Marketing Intelligence Report on Walmart's Online Shopping Stores

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Marketing Intelligence
UK College of Business and Computing
01/02/2019

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Introduction
This marketing intelligence is based on Online Shopping Stores of Walmart Retailer. It
aims at showing various aspects of marketing research like consumer buying behaviour,
customer loyalty and satisfaction, and corporate loyalty. Information from Walmart organisation
and the retail sector of the US is obtained from secondary sources. Moreover, it shows how to
conduct effective market research.
Task 1
1.1 Main Stages of Purchase Decision-Making Process at Walmart
There are five main five stages entailed in making the purchasing decision, and they
include recognition of the problem or need; searching of information; evaluating alternatives;
purchasing decision; and post-purchasing or outcomes(Orji, 2013). The problem recognition
stage is crucial in the purchasing decision because it determines the action of buying. The phase
depends on the extent to which the consumer departs from homoeostasis that is the balance
between the desired state and the current status quo of the consumer(Furaiji, et al., 2012). The
process is stimulated by either consumer’s desired or actual state and also connected to the
subsequent decision making stages like information search.
Information search stage entails either internal or external processes of finding out about
a brand or a product(Lee, 2005). According to Mohammadi and Mohamed (2011, p. 153),
internal information search depends on the existing knowledge of the customer about the
product. Therefore, it depends on the memory of the customer(Munthiu, 2009). External
information search is largely controlled by the firm trough personal interaction (word of mouth),
and mass communication or promotional processes like advertising(Lee, 2005). These
approaches aim at supplementing the internal information search by spreading awareness and
informing the consumer about the product. The main aim is to stimulate the need recognition and
purchasing decision.
At the third stage, the consumer is faced with a number of retail stores, and therefore
they are supposed to evaluate and select the best which will offer products that fulfil their
needs(Mohammadi & Mohamed, 2011). In the evaluation, the consumer uses aspects like price,
country of origin, and brand name. Therefore, the robust and global brand name of Walmart, its
USA origin logo, and discounted prices makes it be preferred. Other factors considered at this
stage include consumer involvement, situational factors, and comparability (Lee, 2005, p. 9;
Furaiji, et al., 2012).
The purchasing stage can be divided into three groups(Lee, 2005). First, the fully planned
buying decision where consumers chose both the brand and product before visiting the retail
stores(Orji, 2013). Second, partially planned to buy decision where the customers have the
intention of purchasing but defers the selection of the product until the real shopping period.
Lastly, impulse purchasing where the consumer selects the both the brand and the product while
in the store.
The final stage indicates the outcome of purchasing which determines consumer
satisfaction or dissatisfaction with the product or the purchasing process(Mohammadi &
Mohamed, 2011, p. 154). This stage is influenced by after sales services offered by the company.
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1.2 Theories of Buyer Behaviour in Terms of Individuals and Markets
Consumers are perceived as rational beings with the ability and skills to evaluate the
sequential process of making the purchasing decision in order to arrive at the optimal choice
from various alternatives. However, due to the existing market uncertainty regarding costs of
obtaining information and the future, the rational decisions of the customers are limited in that
the purchasing decisions become bounded by rationality(Lee, 2005, p. 6). In this case,
Mohammadi and Mohamed (2011, p. 153) argued that the consumer utilises socio-psychological
attributes like motives, values, personal characteristics, and attitudes and non-psychological
elements like price, advertising, and product design in making the purchasing decisions.
1.3 Factors that Affect Buyer Behaviour
Lee (2005) generalised factors that influence consumer behaviour into three groups. The
first one entails environmental influences like social class, culture, situation, family, and personal
influence. Secondly, individual influences and differences like lifestyle, consumer resources,
knowledge, involvement and motivation, and attitudes. Lastly, psychological processes like
learning, behaviour change, and information processing(Munthiu, 2009). According to Durmaz
(2014 ), cultural factors such as myths, customs, laws, rituals, language, and artefacts influences
the purchasing decisions of the customers. This aspect determines the preferences, values,
perceptions, and behaviours of individuals which in turn influences how they make purchasing
decisions(Durmaz, 2014, p. 3).
Thangasamy and Patikar (2014, p. 40) showed a list of factors that influence consumer
purchasing decision from the most important to the least factor. They include necessity, comfort
and convenience, price sensitivity, previous experience, product promotion, and recommendation
from the retailer.Accordingly, the involvement of buyers in the purchasing process has a
significant influence on brand preference and final purchasing(Thangasamy & Patikar, 2014, p.
40).
Nguyen and Gizaw (2014) categorised factors that influence purchasing behavior into
branding attributes like branding strategies, brand equity, brand awareness, and brand familiarity;
perceptions including perceived quality, perceived risk, and perceived quality; satisfaction
factors like attitude and intention; and demographic factors like age, gender, and
income(Danesh , et al., 2012, p. 142).
1.4 Relationship between Brand Loyalty, Corporate Image and Repeat Purchasing
Tu et al. (2012, p. 25) argued that brand loyalty is depicted when customers purchase
from the organisation frequently, offer sincere suggestions about brand improvement,
recommend others to purchase the firm's product, and do not switch to other substitutes in the
market. Corporate image is the perception consumers develop about the company regarding a
bundle of values such as quality, satisfaction, convenience, and satisfaction(Demir, et al., 2013,
p. 1067; Dust & Askarzade, 2013). According to Zhang (2015, p. 59), repeat satisfaction entails
frequent purchases from the same retail stores by loyal consumers. Strong corporate image of
Walmart has significantly contributed to higher brand loyalty among consumers. This is because
the store is offering highly discounted products at convenient places and with high quality. As a
result, the enterprise records high levels of repeat purchases from loyal consumers.
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TASK 2
2.1 Marketing Research Objectives
 To obtain information about the consumer demands that can help Walmart revamp its
operation
 To gather data about the consumption patterns that will help Walmart to quantify its
services in the desired manner.
 To gather knowledge about the trends in the retail industry which can help Walmart to
design its services
 To gather data about the strengths and weaknesses of the competitors of Walmart
 To generate response about the satisfaction levels of existing consumer base of Walmart
2.2 Marketing Research Techniques, their Use, and Effectiveness
American Customer Satisfaction Model (ACSI) is one of the techniques used in
marketing research to evaluate the satisfaction rate of consumers. The model is preferred because
it integrates the three questions that determine the overall satisfactions, satisfaction as compared
to customer satisfaction, and satisfaction compared to the ideal organisation(Angelova & Zekiri,
2011, p. 242). The model depicts a cause-effect paradigm with three indices located at distinct
places. Satisfaction drivers like perceived quality, perceived value, and customer expectations
are located on the left side; satisfaction indices (ASCI) is centrally placed; and satisfaction
outcomes like customer loyalty and customer complaints are on the right side(Angelova &
Zekiri, 2011). Therefore, the model is effective in enhancing and evaluating the performance of
the firm in the market.
The collection of primary data in marketing research utilises the quantitative techniques
such as issuing of questionnaires. In most case, open-ended questionnaires are used to collect
information concerning variables that determine customer satisfaction and loyalty (Danesh, et al.,
2012).
2.3 Secondary Data
Various secondary information is utilised to fulfil the above objectives. The secondary
information used includes Walmart's annual report reports, market reports and analysis from
various agencies like trade associations, commercial services, and professional journals, and
consumer analysis information. Other sources include a regular survey of the retail sector
including market size, market characteristics, and competitor analysis such as promotional
efforts, distribution techniques, prices, and products (Smith & Albaum, 2010, p. 40).
2.4 Validity and Reliability of Market Research Findings
After the market research is completed, then the findings call for assessment of the higher
authority for the management team to start designing the activities as per the findings. However,
the management must be ready to make sure that the data is appropriate and reliable. For this to
happen, the researches need to relate the findings to the survey results (Mooi, 2014). The sample
size must be representative of the target population for Walmart. Another way for validating the
research is to make sure that a proper methodology is followed when conducting the research.
The researchers also need to make sure that the data sources are reliable.
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2.5 Marketing Research Plan to Obtain Information
Smith and Albaum (2012) described nine stages of developing a valid market research to obtain
consumer and market information as outlined below:
1. Formulating the research problem depending on the problem faced by the firm. Such
problem may include poor performance or expectations, lower customer turnover and
retention rate(Regional Business, 2015; Shukla, 2008).
2. Designing inquiry approach. In most cases, scientific approach is utilized which
considers problem-awareness, hypothesis formulation, future prediction, and hypothesis
testing (Smith & Albaum, 2012, p. 11).
3. Developing research methods, either non-experimental or experimental.
4. Research Design that depicts the framework or plan for carrying out the market survey
and collecting information(Saxena, 2011).
5. Techniques of collecting data, observation, questionnaires, internet surveys, and
interviews are highly encouraged in marketing research (Smith & Albaum, 2012).
6. Sampling techniques
7. Data collection
8. Data analysis and interpretation. Data analysis techniques will depend on the type of data
collected and measurements used.
9. Developing research report that captures all the research processes, results, conclusions,
and recommendations for an effective course of actions (Smith & Albaum, 2012; Smith
& Albaum, 2010).
TASK 3
3.1 Market Size Trend for Wal-Mart
Walmart is related to the retail industry, which is regarded as one of the most significant
industries that is on the pathway of development. It is expected that the retail industry will be
valued at a whopping 32 Billion US Dollars by the year 2023 (Pantano, 2014). Markets in the
Asia-Pacific, Middle East, and Latin America are known for driving the development of the
industry and thus Walmart must be able to bring in adjustments at operating level that help the
business develop in the regions mentioned above. The recent trends of the retail industry is to
serve on a digital platforms and introducing delivery options. Walmart is positively following
these trends in recent years.
3.2 Key Competitors and Competitive Analysis
Amazon is regarded as one of the main competitors of Walmart as the recent year saw
Amazon invest over 400 Billion US Dollars in its operations. Moreover, Amazon also has hands
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on a large and dedicated workforce of 342,000 people. Thus, it can be said that the output
capacity of the firm is commendable (Gregory, 2015). In 2017, the organization involved itself
in earning a sales value of 136 Billion US Dollars. Thus, it can be said that Amazon is a strong
competitor of Walmart.
3.3 SWOT Analysis of Wal-Mart
Strengths
Wal-Mart has significant economies of scale and the robust financial position indicated in
its growth in profits. These advantages enable the retailer to offer quality products at highly
discounted prices and enabling it to maintain the cost-leadership strategy. Besides, the retailer
has sufficient finance to enter into lucrative markets and provide continuous product
developments on its shelves (Mazzone, 2016).
Wal-Mart offers a wide variety of products in both convenient stores, online groceries,
and supercenters. This product and store diversification enable the retailer to capture a wide
range pf consumers across all target markets (Walmart, 2016).
Significant emphasis on technological advancement in store operations, management, and
supply chain management has enabled the retailer to save on costs, improve efficiency,
effectiveness, and convenience in serving customers and making strategic decisions (Mazzone,
2016).
Weakness
Significance emphasis on cost leadership strategy has made the retailer cut employees
benefits and wages to maintain its low cost of operations. Critics indicate the poor working
conditions of employees such as low wages and underpaid overtime work. Therefore, most
employees are not highly motivated to offer quality services to the customers (Marcilla, 2014).
Wal-Mart is experiencing cannibalization where it competes with itself by the continuous
opening of new stores in the same region (Mazzone, 2016).
Opportunities
Significant opportunities exist in emerging economies such as South Africa, Brazil, and
India where the firm can expand its operations to increase international sales (Deloitte, 2017).
The private label brand of the retailer has a prospective opportunity in the marker as seen
from the continuous increase in their sales. Therefore, offering more private labels with healthy
benefits to the consumer will increase sales (PWC, 2015).
The online groceries offers significant potential in increasing market share by capturing
the Generation Z consumer group who prefer online shopping. Due to the strong brand image,
customer loyalty, and investment outlay, the firm can expand the online operations to offer
convenience to its customers across the markets (Walmart, 2016).
Threats
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The increasing awareness of consumers forms a significant challenge to the operations of
the retailer especially its low-cost strategy. This is because pursuing greener strategy implies
outsourcing quality farm products that are highly priced (Marcilla, 2014).
The company is facing intense competition from other market gurus like Target, Tesco,
and Costco both on online shopping and brick and mortar sales. Some of these competitors also
offer discounted prices (Mazzone, 2016).
Opportunities for Wal-Mart’s Online Shopping
The Online Shopping Store of Wal-Mart has a number of market opportunities. First is
the increasing demand of customers for convenient products. The current market indicates that
consumers are craving for newness, authenticity, creativity, and convenience (PWC, 2015). This
implies that changing the retail sector towards online virtual platforms match the increasing
instant gratification needs (Mazzone, 2016). Secondly, the current technology such as virtual and
augmented realities transformative possibilities to explore exponential opportunities in online
stores. This means that technology is fundamental in offering new, unique and surprising
experiences and products to the consumers (Deloitte, 2017, p. 6). Thirdly, the lean supply chain
of Wal-Mart creates an opportunity to continue offering high-quality products at discounted
prices through the online platform.
TASK 4
4.1 Techniques of Evaluating Customer Response and their Effectiveness
Various techniques exist to facilitate the evaluation of customer response in marketing
research. Kim et al. (2003) suggested for the use of Customer Relationship Management (CRM)
wich can be employed in managing the interactions between the enterprise and customers. This
technique can be effective in evaluating the degree at which Walmart is customer centric through
utilising intangible attributes like value enhancement, innovativeness, service improvement, and
product effectiveness. Through its online stores, Walmart can extract significant information
relating to online responses and feedbacks from customers. The effectiveness of CRM can be
evaluated using the Balance Scorecard which integrates both non-financial and financial
elements. Non-financial factors to be considered by the organisation include channel
management, service quality, the effectiveness of online purchasing, efficiency, trust, customer
loyalty, customer understanding, and customer satisfaction. On the other hand, the financial
factors include reduced costs and increased net sales and profits(Kim, et al., 2003, p. 6).
4.2 Customer Satisfaction Survey
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The customer satisfaction survey must contain the following questions-
 Do you like the services provided at a Walmart outlet?
 How often do you come to a Walmart Outlet?
 Is the Walmart Shopping Website helpful for you?
 Does Walmart serve the products meeting your quality expectations?
 Will you recommend a friend or family member to Walmart?
4.3 Success of the Completed Survey
The survey was very much helpful in gathering information that might help the
organization to revamp its operations to a more consumer friendly level. The participants
answered the questions with ease and thus it can be said that the survey was a great success in
terms of the research objectives.
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