Marketing research 3
MR. Walton started Wal-Mart in 1962. The company started as a cheap price alternative store because Mr. Walton adopted the price-cutting or cost cutting by keeping costs down. It was a man who liked to minimize costs. He liked local investments and this was done by giving most of his staff stock options and he encouraged them to invest in the company. Walmart grew technologically ahead of its competitors because they were in fact one of the first stores to use computer to keep track of their products and stocks.
They also used computer to link stores, warehouses and this is done up to date. In fact, Walmart has a variety of stores, warehouses that have standard merchandise that is sold at lower prices with lower margin and higher volumes. This includes discount retailing in most of their stores which is mostly used in specially stores like their discounting goods stores.
Wal-Mart has placed its stores around major cities and managed its marketing channels well. They have used strategic planning and advanced information system to link their departmental stores and warehouses around major towns and this is boosted by the use of sophisticated marketing tools. Walmart majorly is a low price strategy firm and it has priced its products lower that most of its competitors but however, a research done in 2004 indicated that most people in the US were alarmed by an article that articulated the high cost of low price.
This led to negative publicity of Walmart as most of its customers began to be cautious about its low prices but on the other end, Walmart is actually trying to reach to the tougher market of lower income earners. It also uses strategies of efficiency due to good distribution network. The Walmart stores feature a broad line but have low value added and focus on keeping prices low and are perceived to be having a good deal especially to low income earners and they depend majorly on in purchase of goods in large volumes.
To attract customers Walmart use various promotional tools to generate traffic and purchases. Most of us have seen adverts both on TV and online placed by Walmart, they run special sales and issue coupons. Most of the frequent shoppers at Walmart are also rewarded to encourage frequent purchases. Walmart also runs special page adverts and magazines to remind customers on their existence.
They are also careful to choose locations because customers who like money saving deals will look for stores that are nearest. They plan carefully before choosing on the sites to open outlets. Walmart also has gone a step further to provide one stop shopping where they combine grocery items with huge selection of non-food merchandise.
When we compare it with Nordshoms that was started in 1901 as a shoe store by John v. Nordshoms. In Washington, the latter is a rather different type of store as it is a departmental store where we have several products lines i.e. in the case of Walmart we have clothing products, shoes, handbags, gift hampers and in which case each product line is separated and operated as a separate department and managed by specialized buyers or merchandisers.
Nordshoms unlike Walmart has its goods priced highly but they insist on quality, value, trust and selection unlike Walmart that depend on volume purchase and search for good deals. It also uses the product expansion strategy because it started as a shoe company but later it has expanded to include clothes and other products managed separately like cars and car parts accessories for women. It has also differentiated its products into segments as we have children clothes, women and men.
This is a part of individual marketing where they do not look at customers as a group but deal with them individually. They hold customers by offering convenient locations, special or unique assortment of goods, great services, better quality goods and better services than competitors. They also have included other brands i.e. they purchased best apparels a clothes company and ventured to clothes market.
Because most customers complain that their prices are high, they have embarked on serious expansion and have opened many stores in major cities. This is to areas where incomes are high. Nordshoms use direct mails as promotion tools and telemarketing where they use telephone calls to attract new customers. They also contact existing customers to ascertain satisfaction levels.
They also run adverts on the levels where clients can log on to and ‘try clothes online’. Apart from visiting the stores clients also would like to see how the clothes look like, online marketing is also very important. They also adopt catalogue marketing where they mail one or more product catalogues to selected addresses to lure more customers, all this will stimulate quicker or greater purchase of particular products. They have adopted psychological prices where they use price as an indicator of quality. High priced goods are preferred to have high quality especially where alternative information about true quality is not available.
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