Critical Analysis of Contemporary Issues and Future Developments in Marketing of Wal-mart Company - Book Report/Review Example

Critical Analysis of Contemporary Issues and Future Developments in Marketing Introduction Marketing, like other business functions is integral tobusiness management. It is an ever changing field, which remains current by addressing problems that are current to the business environment. Likewise, marketing also prepares companies for future challenges in the world. Given the uncertainties that it faces, marketing does well to create a road map for the future. These aspects of management are best explained through an example. Walmart, the retailing giant is a good example as a case in point. The aspects viz. globalisation, increasing brand awareness, increasing competitiveness, market share issues, faltering reputation and new product development are explained in this report in the light of the Walmart experience. It is the world’s second largest company and the largest private employer. 2. Globalisation It has been observed of late, that globally marketable goods are the focus rather than standard products sold internationally. According to Holt et al (2004), consumers regard global brands as having higher quality and appealing to a larger cosmopolitan section (as cited in Parsons & Maclaran, 2009, Ch 12). There is a shift in consumer preference for brands that have a global presence and are vouched for by the maximum number of people. International marketing is the “performance of business activities that direct the flow of a company’s goods and services to consumers or users in more than one nation for a profit” (Ghauri & Cateora, 2009, pp 1/7). It leverages the advantages of marketing in one country for use in other countries. However, regional variations are required to make the product offered appealable to each market. The greatest leveller all over the world is competitive prices. This is understood by all sections of consumers and Wal-Mart takes advantage of this very factor to stay ahead of competition. Walmart comprises three divisions viz. Walmart Stores U.S., Sams Club, and Walmart International. There are nine retail versions in which it functions viz. supercenters (comprising the online retailer, walmart.com), food and drugs, general merchandise stores, bodegas, cash and carry stores, membership warehouse clubs, apparel stores, soft discount stores and restaurants. Walmart Market closes the distance between discount store and supercenters. Walmart opened ‘Supermercado de Walmart’ to woo the Hispanics in the United States. Walmart Express caters to smaller towns with lesser capacity or larger cities with less space. It has left its footprints in Canada, the UK and Brazil by taking over existing outlets. For the future, Walmart faces a globalised consumer base. The clientele is particular about which brands it uses. Only brands with a reputation which are endorsed across sections are preferred by the consumers. The attention span of customers will be lesser. Each brand will compete fiercely to get noticed by customers. Changes should be incorporated among brands so that they remain ahead of competition. Newer markets should be sourced by means of acquisition of foreign companies by the parent Wal-mart Company. Based on the changes in preferences of the customers, Wal-mart needs to vary or modify its product mix as an offering to the customers at large. This has a bearing on the different stores of Wal-mart located all over the world. 3. Increasing brand awareness “A successful brand is an identifiable product, service, person or place, augmented in such a way that the buyer or user perceives relevant, unique added values which match their needs most closely” (Chernatony & McDonald, 2012, p. 25). From the above definition, we can say that the products and services provided by Wal-Mart are diverse, varied and easily recognisable. The customer gets the impression that he receives added value by consuming what Wal-Mart has to offer. Moreover, the products and services offered are suitable to the customers and match his requirements in the best possible way. Millenials or Generation Y consumers are highly brand conscious. Born after 1981, they leverage a brand and in doing so solidify the personal image of the brand (Dos Santos & e Silva, 2013, p. 6). Hence, they choose brands that are perceived favourably among peers. They also look for instant gratification from the brand. Since they were born after 1981, they are the generation which came of age in the digital era (Ibid). They are the generation that best understands cyberspace and harnesses it to their utmost advantage. Hence, concepts like online advertising and the use of social media appeal the most to them. The older lot among Generation Y are gainfully employed and have disposable income to spend on various goods and services offered by Wal-Mart. Hence, targeting this section requires specific marketing that can be a game changer vis - a - vis other competitors. They require products that can satisfy them instantly rather than providing products which take time to sink into their conscience. Given the plethora of options laid out in front of them, Wal-Mart needs to offer attractive products that can hold their attention for considerable time. Given that they give importance to peer opinions, the general opinion of a homogeneous group becomes the basis for purchase by everyone in the group. In the contemporary world, the economy is well connected and linked to various aspects of business life. Hence, it becomes necessary to understand the effects of linking brands to other entities like person, place etc. Various marketing activities need to be integrated to create the appropriate brand knowledge structures (Keller, 2003, p. 599). Every customer associates a brand with something due to the mental impression that he/she has about the product. Hence, a well thought of and planned structure can actually lead a customer to complete a transaction. 4. Increasing competitiveness In competitive strategy, it is important to gather information on competitors (Hooley & Graham, 2008, p. 140). Each competitor has a different way of facing the market. Different attributes regarding competitors need to be collated and compared with each other. Each competitor’s product mix should be closely examined. This helps in predicting the future course of action undertaken by each competitor individually. Unless this is done with a fair amount of accuracy, no company can stay ahead in the rat race. To remain competitive in the global scenario, companies execute their activities through subsidiaries. These are owned by the multi-national corporation (MNC) but situated outside the company (Homburg, et al, 2012, p. 1-2). The best option for Wal-Mart would be to continue the current acquisition model. Rather than creating subsidiaries from scratch, acquiring existing ones is a better option. Developing new subsidiaries involves costs. One should have done the ground work required in advance. A faulty understanding of the market can lead to heavy losses in the inception stage itself. However, an existing subsidiary would have its own experience in the market. The very act of acquiring an existing subsidiary ensures that it turns round the corner and starts making profits. Wal-Mart should enhance its competitiveness by understanding the different players in the market. It should leverage the synergies resulting from the subsidiaries present all over the world. In future, market research could be a pre-requisite for timely determination of existing competitors. Wal-Mart has forayed into the luxury segment of late where the adage ‘one size fits all’ does not hold water. In such segments, each customer is a segment by himself. Hence, every customer requires tailor-made solutions for any problem at a given point of time. In the general sales aspect, Wal-Mart has had to conduct better segmentation of its target to be more effective. This required a closer look at people’s preferences, the buying habits, the time of purchase etc. Wal-Mart has adopted the latest techniques to reach out to its audience. While online advertising has established itself over the years, the social media have not been far behind. Social networking sites have been used to target customers from all strata of society. These have also been used as Public Relations (PR) tools to stay ahead of the race. Wal-Mart has been able to steal a march against competitors by intimating its policies all over the world. 5. Market share issues To increase one’s share of the market, a company has to study the nature of customer base. Segmentation should be properly done to focus on the target groups. In one segment, a distinct marketing mix satisfies a group of customers with similar requirements (McDonald, 2007, p. 56). Wal-Mart has the advantage of being a leader in the global retail business. It offers various products to customers. The Unique Selling Proposition (USP) of Wal-Mart is its competitive price. The very reason for the dominant share of Wal-Mart is this price. However, it cannot rest on its laurels in a dynamic environment. Wal-Mart needs to be on its toes and make itself continually relevant to the present day. While a dominant market share gives a company the right to finance and other services for routine business, this alone does not foreclose the chance of new players coming up and supplanting Wal-Mart. Technology is a great leveller in that it throws open newer avenues to people for business. If Wal-Mart stagnates, it will not be in a position to retain the dominant share that it currently holds. Technology throws up opportunities which had hitherto been unknown to man. Any startup venture can use technology to its utmost benefit to create new models for business. Over a period of time, such models become entrenched and form the basis for competition in a given industry. Wal-Mart will not only stand to lose if it does not adopt newer models, but will eventually be pushed into oblivion by the customers themselves. As soon as Wal-Mart perceives a change in the rules governing its dominance, it would be prudent to study the threat facing it. Timely action could prevent the spread of competition. Similarly, an early beginning gives it a lee way to adjust to new circumstances in relation to the new comers. If there is a delay on the part of Wal-Mart to react to the circumstance, it may eventually be pushed out of competition itself. Added to this, it may not get the time to recover and face the challenge lying in front. This being a given, it makes sense for Wal-mart itself to invest in R&D which can keep it current in the market. In this manner, Wal-Mart is abreast of all latest developments and provides timely response to new comers. Hence, reinventing itself makes Wal-Mart set the agenda in its area of dominance. 6. Faltering reputation Brand image comes from various personal and environmental factors. The clearer the dimensions that go into a brand, the stronger the brand is (Wijaya, 2013, p. 63). An unclear brand is like a rolling stone which catches no moss. The consumer needs to associate it with something familiar. Each individual makes a mental image that he can associate with the brand in question. If it does not have a clear cut position, it will neither register in the mind of the consumer nor attract him in any way. Irrespective of the dimensions go into a brand, it should be bereft of any ambiguity that prevents its association with someone (or something). In the case of Wal-Mart, the reputation enjoyed among consumers has taken a beating. One reason is the Bangladesh collapse of a garments factory. The severe criticism is an indicator of the reputation that Wal-Mart enjoys. Since it sources its products from various sources, the safety and security of places associated with it are a cause for concern. Given the means that Wal-Mart has at its disposal, the onus of care and compensation falls on its shoulders in the final reckoning. Wal-Mart needs to undertake a PR exercise to clear the blot on its name. It needs to be actively involved in providing corrective solutions to the incident. Hence, there is the need for justified compensation to those affected by the accident. Moreover, the manner in which it treats its part timers has been criticised. That some sections of Wal-Mart are not unionised has been a thorn in the flesh of trade unions. Human Resource issues need to be sorted out within reasonable time, lest they be blown out of proportions. Any intervention from Wal-Mart may not be tolerated by Wal-mart and can only make matters worse. The bribery issue for building permits in Mexico has also not helped either (D’Innocenzio, 2013). While the issue of kickbacks to a limited extent has always existed in business, it cannot give way to any institutionalisation of any sort. It is always better to be perceived to take the moral high ground. Customers give value to ethics and expect fair treatment to everyone. While no one is entirely free of blemishes, it is the swiftness with which one corrects the situation that attracts the attention of people at large. This reassures customers that in a different situation, they can expect justice from itself. 7. Drive for new product development New Product Development is basically multi-disciplinary in nature. Research in this field touches general management, OB, economics, technology, operations, design, engineering and marketing (Baker, 2004, p. 300). The rationale behind a new product could range from market share to innovation & new technology being provided. Hence, it draws on various fields for the inspiration to create a new product. While innovation by itself is not a negative proposition, a new invention can pip even the best innovation at the post. The root cause depends on the decision maker and other causes in combination which lead to a new product being developed. In the case of new products, quality management which used to be one of the characteristics of the product or service is now the success factor of the organisation as a whole (Hermanns & Liu, 2013, p. 49). Total Quality Management (TQM) originally started from Quality Control (QC) with standardisation as its aim. However, this gave way to Quality Assurance (QA) when quality became a habit. Hence, quality is no longer a distinguishing feature of a company. Quality has been taken for granted, given that every company worth its salt has jumped onto the quality bandwagon. Quality needs to be assured and only then are customers interested in the product. Customers are not only discerning in such matters, they raise the bar at regular intervals to push companies on the path of excellence. Hence, quality is crucial to the success of a firm. Wal-Mart can be said to have answers to such problems. A small firm gains economies of scale by operating a single large unit; however, such a firm cannot compete in the market (Reddy & Pellegrini, 2012, p. 55). Hence, given the size of Wal-Mart, finance is never an issue for beginning a new venture. A new product successfully introduced into the market is bound to pick up provided all indicators are well managed. Hence, one should keep in mind the implications of such a development before beginning. It is always better to make products that have a definite strike rate rather than being failures. While this is a financially prudent decision, the fruits of new products will not be known in the immediate present. Wal-Mart not only broad bases its product offerings, it gives customers the necessary variety to choose from. Wal-mart also has the option to phase out any products, in case any product does not attract the required demand. 8. Conclusion With the rapid change in business environment, a new model for competing in the market place is required. This is where relationship marketing comes in. It is not a makeover for conventional marketing (Christopher, Payne & Ballantyne, 2013, Ch 1, Summary). Rather, it advocates a long term interaction between the key agents and the company. To succeed in the market, it requires that a sustained effort should go into the marketing process. A business process is not a cure-all. The success of marketing and its reasons are too complex to correlate with each other (Smith, 2006, Ch 12). Given the dynamic nature of marketing, the value-add of many strategies is limited (Ibid, Afterward). However, the exercise of strategic planning in marketing is not an entirely futile exercise. It definitely provides a roadmap to follow in the uncertain world of business. References Baker, M. 2004. Marketing Theory. London: Thomson Learning. Christopher M., Payne, A & Ballantyne, D. 2002. Relationship Marketing. Oxford: Butterworth-Heinemann. D’Innocenzio, A. 2013. “Faltering Wal-Mart changes leaders”. The Register-Guard. Nov 26. [online] available at: http://www.registerguard.com/rg/business/30789228-78/mart-wal-company-mcmillon-duke.html.csp [accessed 10 Jan 2014]. de Chernatony, L & McDonald, M. 2003. 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