Global Marketing Report: Walmart's International Market Entry Analysis

This report provides an executive summary of Walmart's global marketing strategies, focusing on market entry modes and international market selection. It examines Walmart's expansion into China and South Korea, analyzing the reasons behind market choices and the effectiveness of different entry methods, particularly joint ventures. The report also explores potential marketing strategies, including communication mix, discounts, and advertising, that can help Walmart attract customers and achieve its business goals. It highlights the factors influencing market entry mode selection, such as financial stability and supplier relationships. The report concludes by assessing the successes and failures of Walmart's international ventures and providing insights into effective global marketing practices. The analysis includes demographics, consumer spending power, infrastructure, and language considerations in the context of the selected markets. The document is contributed by a student to be published on the website Desklib.

Global Marketing
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Executive Summary
Global marketing is one of the important part of general business management in which
companies market their products as well as services locally as well as nationally. Selection of
modes of market entry plays a vital role if companies want to enter the new market for
expanding business and accomplishing goals. Franchising, licensing joint venture are some
modes of market entry that can be chosen by companies. Selection of market entry modes
depend on some factors such as financial stability of company, relation with suppliers and others.
For selecting international market, companies require focusing on several factors such as
customers requirements, their needs, market trends, economic condition and others. Analysis of
all these factors play a vital role in making better decision and accomplishing goals. Marketing
strategies also considered the main key of success of company and some main effective
marketing strategies that can help companies in promoting their goods and attracting customers
include: communication mix, discounts and others.
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Contents
INTRODUCTION...........................................................................................................................3
Brief background.........................................................................................................................3
MAIN BODY..................................................................................................................................3
Selecting two International market..............................................................................................3
Reasons of selecting these markets by Wal-Mart........................................................................5
Method of market entry used by Wal-Mart along with effectiveness.........................................6
Potential marketing strategies......................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
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INTRODUCTION
Brief background
Walmart is based on the American multinational retail corporation that can operates a chain
of hypermarkets, discount departmental stores and other kind of grocery shops. It is one of
leading organization that provide various kind of product as well as service to their potential
consumers in global world.
This company was established in 1962 by Sam Walton in which incorporated on 1969. It has
owned and operates Sam’s Club retail warehouses. There are approximately 11, 000 stores and
clubs in 27 different countries, operating under multiple 56 names (Courtemanche, Carden and
Ndirangu, 2019). Walmart is one of the largest company by its revenue and expanding their
business within international markets such as China, South Korea.
MAIN BODY
Selecting two International market
Walmart has been already establishing their business in Chinese market, usually it began in
1996 with opening of super centre and Sam club. The company was provide the various kind or
products related the foods, clothes, household appliances and other grocery. For purpose of
business expansion, The Walmart super centre provide one stop shopping experience which are
attracting more and more consumers.
Walmart entered in South Korea market in 1990 for purpose of international expansion.
However, it had a major failure in market and few years ago. Walmart left, did not translate well
in Korea. Initially, company has been tried to establish the business in South Korea so that they
can perform different tasks, while selecting the appropriate criteria (Magnani, Liu and Banerjee,
2019). As continue to focus on putting some efforts where it can directly impact on the growth
strategy, which became increasingly that in South Korea’s current environment or environment.
Sometimes, it is very difficult to reach the scale and contribution to business growth or
development in global marketplace.
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Selection Criteria China (Country-1) South Korea (Country-2)
Demographics: Targeting every group of
people, who want to purchase
different foods, grocery items.
Targeting families and young
generation group of people
attract towards different foods,
grocery items
Consumer spending power Walmart provide the better
discount, offers according to
need of client. Consumer
spending power towards
Walmart brand is becoming
moderate (Magnani, Liu and
Banerjee, 2019).
Walmart needs to be reinvent a
local strategy for potential
consumers, who are
significantly different from
American consumers. But the
consumer spending power is
lower.
Infrastructure Walmart has built
infrastructure within
supercenter 164000 sq. fit and
thousands of different goods.
Selecting as Sam club in
approximately 230,000 sq. fit,
which offers huge amount of
products and services.
In south Korea, Walmart has
been established the business
total 79 e-mart hypermarket
and opened 16 different stores
as E-mart in the country
Language Increasing the job
opportunities of Chinese
people, hiring local people
who have established a good
coordination with local
consumers, identifying its
basic need or requirement.
Increasing the job
opportunities of Korean
people, hiring local people
who have established a good
coordination with local
consumers, identifying its
basic need or requirement.
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Reasons of selecting these markets by Wal-Mart
In the context of Wal-Mart it can be said that it operates in several international markets
and expanded its business in an effective manner. Among all international markets such as:
Mexico, China, Germany, South Korea, Britain, Brazil and others, it has made an effective
growth and succeed and there are several reasons of this retailer of choosing these markets such
as:
South Korea: Wal-Mart has a leading department store and hypermarket chain in South
Korea. One of the main reasons of selecting this market by Wal-Mart was is rapid growth of
retail industry. It is found that South Korea is one of the leading countries that made an effective
growth in retail sectors. Hypermarkets, supermarkets, convenience stores
and online retailing have rapidly grown over the years. It is also found from research that it
ranked 4th in economy in Asia 12th in worldwide. So, from these effectiveness and features of
South Korea in retail sector it can be said that these was main reasons (South Korea Retail
Sector, 2020).
It is found that initially it made an effective growth and attracted customers but gradually it
slowed down and became fail. There were some reasons that made it unsuccessful in this
international market such as: lack in considering local needs by marketer, mismatched
merchandising, assortment and others. Wal-Mart is the biggest retailer in the world with sales of
around $135 billion but due to some factors it became fail in South Korea. If it could have
focused on marketing the more then it can have several advantages of opportunities because Sot
Korea is one of the effective international markets for operating retail functions. It should have
focused on local market needs because customers needs play a vital role and success as well as
failure both depends on satisfaction of needs of customers.
China: In this regard, it is found that Wal-Mart is changing China completely and it has
developed its stores and made growth in this international market, It has now around 146 stores
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in China and it also provided around 70,000 job opportunities to Chinese and it was good for
their economy. It is found from research that it made several changes in China as by providing
employment and other opportunities it attracted customers and increased sales. It is also found
that Wal-Mart is now striving hard for reducing negative impacts on environment by reducing
wastes and carbon emission and for this it implemented some policies for suppliers and it makes
sure that suppliers work accordingly. One of the main reasons of Wal-Mart of selecting this
market is effective growth of retail sector as it is stated that China has the second largest share in
this sector after US (Retail Industry in China, 2018). It is also found that retailer are striving hard
for making themselves as the largest retail market and surpass the US. It is also found that Wal-
Mart has increased sales in China over the past decades. About 90-95% local products of Wal-
Mart were sold in China stores and it all happened because it focused on improving relation with
suppliers.
On the negative side it is also found that Government of the China fined on Wal-Mart
because of not following rules and regulations or for violating local as well as national laws. It
was also forced for closing its stores temporary (Wal-Mart Failed in Korea because of a Lack of
walking around, 2018). Wal-Mart paid fines even it believed that all claims to be unfounded. But
still it was trying hard for regaining its image by providing qualitative products at lowest price
and attracting customers by satisfying their local needs. It was dominated by Chinese and they
forced it to adapt its strategies and sell products as per the needs of Chinese and that is why its
forced to put heads of pigs and other animals. There are several other reasons that made it
slightly unsuccessful.
Method of market entry used by Wal-Mart along with effectiveness
There are several strategies of market entry and selection of market entry should be in an
effective manner because it can make company successful and failure. There are several factors
that need to be considered while selecting market entry strategy. In the regard of Wal-Mart it is
found that it focused on Joint venture for entering in China retail market. Through an effective
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joint venture agreement it entered in China in the year of 1996 (Wal-Mart Buys out Chinese
Partner’s Holding in Joint Venture for $517m, 2016).
Joint venture: It is one of the effective ways of operating business in which 2 and more
than 2 parties agreed on accomplishing tasks. For that all involved parties require making a pool
of resources and deciding the main purpose of operating business activities. It may be business
activities or a new project. Each of the party has to bear losses and take advantages of profits and
all responsibilities. They are also responsible for cost associated with it. Venture has its own
entity and separate from participants’ other business interests. Or in other words it can be said
that it is a type of partnership in the colloquial sense of the world and can take on any legal
structure. There are some reasons that show that why Wal-Mart decided to select this entry mode
for operating and entering in China such as:
Cost saving: By making an effective use of this type of entry mode both and all involved parties
can leverage their production at a lower per unit than they can do separately. It is beneficial when
companies make use of advanced technology because it can reduce cost of implementation of
technology within business. Because separately, company requires more investment that can
increase overall cost of implementation of technology. Company can also save cost by sharing
cost in advertising and labour (Wong and et.al., 2018).
Combined expertise: All involved companies in joint venture can have unique features,
effectiveness, skills and knowledge and by combining all skills, knowledge and expertises they
can take several advantages. It also has an agreement that protects rights of each party and
protects them against illegal acts and lawsuit. So, it can be said that by making use of expertises
and all features of each other’s they can attract customers and can make advantages of
competition as well as increase sales.
On the other hand, there are some limitations that may sometimes be able to create
problems for companies. But still as compared to other, this can help companies in
accomplishing goals and reducing costs.
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Potential marketing strategies
There are several marketing strategies that have made Wal-Mart able in becoming successful and
can allow it to attract customers if it is being used in an effective manner. One of the main
effective marketing strategies that can help it out in meeting goals such as:
Communication mix: It refers methods or combination of some strategies that help company in
promoting products and attracting customers
Direct marketing: It includes both sales promotion and personal selling in this strategy of
communication, marketers or sales man meets customers directly or with face to face
communication they make them aware about products. It helps customers in getting all
information and also solving queries at the same time (Chang and Zhang, 2016). It is beneficial
when company is new in the market and requires making aware to customers.
Discounts: Discounts and promotion is other way of communicating and marketing products to
customers. In this strategy, customers can get discounted price or discounts on some specific
products. It may be given in different forms such as coupons, % off deals, in store signage and
others methods. It attracts customers and when they get such discounts then it makes them feel
valued and motivated.
Advertising: It is one of the main used ways of communicating and promoting products of
company. It is mainly used by Wal-Mart. By providing ad in TV, radio, newspaper and others it
attracted customers. Nowadays, companies are providing video ads in social media platforms
because people spend their lot of time in internet using and social media platforms and it can
grab attention of them. Via this company can communicate with customers if customers
approach company via its website (Yun and et.al., 2020).
Product adaption: It is other effective strategy in which companies modify their existing
products as per the needs of customers. In regards to Wal-Mart it can be said that as per the
needs of Chinese customers, it made some changes in tastes and other features of its existing
products for attracting them and increasing sales. It makes sure to company that their modified
products can meet needs of customers (BAUER and et.al., 2020).
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CONCLUSION
From above discussion, it has concluded that selection of international markets require an
effective analysis ability. BY making use of effective critical analysis ability, companies can
make better decision of selecting markets in which they can want to enter or want to expand
business. It has also discussed some factors that are being considered by companies and factors
that may affect company in accomplishing goals such as: human behaviours, demographic
factors and others. Further, this study has discussed effective market entry strategy that makes
companies able in becoming success and entering in new market successfully. It has also shown
some effective marketing strategies such as communication mix.
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REFERENCES
Books and journals
BAUER, K. and et.al., 2020. PRODUCT DEVELOPMENT CAPABILITIES: EXPLORING
MEDIATING AND MODERATING LINKS BETWEEN INTERNATIONAL
PRODUCT ADAPTATION AND INDUSTRIAL MANUFACTURERS’BUSINESS
PERFORMANCE. International Journal of Innovation Management, p.2050084.
Chang, C.W. and Zhang, J.Z., 2016. The effects of channel experiences and direct marketing on
customer retention in multichannel settings. Journal of Interactive Marketing, 36, pp.77-
90.
Courtemanche, C., Carden, A. and Ndirangu, M., 2019. Do Walmart supercenters improve food
security?. Applied Economic Perspectives and Policy. 41(2). pp.177-198.
Magnani, A., Liu, F. and Banerjee, S., 2019, May. Neural Product Retrieval at Walmart. com.
In Companion Proceedings of The 2019 World Wide Web Conference (pp. 367-372).
Wong, A. and et.al., 2018. Collectivist values for constructive conflict management in
international joint venture effectiveness. International Journal of Conflict Management.
Yun, J.T. and et.al., 2020. Challenges and future directions of computational advertising
measurement systems. Journal of Advertising, 49(4), pp.446-458.
Online
South Korea Retail Sector. 2020. [Online]. Available through <
https://www.mordorintelligence.com/industry-reports/south-korea-retail-industry>
Retail Industry in China. 2018. [Online]. Available through <
https://www.statista.com/topics/1839/retail-in-china/#:~:text=In%202019%2C%20China
%20accounted%20for,retailer%20as%20early%20as%202021>
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Wal-Mart Failed in Korea because of a Lack of walking around. 2018. [Online]. Available
through < http://sebastianmarshall.com/why-walmart-failed-in-korea>
Wal-Mart Buys out Chinese Partner’s Holding in Joint Venture for $517m. 2016. [Online].
Available through < https://www.globaltimes.cn/content/953500.shtml#:~:text=HOME
%20%3E%3E%20BUSINESS-,Wal%2DMart%20buys%20out%20Chinese%20partner's
%20holdings,joint%20venture%20for%20%24517m&text=Wal%2DMart%20Stores
%20Inc%20announced,billion%20yuan%20(%24517%20million>
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