Walmarts Winning Marketing Strategy for Success

WAL-MART'S MARKETING STRATEGY

Wal-Mart was founded by Sam Walton, the first Wal-Mart store opened in Rogers, Arkansas, in 1962. Seventeen years later, annual sales toped $1 billion. By the end of January 2002, Wal-Mart Stores, Inc. was the world's largest retailer with $218 billion in sales. Wal-Mart's winning strategy in the U.S. was based on selling branded products at low cost, which enables the lower class and middle class consumers to shop for products and save. Due to the advances in technology over the years Wal-Mart has been able to achieve tremendous success. Wal-Mart's success has allowed the company to expand out of the United States.

About 100 million customers visit a Wal-Mart store somewhere in the world. Wal-Mart's marketing strategy was to guarantee "everyday low prices" as a way to pull in customers. Traditional retailers relied on advertised "sales." The company employed more than 1.3 million associates worldwide through more than 3,200 stores in the United States. Wal-Mart was named number one on the Fortune 500 list and was presented with the Ron Brown Award for Corporate Leadership, a presidential award that recognized companies for outstanding achievement in employer and community relations. Wal-Mart enjoyed a 50 percent market share position in the discount retail industry. Procter & Gamble, Clorox, and Johnson & Johnson were among its nearly 3,000 suppliers.

Though Wal-Mart may have been the top customer for consumer product manufacturers, it deliberately ensured it did not become too dependent on any one suppler; no single vendor constituted more than 4 percent of its overall purchase volume. Further, Wal-Mart had persuaded its suppliers to have electronic "hook-ups" with its stores. About 85 percent of all the merchandise sold by Wal-Mart was shipped through its distribution system to its stores. Wal-Mart used a "saturation" strategy for store expansion. The standard was to be able to drive from a distribution center to a store within a day. A distribution center was strategically placed so that it could eventually serve 150 - 200 Wal-Mart stores within a day. Stores were built as far away as possible but still within a day's drive of the distribution center; the area then was filled back for saturated back to the distribution center. Each distribution center operated 24 hours a day using laser-guided conveyor

belts and cross-docking techniques that received goods on one side while simultaneously filling orders on the other. The company owned a fleet of more than 3,000 trucks and 12, 000 trailers. (Most competitors outsourced trucking.) Wal-Mart had implemented a satellite network system that allowed information to be shared between the company's wide network of stores, distribution centers, and suppliers. The system consolidated orders for goods, enabling the company