Marketing Audit: Wal-Mart

Running head: MARKETING AUDIT WALMART

Marketing Audit: Wal-Mart

Sean Outlaw

MKT/551

University of Phoenix Online

Daniel Oakland

November 18, 2006

Executive Summary

Sam Walton’s first venture as a milk boy is when he understood the value of a dollar and the knowledge of how far a dollar could take one in life. From Sam’s first five and dime stores in the 1950’s to his opening of the first Wal-Mart in Rogers, Arkansas in 1962, no one could have predicted the enormous success of this small-town merchant. Today, fourteen years after his death, Wal-Mart continues to grow and leadership of this company continues to rely on many of the traditional goals and philosophies that Mr. Walton left behind. In keeping one step ahead of the competition Wal-Mart has had to add to Mr. Walton philosophies by implementing state of the art technology and methods of today’s fast-paced business environment.

Currently, Wal-Mart’s has created over 125,000 new jobs and the operation of over 3,000 international stores, buying products from 70 countries. Sharing of sales data with suppliers has seen increase in overall sales and continuous full stock shelves. Customers believe Wal-Mart plays an important role in the community and in doing so continue to benefit working families far more than any special interest group. Over sixty percent of Wal-Mart sells came from the middle income families that frequent stores 50 to 60 times a year. 84 percent of Americans have shopped Wal-Mart with a 2 to 3 percent increase yearly. The use of customer data has allowed for an increase in segmentation in order to better server the customer. The use of radio frequency id tags and electronic check conversion has improved inventory management and reduced cost and boosted operation efficiency. Promotional strategy implementation has seen continued lowered cost and delivery of products and services with minimal difficulty or inconvenience. Continued international growth in China and Europe has distributors forecasting a 13 percent increase in Wal-Mart in the next five years. With a continued increase in promotional and advertisement, Wal-Mart can easily see double digit growth in the next several years. The revamping and synchronizing of the marketing information system has allowed for successful store segmentation of local area cultures and ethnicities.

Wal-Mart’s tendency to overstock on merchandise has reduced gross margins by several percentage points on a yearly basis. Ethical shoppers are frustrated at Wal-Mart’s tactics of forcing low prices causing smaller competitors out of business. The growing concern of employee benefits such as wages and health care and environmental concerns has caused negative publicity for Wal-Mart. The continued growth of the smaller dollar stores has caused problems because of shortness of consumer checkout lines and the ability to open stores in areas to small for Wal-Mart super centers. Internationally, the closing of stores in South East Asia and Germany was seen as a failure in the eyes of many analysts. The recent scale back of the new trendy lines have caused a slight set back in Wal-Mart’s quest to obtain a stronger share of the upper middle class market. The Neighborhood Market product line should be discontinued, since Wal-Mart already has full service grocery stores within their super centers and the Neighborhood Market account for only 10 percent of fiscal net sales. The recent third quarter slump in sales has forced a cutting in price of over 10,000 products. Future reduction in prices could cause a reduction in value for a share of Wal-Mart. If current PR campaigns are not reorganized and restructured to focus more on employees’ benefits Wal-Mart will continually receive negative press.

TABLE OF CONTENTS

SECTION HEADINGS Page

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Strengths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Weakness.