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Walmart's Pricing Strategy Essay

Decent Essays
Joseph Guy

The Marketing Mix: Wal-Mart’s Price Marketing Strategy

Over the past twenty years one company has dominated the discount retailer market. It has been hailed as the most admired company in America twice in the past five years by Fortune magazine. As of 2006 the company employed 1.6 million people that worked in one of their 6200 facilities worldwide. Despite this company’s unmatched success, it has been demonized by many in American culture, often being depicted as a destroyer of small business and the symbol of corporate greed. The company that I am referring to is Wal-Mart. No matter if you are an advocate or adversary of Wal-Mart and their business model, one thing must be mutually understood: They have mastered
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They almost have complete control over their suppliers’ prices. In many ways it is a double-edged sword. Companies and entrepreneurs are able to reach their highest sales and profits once they get their products on the shelves of Wal-Mart’s stores. However, they have little to no say in the price at which their products will sell. Wal-Mart has used their incredible market power to dictate prices in the retail industry. Appropriately, Wal-Mart uses their advantage in terms of price in their marketing and advertising campaigns. If you type in the simple phrase, “low prices” into a Google search, the first hit that appears is Wal-Mart. Whether or not Wal-Mart actually offers lower prices on all of their products is a topic up for debate, but the battle where Wal-Mart has clearly emerged victorious has been in the arena of public perception. When the average consumer thinks of the simple phrase, “low prices” the first thing that comes to their mind is Wal-Mart, as evident of the Google search experiment.

Price has always been the key strategy in Wal-Mart’s marketing strategy. The success of Wal-Mart’s low price philosophy and marketing campaigns has been instrumental to the company’s success in the past half century. It is clear that from Sam Walton’s first store in Bentonville, Arkansas in 1950 to the 6200 stores worldwide as of 2006, Wal-Mart has utilized the price strategy of the marketing mix to become one of the most successful companies in
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