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A Critical Analysis of Walmart and its

Competitive Marketing Environment

Word Count 1353

Table of Contents

1.0 Evaluation of Walmart in a Competitive Environment

2.0 Micro Environment

3.0 Macro Environment

4.0 Marketing Strategy

5.0 Conclusion

6.0 References

10

7.0 Bibliography

12

Appendix A
Walmart Overview

13

Appendix B
Figures List

14

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1.0 Evaluation of Walmart in a Competitive Marketing Environment


Walmart is the worlds largest retailer, a brief overview of Walmart is given in appendix A.
Walmarts vast diversity it has a long list of competitors. These include indirect competitors
selling similar products and direct competitors, such as Kmart and Target in the US and
internationally, Metro in Germany and Tesco in the UK.
Walmarts popularity and ability to retain customers is attributed to its low prices. Their
slogans position the low price subject in customers minds. This way Walmart attracts its
main customer base, conservative people with low budget income.
This is interpreted in Walmarts marketing concept practices. The production concept; where
its marketing efforts are channelled into creating low cost items, selling concept; where
marketing efforts are directed to educating customers of its goods and the marketing concept;
were efforts are channelled into identifying customer satisfaction. Walmart constantly needs
to adapt to the effects that the competitors have within the market environment.

2.0 The Micro environment


Walmarts Micro environment is motivated by immediate local matters. It would study how
to convert, maintain and deliver products and services to customers. It would pay close
attention to direct competitors and other stakeholders, for instance trade unions and
employees (Tim Friesner, 2014). It can better be understood by using the Porters 5 Force
method:

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Threat of Substitution

Threat of Buyers

Threat of
Suppliers

Rivalry amongst Competitors


Threat of new entrants

Figure1. Porters 5 force module

Threat of Substitution
Walmart is positioning its focus on low prices, which customers are normally affected by. So
Walmart has a very low threat of substitution due to its cost advantage along with its vast
range. They have a sound market strategy of how to retain their market position and maintain
their brand promise.
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Threat of Buyers
With thousands of customers visiting everyday Walmart has a great opportunity to carry out
primary research, such as questionnaires, with this Walmart can constantly adapt new
marketing strategies in accordance with changes in behaviours and different demographics.
Walmart identifies different consumer behaviour so needs can be accommodated to retain
brand loyalty and customer satisfaction. There are so many buyers that threat is negligible.
Walmarts vast variety satisfies a wide range of consumer needs.
Threat of Suppliers
Suppliers that work with Walmart follow the basic principle of marketing buying behaviour.
Walmart has a large range of suppliers both locally and internationally and having a
considerable part of the market share so suppliers pose little threat. As Walmart positioned
itself in the market as a bulk buyer it may create a scare tactic of changing the supplier.
Threat of New Entrants
Walmart has expanded their business, in doing so Walmarts marketing department have to
segment these new markets to choose the best locations and ways the brand image is
observed and perceive risks. When opening a new store Walmart has found resistance from
local businesses as they tend to go out of business, the ability to enter the retail business
although very easy is very saturated. Walmarts size makes it very difficult for new entrants to
compete.
Rivalry amongst Competitors

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As Walmart has a variety of products, its more product concentrated competitors have a
slight benefit. Marketing needs to identify and implement a strategy to address this problem.
Walmarts direct competitor (e.g.) Target and Kmart, although hold their own in the market,
are catering for a whole different segment. Walmart stands alone in providing the best
possible prices in the market, which is how it differs from its competitors and why they just
cannot keep up.

3.0 Macro environment


The Macro environment is beyond the organisations operating situation. It cannot be
controlled although can be adapted to or used to. Walmarts benefit-PESTLE can be used to
explain this:

Political:

Economic:

Laws involving selling of


firearms

Currency exchange rates (Walmart


2014)

Local laws restricting money


transfers (Bill Simon, Walmart

Slow
recovery
in
economic
conditions, (Bill Simon, Walmart 2014

2014)

Social:
Catering for different,
demographics.( Reuters
2009)
Walmarts retail culture.
(Andrew Fanno 2012)

Technological:

LEGAL:

Ecological:

The way stores track inventory


and restock their shelves, cutting
costs and passing the savings
along to customers(Todd Traub,
2012)

Legal proceedings, including


Wage and hour Class action,
Gender discrimination, (Walmart,
2014)

24% of Walmarts electricity


comes from renewable sources.
(Walmart, 2014) logistics system
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reduces carbon footprint

(Walmart, 2014)

Figure 2. Walmart PESTLE analyses

Political
Laws enable retailers to sell firearms in the US. Walmarts Marketing department who has
already evaluated its Marketing Segment knows that Walmart provides for low income
earners who are pro-firearms and caters for this consumer. Similar laws do not apply for the
UK. Walmart in the UK are also low income earners but do not have a gun culture so luckily
Walmart is not affected by this. Walmarts competitors in the US (e.g.) Target, do not
accommodate for Gun sales as it does not meet their market segment which is younger
customers who have completed college and are not in to the Gun Culture.
Economic
Slower sales growth and fluctuations in currency exchange rates, contribute to the
Economical effect in the macro environment. Marketing needs to identify with all geographic
areas it operates in and their respective Economic cycles. There is a need to identify when
there is demand for established products and less expensive products. During recession
periods Walmart poses an advantage to its competitors as they are focused on low-priced
items rather than higher value products.
Social

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Walmart Marketing must constantly develop its segmentation internationally, to respect


adapting culture, ethnic diversity, family values, age, education, income also lifestyle and
must cater for them all. In The US Walmart has opened Supermercato de Walmart to cater
for it Hispanic community. (Reuters 2009)

Technological
Marketing research helps on what Walmart is most well-known for; its supply chain and
logistics Management. Understanding what the customer needs and when he is able to
purchase that item, helps management to determine required stock levels and retain low
prices.
Ecological
Consumer behaviour trends are moving towards companies who are environmentally
friendly. Walmarts marketing team understands this and are creating a quarter of its energy
from renewable sources.

4.0 Marketing Strategy


Walmart needs to constantly evaluate its Market strategy and changes its position in the
marketing plan. It can change its existing marketing mix to better translate its consumers
needs or to enter into a new position or market.
Its appeal too many (product and price)
Walmart provides products of all kinds with unbeatable prices. Walmart appeals to a wider set
of personality types as everybody could find something they have use for. (This increases the
overall customer base and puts the company in a safer place).
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Social Media Campaigns (promotion / advertising)


Walmart, focuses a lot of on social media via blogging, video sharing and through you tube
having over thousands of people viewing and seeing posts and the use of celebrities.

Figure3.Walmart advertising featuring Pitbull (Source:http://www.adweek.com/adfreak/pitbull-faces-alaskanexile-walmarts-facebook-promotion-hijacked-141614)

Easily Accessible (place)


Walmart locations, unlike its competitors are less metropolitan to reach its Market segment
with thousands of stores, but you can also easily purchase Walmart items online. Its easy to
market and do business with Walmart due to its accessibility. Customer satisfaction is
increased with 24 hour accessibility.

5.0 Conclusion
Walmart is a consumers Market, it has segmented its consumers as; low-income earners
obsessed with brands, price-sensitive effluents and value priced shoppers. Walmarts

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marketing has a traditional approach as the production concept is still given importance.
Walmart has been involved in a number of disputes due to lack of cleanliness in the stores,
bad customer service, and unpleasant working conditions, although not even this could stop
Walmart. It defused such issues by taking a more modern approach in marketing, which is
based on customer satisfaction by meeting the clients needs and demands. Walmart offers
vast product lines to accommodate as many people possible; it also satisfies its worldwide
customers by giving them unbeatable prices anytime, anywhere even from the comfort of our
homes
This keeps Walmart competitive in todays marketing environment.
Walmart Marketing Philosophy is still driven by the belief of its unshakeable foundation The
Lowest Prices, Anywhere, Everywhere (Walmart, 2014)

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6.0 References
1. American Marketing association, 2014. Definition of marketing. American Marketing
association. retrieved from. https://www.ama.org/AboutAMA/Pages/Definition-ofMarketing.aspx
2. Andrew fanno, 2012 External Analysis Wal-Mart retrieved from:
https://andrewfanno.wordpress.com/2012/02/23/wal-mart-part-2-external-analysis/
3. Benjamin Atuma, 2011 Micro and Macro environment business. CBI business.com.
retrieved from http://contemporarybusinessideas.blogspot.com/2011/11/micro-andmacroenvironment-of-business.html
4. Bill SimonPresident and CEO Walmart US, 2014 Walmart Annual Report 2014 retrieved
from:http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annualreport.pdf
5. CIPD, 2013. PESTLE analysis Resource summary. CIPD. Retrieved from:
http://www.cipd.co.uk/hr-resources/factsheets/pestle-analysis.aspx
6. CGMA, 2014 Chartered global Management Accountant Porters Five Forces of
Competitive Position Analysis. CGMA retrieved from:
http://www.cgma.org/Resources/Tools/essential-tools/Pages/porters-five-forces.aspx?
TestCookiesEnabled=redirect
7. Datamoniter, 2014. Walmart stores inc. EBSCO. Retrieved from
http://connection.ebscohost.com/c/company-reports/65542399/datamonitor-wal-mart-storesinc
8. Farfan .B. 2013. Another day, Another Wal-Mart Class action Employee lawsuit- How
U.S Retail Employment Is defined By Wal-Marts Ethics (WMT, RAD,WTSL). About Money.
retrieved from http://retailindustry.about.com/b/2013/05/27/another-day-another-walmartclass-action-employee-lawsuit-hw-u-s-reatil-emplyment-is defined-by-wal-mart-etheics-wmtrad-wtsl-.htm

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9.Gabriel Beltrone, (2012 July 5) Pitbull Faces Alaskan Exile as Walmart's Facebook
Promotion Is Hijacked. ADWEEK. Retrieved from http://www.adweek.com/adfreak/pitbullfaces-alaskan-exile-walmarts-facebook-promotion-hijacked-141614

10. Jim Rily, 2012. Marketing Concept & Marketing Orientation . Tutor2U. retrieved from:
http://www.tutor2u.net/business/marketing/marketing_concept.asp
11. Jurevicius, O, 2013. SWOT analysis of Walmart retrieved from:,
http://wwwstrategicmenagmentinsight.com/swot-analysis/Walmart-swot-analysis.html>

12.Khade, S.A., and Lovaas, N., 2009 Improving supply and chain performance: a case of
Wal-Marts logistics. International Acadamy of buisness and economics. Retrieved from
http://www.freepatentsonline.com/article/International-Journal-BuisnessStrategy/208534987.html
13. Mallon, C., n.d. Porters 5 force Analysis. Street Decorations. Retrieved from:
http://www.streetdictionary.com/travel guild/1376/business _and _finance/porters _five
_force analysis.html
14.Tim Friesner, 2014 Marketing Environment. Marketing teacher .com. retrieved from
http://www.marketingteacher.com/marketing-environment/
15. Raymond Catala, (2014) Wal-mart SWOT Analysis. Communication, Cooperation,
Collaboration. retrieved from: http://www.raymondcatala.com/wal-mart-swot-analysis-2/
16.Tim Friesner, 2014 SWOT Analysis Wal-Mart. Marketing teacher .com. retrieved from
http://www.marketingteacher.com/walmart-swot/
17.Todd Traub,(2012) Wal-Mart Used Technology to Become A Supply Chain Leader.
Arkansas Business. retrieved from: http://www.arkansasbusiness.com/article/85508/walmart-used-technology-to-become-supply-chain
18.Walmart, (2014) Walmart annual report 2014. Retrieved from
http://cdn.corporate.walmart.com/66/e5/9ff9a87445949173fde56316ac5f/2014-annualreport.pdf
19. Walmart, (2014) Truck Fleet retrieved from: http://corporate.walmart.com/globalresponsibility/environment-sustainability/truck-fleet
20. Walmart.com, 2014. Our story. Retrieved from http://corporate.walmart.com/our-story/

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7.0 Bibliography
Jim Blyth, (2008). Essentials of Marketing. Essex, England: Person Education
Graeme Drummond, John Ensor, (2005) Introduction to Marketing Concepts. : Taylor &
Francis Ltd

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Appendix A

Walmart Overview
The first Walmart store was opened in 1962 in Rogers, Arkansas by Sam Walton. Sam Walton
can be considered as an early Marketer, a direct quote from Walmart CEO Doug McMillan in
the (Walmart Annual Report 2014) is . For Sam, the customer was always the boss, and the
improvements he made to Walmart were customer-driven he was a man that was always
asking customers what we can do better, which is what marketing is all about to deliver
offerings that have value to customers. This ideology remains today which is key to
Walmarts success.
Walmart sells an array of items that include groceries, toys, jewellery, cosmetics, sports and
fitness gear, clothing, baby items, house hold appliances and electronics. Their main target is
to Save people money, so they can live better (Walmart 2014). Thats what contrasts
Walmart from its competitors is its everyday low prices (EDLP) and huge selection.
There are 11,000 stores in 27 countries, Walmart now employs 2.2 million associates
worldwide it is the worlds largest private employer and last years fiscal years sales were
$473billion(Walmart.com,2014).

Figure 4. Walmart organizational Chart (Walmart,2014)

Within the retailing world Walmart is best known for its logistics and Retention of Stores
inventory, which on such a global scale is extremely difficult to comprehend.
It is also well known and caters for its own brand items. For one to better understand
Walmarts size it actually owns its own electric company in Texas Texas retail energy so
that it can sell energy to its stores cheap so that it can maintain its Everyday low price
promise. (Rayes Sonia, 2006)

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Appendix B List of Figures


Figure1.

Porters 5 force Module

Figure2.

Walmart PESTLE analyses

Figure3.

Walmart advertising featuring Pitbull

Figure4.

Walmart organizational Chart

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