Comprehensive Marketing Report: Walmart and Costco Strategies Analysis

This report provides a detailed analysis of the marketing strategies employed by Walmart and its competitor, Costco. It begins by outlining the role and significance of marketing in today's business world, followed by an examination of Walmart's functional departments and their relationship with marketing. The report then delves into the internal and external environments affecting Walmart, including a PESTLE analysis. A comprehensive comparison of the marketing mix (product, price, place, promotion, people, process, physical evidence) of both Walmart and Costco is presented, highlighting key differences. The report explores the marketing strategies utilized by each company, including a marketing-media plan for Walmart, encompassing market segmentation, target market identification, brand positioning, and media channels. Finally, the report concludes with recommendations for Walmart's marketing approach.

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Contents
1. Marketing...........................................................................................................................................3
1.1. Role and Significance.................................................................................................................3
1.2. Marketing and Functional Departments of Walmart.............................................................4
1.3. Internal Environment & Walmart...........................................................................................4
1.4. External Environment & Walmart..........................................................................................5
2. Walmart.............................................................................................................................................7
2.1. Costco.........................................................................................................................................7
2.2. Marketing Mix...........................................................................................................................7
2.2.1. Marketing Mix of Walmart...............................................................................................8
2.2.2. Marketing Mix of Costco...................................................................................................9
2.2.3. Differences Between Marketing Mix of Walmart and Costco......................................10
2.3. Marketing Strategy..................................................................................................................11
2.3.1. Marketing Strategies Used by Walmart.........................................................................11
2.3.2. Marketing Strategies Used by Costco.................................................................................13
2.4. Conclusion................................................................................................................................14
2.5. Recommendations................................................................................................................14
3. Marketing-Media Plan....................................................................................................................15
3.1. Executive Summary.................................................................................................................15
3.2. Mission Statement....................................................................................................................15
3.3. Vision Statement......................................................................................................................15
3.4. Marketing Objectives..............................................................................................................15
3.5. Industry Analysis.....................................................................................................................15
...........................................................................................................................................................17
3.6. Identification of the Pakistani Market...................................................................................17
3.7. Situational Analysis.................................................................................................................17
3.7.1. PESTLE Analysis.............................................................................................................17
3.7.2. SWOT Analysis................................................................................................................19
3.8. Marketing Mix for Walmart...................................................................................................19
3.9. Market Segmentation..............................................................................................................20
3.10. Target Market/ Targeting...................................................................................................20
3.11. Brand Positioning................................................................................................................21

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3.12. Media Plan............................................................................................................................21
3.12.1. Channels For Communication........................................................................................21
3.12.2. Media Budget...................................................................................................................22
3.13. Action Plan...........................................................................................................................22
3.14. Evaluation and Control.......................................................................................................23
3.15. Conclusion............................................................................................................................23
References................................................................................................................................................24

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1. Marketing
Marketing is an important aspect of today’s business world. It includes consideration and
acknowledgment of the marketplace, requirements of people, establishing profitable connections,
consumer driver market tactics, and offering good quality products to them (Kotler et al., 2011).
Companies nowadays understand the significance of constructive connections with consumers and that is
why organizations all over the globe are trying to have an advanced methodology regarding marketing.
The concept of marketing essentials is common and every business understands that it’s a must to operate
successfully in today’s competitive business world. This assignment is based on the marketing strategies
and aspects related to the marketing of Walmart and its competitors. It’s an American-based organization
that manages a chain of superstores, department retailers, and grocery stores. It’s a gigantic organization
that has more than 10,000 stores in at least 25 countries. It has over 2.3M employees and its revenue’s
calculated at hundred billion dollars every year. The reason for such high revenue is the customer-focused
strategy of Walmart and the outstanding marketing of the company (Baker and Hart, 2016).
1.1. Role and Significance
Marketing is vital as it facilitates a company is selling its products. No matter what is the objective of any
firm, but the goal, in the end, is to make money and generate profits. For that, marketing is significant.
Business experts say that many companies would not exist if there was no concept of marketing.
Marketing drives the need for a product or a service among people. It brings awareness about a particular
product and that ultimately drives sales of a company. The marketing function is described as the
functions of companies that facilitate it to recognize and locate possibly successful goods for the
community and then assists in its advertising too. These functions are mostly the same and roles of
marketing include Product development,
promotion, generating revenues etc.
(Armstrong et al, 2014). Basic functions are
given in figure 1.
Figure 1: Functions of Marketing

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All these functions have some tasks related to them and they’re the reason behind a company’s
development and success. Furthermore, they comprise different departments within a firm including HR,
finance, sales support, etc. Now, marketing functions are directly linked with the functional departments
of a firm (Kotler and Keller, 2012). Each role of marketing is significant for companies in general and for
Walmart. Their relationship with each other in Walmart is given below;
1.2. Marketing and Functional Departments of Walmart
The interrelationship among marketing and functional departments of Walmart is elaborated as;
marketing is an element of Walmart, just like any product Walmart offers, and thus all the functional
departments are linked to each other. For effective marketing and successful marketing campaigns, all the
departments play a very vital role and without their collaboration or interference, it’d be very difficult to
carry it out. To formulate and execute any marketing strategy Walmart has, finance is required and that is
handled by the finance department, the team is formulated by the HR unit, and other functions are taken
care of by the sales and manufacturing department of Walmart. Walmart often offers discounts and
special events offers, for that purpose the marketing team makes sure to communicate with the finance
and the manufacturing unit as this decision can’t be made by the marketing department alone. The
research department analyzes the market trends and customer’s buying patterns for marketing purposes.
The purpose of Walmart is to provide everything to people under a single roof and to provide good
quality products at low prices. To ensure the effective achievement of this purpose, all units unify and
work together to enhance profitability and provide customers with whatever stuff they want. A complete
plan is provided to the marketing team of Walmart by the finance team regarding the budget. They
illustrate how much will it cost for marketing campaigns and their execution. The manufacturing unit of
Walmart notifies the logistics unit about the requirements and fulfillment of users. HR plans and
guidelines are formulated based on market trends, and target audience. This, all departments of Walmart
are interrelated with marketing and they all work together to achieve the goals, mission, and vision of the
company (Strydom, 2004).
1.3. Internal Environment & Walmart
There are some internal elements that have helped Walmart in the past in achieving organizational
integration and are still helping the firm in this regard. These elements and components are the Suppliers,
Customers, technology, organizational structure and strategy, Employees, and the management style. All
these people, their skill sets and approaches have helped Walmart in achieving organizational integration

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as they’re all aligned with the aims and objectives of the company. From the CEO to an entry-level
employee, everyone’s aim is to work on towards the same target. For this, Walmart offers exceptional
training to its employees, uses PR to keep stakeholders informed, and maintains communication with
everyone related to Walmart (Kampf, 2007).
1.4. External Environment & Walmart
The external environment of Walmart has been analyzed through PESTEL analysis to see how it has
contributed to the overall organizational integration.
Political
Political factors include aspects like political situation, taxes, rules and regulations. Walmart is a huge
business where billions of people visit the stores every day. If there’s any road blockage, or protest, the
distribution of products will be greatly impacted. Similarly, if the political aspects are positive and there’s
political stability, then Walmart will operate successfully. These aspects are unpredictable but Walmart is
flexible enough to tackle any issue coming in the way. Till yet, Political aspects haven’t caused any
trouble for the company (Hemphill, 2008).
Economic
Many elements come in this factor and these include inflation, income per capita, and other economic
regulations. A country having slow economic growth will greatly impact businesses. But Walmart
formulates strategies based on all these factors and ensures to offer products at prices that will not harm
the company. If the rate of inflation is too high and people are unable to buy products at high prices,
Walmart then offer products at lower prices to increase the sales. That’s how the economic conditions
become favorable for the company (Holme and Watts, 2000).
Social
Aspects that are a part of this factor include customer satisfaction, interaction among employees and
customers, interaction of management with the employees, and integrity. The organizational culture of
Walmart is constructive and positive that ultimately encourages positive attitude. All the work staff of
Walmart is kind and nice to customers. Such customers then help in fostering a positive image of
Walmart in the society. Similarly, Walmart ensures to sell products based on the region they’re operating.
For example, fresh meat and vegetables is a must in Asian countries. Stocked and frozen products are sold
in Europe, just the way people like it (Hemphill, 2008).
Technological
Technology greatly helps a business in a number of ways. Walmart has spent billions on establishing
technology to facilitate the employees in doing their jobs with ease and in providing excellent customer
service. During the Covid-19 pandemic, everything was online and many businesses found it hard to

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survive because they didn’t have enough finance to invest in technology. But Walmart has invested in
Robotics that helps in cleaning, performing basic manufacturing tasks and much more. This has increased
efficiency of employees and the company as they don’t have to waste time in doing basic work
(Ghazzawi et al., 2014).
Legal
The retail sector is sometimes impacted by legislation conditions. Majorly the issues are with customers,
government, trusts and monopolies. Legal factors have caused issues for the company in the past. As
Walmart used to discriminate and pay less salary to female employees as compared to male employees.
Similarly, working conditions were poor for employees. Lawsuits were filed and the company had to pay
million dollars to resolve the issues. But now, the company has understood the importance of such
matters and has worked on them to move a step forward to achieving its goals (Holme and Watts, 2000).
Environmental
Walmart’s amazing strategy regarding eco-friendly products has won hearts of many individuals. The
company has initiated many projects like “Gigaton” where the company has planned to reduce the waste
by 2030. The company has promised to reduce waste and create products that support nature. This
initiative has given Walmart a competitive edge and many customers came in the support of this plan
(Holme and Watts, 2000).

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2. Walmart
Walmart is an American firm founded in the year 1962 by Sam Walton. It’s headquartered in the USA
and has over 10,000 stores in at least 25 different countries. It manages a chain of superstores, department
retailers, and grocery stores. Walmart is known by everyone and its world’s number one company by
revenue. During the Covid-19 pandemic, its revenue was calculated at $548.854$. The company has
employees greater than any other company in the world and has 2.3M employees. A normal superstore of
Walmart has more than 120,000 products available and overall 75M products (Walmart, 2021).
2.1. Costco

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Costco is an American-based organization and biggest competitor of Walmart. It was world’s 5th largest
retailer during the Covid-19 pandemic and is known for selling organic foods, fresh vegetables, and wine.
In terms of revenue, it was at number 10 in the whole world. Costco has more than 800 stores in the world
and has a major business in the USA. The company has little to no presence in New Zealand and has
plans to capture that market in 2022 (Costco, 2021).
2.2. Marketing Mix
Marketing Mix signifies the group of actions or practices that a company implements to promote itself in
the market. The 7Ps formulate a marketing mix and these are product, price, place, promotion, physical
evidence, process, and people. Nowadays, many other Ps have become a part of the marketing like
packing etc. (Reid and Bojanic, 2001).
All the factors of marketing mix are related to each other and influence each other. Together, the
formulate a business plan for a firm and can help in accomplishment of goals if managed effectively. But
if managed poorly, it can destroy a business and that might take years to recover. Marketing mix of
Walmart and Costco is given below;
2.2.1. Marketing Mix of Walmart
Product
Products means the products or services sold or offered by a business (The Economic Times, 2019).
Walmart offers a huge range of distinct products including kids wear, books, electronic devices,
ornaments, gift cards, perfumes. And surprisingly, the top seller of Walmart according to the CEO of the
Figure 2: Marketing Mix (Indiamart.com, 2019)

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company is “banana”. To sum up, Walmart offers 75M different products all over the world (Walmart,
2021).
Price
Price means the value at which a product is being sold. Prices offered by Walmart for each product is
different and that depends on the quality and quantity of the product. Walmart sets a particular price for a
product based on the segment they’re targeting, buying power of customers, and demand for that product
in the market. Walmart has products available in affordable prices and their pricing approach is according
to special occasions and events. Pricing approach employed by Walmart is the “Economic pricing
strategy”, where everything is sold at a price that every one can buy (Walmart, 2021).
Place
Place means to the location or spot where the products are being sold. Walmart has brick-and-mortar
stores along with online market. Some products are produced by the company itself and some products
are bought from different manufacturers. All those products are then available at their physical and online
stores. Homedelivery is also available and products are delivered at doorsteps. So, the company has more
than 10,000 physical stores (Corporate Finance Institute, 2021).
Promotion
Promotion means any initiative taken by a company to bring awareness among community about their
products or services. Walmart does aggressive marketing campaigns and uses both digital and tradition
platforms to promote itself. Digital platforms comprise of Facebook, Snapchat, Instagram, Google
AdWords, and a lot more. Similarly, traditional platforms utilized by Walmart for promotion purposes
include TV, print advertising, billboards etc. Billions is invested in marketing by Walmart for advertising
(Retail Me Not, 2021).
Process
Process indicates the systems going on in a company which are carried out by following some steps.
Walmart is a company known by everyone around the globe. It’s the biggest retailer in the USA, so lots
of processes take place i.e., steps to ensure effective selling, products carefully delivered to the customers,
shipping processes, and many internal functions as well. Let’s take an example. A person has placed an
order for a perfume. The customer has placed the order, paid for it, and entered his/her home address.
Walmart will check if the payment has been made, the product will be then dispatched and sent to that
address. Now, the company has particular people for delivering products. Once a product is delivered, the
customer service care then contacts them and confirms if they’ve received the package. So, these are the
processes that are going on in Walmart all the time (Panmore Institute, 2021).
People

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People means the individuals targeted by a company. Extensive market research is significant to find out
whether there are enough customers in the target market or not. Work staff or an organization also come
in this category and they’re vital since they ensure smooth accomplishment of every procedure. Walmart
takes both these factors into consideration and spends billion of US dollars in doing market research. The
company has spent a lot in technology just to train its employees so that they can help in delivering best
services to their consumers. Walmart trains more than 75000 employees every month and that shows how
much the company cares about its employees and is committed to offering quality service (eTail, 2021).
Physical Evidence
Physical evidence includes a number of factors. It’s the experience of customers with the store, how
comfortable they feel within the premises of the company, cleanliness, transparency, and speed at the
product is delivered to the customers. Walmart has amazing interior of their stores so that customers are
attracted, has clean stores, and amazing ambiance (Team, 2021).
2.2.2. Marketing Mix of Costco
Product
Costco has a huge product portfolio. Food items, clothes, electronics, vegetables etc. are a part of it. 4000
different products are a part of physical and online Costco stores. Every store has one selling item through
which the company earns billions. Costco has too and that is toilet paper. The CEO of Costco one stated
that no two stores of Costco have the exact same products. That was unplanned and unintentional (Delish,
2021).
Price
Prices offered by Costco differ and change depending upon the target market, place/location, and events.
A product sold at a physical store might be cheap as compared to the same product sold online. That is
because the delivery charges and shipping charges are adjusted in that price. Pricing strategy used by
Costco is premium pricing strategy where high quality products have high prices (Queen Bee, 2021).
Place
First store of Costco was opened in Seattle back in 1976. Now it has more than 800 stores in eight
different countries. Costco has online stores as well and are at a location from where everyone can access.
When a customer places an order online, the product is brought to the distribution center and then
delivered to the customer (LLC, 2021).
Promotion
Costco uses both traditional and digital platforms for promotion but focuses mostly on digital promotion.
It has affiliate programs where bloggers post reviews about Costco’s products to promote the brand.

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Social media marketing is carried out by Search Engine Optimization and discounts are given by the
company during holidays to improve the brand image. “Gift a smile” was marketing campaign carried out
by the company where people used to buy gifts and send to different charities (LLC, 2021).
Process
Costco makes sure that there’s enough stock to provide customers with whatever amount they want. All
the processes are in place where retailers notify if a product is going to finish soon. If a customer places
the order, the entire procedure is carried out efficiently from dispatching to delivering. Chatbots are
designed to see what the customers want and how was their experience with Costco. Chatbot serves as
market research and a feedback provider (LLC, 2021).
People
Providing an excellent service to customers is top priority for Costco and for that purpose the company
trains its employees. They greet and treat customers with respect and handle bad customers efficiently.
Entire workforce is trained according to their personal requirements so that employees develop
themselves and do their jobs effectively (Overman and Overman, 2021).
Physical Evidence
All products sold by Costco have some physical components involved even if the product is intangible.
Other than Costco’s logo, unique store design, and appealing environment, the company has a distinct
colour packaging. For example, kids’ section is all colourful that attracts customers. Similarly, if a
customer buys something from the food section, they get a free muffin. For online shopping, Costco puts
pictures taken from different angles so that customers can shop easily (Delish, 2021).
2.2.3. Differences Between Marketing Mix of Walmart and Costco
a. Product portfolio of Walmart is huge. It has billion of different products ranging from a toothpick
to a refrigerator. Costco’s product portfolio is also huge but compared to Walmart; it has limited products.
b. Walmart is available in 25 different countries and has more than 10,000 stores. Even people in
remote areas have access to Walmart and its products. Costco on the other hand has 800 stores only.
c. Walmart uses economic pricing strategy while Costco has premium pricing strategy.
d. Walmart has marketing strategies for both platforms. This incorporates contests and rewards,
discounts, pamphlets, word of mouth and whatnot. Costco’s marketing on the other hand is restricted and
doesn’t utilize all types of marketing mediums (Pillai, 2010).
2.3. Marketing Strategy
An approach utilized for reaching out to individuals and converting them into customers of your business
is called a marketing strategy. It’s an essential plan for any business and it consist of a firm’s value
proposition, info about target customers, and some other high-level components (Schnaars, 1998).

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Having a marketing strategy is significant for a number of reasons; it gives a company an edge over its
rivals, benefits a company in developing by generating leads and generating revenues as a result. It helps
a company in deciding prices of products based on the data gathered through market research (Ferrell and
Hartline, 2019).
2.3.1. Marketing Strategies Used by Walmart
Different marketing strategies are used by Walmart for targeting its customers and they’re explained
below.
1. Segmentation
It’s the procedure where a company divides the marketplace of possible clients into groups formed on
several characteristics (Weinstein, 2013). Segmentation is very important as all customers can’t be treated
equally. This varies from their gender, interests, to their behaviors etc.
Demographic Segmentation
Demographic segmentation divides and separates people based on several demographic elements
corresponding marital status, occupation, age, place where they live, culture, and salary. Walmart targets
people of all age groups, all genders are targeted regardless of their living conditions i.e., pricing strategy
is economic that is affordable by everyone. Single, married, old people, single parents regardless of their
cast or culture are the target audience of Walmart (Business Research Methodology, 2021).
Psychographic Segmentation
This segmentation targets individuals based on their personality, living style, and attitude. Living style is
how a person is living his life and using different products in daily life. All social classes including upper,
lower, and working class are target audience of Walmart in this category. Resigned, struggler, wannabe,
traveller and activist come under this category of Walmart as well (Business Research Methodology,
2021).
Behavioural Segmentation
Figure 3: Marketing Strategies - STP