Recently Target has been stealing customers away from Wal-Mart so they decided to revise their marketing strategy in order for the customers to come back to them and see that they still have every day good, low prices. According to Hass & Rigby (2004) “CEO’s are both exploiting weaknesses of other Wal-Mart competitors and simply maneuvering around the bear”. CEO’s are looking at the competition and trying to determine their weaknesses are and what strengths Wal-Mart needs to enhance. They realized that “focusing more on the basic necessities like food and medicine are Wal-Marts strong points” (Ferrell, O., Hirt, G., & Ferrell, L., 2009). Wal-mart has always made more money in their grocery and pharmacy areas in the stores and changed their …show more content…
The competitive environment became very fierce. They looked at the competitors and realized that they are starting to offer different products at lower prices and seem to be thriving. Wal-Mart competitors are getting designers to customize clothing and household items at a cheaper cost, and customers are flocking to the stores for designer items, while Wal-Mart has been riding on the “every day low prices” slogan to keep them running. “While Target long ago enlisted Isaac Mizrahi to design $19.99 giraffe-printed sweaters and Michael Graves to design tea kettles, Wal-Mart has been trying to figure out both its men's and women's clothing lines -- with only limited success” (Razhon, 2005). Wal-Mart continues to struggle to keep up with Target and their designer items. Because of Target being their main competitor, they examined them and realized they needed to change their market strategy. Wal-Mart started concentrating on the products they know were profitable. Those items were in the grocery aisles, pharmacy, and entertainment. According to Allen Long (2009) “Wal-Mart grocery prices are 15% to 25% lower than traditional supermarkets”. Customers will continue to shop the grocery aisles to obtain the lower prices and save money throughout the year by doing so. Wal-Mart is betting on those customers that come into the stores to shop for groceries …show more content…
One would think that the new market strategy would be geared towards both thriving and recession economies. During the recession, Wal-Mart almost seemed recession-proof. There are some reasons why Wal-Mart does so well during recessions. Some of those reasons are that they sell necessity items like toilet paper and brand identity. Wal-Mart brand has been known to be able to buy underwear and chocolate all in the same store and not have to go to specialty stores for items (Gross, 2008). Because of selling necessity items and everything else, Wal-Mart market strategy should be able to work in a thriving economic environment. The market strategy that Wal-Mart has is working with looks into the demographics and psychographics of their customers to determine what the customer wants at the lowest prices possible (Bhasin, 2017). This means that they look at the characteristics of their customers and modify the market strategy with the changes that are made by their customers. Wal-Mart is very convenient for many people because they can shop for everything from underwear to big ticket items like computers all in one store. When the economy is thriving, the working class customers are still going to shop at Wal-Mart to continue to receive the low prices
Target has been a successful retail company coming in 2nd place behind Wal-Mart. Although these success comes in many forms there are factors that deter Target from ever reaching first. Target Corporation has run into a few weaknesses in the recent years. These weaknesses that Target are facing can impact their future goals. These weaknesses include lawsuits that Target is facing with the recent events and not having an international presence.
Sam Walton’s extraordinary business strategies drove Walmart to its success and their key focus was customer satisfaction. As part of their customer centric initiatives Walmart had set up a unique pricing strategy with their “Every Day Low Prices” EDLP (Karen Robson, 2013). They would offer customers their daily needs at the lowest possible price to drive Walmart’s growth in the United States (Karen Robson, 2013) . Their pricing strategy was different than other major retailers in the U.S at the time; this provided an advantage towards rapid success and expansion (Karen Robson, 2013).
SUPPLY CHAIN MANAGEMENT: Effective supply chain management is one of the most important operational strategies that allow company to enjoy sustainable competitive advantage. More than the manufacturing expenses the distribution costs are high. If a retail firm has a proper supply chain management it can cut down the cost and have a competitive advantage of providing goods at lower cost. The cross docking concept that was introduced by the Wal-Mart was one of effective concept.
Sam Walton’s strategy was to start his businesses in small towns so he would not have to compete with the bigger businesses in the bigger cities. He provided the merchandise to the customers in the small towns that they weren’t getting and they didn’t have to travel very to get the items they needed for their households. The strength is their customer service that is delivered to their customers every day. The door greeter at the front door who greets the customers as they enter into the store is an example of their customer services. Another strength is the relationship and bond the company have with their employees to make sure they are well taken care of during employment with the company (Parnell, 2008). The weaknesses are a big store
Target’s business-level strategy is one that does not strictly focus entirely on one plan to gain a competitive advantage over competition. It encompasses various strategic and meticulous planning and decision making that is implemented in order to position the company at the top of the retail industry. With competition from the likes of Wal-Mart, Sam’s Club, and Costco, Target uses several clever and “out-of-the-box” ideas to attract consumer attention and ultimately increase market share within the industry. Most of the company’s ideas centered more on the differentiation of products and services provided to customers than lowering prices. For quite some time, the company’s plan was to not compete head-to-head with Wal-Mart in terms of lowering prices but instead to provide their customers, who they identify as “guests”, with a special experience every time they visited a Target location. One idea that was implemented was to market and sell upscale, trendy clothing and unique merchandise at discounted prices.1 This strategy, known as the “cheap-chic” strategy, focused on providing good quality clothing from various well known designers and fancy products from high-profile manufacturers for prices lower than their competition. This plan was vital because it began essentially began the concept of customers referring to Target as “Tar-zhay” which according to Patrick Barwise and Sean Meehan, who are university professors, as a “connote its trendy sensibility”. Target
Since 1962 and the beginning of the discount retailer market Wal-Mart has been ahead of the retail game. By 1967 there were 24 Wal-Marts that had grossed 12.6 million dollars. In just 7 years Wal-mart had spread into 9 states. By 1979 Wal-Mart was the fastest store to reach a billion dollars in sales. In 2005 Wal-Mart has 3,800 domestic stores along with 3,800 stores internationally, and had made over 312 billion dollars. As you can see the Wal-Mart empire has grown monumentally. To move into this segment of the market would be tough.
Evidently, Wal-Mart is not doing anything to differentiate itself from rivals. It gives no frills to self-service outlets always providing the cheapest prices. Through a well-built influence with suppliers, the company has gained the power to manipulate prices and amend manufacturing procedures thus wringing out more savings for its customers. All that the company does from the frequent calls to suppliers to doubling up execs in hotel rooms aimed at saving the
When it comes to retail giants, Walmart stands tallest by a very large margin. In fact, Walmart’s retail sales more than tripled their closest competitor in 2015 (“STORES top retailers 2016,” 2016). Walmart has consistently used the same marketing strategy for many years. Their “Everyday Low Price” strategy is a well-known advertisement moniker and has driven repeat sales to customers for years (Ferguson, 2015). Another familiar sign
Wal-Mart stores were no longer thriving in their respective market, thanks to competition from Kroger, Costco and Safeway and lowered prices in their stores (Ferrell, Hirt, Ferrell, 2009). Serious competition for the company did not take hold until Target began selling more fashionable clothing in housewares in their stores. In order to step up their game and reestablish themselves, Wal-Mart developed a clothing line of their own that was more fashionable and liked amongst their target consumers. However, the company did not manufacture enough for the average sized consumer to purchase. Instead, they were pushing the latest trends in fashions and leaning towards skinny jeans instead of the sizes that their average customer would wear (Ferrell,
Wal-Mart is the world's largest retail and departmental store chain. Having business operations in 27 countries with 69 different brand names, Wal-Mart is able to serve a huge number of customers per day. Wal-Mart is the fastest growing and the most successful retail brand in the world. The factors which make it the strongest brand in its industry include large customer base, sound financial strength, strong brand image, and huge supply chain network. Wal-Mart has certain weaknesses in its operations and business setup like low acceptability of certain products, high employee turnover, and less recognition of newly introduced brands. These weaknesses can be overcome by availing attractive opportunities from the market and investing more in the most profitable areas. Wal-Mart faces the biggest threat from its competitors and ever-changing customer preferences.
The success of Wal-Mart is due in large part to its ability to consistently produce high quality products at a low cost. This is very critical to the future success of Wal-Mart because it provides consistency to customers who are price sensitive. By committing themselves to "Everyday low prices," Wal-Mart assures customers that the products sold within their stores are competitive in reference to its retail competition. This low price strategy also provides Wal-Mart with a
Walmart serves nearly 260 million customers weekly across 27 different countries, both in stores and through its websites (“Fortune”, 2015). Walmart relies heavily on its proper and effective marketing strategies; Walmart would not be able to achieve the level of success without these strategies. Low prices, easy access for its customers, and social media campaigns are a few of the vital tactics Walmart has used in its marketing plan. “Save Money. Live Better” is Walmart’s mission in delivering customers products at the lowest prices. This low price strategy plays a marketing role that caters to customers who seek the lowest prices and with grocery stores that provide great deals (Brown, 2017). Walmart’s low cost business model is protected by its powerful supply and distribution chains throughout the world. Customers can expect the same cost efficient style in every Walmart store worldwide.
The recognized giants in today’s discount retail market are Wal-Mart, Sears, Roebuck and Company, and Target, and this paper compares Wal-Mart and Target. As the competition stiffens to capture market niches, these two organizations are heading for a showdown. This work demonstrates distinctive differences in company culture, promotion within the organization, lofty goal setting, and leadership styles between these two organizations. Although this paper shows a definite competitive advantage for the Wal-Mart organization, it will also demonstrate that Target
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
Wal-Mart is a company which operates in the service sector, more specifically in the “Discount, Variety Stores/Retail” industry. The company’s superior performance is demonstrated through the fact that it was America’s largest company (in terms of revenue) in 2002, and the reputation of the company is reflected in the opinion of “Fortune” who have identified Wal-Mart as one of the world’s most admired companies. In 2004 Wal-Mart had been hiring 1.4 million employees – making it the largest corporation in the world. Wal-Mart’s share prices have also been stable at time of stock market volatility. There are