Whether The Marketing Mix Contributes on the Success of Wal-Mart

Introduction

The selling mix, as a paradigm, has been maintaining applied in concern since it was merged more than 50 old ages ago. Many companies are still utilizing it as a usher in selling ( Zineldin, 2007 ) to derive more competitory power in the market.

The activities integrated in marketing programmes to make, pass on, and present value for consumers were classified into merchandise, monetary value, publicity and topographic point in marketing mix tool by McCarthy ( cited in Davies et al. , 1995 ) in 1960, and Kotler et Al. ( 2009 ) defined the sub activities of each component of the 4Ps: merchandise assortment, quality, services, etc for Product ; list monetary value, price reductions, allowances, etc for Price ; gross revenues publicity, advertisement, public dealingss, etc for Promotion ; and channels, coverage, locations, conveyance etc for Place. By utilizing the usher and seting the elements and the sub activities of them, companies can happen a selling scheme suitable for both the industry and the organisations.

Although the application of the selling mix seems to be different among industries, it still has influences on the concerns in extents. To see whether the selling mix can work to the accomplishments of the organisations, the schemes and the application of the selling mix of Wal-Mart, the largest retail merchant in the universe, can be a great pick to analyse. As a well known hypermarket concern leader, Wal-Mart “ serves clients and members more than 200 million times per hebdomad at more than 8,650 retail units under 55 different streamers in 15 states ” ( Anonymous, 2010 ) , and it is still widening its concern globally. This essay will analyse the part of the selling mix on the success of Wal-Mart, and a brief strategy of betterment will besides be looked at.

Merchandise

As a retail merchant, the term “ merchandise ” can be divided into two parts, the retailing service to providers, and the merchandises and services to clients. Since both providers and retail merchants are prosecuting a low-margin, high-volume scheme ( Kotler et al. , 2009 ) , the stable and high-volume orders from Wal-Mart can run into the demands of the providers. However, merely big orders are non plenty in current concern, harmonizing to Hansen ( 2009 ) , a service-centered doctrine and service quality are important for constructing long-run relationship with providers. To maintain a high quality of service, Wal-Mart is advanced and a innovator in engineering development. It is among the first retail merchants utilizing computing machines to track stock list ( 1969 ) , following the saloon codifications ( 1980 ) and wireless scanning guns ( late eightiess ) , and presenting EDI for better coordination with providers ( 1985 ) ( Johnson, 2002 ) , which developed the efficiency of distribution and turnover of goods so that it can run into the demands of providers.

To single clients, non merely selling merchandises of providers, Wal-Mart has private-labels such as Great Value, Ol’Roy, Partent ‘s Choice etc, which provides merchandises in broad Fieldss. Kumar et Al. ( 2007, cited in Geyskens et al. , 2010 ) argued that private-label merchandises are positioning at mid-quality, and they are every bit good as national trade name offerings but cheaper. However, Wal-Mart focal points on the quality instead than merely mime other trade names ( Neff, 2009 ) , seeking to run into the demands of most clients concentrating on cost public presentation. Because of the attempts Wal-Mart made, clients are progressively trusting on the private labels ( Rae, 2009 ) .

Besides, harmonizing to Min ( 2010 ) , clients evaluate the service with merchandise quality, which is followed by cleanliness of the shop, competitory monetary value, merchandise assortment and fast check-out procedures. By doing aggregation of client information and IT invention, these factors are acquiring focused on by Wal-Mart, which keeps the service quality and satisfaction of clients.

Monetary value

The monetary value factor of Wal-Mart can be looked at by the position of both B2C and B2B concerns. For the pricing schemes towards persons, a lower monetary value can capture more market portion even rivals build monetary value wall to contend in the market ( Chiu et al. , 2009 ) . Wal-Mart has a great advantage in the competition among retail merchants because of offering a lower monetary value and assuring it the lowest among all, but take downing the monetary value does non decidedly lead to a cut in the net income. Wal-Mart uses a wide line and low value added merchandise lines to maintain monetary values low and raise the volume that is increased greatly plenty to do up for the low border ( Kotler, 2009 ) . However, there is ever a hazard: if the added grosss from the increased demands can non cover the loss of border, it will decrease the net income ( Nijs et al. , 2007 ) . By utilizing and roll uping a immense database of ingestion of merchandises in big parts and ace centres, harmonizing to the jurisprudence of big Numberss, the demands of the merchandises could go stable and predictable. With a anticipation of consumer behaviour and hazards, an aggressive pricing scheme helps Wal-Mart addition immense advantages and profitableness.

Topographic point

For Wal-Mart, a company that has been focused on price reduction selling and growing ( Graff, 1998 ) , cost is ever a key to it. With mature direction and determinations on topographic points the merchandises available to clients, distribution and channels, Wal-Mart gets phenomenal growing and first-class public presentation. First of all, sing the size, bulk of Wal-Mart supercentres are located in nonmetropolitan counties and acquire around the distribution centres ( Graff, 1998 ) , which can do Wal-Mart benefited from a low land-rent cost and a more efficient distribution. However, a great negative impact on Wal-Mart ‘s market portion occurred because of the factors of the turning adulthood of internet retailing industry and lower monetary values offered by online retail merchants ( Bock et al. , 2007 ) . In order to maintain the market portion and the client satisfaction, Wal-Mart launched its ain retailing web sites and planned to construct multichannel. This shall profit the elephantine retail merchant as research workers found that the acceptance of cyberspace and a multichannel scheme will be more profitable for retail merchants than traditional schemes ( Zhang, 2009 ; Bock et al. , 2007 ) .

Other than the location of supercentres, the public presentation of distribution of Wal-Mart is outstanding. First, by geographical cleavages, distribution centres, around by supercentres, are located in appropriate parts. Suppliers make most bringings to distribution centres, and retail merchant so ferry goods between the regional centres and single shops utilizing its ain trucks ( Burritt et al. , 2010 ) , which reduces the cost of transit and enhances Wal-Mart ‘s control on the whole stock list and procedure of bringing. Besides, a mature IT system weighs greatly for Wal-Mart: handheld computing machines used by employees can roll up the information of merchandises such as storage, packaging and transportation, and a orbiter communicating system set up in 1983 aid directors to track gross revenues and stock lists in shops across the state ( Chandran et al. , 2003 ) , which keeps the distribution under control and improves the efficiency.

In add-on, Wal-Mart puts a great concern upon the providers and the integrating of supply concatenation. Because great volumes of merchandises are sold through Wal-Mart, providers are delighted to make concern with the retail merchant at a lower monetary value because of the big orders, which increases the bargaining power of Wal-Mart. As what Davies et Al. ( 1995 ) found: strength in dickering power positively relates to commercial success. It seems that Wal-Mart keeps a superior power upon its providers to squash the cost. However, Even providers treat Wal-Mart as a primary client perform worse financially ( Bloom, 2001 ) , there may still be benefits for providers to maintain a long-run relationship with a higher performing channel member being efficient and aggressive to pull consumers to providers ‘ merchandises, because the gross with a high volume sold might cover the squeezing, and some providers hope it might assist them spread out their market portion ( Bollm, 2001 ; Erdem et al. , 1997 ) . By cutting the cost in the B2B portion, the monetary values of merchandises could be lower and more advantages Wal-Mart can derive in the market. Besides, with a idea that seting the volume together of both itself and its providers are purchasing from one provider can cut down costs ( Muntaner, cited in Boyle, 2010 ) , Wal-Mart has been seeking to team up with providers to buy the natural stuffs, like teaming up with Pepsi to buy sugar together from one sugar provider at a lower monetary value, in order to cut down the cost of private labels so that more attractive monetary values can be offered to clients. A good direction of the topographic point factor improves the efficiency of distribution and lowers the cost of the company.

Promotion

The component of Promotion was divided into gross revenues publicity, including decrease of monetary value, price reduction etc, and communicating, including advertisement, public dealingss, shop design etc ( Van Waterschoot et al. , 1992 ; Davies, 1995 ) . In gross revenues publicity, Wal-Mart utilizations reduced monetary values to increase the gross revenues of the stock list in order to maintain a high turnover rate and let go of the job of stocking of stock list. Besides, as it was found that a little alteration in the monetary value will take to great betterment of concern public presentation in a high price-elasticity merchandise ( Driussi, 2007 ) , Wal-Mart utilizations short-run price reductions on peculiar merchandises to excite the ingestion of merchandises.

Refering about the communicating of Wal-Mart, with an increasing budget on advertisement from $ 405 million in 1999 to $ 2.3 billion in 2008 ( Norman, 2009 ) , the trade name name and the motto of “ save money, live better ” , once “ ever low monetary values ” are acquiring widely known, which leads to a greater consciousness of public and an addition in trade name equity ( Keller, 1993 ) . Besides, it uses diversified publicizing methods such as Television, web sites and newspaper, which is “ important to the success of any advertisement run ” ( Scott, 2009 ) . In add-on, harmonizing to Ataman ( 2010 ) , by doing attempts on advertisement can better the client trueness to the companies, which might besides be an of import ground for Wal-Mart being attractive and good accepted by populaces in either new or bing market.

It seems that Wal-Mart focuses greatly on communicating with clients and seeking to acquire more strength of trade names. However, there are still some factors that Wal-Mart needs to take into consideration. First of wholly, although Wal-Mart is widely accepted by the populace, the public relationship and the societal image from the populace tell a different narrative. With “ a history of anti-union tactics and worker differences, including an on-going gender favoritism case ” ( Bustillo, 2010 ) , Wal-Mart is acquiring into a societal issue negatively affects its societal image. Society worries about Wal-Mart ‘s lacking of consideration to wellness, life and rights of employees. However, Wal-Mart has been seeking to doing attempts on its CSR while the populace does non recognize. It offers a better wellness attention program than the retail norm, in which “ 80 % of its US workers can acquire wellness coverage while merely 58 % for the retail sector as a whole ” ( Bustillo et al. , 2010 ) . This phenomenon shows that Wal-Mart needs to do attempt on PR to alter the prejudices made by the society.

In add-on, with a development of client positions, physical environment and societal cue, factors act uponing clients ‘ feelings and satisfaction ( Bitner, 1992 ; Hu et al. , 2006 ) are acquiring more focussed. Wal-Mart can seek to roll up more clients ‘ penchant to the shop environment such as shop designing and employees ‘ behaviors in order to construct a welcoming feeling to clients and serve clients better.

Integration of The Marketing Mix

Although each component of the selling mix Wal-Mart focuses is analyzed, the selling mix should be treated as a whole. An application of the selling mix upon the concern needs the coordination among sections of a company, non merely selling section, and “ parttime sellers ” who are non working for marketing section but have connect with clients need to be greatly relied on to bring forth and circulate the market intelligence ( Davies et al. , 1995 ; Gronroos, 1994 ) . It can be shown from the above analysis that the elements of the paradigm influence each other such as monetary value and PR, supply concatenation and monetary value, cost and distribution etc, and Wal-Mart controls them in a macro vision. With an interaction among the sections, Wal-Mart can acquire advantage in each component of the selling mix by utilizing resources widely and expeditiously.

Decision

By analysing the concentration of Wal-Mart upon the selling mix, it non merely treated the paradigm as a usher, but besides applies it upon the scheme and direction of the company. It is non unjust to state that with a proper application upon the concern and a great interaction in the selling mix, Wal-Mart gets benefit from the authoritative theory. The application of the selling mix could be seen as a cardinal positive factor of the success of Wal-Mart.

However, to better the concern public presentation of the elephantine retail merchant harmonizing to the paradigm, some “ soft ” factors such as the flexibleness of distribution, PR and consumers ‘ emotion can be concerned by Wal-Mart.