DATABASE MARKETING ITS ADVANTAGES

AND DISADVANTAGES

BY

Miss. P. PIRAKATHEESWARI, Lecturer in Commerce,

Sri Sarada College for Women (Autonomous), Salem – 16.

 “Knowledge is a process of pilling up facts; wisdom lies in their simplification”

–         Alexander Graham Bell

 Introduction

           The database Marketing is the process of building, maintaining and utilizing the databases (on the customer, products, suppliers and resellers) for the purpose of contacting, transacting and building relationships.  The database marketing is an interactive approach to marketing, which uses the individually addressable marketing media and channels such as mail, telephone and the sales force.

 Features

 The salient features of database marketing include:

ü      Extending help to a company to reach its target audience;

ü      Stimulating the customer demand; and

ü      Recording and maintaining an electronic database of the customer, and all commercial contacts, so that the business firm could improve their future contacts and devise a more realistic marketing strategy.

 Characteristics of Database Marketing 

1. Each actual or potential customer is identified as a record on the marketing database.
2. Each customer record contains information (used to identify the likely purchases of particular products and how they should be approached) on:

• Identification and access (eg. Name, address, telephone No)
• Customer needs & characteristics (demographic and psychographic information about customers, the industry type and decision making unit information for the industrial customers)
• Campaign Communications (whether the customer has been exposed to particular marketing communication campaigns)
• Customers past responses to communications done as a part of the campaigns
• Past transactions of customers (with the company and possibly with the competitors).

1. This enables the firm to decide on how to respond to the customer needs.
2. The database is used to record the responses of the customer to the firm’s initiatives. (e.g. marketing communications or sales campaigns).
3. The information is also made available to the company’s marketing policy makers which enables them to decide:

• The target markets or segments appropriate for each product or service.
• The marketing mix (price, marketing communications, distributions channel, etc) appropriate for each product in each target market.

1. This step is vital in relationship marketing.
2. The marketing campaigns are devised in such a manner to provide the most relevant information that the company is seeking.

 The growth of database marketing has been facilitated by:

• The powerful processing capability and the immense storage capacity of state-of-the-art computers; and
• The manner in which the telecommunication technology is harnessed to make the customer and market data available to the wide variety of staff involved in the marketing and sales offices.

 Advantages of Database Marketing

             The one-on-one marketing, which directs the customized offerings to individual customers, has provided an additional thrust to database marketing.  It has employed the database to capture the interactions between a firm and its customers at each point of time and utilizes the data analysis to search for patterns in these interactions.  These patterns provide the most attractive potential customers besides providing clues in customizing the products, pricing and promotions of a product.  When utilized in the proper manner, the database marketing could provide insights into the customer’s buying behavior across the product categories, so that the companies could devise their programmes and plans to the “whole customer”, then the customer seen only through the narrow view of their own products and brands.

 Disadvantages of Database Marketing 

• The cost incurred in setting up the software and hardware requirements has made the database marketing expensive in its establishment.
• The database often demands new skills and organizations from new analytical and decision-making skills in sales and marketing to a revamped information system organization that could support the entirely new class of users.
• The database marketing depends on the data quality.  While the observational data is powerful, the corrupted observational data could be ‘powerful misleading’.  The quality also depends on the quality of analysis and the extent to which the databases are linked.
• Till now, the database marketing has been primarily used as a tactical tool.

 Conclusion        

The application of technologies to great more customer added value and to facilitate the coordinating of networks is of particular importance for a modern organisation and its networks.  A well-integrated application of technology and staff along with experience that could respond to the customer needs, encourage the customers to use a whole range of products/services of firm rather than confine to just a few.

The new technologies have radically altered the ways in which many service organizations deal with their customers.  The most powerful force for change today comes from the integration of computers and telecommunications.  The digitization allows text, graphics, video and audio to be manipulated, stored and transmitted in the digital language of computers.  The faster and more powerful software enables firms to create relational databases that combine the information’s about customers with details of all their transactions.  The firms could utilize these databases for a) insights into new trends, b) new approaches to segmentation and c) new marketing opportunities.  The technological change affects many other types of services too from airfreight to hotels to the retail stores.

Source by P. Pirakatheeswari

The marketing practices are century’s old, but systematic marketing concept as a distinct discipline has been evolved in the beginning of 20th century. “Customer are main decider of business” – this concept is getting ultimate importance from this century. The motive of any business was profit maximization through volume of business according to Selling Concept, but in later years of 20th century, the motive of business has been shifted toward profit maximization through customer satisfaction. In today’s competitive world each and every company has to face cutthroat competition with other competitors for a foothold in ever slippery market. That is why mere customer satisfaction is not assuring loyalty towards any brand. As prospects are having many choices and they are more price sensitive now, companies need to do something additional to make its customers retail. Previously companies used to offer differentiated products and services to retain their customers. But in today’s world imitation of new features and offers are very common and that is why product and service differentiation are tough. So, not only creation of new customers but also retention of old customers is very vital step for profit maximization.

The emphasis on relationship is now a key to successful business and the traditional concept of making sales is being replaced by making long time win – win relationship with customers. It is emerging as the core marketing activity for business operating in fiercely competitive environments. On average, business spends six times more to acquire customers than they do to keep them (Gruen, 1997). Therefore most of the firms are now paying more attention to their relationships with existing customers to retain them and increase their share of customers’ purchases. 

Relationship marketing can be defined as “process of attracting, maintaining, and in multi service organizations, enhancing customer relationship” – Berry (1983).

The underlying concept is that to keep the loyal customer retained within the company and to honour their long term performance.

Shani and Chalsani (1992) viewed relationship marketing as ‘ an integrated effort to identify, maintain and build up a network with individual customers and to continuously strengthen the network for mutual benefits of both the sides, through interactive, individualized and value added contracts over a long period of time.

Intensifying competition and technological developments made businesses look for ways to reduce cost and improve their effectiveness. The practice of relationship marketing has the potential to improve marketing productivity through marketing efficiencies and effectiveness (Sheth and Parvaliyar, 1995).

The benefits of relationship marketing and CRM come through lower costs of retention and increased profits due to longer defection rates (Reichheld & Sasser, 1990).

The developing economies now calculate on service industries. There is a shift to service economy from industrial economy. In this labour intensive sector relationship plays an important role. The major service organizations like banks, hospitals, hotels, IT and telecoms requires regular interaction of marketers and customers, so that the bond and understanding between both will become strong.

According to market Line Associates, the top 20% of typical bank customers produce as much as 150% of overall profit, while the bottom 20% drain about 50% from bank’s bottom line and the revenues from the rest just meeting their expenses.

Berry (1993) recommended the following five strategies for practicing relationship marketing:-

1. Developing a core service around which to build a customer relationship
2. Customizing relationship to the individual customer
3. Augmenting the core service with extra benefits
4. Pricing service to encourage customer loyalty
5. Marketing to employees so that they will perform well for customers

Development of relationship orientation of marketing in post industrial era is the rebirth of direct marketing between producers and consumers. Several environmental and organizational development factors are responsible for their rebirth. Development in information technology, data warehousing, data mining have made it possible for firms to maintain a one to one relationship with their customers.

Service firms are always been relationship oriented. The nature of service business is relationship based. A service is a process or performance where the customer is involved, sometimes for a long period of time, sometime only for a short time, and sometime on regular basis. There is always a direct contact between a customer and the service firms. This contact makes it possible to create a relationship between service provider and customer. In growing service businesses, the customer was turned from a relationship partner into market share statistics.

There are certain important issues for understanding customers and maintain a long term mutually trusted relationship with them. These issues are as follows –

1. CRM initiatives undertaken by firms
2. Development of those programs
3. Identifying important (key) customers
4. Measurement of effectiveness

CRM initiatives –

IT and Telecom, Banking, Hotel, Hospital sectors are adopting various CRM initiatives. In case of It and telecom the customer care centres are the initial receiver of customer complaints and processed that for the other levels of management for solution. In case of Banking, Hotels and Hospital sectors the feed back opportunity is one of the forms of getting customer satisfaction and dissatisfaction level. In customer centric marketing, marketers assess each customer individually to determine whether to serve that customer directly or indirectly. Also customer centric marketers determine whether to create an offering that customizes the product or service of the marketing mix or standardize the offering.

Process –

Information from customers is collected systematically over a period of time. This can be done through regular surveys and during customer interaction noting down the important points. This information has to be combined with the organizations experiences with customers to build rich customer profiles, buying behaviours, preferences and usage patterns.

Identifying Key Customers –

When it comes to combining customer information with experiences, service firms seem to be economizing. Most of them seem to be doing it for selected customers. Hotels do it for their regular guests specially those who have enrolled for their membership schemes. Financial service providers selectively do it for their high net worth individuals who typically use multiple offerings of the service provider.

Measurement of Effectiveness –

Most service firms rely on periodic surveys to understand their customers’ expectations and also understand and anticipate the behaviour of customers. Many service firms have indicated that they work with their customers as a team to ensure that their expectations are to exceeded. Research has constantly indicated that one of the major reasons for poor quality service is the gap between perception of managers about the customer expectations and customers’ real or actual expectations (Parasuraman, Zeithaml & Berry, 1985). Roger and Dorf (1999) have recommended a four stage process of Identification, Differentiation, Interaction, and Customization for implementing one to one relationship with customers. After analyzing the information and findings company must go for implementing those key elements and again they need to follow up the result.

References –

1. Gronroos, C.(1995) ‘Relationship marketing: The Strategy Continuum’, Journal of Academy of Management Science, Vol 23, No. 4, pp 252 – 254
2. Parasuraman,A.,Zeithaml,V.A., & Berry, L.(1985), “A Conceptual Model of Service Quality and Its Implications for Future Research”, Journal of marketing, Fall, pp-40 – 50
3. Shainesh, G., Mohan, R., “Status of Customer Relationship in India” – www.decisioncraft.com
4. Kotler,P., Keller, K.L., Koshy, A., Jha, M., ‘Marketing Management – A South Asian Perspective’ – 13th edition pp – 22 -24, Pearson Education Ltd.

Source by Sunetra Paul Maitra

Renovate: restore or make new, reinvigorate, refresh or revive.

Now is the time to renovate your marketing strategies. By renovating your marketing strategies you will be investing in your future, making the most of the current economy and bringing in more revenue than your competitors.

Many businesses are cutting back on marketing due to the economy. They look at the budget and feel that marketing is a good place to cut. I believe this is the worst thing we can do as business owners during a tough economy. We need to be out in front of our clients now more than ever! In a good economy there is enough for all of us and sometimes it comes without much effort on our part. But in a tough economy, when people are carefully deliberating on each and every purchase – we can not afford to hide. We must be out in front of our clients and potential clients.

If we are not out in front of our target market – you can bet your competitors will be. But marketing does not have to look like what it has in the past. By taking on a marketing renovation project, you look at what is working, what can be cut and determine how you can use more low-cost or no-cost marketing solutions.

A marketing renovation isn’t about starting over – it’s about keeping what works, getting rid of what doesn’t and adding a few new pieces that will work better. It’s about refreshing or reinvigorating your current strategies to make them more effective and in the end bring in more revenue.

Our goal with marketing must be to stay in front of our target market consistently and effectively. We must stand out from our competition by sharing what makes us unique and by telling potential clients why they will benefit from working with us.

Now is the time to Renovate Your Marketing. Now is the time to be committed to growing your business. To making the changes needed to survive this economy. And to bring in more revenue. Now is the perfect time to renovate.

For more information about marketing renovation, contact Michelle at 207-847-3438 or e-mail michelle@michelleneujahr.com

Source by Michelle Neujahr

Marketing Concepts

 *Dr.P.Shanmukha Rao  **Dr.N.V.S.Suryanarayana

Market:  The concepts of exchange and relationships lead to the concept of a market.  A market is the set of actual and potential buyers of a product.  These buyers share a particular need or want that can be satisfied through exchange relationships.

Marketing means managing markets to bring about profitable customer relationships. However, creating these relationships takes work.  Sellers must search for buyers, identify must first create a need-satisfying marketing offer (product). It must decide how much it will charge for the offer (price) and how it will make the offer available target consumers (place).  Finally, it must communicate with the target customers about the offer and persuade them of its merits (promotion).

Marketing: Marketing is the business function that identifies customer needs and wants. Creating customer value and satisfaction are the heart of modern marketing thinking and practice. Marketing is the delivery of customer satisfaction at a profit.

             Many people think of marketing only as selling & advertising. But selling & advertising are only the tip of marketing. Marketing means managing markets to bring about exchanges and relationships for the purpose of creating value and satisfying needs & wants.

Today, marketing must be understood not in the old sense of making a sale – ‘’telling and selling” – but in the new sense of satisfying customer needs.  If the marketer does a good job of understanding consumer needs; develops products that provide superior value; and prices, distributes, and promotes them effectively, these products will sell very easily.  Thus, selling and advertising are only part of a larger ‘’marketing mix” – a set of marketing tools that work together to satisfy customer needs and build customer relationships.

Broadly defined, marketing is a social and managerial process by which individuals and groups obtain what they need and want through creating and exchanging value with others.  In a narrower business context, marketing involves building profitable, value – laden exchange relationships with customers.  Hence, we define marketing as the process by which companies create value for customers and build strong relationships in order to capture value from customers in return.

Customer Needs, Wants, and Demands:

The most basic concept underlying marketing is that of human needs.  Human needs are states of felt deprivation.  They include basic physical needs for food, clothing, warmth, and safety: social needs for belonging and affection: and individual needs for knowledge and self – expression.  These needs were not created by marketers: they are a basic part of the human makeup.

           

                        Wants are the form human needs take as they are shaped by culture and individual personality. An American needs food but wants a              Big Mac, French fries, and a soft drink. A person in Mauritius needs food but wants a mango. Rice, lentils, and beans.  Wants are shaped by buying power, wants become demands.  Given their wants and resources, people demand products with benefits that add up to the most value and satisfaction.

       

Marketing Management: 

The analysis, planning, implementation and control of programs design to create, build and maintain beneficial exchanges with target buyers for the purpose of achieving organizational objectives.

Marketing Management Concepts

Production

Product

Selling

Marketing

Societal

   

 

Production concept:

 

Management should focus on improving production and distribution efficiency. When the demand for a product exceeds the supply, management should looks for ways to increase production. When the products cost is too high, improved productivity is needed to bring it down.

Product concept:

                 Consumer will favour products that offer the most quality, performance and innovative features. Thus, an organization should devote energy to making continues product improvements. 

Selling concept:

            Consumers will not buy enough of the organizations products unless its under takes large-scale selling and promotion effort. 

                        Existing           Selling &         Profits through

Factory            products          promoting        sales volume

Selling:

Selling is also important function of marketing. It is the process where by goods and services finally flow to the customers who need them. Selling focuses on the needs of the seller.

Marketing concept:

 

                        Customer         Integrated       Profits through

Market             needs               marketing        customer satisfaction

            The marketing concept holds that achieving organizational goals depends on determining the needs and wants of target markets and delivering the desired satisfaction more effectively and efficiently than to competitors.

Marketing means obtaining customers. Marketing focuses on the needs of the purchaser. Makes profits by creating long term customer relationships based on customer value and satisfaction. 

Societal concept:

 

            The societal marketing concept holds that the organization

Society

(Human welfare)

Consumers

(Want satisfaction)

Company

(Profits)

should determine the needs, wants and interests of target markets.

                                                                                                         

                                                                                                     

 

 

Marketing Mix (4 Ps):

            Marketing mix includes the set of controllable, tactical marketing tools in the target market.

• Ø  Product means the goods and services combination the company offer to the target market. Ex: Nuts & Bolts, Spark plugs, Pens & Pencils etc.

• Ø  Price is the amount of money customers have to pay to obtain the product.

• Ø  Place includes company activities that make the product available to target consumers

• Ø  Promotion means activities that communicate the merits of the product and persuade target customers to buy it. Ford spends money each year for advertising to tell consumer about the company and its product.

Product

Product variety

Quality & Design

Features

Brand name

Packaging & Services

Warranties & Returns

Price

List price

Discounts

Allowances

Payment period

Credit terms

Place

Channels

Coverage & Locations

Assortments

Inventory

Transportations

Logistics

Promotion

Advertising

Personal selling

Sales promotion

Public relations

Target

Customers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Marketing effort / Marketing control:

            The company wants to design and put in to action the marketing mix that will best achieves its objectives in its target markets.

Planning

Develop strategic plans

Develop marketing plans

Implementation

Carry out plans

( The company turns the plans

in to action )

Control

Measure results

Evaluate results

Take corrective action

Analysis

Source by S.R.PADALA & NVS SURYANARAYANA

Introduction

Walmart is the largest retail store in the US. It has over 3, 700  stores countrywide and many others internationally. Despite these positive results, there is a need for injection of new ideas in order to ensure that the retail giant sustains its position as a market leader. The essay seeks to examine its marketing strategies in the present and possible strategies to ensure future growth. (MSNBC, 2007b)

Walmart Strategic business goals and objectives

Walmart has always aimed at increasing sales through its friendly prices. This image has stuck with the company for a very long time. Not only is the company associated with low prices, but it has a variety of items under one roof. These qualities favor the rural clientele.

The company is driven by a commitment to business excellence. This is seen by the quality of care accorded to customers once they report to their retail stores. This is ensured by the participation of employees in this business goal. The company has cultivated a culture of perfection in that they always want to be on top. The Walmart marketing manager has said that Walmart’s major business objective is to ensure that their sales are always increasing. It is one thing to get to the top but remaining there is different. The company ensures their growth rate does not stagnate. Other companies usually work on increasing their performance and once they have reached those targets, they choose to relax. However, this does not apply to Walmart; the company ensures that they always look for ways of sustaining their competitive advantage.

The Company is driven by the pursuance of technological improvements. This is achieved through the use of new technologies in service delivery. Creativity and innovation is another business objective for the company. Through the efforts of their employees, the company aims at maintaining their market positions by brainstorming and looking for new ways of attracting potential clients. (MSNBC, 2007b)

The Company also values being considered as a strategic community partner. The company’s mission is ‘saving money to live better’. This is an image that the company has worked on very well. Many people consider Walmart as a consumer friendly retailer. The company has cultivating this image through a number of ways. First of all, through their consumer friendly prices, through their satisfactory customer service, and also through their convenience as a one stop shopping centre.

Walmart uses the aspect of availability as another business objective. The Company has opened up a series of locations in different parts of the country. This means that customers are not inconvenienced when trying to locate them. Additionally, it becomes very difficult to ignore the store when one can see it in virtually all parts of the country. This aspect of availability is one of the reasons why the company has done very well in the past. (MSNBC, 2007b)

Analyzing Walmart’s situation

Walmart is dealing with attacks from a range of stakeholders in the retail industry. For instance Trade unions, human rights organizations and former employees. these groups have all accused the retailer of abusing its employee’s rights. They assert that Walmart discourages its employees from participating in trade unions. Employee rights groups argue that the company’s enumeration package does not reflect the rich profit margins that the company enjoys currently. In the year 2006, Maryland legislature passed a law that would force Walmart to spend a specified amount on health insurance. However, this law was reversed by a federal court. Additionally, some groups have been formed to specifically give anti-Walmart remarks. For instance WakeupWalmart protesters assert that Walmart’s advertisements on their corporate responsibility efforts indicate that Walmart wants to fool the eyes of the American public. Such an image could damage the company’s public relations and this could drive away certain precious clients.

The company has expanded rapidly over the past years. With its three thousand seven thousand retail chains located in the US, the retailer has saturated the market. It is difficult to get to a certain town without locating a Walmart store. This means that the company might face severe obstacles in its expansion procedures. It would therefore be wise for the country to consider other parts of the world such as China and India. However, efforts to replicate this success in other countries have not bore fruit as the country has not done very well in South Korea after recording low profits for a while, the company was forced to close its subsidiary in Germany. The company had to sell this subsidiary at a throw away price in order to stay ahead. Therefore, expansion strategies need to be done systematically (MSNBC, 2006)

The corporation is also faced with the challenge of continuously attracting clients into its stores. Clients have already decided on what they want to buy in Walmart and it is difficult to convince others to join in. This is the reason why the company’s client traffic has been reducing in 2007. The company has reached saturated levels in the US market and it is difficult to convince other individuals to continue with the company. (MSNBC, 2006)

Walmart is faced with the challenge of making its stores more convenient. The company’s representatives asserted that they may consider reducing the sizes of their stores in the future because it is difficult to navigate the stores for just one particular item. There is a need for the company to change its image from its large rural base into smaller, urban and more convenient stores. The company’s major competitors have already embraced this concept as Tesco of the UK has small stores specializing in specific products. (MSNBC, 2006)

Strategic goals for Walmart’s future growth

Walmart needs to target external markets. However, the company should change its market entry techniques. It should focus on customizing its business objectives within each country.

The retail giant needs to make product quality as part its major business strategy. Quality in this regard refers to both the customer service and the nature of the products in its stores.

The company needs to reinforce an image of a community based organization. This means that its employee practices should be enhanced and it should also maintain its low price offering. (MSNBC, 2007a)

Strategic marketing program marketing objectives, targeting and positioning

The Company needs to change its marketing objectives in such a way that they can attract a different market segment. In the past, the company has been associated with the middle class or low-income earners. Affluent clients tend to shy away from the retail giant due to the misconception that Walmart’s products are of lower quality. Most of them use the store for pharmaceutical and grocery shopping and pay no attention to the stores when it comes to other options. The Company has tried to establish this concept in the past. In the year 2006, the company opened up stores with this objective in mind. They stocked a wide range of sophisticated products such as jewelry, electronics, a sushi bar and a variety of electronics. The affluent market is crucial in the company’s efforts to secure new markets because they have saturated current ones. Almost all middle class shoppers prefer Walmart. Therefore, in order to sustain its position, the company needs to assess what competitors are doing to boost sales. Target – Walmart’s rival – has managed to attract affluent consumers. Consequently, Walmart must try and give these shoppers a reason for shopping at the company. Affluent shoppers appreciate quality and need to be assured that they can find it at Walmart. The reason why the company failed in its 2006 efforts to target these clients is because it went about implementing this goal in the wrong way. First of all, the company needs to improve the appearance of their stores through creative store displays. This is particularly important for stores allocated in affluent neighborhoods.

Walmart needs to work on the quality of its items. Some of the affluent consumers believe that Walmart has failed in this regard. In instances where the perceptions about the company are totally wrong, then the company can improve this image by marketing its products in a different way. They could talk about the quality of their items with particular emphasis on merchandise that affluent workers prefer. However, the company should be very careful about the type of products they choose to sell. In the year 2006, the company wanted to follow their rival- Target’s product portfolio. However, this did not work very well because they tried including designer labels in their apparel section. This is a very tricky item to sell and may not necessarily give positive responses. Designer items fluctuate from season to season and it may be difficult for the company to keep up with the trends. It would have been wiser if the company stuck with electronic items as these are less susceptible to change. Additionally, the company needs to make this transition slowly. All successful entrepreneurs agree that there is no need to change a winning team. Therefore, even if Walmart plans on targeting those affluent consumers. They must ensure that these changes do not scare away current clients. Walmart should do a thorough market analysis to find out the most appropriate manner of attracting these clients. Other retail stores that have made a name for themselves among these affluent shoppers have been working on this image for centuries. Consequently, Walmart should not imagine that they could do this overnight. (MSNBC, 2007b)

Additionally, the company should venture into other countries. Despite the fact that the company has done very poorly internationally: it closes one in every three stores overseas, there is need to expand operations. Since the company has reached saturated levels locally, then there is a need to tap some of the internationally resources. First of all, the company should exercise a lot of selectivity before choosing a particular country. Part of the reason why the South Korean outlet had to be closed was that the company still used the same marketing strategies applicable in the US. Different countries have different preferences, the company’s strategy of saving money to live better may not be feasible everywhere. The company should not enter international markets directly. It could collaborate with local leaders in those respective countries in order to work with a winning formula. Alternatively, the company should test an international market by beginning with fewer and smaller stores. If the response is good then it could proceed to expand. Countries chosen for expansion should be economically secure. Therefore, increasing the number of stores in China and India is probably a good idea. However, this should be done slowly and after thorough research. (Pallavi, 2007)

Marketing program

Product

The company should not abandon its idea of attracting the affluent client. However, this should be done sequentially; the Company had introduced Metro 7 stalls in 1,500 stores. These stores offered jewelry, expensive wine and other expensive commodities. The reason why this did not work very well was that the change was introduced rather drastically. The company should introduce expensive products only in stores located in affluent neighborhoods. (Pallavi, 2007)

Additionally, the company needs to exercise selectivity in the types of products chosen. The company should stay away from designer clothes or organic foods because these did not yield good results in the past. The focus should be on electronics.

The company needs to inject more creativity in its product offerings. It indicated this through its partnership agreement with Canopy furnishings. During the month of March this year, the company introduced a range of furniture items from Canopy and it is very optimistic that this would do well. The company should follow such an approach. For instance, the company should partner with other brands for household items and electronic companies. By securing well-known suppliers, the corporation can offer better quality products thus attracting the eye of the affluent clients who are particularly interested in these items.

Place

Since the Company has already saturated the local market, then the focus should be on international markets. However, entry into those international markets should be done tactfully. Walmart should choose economically secure countries. The stores found in these areas need to be located strategically. (Pallavi, 2007)

Price

The pricing aspect of Walmart’s marketing mix is part of the reason why the company has done so well so far; this is its winning formula. The company should maintain their low pricing strategies but they should merge this with product choices. They need to improve on the quality of service and their items in order to make themselves more appropriate in this scenario.

Promotion

One of the most notable promotional strategies in Walmart is the use of public relations. The company takes part in charitable events and has marketed itself as a community based institution. However, there have been a number of accusations in the media that Walmart exploits its employees. The company has had to grapple with lawsuits centering on this poor image. The company has already embarked on this program by marketing the company as a fair employer; it provides its employees with a good health insurance pan. The following issues have been highlighted in an advertisement posted in support of Walmart’s corporate responsibility

• The retailer is the nation’s largest employer
• Its offers affordable health plans starting from $ 23
• The company contributes close to 245 million dollars in charitable events annually(MSNBC, 2007a)

Instead of using advertisements such as the one shown above, Walmart should place more effort in improving their staff management policies. The problem with such advertisements is that they take so long to change consumer opinion. As a matter of fact, they may engrain negative perceptions because clients will see that the company wants to improve a tarnished image. Instead of spending millions on such advertisements, the company could direct those funds to improve their reward systems. A good employer does not need to advertise their employment practices as they will speak for themselves. The company should boost its health insurance plans because other companies offer better health programs yet they earn less than Walmart. This will go a long way in improving company image. (MSNBC, 2007a)

In line with this argument, the Company need not convince the public that its employees are actually happy to work for the company. These employee opinions should not be communicated to the public. Walmart asserted that, it has been found that a whooping eighty one percent of the company’s staff would recommend one of their friends to become Walmart employees. This kind of approach will not work for the company because the company is adopting a defensive strategy. The accusations made against the company could be embraced and turned against the counter accusers by improving organizational policies.

Lastly, the company should embrace the idea of hospital partnerships for its retail clinics. The company already announced that it plans on expanding the number of in-store clinics from fifty five to a whooping four hundred by the year 2010. While it may be a good idea in itself (given the fact that Walmart will be enhancing its corporate image as a company that cares for the community), there is still room for improvement. Walmart has been in the news for a number of wrong reasons. One of the accusations labeled against the retail giant is the fact that their employee health insurance plans do not fit their status as market leaders. Consequently, the company needs to look for ways of improving this image through a number of avenues. First of all, they could offer their employees access to the in-house clinics. This will go long way in enhancing their employment practices. (Pamela Lewis Dolan, 2008)

Conclusion

Walmart has done a lot in the past in order to secure its position as a retail market leader. These include offering low prices, offering good customer service and constant innovation. However, lately the company has grappled with low customer traffic. Market saturation in the middle income market segment, poor international performance and bad public relations as a result of their employee practices. The company should adopt the following strategies in order to ensure future growth; adopt penetrative strategies international markets, introduce good product packages for products favored by affluent clients and improve health insurance plans within the company. These will go a long way in sustaining the company’s positions as the US’s retail leader. (Pallavi, 2007)

reference:

MSNBC (2006): Wal-Mart turns attention to upscale shoppers, The Associated Press

MSNBC (2007a):Wal-Mart to air ads countering attack, The Associated Press

Pallavi Gogoi (2007): Wal-Mart goes abroad for growth; The McGraw-Hill Companies

MSNBC (2007b): Wal-Mart considers not-so-Super centers, The Associated Press

Pamela Lewis Dolan(2008): Wal-Mart partners with hospitals to rapidly expand in-store clinics, retrieved from

http://www.ama-assn.org/amednews/2008/02/25/bil10225.htm accessed on 9th July

Source by Carolyn Smith