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CUSTOMER SATISFACTION LEVEL AT WAL-MART

CUSTOMER SATISFACTION LEVEL AT WAL-MART

Business Research Methods

GB - 598-050
Fall 2009
Dr. Tony Vrba

Submitted by
Shagun Nagpal
Tarleton State University

Presented in Partial Fulfilment

Of the Requirements for the Degree
Masters in Business Administration

CUSTOMER SATISFACTION LEVEL AT WAL-MART

ABSTRACT
This research is all about the bad impacts of Wal-Mart on customers, peoples, retail
industry as well as the US Economy. The primary purpose of this quantitative research is to
determine why CUSTOMER SATISFACTION LEVEL AT WAL-MART IS GOING DOWN
and what the reasons for this decreasing satisfaction are. This is the main research question
during this whole research. As we all know that Wal-Mart is not a small company it is one of the
biggest retail company in United States. To complete this research I have gone through 20
articles and on the basis of the reviews of these articles I have find many reasons for the downfall
of there customer satisfaction. The main target population for this research includes Wal-Mart
staff in Stephenville, TX and customers of Wal-Mart and near retail stores such as H.E.B,
Staples and dollar tree. The survey instrument used was questionnaire and on the basis of this
survey lots of data is being collected which includes likes and dislikes of the entire population.
So first of all reasons for the dissatisfaction is being discussed on by one and after that findings
and suggestion for Wal-Mart to increase there customer satisfaction is discussed.

CUSTOMER SATISFACTION LEVEL AT WAL-MART

TABLE OF CONTENT

PAGE NO.

CHAPTER 1
Introduction.................4
Purpose of the Study.............5
Research Question............6
Research Variables...........6
CHAPTER 2
Literature review...........8
Synthesis of Theorists.......9
Conclusion......12
CHAPTER 3
Methodology.......13
REFERENCES..............15

CUSTOMER SATISFACTION LEVEL AT WAL-MART

CHAPTER 1
INTRODUCTION
Wal-Mart's milestones began in 1962 when the first Wal-Mart was opened in Rogers,
Arkansas. Seven years later the company incorporated as Wal-Mart Stores, Inc. Then a year
later they opened the first distribution center and home office in Bentonville, Arkansas, and also
went public on the New York Stock Exchange. Several years later, in 1988, the first super center
was opened. Then in 1991, the first international unit was opened in Mexico City. In 2002,
Wal-Mart became number one on the Fortune 500 list and was presented with the Ron Brown
Award for Corporate Leadership, a presidential award that recognizes companies for outstanding
achievement in employee and community relations Thompson. K., (2006).Wal-Mart is currently
at no.8 at global 2000 companies rating in Forbes magazine. Wal-Mart creates the ideal onestop shopping experience. Wal-Mart is organized into ten distinct divisions. These include: WalMart stores, SAM'S CLUBS, Neighborhood Markets, International, walmart.com, Tire & Lube
Express, Wal-Mart Optical, Wal-Mart Pharmacy, Wal-Mart Vacations, and Wal-Mart's Used
Fixture Auctions Paruchuri, S.,(2009) But now a days customer satisfaction level at this
superstore is decreasing at an increasing rate and the reason behind this are Decreasing stock
prices, Less wage rate, Dissatisfied health care plans for there employees, Wal-Mart
destruction to environment, Anti union policies, Gender discrimination, Child labor and there
responsibility towards security of their customers.

CUSTOMER SATISFACTION LEVEL AT WAL-MART

PURPOSE OF STUDY
The purpose of research can be a complicated issue and varies across different scientific
fields and disciplines. At the most basic level, science can be split, loosely, into two types, pure
research and applied research. As we all know that Wal-Mart is one of the biggest retail
outlets in United States and its growth rate is increasing at an increasing rate but if we look
inside this growth you will find that it is true that Wal-Mart is growing at a growing rate but the
customer satisfaction level at Wal-Mart is continuously decreasing Sandercock, L.,(2005),
Hawker, N. W. (1996) and Beaver, W. (2005) So the main purpose of this quantitative research
is to find the reasons why the old customers of Wal-Mart are going to other retail stores and why
new customers are not getting attracted towards Wal-Mart price saving policies. Other most
important purpose of doing this research is to find the needs of the customers towards a
superstore like Wal-Mart or what are the expectations of customers and employees of Wal-Mart.
These are the other most important purpose of doing this research, to examine the Economic
Impact of Local Businesses vs. Chains, to examine whether the arrival of a superstore increases
or decreases the number of retail jobs in the region, to examine the effect of big-box chains,
particularly Wal-Mart, on wages and benefits for retail employees, how the arrival of a big-box
retailer displaces sales at existing businesses, which must then downsize or close, resulting in job
losses and declining tax revenue. All these purpose are very important because they help us to
know why customers are not satisfied with Wal-Mart.

CUSTOMER SATISFACTION LEVEL AT WAL-MART

RESEARCH QUESTION
There are various questions that the study would answer to:
1. Why customer satisfaction level at Wal-Mart going down?
2. Who is responsible for customer dissatisfaction at Wal-Mart, customers or Promoters?
3. You Decide...Is Wal-Mart a Good Corporation?
4. Do people like Wal-Mart or its there Completion to Shop There?

RESEARCH VARIABLES
Following are the various research variables which are used in this study:

CUSTOMER SATISFACTION:
Customer satisfaction is a business term, and it is a measure of how products and services
supplied by a company meet or surpass customer expectation John, Joby (2003) and Kessler,
Sheila (2003). It is seen as a key performance indicator within business and is part of the four
perspectives of a Balanced Scorecard. In a competitive marketplace where businesses compete
for customers, customer satisfaction is seen as a key differentiator and increasingly has become a
key element of business strategy

CUSTOMER SATISFACTION LEVEL AT WAL-MART

BIG BOX RETAILERS:

A big-box store (also supercenter, superstore, or megastore) is a physically large retail
establishment, usually part of a chain. The term sometimes also refers, by extension, to the
company that operates the store. Examples include large department stores such as Wal-Mart
Goetz, S. J. and Artz, G. M.
ECONOMIC DEVELOPMENT:
Economic development is the increase in the standard of living of a nation's population with
sustained growth from a simple, low-income economy to a modern, high-income economy
Steven M. S. (2003) and Sen, A., (2000). Its scope includes the process and policies by which a
nation improves the economic, political, and social well-being of its people.
SOCIAL VALUES:
Social capital is a sociological concept used in business, economics, organizational
behaviour, political science, public health and the social sciences in general to refer to
connections within and between social networks Edwards, B. (1997) and Kennan, W. (2000).
Though there are a variety of related definitions, which have been described as "something of a
cure-all for the problems of modern society, they tend to share the core idea "that social
networks have value. Just as a screwdriver (physical capital) or a college education (human
capital) can increase productivity (both individual and collective), so do social contacts affect the
productivity of individuals and groups

CUSTOMER SATISFACTION LEVEL AT WAL-MART

CHAPTER 2
LITRATURE REVIEW
This study presents the most sophisticated analysis to date of Wal-Mart's impact on retail
employment and wages. Analyzing national data, the study found that the opening of a Wal-Mart
store reduces county-level retail employment by 150 jobs. Because Wal-Mart stores employ an
average of 360 workers, this suggests that for every new retail job created by Wal-Mart, 1.4 jobs
are lost as existing businesses downsize or close Basker, E. (2007). The study also found that
the arrival of a Wal-Mart store reduces total county-wide retail payroll by an average of about
$1.2 million. This study improves substantially on previous studies by convincingly accounting
for the endogeneity of the location and timing of Wal-Mart's entry into a particular local market.
That is, Wal-Mart presumably does not locate stores randomly Carden, A. (2009). When
expanding into a particular region, it may, for example, opt to build in towns experiencing
greater job growth. Unless this location selection bias is accounted for, one might compare job
growth in towns that gained Wal-Mart stores versus those that did not and erroneously conclude
that Wal-Mart caused an expansion in employment.

CUSTOMER SATISFACTION LEVEL AT WAL-MART

SYNTHESIS OF THEORISTS
Wal-Mart, the biggest success in the business in the USA, is the top seller of groceries,
according to USA TODAY (2003). There is already a Wal-Mart in Carbondale and there is a
new project to build another one in Murphysboro area. The question is, is it good or not to build
another Wal-Mart in a small town?
In my whole research I found the following things which are responsible for the downfall of
customer satisfaction at Wal-Mart.
First according to Paruchi, S., Baum, J. and Potere, D.,(2009) Wal-Mart is responsible for the
destruction of small local retail business and due to that destruction customers are feeling bad
towards Wal-Mart impacts on these small retailers so as a result there satisfaction level towards
Wal-Mart is going down and down.
According to Goetz, S. J.,(2006) Wal-Mart is a business of 1.39 million employees and from
this big population almost 50% employees are below the poverty line because there wage rate is
as low as $8.23 per hour and this rate is calculated by six rate variables. This low wage rate is
putting 50% of there employees below the poverty line which is the most important point of
there dissatisfaction towards Wal-Mart.
According to Hicks, M.J., (2006) Wal-Mart is coming on the way of Economic Development
and stands as a hurdle for other companies to help in the economic development of the nation.
This is also called as a local Wal-Mart effect. So you can easily see that the customers are more
in the favour of Economic Development of nation instead of Wal-Mart growth thats the main
reason for there dissatisfaction.

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CUSTOMER SATISFACTION LEVEL AT WAL-MART

According to Carden, A., Courtemanche, C, and Meiners, J., (2009) Wal-Mart is painting the
Town Red and effecting individual values. This statement implies that Wal-Mart is earning profit
but only for the company not for the employees and this effect the morel and social values of an
individual and as a result customer satisfaction level goes down.
As we all know that U.S people love there economy to rise and they will do anything to
stabilize this economy. Now if any body harms this economy then what? U.S people will not
tolerate this and make a strict action towards it. According to Jantnez, R., Pescatrice, D. and
Braunstein, A.s article the superstores of Wal-Mart are badly effecting U.S economy and
making harm to there cultural rights. So as a result U.S citizens are not accepting Wal-Mart and
taking action in boycotting Wal-Mart and there products which badly make a downfall in there
satisfaction level.
Wal-Mart is not only the world's largest company; it is also the largest company in the
history of the world Warren, D. T. (2005). Americans spend $25 million every hour at WalMart, twenty-four hours of every day, of every year. According to Fishman, C., (2006) Wal-Mart
is playing a strategy with those people who know shopping was so important and try to make
them addict for Wal-Mart products by offering products at half prices. But when people came to
know about the strategies used by Wal-Mart, they just backup with all those stuff and jump to
some other retail store like H.E.B and Staples. So as a result there customer satisfaction level
again goes down and down.

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CUSTOMER SATISFACTION LEVEL AT WAL-MART

Crime in our parking lots was on a rapid increase in many areas region ten, Florida and it
was evident from customers count and sales in the evening hours, that people were becoming
afraid to visit our stores during those hours These are the words of Tom Rinehart who tries to
say that Wal-Mart is not safe in evening times and customers are not safe to stand in the parking
lots of Wal-Mart which makes customer dissatisfied with Wal-Marts security.

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CUSTOMER SATISFACTION LEVEL AT WAL-MART

CONCLUSION
To conclude this statement I would only say that a single person or a small group can not
affect the satisfaction level of big box retailers like Wal-Mart. If the customer satisfaction level
at Wal-Mart is going down then there must be a big population of unsatisfied peoples who dont
like the policies and strategies of Wal-Mart. A single reason can not change the minds of
millions of employees and billions of customers to leave Wal-Mart and Jump towards any other
superstore, there must be thousand of reasons for there dissatisfaction. At the end I would like to
say that this research is just a part of customer dissatisfaction because these words are seems to
be two words but there meaning consist of many alternatives which can help to change the entire
concept of this research. To make this research fully acceptable by everybody I would say that
Wal-Mart is not just a retail store it is a birth house of many problems and the biggest reason for
economic instability and poverty. Another way to conclude this research is like Wal-Mart has a
lot of advantages for people's lives and building another Wal-Mart can increase this quality.
They offer lot of work that is good for people who are looking for work. But two Wal-Mart
stores can destroy small businesses, and also the quality of life for some citizens. All these jobs
that they offer have not enough income and they can't cover all the people who work for them. In
my opinion, to build another Wal-Mart can have some advantages but for me, there are more
disadvantages than advantages Hawker, N. W. (1996). Stephenville is not a big town, so one
shop like this is enough.

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CUSTOMER SATISFACTION LEVEL AT WAL-MART

CHAPTER 3
METHODOLOGY
Following are the different types of methods used in this research
Survey method:
A survey of 50 Wal-Mart customers and 30 Wal-Mart employees was conducted to
accomplish true and better answers of research question. The target population for this research
was mainly customers of age group 15-30 and above 50. Reason for choosing this age group was
that they expect much more from a retail store then age people from age group 31-50. Target
place was the parking lot Wal-Mart superstore Stephenville, TX. To conduct this survey two
types of questionnaire were used one was a job satisfaction questionnaire and other was customer
satisfaction level questionnaire.
Interview method:
The second method used to collect information regarding likes and dislikes of customers is
oral interview of the common people who goes for shopping daily and the target population was
every body who comes for shopping and the target place was Tarleton State University
Stephenville, TX

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CUSTOMER SATISFACTION LEVEL AT WAL-MART

Review of articles:
Third most important and totally new method used to conduct this research was making
reviews of related articles and with the help of these reviews findings the answers of research
questions. For this method, twenty articles are taken from many sources and then review of these
articles is being constructed which includes Summary, Key Points, Strengths and Weakness of
these articles and source of these article was Tarleton state university online library.

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CUSTOMER SATISFACTION LEVEL AT WAL-MART

REFERENCES
Paruchuri, S., Baum, J. and Potere, D., (2009), The Wal-Mart Effect Wave of
Destruction or Creative Destruction, Economic Geography, Vol. 85(2), pp. 209236, 28p

Goetz, S. J., (2006), Wal-Mart and Country Wide Poverty, Social Science
Quarterly, Vol. 87(2), pp. 211-226, 16p.

Hicks, M. J., (2006), What is the local Wal-Mart Effect?, Economic Development
Journal, Vol. 5(3), pp. 23-31, 9p

Goetz, S.J and Shrestha, S.S, (2009), Explaining Self-Employment Success and
Failure: Wal-Mart versus Starbucks, or Schumpeter versus Putnam, Social Science
Quarterly, Vol. 90(1), pp. 22-38, 17p

Warren, D. T., (2005), Wal-Mart Surrounded, New Labour Forum, Vol. 14(3), pp.
17-23, 7p

Lichtenstein, N., (2009), Sams world How the Obama Era Will Transform
Wal-Mart New labour Forum, Vol. 18(2), pp. 16-24, 9p

Horwitz, S., (2009), Wal-Mart to the rescue - Private Enterprises Response to

Hurricane Katrina, Independent Review, Vol. 13(4), pp. 511-528, 18P

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Sobel, R. and Dean, A. M., (2008), Has the Wal-Mart Buried Mom and Pop? The
Impact of Wal-Mart on self employment and small establishments in the United
States, Economic Inquiry, Vol. 46(4), pp. 676-695, 20p

Blecher, M., (2008), When Wal-Mart Wimped Out, Critical Asian Studies, Vol.
40(2), pp. 236-276, 14p

Sandercock, L., (2005), Introduction to Special Feature The Wal-Mart-ing of

the world? The neoliberal city in North America, Routletge, Vol. 9(1)

Carden, A., Courtemanche, C. and Meiners, J., (2009), Wal-Mart and Values:
Painting the Town Red?, Business &Politics, Vol. 11(2), p1-16, 17

Jantzen, R., Pescatrice, D. and Braunstein, A., (2009), Wal-Mart and the US
Economy, Eastern Economy Journal, Vol. 35(3), pp. 297-308, 12p

Parnell, J. and Laster, D. L., (2008), Competitive Strategy and the Wal-Mart Threat:
Positioning for Survival and Success, SAM Advanced Management Journal, Vol.
73(2), pp. 14-24, 11p

Hausman, J. and Leibtag, E., (2007), Consumer Benefits From Increased

Competition in Shopping Outlets: Measuring the Effects of Wal-Mart, Journal of
Applied Econometrics, Vol. 22(7), pp. 1157-1177, 21p

Artz, G. M. and Stone, K., (2006), Analysing the Impact of Wal-Mart Supercenters
On Local Food Store Sales, American Journal of Agriculture Economics, Vol. 88(5),

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pp. 1296-1303, 8p

Goetz, S. and Rupasingha, A., (2006), Wal-Mart and Social Capital, American
Journal of Agriculture Economics, Vol. 88(5), pp. 1304-1310, 7p

Fishman, C., (2006), The Wal-Mart and a Decent Society: Who Knew Shopping
Was So Important?, Academy Of Management Prospectives, Vol. 20(3), pp. 6-25,
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Hawker, N. W. and Petty, R., (1996), Wal-Mart and the Divergence of State and
Federal Predatory Law, Journal of Public Policy & Marketing, Vol. 15(1), pp. 141147, 7p

Beaver, W., (2005), Battling Wal-Mart: How Communities Can Respond, Business
&Society Review, Vol. 110(2), pp. 159 -169,

Basker, E., (2007), The causes and consequences of Wal-Marts Growth, Journal Of Economic
Prospective, Vol. 21(3), pp. 177-198, 11p

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