BM7101: Analyzing Consumer Behavior and Markets: A Walmart Study

This report provides an in-depth analysis of consumer behavior within Walmart stores, examining factors that influence customer purchasing decisions. It explores the retailer's target audience, market position, and competitive landscape, while also delving into the psychological and social elements affecting consumer choices. Key theories such as the Theory of Reasoned Action, the EKB model, and the Motivational Need Theory are applied to understand why consumers prefer Walmart and how the company can better meet their needs. The study uses qualitative research methods and secondary data sources to provide recommendations for Walmart to improve its marketing strategies and increase its market share in the competitive retail environment. This includes understanding the impact of income levels, personal lifestyles, peer influence, and age on buying behavior, ultimately helping Walmart to refine its approach and attract more customers.

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UNDERSTANDING MARKETS AND CONSUMER
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Contents
Introduction.................................................................................................................................................3
Research problem/issue..............................................................................................................................3
Research Questions.....................................................................................................................................3
Research objective......................................................................................................................................4
The significance of the study.......................................................................................................................4
Literature review.........................................................................................................................................4
Conceptual Framework...............................................................................................................................6
Methodology...............................................................................................................................................7
Discussion and analysis................................................................................................................................7
Limitations...................................................................................................................................................9
Conclusion...................................................................................................................................................9
Recommendations.......................................................................................................................................9

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Introduction
This report analyzes the environment of WalmartInc to identify the factors that affect consumer
behavior for this market. The retail industry is very dynamic and unique and it is therefore
important to understand the behavior of consumers so as to be able to serve them appropriately.
The retail industry is also very competitive and there are very many players in this industry and
hence its very crucial that the players in this industry understand the customers are that they can
be able to serve them better( Seth, & Randall, 2011). Walmart is the world leading supermarket
chain retailer by revenues. The company operates in many countries such as Brazil, Canada,
Chile, Japan, and India. In 2016, Walmart was the biggest company in the world in terms of
revenue with revenue estimated at $480billion(Mandel et al., 2017).Walmart also became the
biggest employer in the world with 2.3 million employees in 2017 (Mandel, Rucker, Levav, and
Galinsky, 2017).This report analyzes the behavior of consumers who purchase specifically from
the Walmart stores. The theory of reasonable action, the EKB model, and the Motivational need
theory are discussed in this report ( Lichtenstein, 2011). These theories are analyzed in relation
to the Walmart retail store customers. The theories of consumer behavior are based on
psychology, economics, and human behavior. Understanding consumer behavior helps in
creating a message that catches the eye and the imagination of the consumer.
Research problem/issue
Walmart is a global leading retailer that operates worldwide and it deals with a wide range of
products. The retailer has been facing increased competition from new firms who offer products
at very cheap prices(Reny, 2015). In order to be able to survive in this ever increasingly
competitive environment, it is important for Walmart to understand the factors that influence the
customers to buy from the company and not from the competitor. The report uses the EKB
model, theory of reasoned action, Hawkins Stern Impulse buying and the Motivation Need
Theory to analyze the behavior of Walmart Stores Inc ( Spellman, 2016). This helps in
identifying the recommendations that need to be made in order to improve the organization.
Research Questions
What is the target audience of Walmart StoresInc?

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What is the market position of Walmart retailer?
Who are the competitors of Walmart?
What value does the company offer consumers?
Why do consumers prefer buying from Walmart as opposed to competitors?
What are the psychological factors that affect consumer behavior?
What are the social factors that affect the behavior of Walmart customers?
Research objective
The study aims at understanding consumer atmospherics and how they affect Walmart customers
to help make recommendations on the changes that the company should apply to meet the needs
of consumers.
The significance of the study
The study is important in helping to understand how customers behave and how the company
can use this information to influence the demand of the customers to improve the performance of
the company. This will help Walmart to put together strategies that will help to attract more
customers to and increase its market share.
Literature review
Consumer behavior is the study of individuals and organizations and how they make their buying
choices. These factors may be psychological, motivational and behavioral. These factors have
different effects on the behavior of customers. It is therefore important to understand these
factors in order to be able to serve the needs of the customers in a better way. Different authors
have defined different theories that explain the behavior of consumers. Ali, (2017) explains that
consumer thinks and feel differently concerning the alternative products that are at their disposal.
The way in which a consumer thins about a product is very critical in determining whether or not
the customer will buy the product. The thinking of a customer towards a particular brand or

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product may be influenced by the past experience of the customer or by the attitude that a
customer has toward the product or brand.
Armstrong, Adam &Denize, (2014) argues that the reasoning of a customer influences the
buying decision of that consumer. Customers reason differently when they are faced with
choices. The reasoning is defined as the action of thinking about something in a logical and
sensible way. Some customers buy without taking too much time to think about the product they
are buying or the choices they are making. The reasoning of an individual customer may be
influenced by factors such as the level of education of the consumer, level of exposure and their
knowledge of the industry.
The buying behavior of a customer is also influenced by the environment of the customer. The
environment, in this case, means factors such as culture, media, and friends. The practices,
beliefs, and traditions of the social influence the buying choices of a consumer. According to
Lamb, Hair &Mcdaniel, (2012), these factors shape the attitudes of the customers towards a
particular product or brand and hence influence whether or not the customers buy the product.
The peers of the customer influence consumer choice especially for lifestyle commodities. The
other environmental factor that influences buying behavior of an individual customer is access to
information(Xiao, Ford and Kim, 2011). A customer with access to information is more likely to
make an informed decision as compared to a consumer who has little information about the
product and the brand.
There are also a variety of personal factors that affect the buying behavior of an individual. The
personal factors are characteristics that are specific to an individual person and may not relate to
other people. These personal factors include the unique habits an individual, interests of an
individual and the opinions of an individual. The decision-making pattern of an individual in
other aspects apart from purchasing plays a role in determining the buying behavior of an
individual customer. The age of an individual also affects their buying behavior (Haghshenas,
Abedi&Ghorbani, 2013).The spending patterns of older people are different from those of the
younger people. The gender of an individual also plays a huge role in determining consumer
behavior.

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Social factors also influence the behavior of consumers greatly. A person`s family influences the
buying behavior of customers. The family of an individual determines their preferences and
consumer tastes. The social interactions and the work environment also influences the behavior
of an individual. In addition to this, the social class of a person influences their buying decisions.
Conceptual Framework
Some of these theories include; Theory of reasoned action, EKB model theory, motivational
need theory and the Hawkins Stern Impulse Buying theory. The theory of reasoned action was
developed by Martin Fishbein and IcekAjzen in the 1960s( Academy Of Marketing
Science&Dato, 2014). The theory of reasoned action revolves around the significance of the pre-
existing attitudes in the process of the customer making a decision. The theory explains that the
consumer acts on a behavior based on their intention to achieve a particular outcome. The theory
reasons that consumers are rational and they always act in their best interests. The theory argues
that consumers are specific meaning that consumers take a specific action when the expected
result is specific. Between the time the consumer decides to act to the time the action is
completed, the consumer retains the ability to change their decision (May 2013). Therefore, it is
important that a marketer is specific and associates a purchase with a positive result.
Enge, Kollet, and Blackwell (EKB) model elaborate the theory of reasoned action further. The
EKB model lays out a five-step process that consumers use when making a purchase decision.
The first step in this model is where the consumers absorb the material they see through the
various advertising modes (Altman &Zube, 2009). These may include television, newspaper and
online advertising. The consumer processes this information and compares the expectations and
past experiences of the product. After a particular period of thought, the consumer moves to the
decision making a stage where they make a choice based on rational consideration. Customer
expectations are the most useful consideration for customers when making decisions under this
model.
The other framework used analyzing the consumer behavior of Walmart customers is the
motivational/need theory. This theory is based on Abraham Maslow hierarchy of needs. The
theory argues that people act to fulfill their needs based on five elements. These
include;physiological,safety,love,esteem and self-actualization (Sinha, 2010). It is important for

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business organizations to tailor the marketing message based on the consumers` hierarchy of
needs. This is because consumers prioritize their consumption based on the Maslow hierarchy of
needs pyramid.
Methodology
The study is conducted using qualitative research methods. The data collected is descriptive in
nature and cannot be accurately measured.
The research is conducted based on the secondary sources of information. The data used in the
study is collected from books,peer-reviewed journals, thesis, dissertations as well as online
sources. The different sources of data for this research provide useful information that can be
analyzed and compared to give accurate results that are critical in answering the research
questions ( Cole, 2015).
Data analysis for the study is based on content analysis. The hypothesis is compared with the
results of the study in order to help answer the research questions. Tables, graphs, and charts are
the methods of data presentation used in this study.
Discussion and analysis
The section of the report analyzes how the theories of consumer behavior apply to Walmart
retailers. Walmart targets consumers of both the middle class and low-income earners. The
slogan of the company is “Save Money. Live Better”. The company offers the products at the
cheapest prices in the market. The retailer sells all the major products including household
commodities, fruits, and vegetables as well as electronics. Walmart strives to ensure that it
remains dynamic to ensure that it meets the needs of consumer (Sokolowski, 2011)s. In order to
do this, the company carries out continuous market surveys in order to understand the needs of
consumers. It also offers customers an opportunity to make suggestions that would improve the
service and the products offered by the company.
One of the factors that affect the behavior of Walmart consumers is their level of income. Most
of the Walmart customers are price sensitive ( Luo, 2010). This means that a slight change in the
price of a product has a huge effect on the demand for the product. A customer with little income

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purchase basic commodities which are cheap and affordable to them. Consumers in the higher
income bracket purchase luxury brands and products since they have more disposable income.
The economic situation of an individual determines the amount of money they have at their
disposal for spending and hence influencing their buying behavior(Dahl, 2013)
Personal factors such as the lifestyle of an individual, peers, as well as their tastes and
preferences. An individuals` lifestyle defines the kind of products they consume. For example, an
individual may prefer to buy a particular type of cloth because their lifestyle defines the kind of
clothing they were (ViriyaBoonmuang, 2016). Walmart customers buying behavior is also
influenced by peers. A person's friends have an impact on the things a person likes and the ones
they may not like. If a customer has friends who like buying from Walmart, there is a high
probability that they will influence their friends to buy from the retailer as well.
Age is also another factor that defines the behavior of Walmart customers. For example,
customers who are parents mainly between the age of 30 and fifty-five years are likely to buy
products for kids such as toys. Young consumers between the age of seventeen and thirty are
likely to buy classy and trendy clothes ( Ireland, Hoskisson&Hitt, 2012). Young people spend
more money compared to old people who are above the age of sixty years.
Another atmospheric that affects the behavior of Walmart consumers is the reference group and
social status. The reference group influences the attitudes and the behavior of an individual and
hence influencing their buying patterns and the kind of products they purchase (Rishi, 2015). The
way in which the society views someone also influences their buying behavior. A person who is
seen to be of the high social class will mostly go for expensive and premium products.
Psychological factors such as the attitude of customers towards the Walmart brand also influence
their buying behavior. The attitude of a customer towards the brand or product could be
influenced by past experience or what they hear about the product or brand.
Different individual consumers have different motivations which drive them to buy a particular
product. The needs of an individual are ranked according to Abraham Maslow hierarchy of needs
model. Consumers buy products depending on the level that their needs fall in the pyramid.

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Limitations
Time was a major limitation of this study. The research was carried in a short period of three
weeks and hence making it difficult for carrying enough literature review and to collect all the
information needed for the study.
The other limitation of this study is that only secondary sources of information were used. Lack
of primary data means that the information is not first hand and it, therefore, could be highly
biased.
Conclusion
The report analyzes the factors that affect the consumer behavior of Walmart customers. The
company operates globally and in the year 2016, it was ranked by the Forbes magazine as the
biggest company in the world based on revenue. The company attracts consumers with different
income levels and belonging to different social classes. The research problem investigated in the
research is the factors that affect the buying behavior of Walmart customers and how this affects
the company. The research questions are clearly stated to help guide the researcher in achieving
the objectives of the study. A thorough literature review is done to identify past literature on
consumer behavior and how it can be influenced to benefit organizations. The theories of
consumer behavior and the methodology used in this study is also stated in the body of this
report.
Recommendations
Walmart needs to carry out regular market surveys. This will help the company to understand the
customers and hence help to fulfill the needs of the customers.
Walmart can shape the attitudes and beliefs of customers towards the brand and the products by
carrying out promotional campaigns such as Television adverts and contributing to social causes
in order to improve the brand image of the company.
The company should offer products that cater to both high-income earners and low-income
earners. By doing this, the company will ensure that it is able to influence the buying behavior of

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both the high-income earners and the low income. Customers from different social classes will
also be comfortable purchasing from the Walmart stores.
Walmart should improve its services in order to influence the buying behavior of customers. The
after sale services of the company needs to be improved and customers need to be treated better
so as to attract new customers and to retain existing customers.

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11
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