Marketing and Management: Wal-Mart's CSFs and Marketing Mix Analysis

This report provides an analysis of Wal-Mart's marketing mix, focusing on two prioritized critical success factors (CSFs): cost control and targeting a neglected niche market. It details Wal-Mart's existing marketing mix, including product, price, place, promotion, people, process, and physical evidence. The report recommends adjustments to the marketing mix based on the identified CSFs, such as incorporating regional products, leveraging digital marketing, and focusing on online sales for cost control. For the niche market strategy, it suggests hiring local talent and adapting processes to local cultures. The analysis concludes that Wal-Mart's success is tied to its cost-effective strategies and niche market focus, with recommendations aimed at enhancing these areas for sustained growth. This detailed report is available on Desklib, where students can find a variety of study resources.

MARKETING
AND
MANAGEMENT

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Executive Summary
Wal-Mart is a big retailer with lots of factors that can guarantee a success for the company. It
is essential that company prioritise their CSFs among all the CSFs they have so as to achieve
the success at optimum level. This report showcases the two CSFs for Wal-Mart in a
prioritised manner. First is the cost control that has helped them in lowering their cost of
operations. This is the major reason why they have been able to bring their products at lowest
of costs. Second is their concentration on the neglected niche market. This has helped them in
gaining control over the larger part of the market. Concentrating on regional and local culture
is important for the company along with the facts that in the coming years they need to do
more business on the online mediums rather than brick and mortar type business. It is also
found that Wal-Mart has to hire more people from the local cultural background then the
others.

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Contents
Executive Summary...............................................................................................................................1
INTRODUCTION.................................................................................................................................3
Two prioritised CSFs for Wal-Mart.......................................................................................................3
Marketing mix of Wal-Mart..................................................................................................................4
Recommendations in marketing mix based on the two CSFs................................................................6
Conclusion.............................................................................................................................................7
REFERENCES......................................................................................................................................8

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INTRODUCTION
In the modern day business, there are various aspects that need to be covered by an
organisation. Every company has some or the other critical success factor and it helps them in
their growth. Wal-Mart is one of the biggest retail firms in the world and they have many
critical success factors in their list (Chan, 2011). This report identifies the two major critical
success factors of Wal-Mart along with their marketing mix. It also recommends the changes
that are required in their marketing mix based on their critical success factor.
Two prioritised CSFs for Wal-Mart
Among all the critical success factors the two CSFs which need to be prioritised has been
explained below.
 Cost control: Wal-Mart is known for its control over the cost. This cost control is
done in the several aspects of the business. They have launched several types of
models for achieving success in the market. Cost control is practiced in the Wal-Mart
checking the fact that there should not be any compromise with the product and
service quality. Every Day Low Price (EDLP) is a key communication propagated by
the Wal-Mart all through the year. Further they offer or bring schemes like roll back
and special buy where the emphasis is put on the bulk buying and discounts. Their
cost averages around 20% less than their competitors (Pope and Pope, 2015). Along
with this Austerity measures is used by the top management for keeping their cost on
the lower side. They pass on the benefits to the end users. In order to make their
internal cost control, they have made no specific investments in the regions where
there is no direct return.
 Targeting a neglected niche: Another important critical success factors that has
given Wal-Mart a competitive advantage in the market is that they have targeted the
niche market which has been neglected by other players. They have catered to the
requirements of the smaller market segment that has been neglected by other players
like the people living in the smaller towns or shoppers in these towns. Along with this
the cited firm has grabbed the advantage that is created by first movers i.e. they
become first to enter into the smaller towns and then they try to move towards the big
cities (Merriman, et. al. 2012). Apart from this, they have also concentrated towards

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saturated small markets which act as a barrier to entry and generate strong loyalty by
the existing consumers. At the initial stages of firm’s growth no direct competition is
faced by the firm. This helps in catering larger customer base. They have also reduced
their land acquisition cost and real estate prices.
Marketing mix of Wal-Mart
Marketing mix is a very essential tool in the marketing and it gives idea about the company
wants to present themselves in their marketing. Marketing mix for Wal-Mart is as follows:
 Product: Wal-Mart is a multi-brand retail chain having different types of products
being available in their portfolio (Hicks, Keil and Spector, 2012). It offers products
such as books and music, movies, furniture and patio, clothing, household items,
video games and baby items, pet’s products, pharmacy products, fitness and outdoor
products, health and beauty items, gifts, personalised shopping, gifts, Auto & tires etc.
They also have the departments that are seasonal where they sell products like
Halloween party costumes. There are also departments related to different products
such as computers, tablets, tech items, bedding, home décor, heating and cooling
equipment and garbage equipment etc.
 Prices: Wal-Mart has become market leader and one of the reasons for it has been its
pricing strategy. It sells its products at lower cost than competitors and most of its
products have costs 15-20% lesser than that of their competitors. They enjoy the
benefits related to economies of scale. They are procuring their products in large
quantities from all across the globe which helps them in lowering their prices. Their
pricing strategy depends on the consumer’s behaviour in that nation. Based on the
demand and time, they have been coining their pricing strategies and hence some
special terms like “Everyday low prices” and “Always low prices” is used by the firm.
This signifies that every product is priced differently every hour (Olney, 2015). Every
Day Low Prices has been their primary strategy. Their promotional line such as “Save
money. Live better” suggests that company gives too much importance to pricing.
 Place: Wal-Mart is having large numbers of stores all across the globe i.e. more than
11500 retail units working under 63 banners and operating in 28 nations. Alone in US
they have 4600 retail units. Along with this they have 650 Sam’s club as well as more

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than 6200 Wal-Mart International outlets. Their strategy for distribution includes
direct delivery to stores by the vendors that are retail store suppliers. Products are
delivered to their stores in huge amount. There are approx. 150 distribution centres
where they use cross docking method. Where the company sees that the goods are
centrally ordered and then sent to individual stores, they take use of hub & spoke
method. Alone in transportation, they have a fleet of 6,100 tractors, 61000 trailers and
more than 7800 drivers. They aim towards reducing the cost of supply chain and
transportation as well as moving towards greener transportation (Zhu, Cordeiro and
Sarkis, 2012). The products are stored in both urban and rural areas. The type of
stores includes Wal-Mart super centres, Wal-Mart express stores, Wal-Mart discount
stores, Wal-Mart neighbourhood market.
 Promotions: Wal-Mart does promotions through a plethora of sales promotions like
product bundling and its competitive strategies related to pricing. They have adopted
a brand promotion strategy that is highly aggressive. Their e-commerce unit attracts
the consumers by providing them with gifts. Their pricing strategy acts as a biggest
contributor in attracting their customers. The website also uses tag lines such as “Grab
it before it’s done” helps in attracting potential consumers to buy the products without
thinking heavily before the offer actually expires (Jiang, Jerath and Srinivasan, 2011).
Among all the strategies EDLP has been most successful in attracting its customers.
 People: They have kept huge focus on their workforce so as to give best of services to
their customers. They have a highly trained and highly motivated staffs that are able
to handle all its strategies. This company has more than 2 million workers all across
the globe and approx. 1.5 million alone in USA. Wal-Mart has reached to around 200
million customers in all over the world (Chekwa, Martin and Wells, 2014).
 Process: They believe in keeping things simple and hence making processes efficient.
Customers can shop easily by the help of facilities such as arranged product
categorisation and placement, trolleys available, various payment modes acceptable
etc. Along with this other backend services such as warehousing, procurement and
distribution are itself a benchmark for the other retail firms to follow (CLIFFORD,
2012).
 Physical Evidence: This marketing Mix can be seen by the fact that they have more
than 11000 units in the world. Each store has multiple product category and efficient
product placement etc. They also have different types of stores that add value to the
business (Krugman, 2015).

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Recommendations in marketing mix based on the two CSFs
There are changes required in the marketing mix of the Wal-Mart. These recommendations
are based on the CSF of the company.
Based on cost control
 Product: They need to add regional and culture related items that also includes selling
antique pieces. Their product range should also include wine and other beverage
products as people are in search of these products at lower prices.
 Price: In order to use cost control as strategy, they need to adopt more technologies
such as supply chain management system so as to reduce the overall prices of the
product and to make an effective cost control.
 Promotions: They need to become aggressive on their digital media campaigns
especially the ones that is done on social media. Social media marketing will be
helpful for reducing the budget of overall marketing operations.
 Place: They are excellent in Brick and Mortar kind of business but they need to
concentrate more on the online business (Bhatnagar and Syam, 2014). They need to
sell most of their products using online stores this will help in controlling the cost.
Based on concentrating on neglected niche market
 People: They need to concentrate more on hiring people from the local areas that
would help in providing better services in the niche market. Cultural similarity
between the staffs and consumers has a very healthy effect on the customer
relationship management.
 Process: More local culture based operations needs to be done. More concentration
should be kept on doing task according to behaviour of the local consumers in the
region (Moghadam, Ghomi and Karimi, 2014).
 Physical Evidence: They need to add more suppliers in their group so as to provide
the quality products even in the towns that are having less competition. In order to
control the market they need to provide products as they promised.

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Conclusion
From the above based report, it can be concluded that Wal-Mart is one of the biggest retail
firms in the world. Cost control and targeting a neglected niche market has been their
priority. They have been selling range of products at prices lower than competitors by around
15-20%. There have more than 11000 stores and also sells products through online channels.
They have wonderful workforce and the process is also smoother and simpler. They need to
bring products that are antique as well as wines and beverages can be beneficial. Doing
marketing and selling by online channels could be effective in controlling the cost. For
having control on neglected niche market they need to hire more people from the local areas
as well as they should make process local culture oriented.

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REFERENCES
Bhatnagar, A. and Syam, S.S., 2014. Allocating a hybrid retailer's assortment across retail
stores: Bricks-and-mortar vs online. Journal of Business Research, 67(6), pp.1293-1302.
Chan, A. ed., 2011. Walmart in China. Cornell University Press.
Chekwa, E., Martin, J. and Wells, K., 2014. Riding on the waves of sustained competitive
advantage: consumers’ perspectives on Walmart Corporation. International Journal of the
Academic Business World, 8(2), pp.13-25.
CLIFFORD, S., 2012. Retail frenzy: Prices on the Web change hourly. The New York Times,
edição de, 30.
Hicks, M.J., Keil, S.R. and Spector, L.C., 2012. Mom-and-pops or big box stores: some
evidence of Walmart impact on retail trade. Economic Development Quarterly, 26(4),
pp.311-320.
Jiang, B., Jerath, K. and Srinivasan, K., 2011. Firm strategies in the “mid tail” of platform-
based retailing. Marketing Science, 30(5), pp.757-775.
Krugman, P., 2015. Walmart’s visible hand. The New York Times, pp.1974-2008.
Merriman, D., Persky, J., Davis, J. and Baiman, R., 2012. The impact of an urban WalMart
store on area businesses: The Chicago case. Economic Development Quarterly, 26(4),
pp.321-333.
Moghadam, S.S., Ghomi, S.F. and Karimi, B., 2014. Vehicle routing scheduling problem
with cross docking and split deliveries. Computers & chemical engineering, 69, pp.98-107.
Olney, P., 2015. Where Did the OUR Walmart Campaign Go Wrong?. Working in These
Times, December, 4.
Pope, D.G. and Pope, J.C., 2015. When Walmart comes to town: Always low housing prices?
Always?. Journal of Urban Economics, 87, pp.1-13.
Zhu, Q., Cordeiro, J. and Sarkis, J., 2012. International and domestic pressures and responses
of Chinese firms to greening. Ecological Economics, 83, pp.144-153.

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