Wal-Mart’s Bad PR Comes at a Bad Time, Term Paper Example

Wal-Mart Strategy Analysis

Wal-Mart’s corporate and marketing strategy today focuses on expanding into global markets, the dominance of the retail segment, recognition and company image, and exploring new sectors or retail sales (Hayden, Lee, McMahon & Pereira, 2002). The below study will focus on marketing, communication, and corporate strategies that support the main goals of the company; expansion, reputation management, and dominance.

Background

The first store of Wal-Mart opened in Arkansas, in 1962. Since then, the company has created a large chain of retail stores across America, and currently is expanding to global markets. Today, Wal-Mart is the largest retailer in the world, with sales of $218 billion (William F. Achtmeyer Center for Global Leadership, 2013). The 2013 Annual Report (Wal-Mart, 2014), the main achievements of the company were: improving customers’ shopping experience, engaging with communities, and embracing and empowering talent. In the year 2013, Wal-Mart increased its operations revenue by 4.7 percent. One of the main driving forces of Wal-Mart’s marketing and communication strategy is its global responsibility campaign. It is successful in engaging with customers, improving the reputation of the brand, and it can be implemented in marketing communication. The next part of the paper will analyze how successful Wal-Mart is in delivering meaningful marketing messages related to services and brand image.

Marketing of Services

The business-level strategy of Wal-Mart (Wei, Wang, Zhang & Ao, 2013) focuses on differentiation. The company has been criticized in the past for inattentive staff and lack of customer focus. It is clearly visible that Wal-Mart has adopted a new customer-focused strategy, and these messages appear in company reports, press releases, and media advertisements. Hayden et al. (2002) determine the company’s stakeholders as stockholders, executives, employees, communities located in the catchment area of stores, consumers, non-profit organizations, other retailers in the market, online, and gasoline retailers. Wal-Mart, after seeing a long-lasting impact of negative press and legal cases against the company has created a marketing plan that implemented public relations strategies in corporate communication. It is important that the company maintains its reputation and creates policies in the USA and within the global marketplace that prevent further attacks. Wal-Mart today also focuses on other segments of retail apart from the main line of business activities: mobile phones, electrical items, while featuring popular products on “Rollback Madness” commercials. The new slogan adapted by the company: “Save Money, Live Better” is focusing on customers who are looking for quality products and would like to reduce their shopping bill. Therefore, the main market segment the company currently targets with marketing messages is: middle-class and below middle-class shoppers (mainly families) who like saving money on regular shopping and would like to get quality products for less. At the same time, these shoppers expect Wal-Mart stores to be customer-friendly and easy to navigate through. As the latest Strategic Minds (2011) analysis confirms: “what they lack in aesthetics, they make up for with an absolutely unparallel convenience and price competitiveness. Wal-Mart has redefined the art of online marketing, using techniques at grand and impressive scales to become one of the top company’s in the wide history of corporate America”.

Global Marketing

Wal-Mart has recently moved to China, Canada, and Mexico. The market entry and marketing strategy of the company when moving into new markets was based on differentiation. Every product the company supplied to the new stores was somewhat different from those available in other shops. While in Canada, Wal-Mart used acquisition, it expanded to non-food items, creating a competitive advantage over the main competing company: Target. (Mun & Yazdanifard, 2003). In China, there was a lack of well established compact hypermarket network, therefore, Wal-Mart had to create and communicate the culture that relates to shopping once a week or twice a month and completing all purchases at the same time.

The market expansion strategy of Wal-Mart, according to Smith (2013) is to create a market research, analyze risks associated with market entry, identify the demographic segment of the market that would be interested in the services and products of Wal-Mart, and adjust marketing messages, services to local needs. The CFO if Wal-Mart (Smith, 2013) also stated: “We oftentimes go into customer homes,” Smith explains. “In fact, I did that recently, about a year and a half ago. We were looking at a couple of markets, including one that we’re not even in today. And we arranged that with a third party, to go in and try to understand that shopper”. Understanding customers to tailor the services to their needs, and create marketing messages that are both meaningful and engaging for them is the secret to Wal-Mart’s successful market entry in various countries. Indeed, it is clear from the advertisements featured in different countries that Wal-Mart is focusing on messages that engage local customers. They take time to understand the customs, preferences, and values of the country. Acquisition strategy is a successful method, as the company can rely on the acquired firm’s local knowledge to develop a marketing strategy.

Case Examples

In 2014, WalMart focused on families looking for low prices in its advertisements. Further, they placed corporate responsibility messages into commercials screened on television. The “Walmart Strawberry Fields” commercial emphasizes not only the importance of quality products being sold by Wal-Mart, but also the corporate initiative of selling local produce, supporting farmers in America. This meaningful message comes after several articles appearing in the press in recent years accusing Wal-Mart of exploiting workers abroad, breaching security regulations, endangering local communities, predatory pricing, and tax evasion (Goldman, 2012). Wal-Mart’s leadership understood the challenges and consequences of bad press and started to create a marketing communication strategy that is suitable for improving the company’s reputation. Similarly, the “I am a Factory” commercial focuses on the message: “Wal-Mart is supporting the creation of American manufacturing jobs”. While this commercial does not have a direct marketing message, it does create a positive brand image.

The “Ready for Spring” commercial by the company focuses on the “target customer” and features middle-class families doing shopping in Wal-Mart. Several other examples can be seen where the company’s marketing department features “everyday people” saving money by shopping at the store.
Another aspect of Wal-Mart’s marketing strategy is the use of celebrity endorsement. One of the commercials featured Katie Perry in a Wal-Mart store, creating not only positive image, but also emotional response from customers. The involvement of Taylor Swift in the Christmas campaign with an emotional song also relied on creating positive associations with the brand. Using celebrity endorsement in commercials is not new to Wal-Mart’s marketing strategy; it has been used in the past to emotionally engage with customers and create a positive image of the brand. In 2008, the Christmas commercial, for example, featured Beyonce.

Conclusion

The above review of Wal-Mart’s marketing strategy has revealed that the company has successfully identified the market segment to target, created meaningful messages for people, and improved its brand image in the past few years. Implementing corporate responsibility campaign elements in commercials and press releases has helped the company increase customer engagement, improve its reputation, and enter new markets, tailoring services and marketing messages to local customers’ values and preferences.

References

Goldman, D. (2010) Wal-Mart’s bad PR comes at a bad time. CNN Money. Retrieved from http://money.cnn.com/2010/04/28/news/companies/walmart/

Hayden, P., Lee, S., McMahon, K., & Pereira, M. (2002) Wal-Mart: staying on top of the fortune 500. A case study on Wal-Mart Stores Inc. George Washington University. Retrieved from http://mike-pereira.com/subpage/docs/Wal-Mart-CaseStudy.pdf

Mun, L. & Yazdanifard, R. (2003) Walmart success in Mexico, Canada and China:
Global expansion, strategies, entry modes, threats and opportunities. Retrieved from http://www.researchgate.net/profile/Lee_Yee_Mun/publications

Smith, C. (2013) Global vision, local flavour: Walmart International’s expansion strategy. The Financial Director. Retrieved from http://www.the-financedirector.com/features/featurefinance-director-europe-cathy-smith-walmart-international/

Strategic Minds. (2011) The Wal-Mart marketing strategy. Retrieved from http://www.strategicminds.eu/blog/the-wal-mart-marketing-strategy

Wal-Mart (2014) Annual Report 2013. Retrieved from http://c46b2bcc0db5865f5a76-91c2ff8eba65983a1c33d367b8503d02.r78.cf2.rackcdn.com/88/2d/4fdf67184a359fdef07b1c3f4732/2013-annual-report-for-walmart-stores-inc_130221024708579502.pdf

Wei, L., Wang, S., Zhang, J. & Ao, Y. (2013) Strategic Analysis For Wal-Mart. Retrieved from http://www.sfu.ca/~sheppard/478/syn/1137/G_6_1137.pdf

William F. Achtmeryer Center for Global Leadership. (2013) Wal-Mart Stores, Inc. Retrieved from http://mba.tuck.dartmouth.edu/pdf/2002-2-0013.pdf