latest Net Insider Transactions 1,194.00 Source: EDGAR Online. Table 2 Growth Rate (in Month) Growth Rates 12 Month 36 Month 60 Month Revenue Growth 9.1% 32.1% 54.5% EPS Growth 16.8% 33.0% 76.9% Dividend Growth 161.9% 238.5% 46.7% Source: EDGAR Online. From a minute analysis of above data, it is clear that MOSCOW is the most profitable area of Wal-Mart in the present context as well as of future. Wal-Mart is expecting that the future profit will be doubled in MOSCOW. MOSCOW- Wal-Mart Stores Inc., the world's largest retailer, may expand into Russia within the next two years to capitalize on a swelling economy and a dearth of competitors may be taken place (Ermakova, 2008). 1.2. Customers Customers are the most significant fraction of a company. A company has to study its customer markets very closely. There are 5 types of customer markets; such as, Consumer markets, Business markets, Reseller markets, Government market, International markets. All of those markets want to satisfy themselves by qualified goods and services at a reasonable price .Every customer's resources are limited and in order to get maximum utility, they want to utilize these resources at the best practicable means. Customers expect such types of brand which ensure more attention on their demands. Wal-Mart is such type of brand which is satisfying the customers' demands with due importance. As one of the largest retail seller organizations throughout the world, Wal-Mart has a record success. Currently, the company has more than 30,000 stores worldwide which have helped to earn $265.3 billion by January 31, 2003. The success of the year 2003 is much aspiring from arithmetic point of view as the ratio of gaining is 11.6% more than preceding year. Commendably, 84% of U.S. households are shopped from Wal-Mart. From above data, it is conspicuous that the success of Wal-Mart in retail business is really a leading example in the business arena, particularly in case of retail business. Hale (2004) has revealed that Wal-Mart faces a challenging market in terms of following matters: More product choices for consumers and increased blurring of competitors; More media choices; More shopping choices and continued blurring of retail channels; and Less loyal customers. Wal-Mart has used customer or consumer relationship management (CRM) activities to improve relationship with consumers very efficiently. Each shopper made a number of trips each year to Wal-Mart; it's between 50 to 60 trips per year. To establish CRM Wal-Mart follows market segmentation. Hale (2004) states that "[i]n terms of segment size, 66% of Wal-Mart's sales come from their "top shoppers" - the 25% of shoppers who were the heaviest spenders in Wal-Mart. In fact, a majority of Wal-Mart sales are from the top, two individual shopper segments- those households who were also in the heavier total retail spending segments". Due to the incentives and customer-oriented marketing policies, Consumers or customers enjoy privileges and accordingly they feel comfort to buy goods from Wal-Mart according to their wishes and demands. As the policy of Wal-Mart relating to sell more at a discounting price, consumers can increase there value and satisfaction. 1.3. Direct Stakeholder According to Roy (2006), "[d]irect Stakeholders means different types of consumers and organizations that are benefited or harmed by the company or brand" (p.89). There are different types of stakeholders of Wal-Mart; such as, shareholders, suppliers, distributors, dealers, transportation agencies, bankers, advertising companies, market research agencies etc. 1.4. Shareholders The shareholders of Wal-Mart are benefited day by day; because, share prices of Wal-Mart are increasing. "The price of Wal-Mart's stock has ranged from about $53 to $55 since January. 1. 1999, 2000, 2001. 2. (d) $18. 3. (a) $45. 4. (a) $55 (allow a few dollars leeway). 5. (a) $66 6. Jan.-June, 2002; Sept. 2003" (New York Times Upfront, 29 Nov. 2004). The above data suggests that the value of Wal-Mart is favorable for its shareholders. 1.5. Suppliers The suppliers of Wal-Mart enjoy benefits in discharging transaction with Wal-Mart; because, Wal-Mart's sales is continuously increasing day by day. Consequently, Wal-Mart needs more goods and services to resale them to its customers. Alike suppliers and shareholders, Distributors, dealers, transportation, bankers, advertising, marketing, market research agencies etc. are also benefited. For its radical change and gradual development in sales and marketing, Wal-Mart In recent years has become a model for super retailer shops or brands in case of marketing. Wal-Mart has owned improved transportation system. Due to its transportation development, Wal-Mart can take the conveniences and privileges in different aspects including managerial economies, risk bearing economies, marketing economies, etc. 2. Marketing 2.1. Objectives An objective refers to the things which should be earned. It is well-known that Wal-Mart is a retail company; so, it designs and operates its activities on retail basis. The objective of Wal-Mart adopted in particular reference of United States of America is to radically reduce the rate of water, plastic and cardboard used in laundry detergents, both by making stock of concentrated detergents and by creating conditions that encourages to stock. A single bottle of concentrated laundry detergent uses approximately half of the water and 20 to 40 percent less plastic than the standard size which varies on the brand. The technology to concentrate liquid detergent has been available for more than a decade. Approximately, 25 percent of the liquid laundry detergent sold in the United States is sold through Wal-Mart Stores. Wal-Mart has some other objectives that increase customers, produce more goods for the purpose of becoming a number one retail super-shop around the world. 2.2. Strategies Strategy means plan by which company can go ahead. Every company has some certain strategies which are generally hidden. The starting point for the marketing audit is the corporate goals and objectives followed by the marketing objectives. An auditor may find the objectives to be poorly stated or he may find them to be well-stated considering the resources and opportunities of a particular company. For example, a chemical company sets a sales growth objective for a particular product line 15 percent. But, the total market reveals no growth and competition was fierce. In this concern, the auditor objects the basic sales growth objective for that line and proposes that the product line should be reconsidered for earning the objective at the best extent. 2.3. Tactics Tactics is also the same alike to that of strategies. But, tactics adopted by a particular company are for obtaining the goals. For the sake of expanding its business, Wal-Mart has designed some tactics for acquiring its objectives. Wal-Mart has introduced new tactics though they are very few in number. Of course, most of the tactics adopted by Wal-Mart are matched with previous one. 2.4. 4 Ps 2.4.1. Product Products mean goods and commodities which are consumed by the customers. Wal-Mart produces a lot of products for the buyers. Some products produced by Wal-Mart should not be produced more while some other products should be added to its production line. There should have been a market research about the products that can be added to the Wal-Mart's product. 2.4.2. Price Price is the thing what we have to pay for purchasing goods in the form of money. Generally, there are two concepts of pricing; one is more sales less profit, i.e. sales in discount or earning profit at the relatively low rate by selling more goods and another is less sale more profit, i.e. selling goods in higher price or earning profits at a higher rate by selling fewer goods. As Wal-Mart is a retail selling company, it sells goods and commodities in retail rate, i.e. at discount selling. Discounting sale ensures more sales, increases customers and goodwill of the company. Fewer sales more profit policy makes fewer sales but in higher price. Price is an important consideration for both consumers and sellers. So, in determining price, some relevant issues are sparingly considered; such as, living standard of particular region, income of the people, willingness to spend money, demand of a particular product, transportation facilities etc. As an ideal retail company, Wal-Mart has been proved as much sincere to give due importance and abide by those considerations. The web page of 2007 Wal-Mart Stores, Inc. (2007) states that "Wal-Mart strives to provide the customers with the lowest prices possible on Walmart.com as well as in there stores. However, sometimes a price online does not match the price in a store. Wal-Mart. com's prices may be either higher or lower than local store prices. There local stores do not honor Walmart.com pricing or competitor advertisements from outside of a store's local trade territory." 2.4.3. Place Place is another important consideration for marketing. If any company fails to find a good place for their sale, certainly they will face a great difficulty in operating their businesses. To get success in retail business, three factors are duly considered: location, location and location. This warrant special mention that the issue relating to place is mostly concerned with small enterprises, worldwide companies like Wal-Mart does not suffer with this problem. Wal-Mart is giving its customers the purchasing power and the convenience of one-stop shopping so that the number of customer can be significantly increased. In recent years, Wal-Mart has been choosing shopping centers which have a long strip of retail stores, including large and freestanding anchors. 2.4.4. Promotion Promotion means giving inspiration to workers for their work. Wal-Mart uses different types of promotion policies for making a good sale of their products. Wal-Mart also uses some promotion tools; such as, advertising, personal selling, sales promotion, public relations and direct marketing to reach consumers. Advertising is direct publicity. They advertise in newspapers, magazines, radio and television. Newspaper is the most popular and favorable source of advertising for its regular publication and reaching to the every corner of the country. Magazines are also a good source of advertising though they are published weekly or monthly. Radio and Television is another two effective sources of advertising. Wal-Mart uses all of these means to disseminate their policies and key messages to the customers' doorsteps. Another great way of publicity is internet. Personal selling means sale directly. But it requires careful training of people likely to be engaged in selling regarding the know-how of managing customers and meet their needs. Sales promotion may be said to make cool environment for selling, including in-store demonstrations, displays, contests. Again, Public relations activities may be called good relations with customers. Wal-Mart does some public relations activities such as making conferences, opening new stores, advertise newsletters. These activities help Wal-Mart in promoting and expanding its business activities. 3. Marketing Information Systems Information means easily accessible disciplined data. Any company can do anything for the convenient as well as efficient operation and management by using its information on the stipulation that the information is relevant, timely, accurate, flawless and effective. In case of the fact that the company has the actual MIS, it can use the said information in the decision making process. Wal-Mart collects information in such a way so that the information collected can be conveniently utilized by the company and their authenticity can be sustained as well. 4. Concluding Remarks From the above discussion, it is clear that Wal-Mart is a discounting super retailer shop. It should follow different strategies to keep the present customer and introduce new market. It should give more emphasis on marketing information systems. Undeniably, compliance with the different market segmentation, Wal-Mart can retain its current status of being an exemplary retail market in the global economic context. Bibliography 2007 Wal-Mart Stores, Inc. 28 Sep. 28, 2007. Changes to the Walmart.com Terms of Use. Retrieved 06 Feb 2008 from http://www.walmart.com/catalog/catalog.gspcat=538449 EDGAR Online. Retrieved 02 Feb 2008 from http://www.edgar-online.com/ or Retrieved 04 Feb 2008 from http://www.walmart.com/catalog/catalog.gspcat=538449 Ermakova, Maria. 22 January 2008. Retail Giant Wal-Mart Eyes Growing Russian Market. The St. Petersburg Times. Iss. 1341 (5), Tuesday, January 22, 2008. Retrieved 02 Feb 2008 from http://www.sptimes.ru/index.phpstory_id=24798&action_id=2 Hale, Todd. 2004. Understanding the Wal-Mart Shopper. Consumer Insight Magazine. The Nielsen Company. Retrieved 06 Feb 2008 from http://www2.acnielsen.com/pubs/2004_q1_ci_walmart.shtml New York Times Upfront, 29 November 2004. Wal-Mart's market. 2007 Gale Group. Retrieved 04 Feb 2008 from http://findarticles.com/p/articles/mi_m0BUE/is _6_137/ai_n17207951 Roy. Keron. 2006. Marketing Audit. New Delhi: Komora Publications. Read More
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