Wal-Mart has various competitors in the industry namely: Target, Costco, Kroger, Walgreens and Kmart. Discount competitors Kmart and Target had paved the way for low-cost fashion items with their respective lines of designer labels.
Wal-Mart has been very keen in providing the individual bargains despite of how they fit with the rest of the store’s merchandise . But nowadays, consumers expect more than just great items. Target, which is one of Wal-Mart’s closest competitors, has eluded Wal-Mart in terms of developing a storewide aesthetic look and left it vulnerable since Target is more fashion-oriented.
Marketing Strategies
Segmentation
Its segmentation consists of individuals in the middle class that has an average income and at the same time thrifty and trendy in buying products. They have an average income yet due to the tough economic times they seek for clothing that is inexpensive yet still is in trend and style in order to cater to their needs to save money and be on budget.
Targeting
Wal-Mart target consists of thrifty, trendy middle class individuals. Due to the slowdown of the economy and opening of new stores, the middle class joined the legion of Wal-Mart shoppers. They typically bought grocery items and health and beauty aids. However, they are chosen because they are great potential customers for the cheap chic apparel of Wal-Mart. Since the apparels are low-priced compared to other competitors, there need for economical products would benefit them in order to save money. The trendy individuals is selected primarily because the products are created with style and in trend which would most likely attract them, this would address their need to be up to date with the style and trend when it comes to their clothing.
Differentiation
Differentiation can be defined simply by that the marketing mix is distinct from and better than what is available from a competitor (Perreault, et. al., 2009, p. 50). A differentiation strategy depends on bringing the best value to the customers in a way that the customer appraises and desires The strategy being used is not about being different only—differentiators would concentrate on the value of the potential customers . Segmentation and Targeting should be paid as a part of the marketing research. Differentiators can later contribute in the marketing communications and producrs to gain that position of the product offering, all of this can be done when the Segmentation and Targeting is completed. Strategy can simply be associated with the enviromental scanning and matching of resources to the opportunities to achieve that position and value at the market.
Positioning
Positioning refers to a company’s purposeful manipulation of the consumer’s image of the company. Positioning is the manner that consumers think about brands or service companies offered in the market. Marketing managers must determine how customers perceive and view the organization’s offering. Also it is important for the marketing manager to have a clear idea of how he or she wants the customers to view the organization’s product or service (Perreault, et. al., 2009).
The positioning statement of Wal-Mart reinforces and communicates to the chosen target market the essential benefits that they would get from buying the product. It is also geared towards showing that the target market’s needs of inexpensive yet stylish apparels would be met efficiently. They put high emphasis on everyday low pricing without compromising style.
Marketing Mix
Wal-Mart has turned its attention to the fashion goods category by the name of Chic. Let us analyze the marketing mix of Chic below:
Product Strategy
Wal-Mart developed their own brand of apparel to be offered in the apparel category, which is the “Chic” by Wal-Mart. This clothing line would be targeted particularly to women. It would consist of t-shirts, pants, shorts, skirts, dresses and the like, depending on the current fashion trend. Well-established team of fashion experts recruited by the company would determine what’s hot and forecast future trends in clothing. After which, they assimilate their ideas and transmit the details back to colleagues in Bentonville who ultimately determine what to produce. However, the main consideration in making these products is that it must incur a low cost. Therefore, the raw materials of the “Chic” apparel line would be of low or medium quality, mostly imported from China in order to be in line with their promise of cheap chic clothing. However, it would be created in styles that are in trend.
Branding
Wal-Mart’s new brand would be branded as, “Chic” by Wal-Mart. Having the branding, “Chic” would communicate into the minds of the target market an image of style. It also connotes a more feminine image, which is beneficial since the target market for this product are females. At the same time, by inserting in the end the “by Wal-Mart” reinforces its image as a cheap or inexpensive product since Wal-Mart’s brand is established on everyday low prices. Having their own store brand, would lessen the expense of having designer clothing made by well-known designers, which was a strategy they did but was not successful. Moreover, in order to attract middle class individuals, the logo of Chic by Wal-Mart would have a simple yet elegant design. It would also carry the Wal-Mart logo, only that the yellow sun-like rays would be in rainbow colors. This would create a personality and identity for the Chic brand.
Packaging
All the apparel would have tags marked with the brand, “Chic” by Wal-Mart. It would also have the logo of the brand with a white background in order to emphasize the various colors. The new apparel would be on hangers in the center of the apparel area, in order to attract and make customers aware of the new styles and trends in the Chic clothing line. All the other items would also be on hangers on the sides. The apparel will be arranged and separated depending on the color of clothes. This would be a means to have an orderly display of the items and at the same time have an attractive aesthetic appeal of the apparel area. In order to prevent clogging in the inventory, those clothing that are outdated will be in racks and folded and placed in a specific area with a big poster having the sign, “It’s never too late! Grab One Now at Half the Price.”
Price Strategy
First of all, in order to clear out the inventory items, Wal-Mart would have an “Inventory Sale” that would last for 14 days. There would be deep discounts for these products, reaching up to 70% mark down in prices. Despite, the very low mark up in price, it would create high volume sales. The high volume strategy allows Wal-Mart to sell a large volume quickly, relying on the smaller profit per item to add up due to volume which would lessen the pressure on store profits and would help in financing the development of the Chic apparel line.
For their store brand, Chic by Wal-Mart, the prices would be lower relative to competitors. It would continue to offer its promise of low prices. However, it would execute a price skimming pricing strategy, especially for those new introduced products. It would set a relatively high price for a product (but this high price is still lower when compared to competitors) at first, then lowers the price over time. This is a good pricing strategy primarily because the products offered are in style and trend. Upon the introduction of the new trend of clothes, the higher price can be justified. But as this products become outdated, then Wal-Mart would have discounts which lowers and lowers its price over time.
Place Strategy
The Chic by Wal-Mart would be sold in Wal-Mart retail stores. However, they would expand the apparel area in there store, in order to give ample space for the display of the clothes. This would allow customers not to have a hard time shopping for clothes. At the same time, having a larger space would allow Wal-Mart to have additional dressing rooms so that it would be convenient for customers. The front part of the apparel area would have manikins displaying the new designs and styles of clothes. The apparel would be divided based on the color of the clothing, specifically, the rainbow colors in order. By this, they are able to create an aesthetic appeal to the apparel area, at the same time, it would be a distinguishing feature of the apparel line, Chic by Wal-Mart. At the same time, having this aesthetic appeal would attract middle class customers who shop at Wal-Mart just for grocery items. It would spark their curiosity to check out the apparel area.
The use of a pull strategy is suggested. This strategy would be directed to the consumers. It involves motivating the customers to seek out the brand in an active process. This would be done through advertising, word of mouth referrals and sales promotions and discounts. Moreover, there will be exclusive cashiers for the apparel area. This would be beneficial on the part of those customers who just intent to buy clothes and it would minimize the long lines in the cashier.
If the brand becomes successful in the long run, it could be a long-term objective for Wal-Mart to have a separate store for their apparel line. This would still carry the name “Wal-Mart” in order to distinguish it.
Promotion Strategy
Communication Objective: To convince young trendy female middle class consumers who shop at Wal-Mart just for grocery items to cross the aisle to check out and purchase, Chic by Wal-Mart. The various promotional strategies would be employed in order to communicate and convince customers to purchase the product.
Conclusion
This essay proved to be a very knowledgeable and enjoyable experience where I discussed the marketing plan of Wal-Mart. Effective marketing planning can be termed as the key to success of companies. It is due to the effective marketing planning that over the past fifty years, Wal-Mart has grown rapidly such that it now employs upward of 2 million people across the world in 8,692 stores.
References
Official Website, Wal-Mart, available at: http://www.Wal-Mart.com/
Lichtenstein, Nelson, ed. Wal-Mart: The Face of Twenty-First-Century Capitalism . New York: Norton, 2006.
Moreton, Bethany To Serve God and Wal-Mart: The Making of Christian Free Enterprise . Cambridge, MA: Harvard University Press, 2009.
Perreault, W. D., Cannon, J. P., & McCarthy, E. J., Jr. (2009) Basic marketing: A marketing strategy planning approach (17th ed.). New York, NY: McGraw Hill.
Baines, Paul, Chris. Marketing. Oxford, UK: Oxford University Press, 2008.
Kotler, Philip Gary Armstrong. Principles of Marketing. Upper Saddle River, NJ: Pearson Education, 2010.
Drucker, P.F. (1955). The Practice of Management, London: Heinemann.