Wal-Mart is undoubtedly the biggest and matchless retail chain across the globe. It was founded by Mr. Walton in 1940s. Since then, it has embarked upon becoming the most successful and distinctive retailer, which offers premium everyday shopping experience with its ultimately unparalleled prices. Wal-Mart offers an extensive range of products under one roof that are primarily sorted into 14 key categories including groceries, baby-care items, electronics, books & movies, outdoor living and photo, home decor, fitness & sports, gaming, health & beauty, jewelry & apparel, medicine, toys, movie and furniture (Wal-Mart, 2016). This paper focuses on analyzing the retail and pricing strategy of Wal-Mart while also analyzing the current competitive situation.
Wal-Mart’s Pricing Strategy
Wal-Mart's pricing strategy is based on selling its products always on low prices. This approach is commonly known as EDLP i.e. Everyday Low Price. Wal-Mart upholds aggressive strategy for its product pricing, which is the actual reason why it has been able become price leader of the retail industry (Ellickson, 2013). Wal-Mart always aims at offering low prices, discount, as well as, occasional and seasonal discount in order to deliver the ultimate pricing benefits to its valuable customers (Wal-Mart, 2016). The products offered at Wal-Mart price are commonly sold at 15% less price than the market retail price (Ellickson, 2013). The company predominantly uses its low-cost transportation systems (based on cross-docking), which enables it to get the products at the least price from the suppliers (Basker, 2015). This works as the primary driver behind the Wal-Mart’s low price strategy and results in enabling it to offer the least and matchless market prices. On a competitive note, Wal-Mart only relies on its cost leadership approach; however, its competitors like Tesco and Asda are also focusing on the differentiation factors that are also vigilantly managed by Wal-Mart through its Sam’s Club Discount offers and Credit Card facility to its customers. This shows that Wal-Mart’s everyday low pricing is classic for achieving cost minimization through aggressive marketing strategies. Wal-Mart has also proven to manage and let down the competitive market forces though its pricing strategy, even onthe factors where it fails to compete. For instance, to manage the differentiation tactics of Tesco and Asda, Wal-Mart offers its customers to use their Wal-Mart’s personalized credit card in order to avail more discount and special offers. Likewise, members of the Sam’s Club can enjoy a discount from any Wal-Mart across the globe (Wal-Mart, 2016).
Wal-Mart’s Retail Strategy
The success of every business is highly dependable on its retail mix as the strategy has to be effective in order to efficiently compete in the market. Retail strategy plays a significant role in influencing customers towards a brand. Variables of a retail strategy include location, pricing, visual merchandising, promotions, customer service, store design and layout. Being a number one retailer in the industry, Wal-Mart has successfully managed all these components that make it stand out in the competition (Basker, 2015). Wal-Mart has blended these factors in a strategic way and as a result, they are consistently posting an overwhelming victory to the business. For instance, Wal-Mart has conveniently located its stores across the globe choosing the premium and the most accessible shopping locations within the national, metropolis, regional and communal premises in order to mark the higher availability. Likewise, the prices are set to be the lowest in the market with the everyday discount that keeps on persuading customers to buy more. It also maintains its store design and layout that are reasonably attractive with special product display. Considering the visual merchandising, shelves are well organized with clear price display (Ellickson, 2013). The products are displayed with well-proposed ideas so that they are inviting and appealing. Wal-Mart also effectively use TV advertisement, Radio advertisement and newspaper ads to disseminate the information regarding its latest promotions and discounts. Last but not the least, Wal-Mart’s customer service is exceptional as the attendants are very helping and friendly, which also serves as an x-factor to Wal-Mart’s retailing charisma (Basker, 2015).
References
Basker, E. (2015). The causes and consequences of Wal-Mart’s growth. The Journal of Economic Perspectives, pp. 177-198. Data Retrieved From http://web.ebscohost.com.ezproxy.apollolibrary.com/ehost/search/basic?sid=24a66480-0bbc-4d4c-9709-42fc04eedd4e%40sessionmgr114&vid=1&hid=120 on May 13, 2016
Ellickson, P. (2013). Just How Big is Wal-Mart’s Impact? Data Retrieved From http://www.simon.rochester.edu/faculty--research/latest-research/working-papers/just-how-big-is-wal-marts-impact/index.aspx on May 13, 2016
Wal-Mart. Official Website. (2016). “Wal-Mart: Our Story”. Data Retrieved From http://corporate.walmart.com/our-story/ on May 13, 2016
