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Walmart Market Segmentation Analysis

1986 words (8 pages) Essay in Marketing

03/07/17 Marketing Reference this

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According to the definition of Kotler, ‘Marketing strategy is the marketing logic by which the business unit expects to achieve its marketing objectives. Marketing strategy consists of making decision on the business’s marketing expenditures, marketing mix, and marketing allocations in relation to expected environmental and competitive conditions.’

Marketing strategy is the process by which the organization translates its business objectives and business strategy into marketing activity (Paul Fifield, 1998).

Fortune Company: Wal Mart

Wal Mart was established by Sam Walton with an innovative vision of discounted retailing store. It is the leader in the discounted strategy market.

Goals of Marketing Strategy

The goals of marketing should be SMART (Specific, measurable, attainable, realistic and time limit). The best marketing plans are result oriented. They define specific, realistic, measureable goals within the time parameters.

The goals of the marketing strategy include a strong brand, building a strong customer base and increasing product/service sales. The goals of the marketing strategy should be specific that how these goals will be beneficial and mean for the company. (O. C. Ferrell, Michael D. Hartline, 2007)

  • Creating a strong brand

Is the company going to start from the scratch or building on a familiar name? What is the brand awareness level of the company, product or the services? What are the features and characteristics of the brand which the company wants to reinforce in the minds of the consumers? What is the target level of brand awareness which company wants to achieve?

  • Building a strong customer base

Who are the best customers of the company? What customers are most likely to spend money and return? What is the profile in terms of demographic and physiographic of the ideal customers? How can the market be reached either online or offline? What are the particular features and characteristics which inspire and attract the loyalty of the ideal customers?

  • Increase product/service sale

For an existing business, what is the current level of sales? For a new business, or new division of an existing business, how the future demand of the product/service sale can be predicted? What is the capacity of your business to handle the new level of sales growth? What is the ability of your production and how much quantities of the product can be produced / distributed? Would your existing staff be able to provide the services or additional staff will be required? (Linda Pinson, 2008)

The marketing activities will make the large part of the overall business expense, so there is the need of understanding by the investors and the bankers of the company that what results the management of the company is looking for.

Marketing Strategy of Wal Mart

The marketing strategy of Wal Mart has following two objectives:

1. Customers would be provided according to their demands, when they want and all at a value. Customer is mainly focused in this first objective.

2. This second aim covers the main base of the company that is employees and team spirit. The company second objective is to treat each other as we would hope to be treated acknowledgeding our total dependency on our associate; partners to maintain the company’s success.

The marketing strategies of Wal Mart are successful because these consider the elements such as social and environmental reasons.

Marketing Research

Marketing research is conducting to know the customers opinion, it can be done pre-production, post-production or re ‘ launch of the product. Marketing research varies from scale to large scale depends upon the company willingness to gather in-depth information.’ There are different marketing research methodologies. All research approached can classified into one of the three general categories of research: exploratory, descriptive and causal. These methodologies differ significantly in terms of research purpose, research questions, the precision of the hypothesis that are formed, and the data collection methods that are used.

1. Exploratory Research: This method is used when one is seeking insights into the general nature of the problem, the possible decision alternatives, and relevant variables that need to be considered.

2. Descriptive Research: Descriptive research embraces a large proportion of marketing research. The purpose is to provide an accurate snapshot of different aspects of the market environment.

3. Casual Research: When it is necessary to show that one variable causes or determines the values of other variables casual approach must be used. (Cravens, 2009)

Research Techniques used by Wal Mart

Walmart relied on Exploratory Research Design (Experience Surveys). Exploratory research design was employed by Walmart mainly because it provided with insights into the factors that matter the most. This design facilitated in probing the emotions, attitudes and feelings that go into the purchase behaviors of the customers of Walmart. Regarding experience Surveys the main purpose of these surveys was to gain a general idea about the Walmart. (Walker, 2006)

Internal & External Forces affecting the Marketing Strategy

Here is the analysis of the internal and external forces which are affecting the marketing strategy of Wal Mart in terms of SWOT analysis.

Internal forces include the Strength and Weaknesses. (Gary Armstrong, Philip Kotler, 2007)


  • customer base
  • Powerful retail brand
  • Largest retailer in the world
  • High ability to have an impact socially and economically
  • Pioneering abilities and experience’
  • Largest employer in the world
  • Among the highest for net sales in the world
  • Has maintained an aggressive growth strategy adding new stores at a high rate
  • Global presence


  • The source of public criticism over low wages, poor health care, killing the small town, discrimination, and violating child labor laws
  • Price deflation because of purchasing a high quantity of items and having to sell at reduced cost (overstocking)
  • Too many stores too close together
  • High employee turnover rate
  • Do not attract higher income customers
  • History of making promises it can’t keep in regards to earnings
  • So many suppliers they are hard to track
  • Huge span of control
  • External forces include the Opportunities and threats. (Gary Armstrong, Philip Kotler, 2007)


  • Mergers, take over and strategic alliance with other global retailers specially in Europe, and China
  • Opportunities to open stores in large consumer markets such as China and India
  • New locations in big market will offer the opportunity to Wal Mar to exploit the market
  • Continue with its current strategy of large super centers.


  • Being number one has to face high competition

Importance of Market Segmentation in Marketing Strategy Formulation

Marketers divide the market into different segments or sub market to capture the heterogeneous market for any product. This process is known as market segmentation.

Market segmentation can be defined as ‘dividing the market into distinct groups of buyers with different needs, characteristics and behavior who might require separate products or marketing mixes’.

Segmentation is the basis for developing targeted and effective marketing plans and strategies. Beside this analysis of market segments helps to make decision about intensity of marketing activities in particular segments.

Market segmentation is important in marketing strategy formulation because of the following aspects.

  • Helps to identify and separate one customer group from other within a provided market.
  • Helps in the choice of a proper market
  • Assists in the successful tapping of the market
  • Facilitate in dividing the market so that those can be overcome successfully
  • Helps to develop the strategies which are beneficial to each group
  • Helps to develop the marketing programs on the basis of prediction
  • Make the market efforts efficient and economical
  • Helps to identify the less satisfied group of customers and get the success by fulfilling their desires

Wal Mart is also moving from its strategy of one store fits all ‘ mode of standardization- and targeting different market.

Wal Mart is categorizing its 3400 US stores into six different models:

  • The Affluent
  • African American
  • Hispanic
  • Empty Nesters
  • Suburbanites
  • Rural

Market Segmentation in Strategy Formulation of Wal Mart:

Wal-Mart is victorious not only because it makes sound strategic administration decisions, but also for its original accomplishment of those strategic decisions and due to this innovative accomplishment of those strategic decisions as such there are not specifiable risks are involved in segmentation session.

Regarded by many as the industrialist of the century, Walton had a standing for caring about his customers, his employees and the population. In categorize to maintain it’s promote position in the concession retail business, Wal-Mart executives maintain to adhere to the management guidelines Sam residential. Walton was a man of easy experience and took a keen interest in people. He believed in three guiding principles that are customer value and service, partnership with its associates, community involvement. (Art Weinstein, 2004)

The Customer: The word constantly can be seen in virtually all of Wal-Mart’s journalism. One of Walton’s earnest beliefs was that the purchaser is always right, and his stores are still obsessed by this way of life. When questioned about Wal-Mart’s secrets of success, Walton has been quoted as maxim; it has to do with our craving to exceed our consumer’s break every hour of every day.’

The Associate: Walton’s greatest success was his ability to sanction, improve, and coach his employees. The sum of the investments generated by the associates actually paid for the construction of a new store in Texas. One of Wal-Mart’s ambition was to provide its employees with the proper utensils to do their jobs ingeniously. The equipment was not used as a wealth of substitute existing employees, but to provide them with a means to succeed in the retail promote.

The Community: Wal-Mart’s charisma can be linked to its homeland identity. Walton believed that every purchaser should be greeted upon entering a store, and that each store should be a manifestation of the values of its regulars and its neighborhood. Wal-Mart is involved in several population outreach programs and has commenced several national efforts through business development grants.’

Conclusion: The ever changing market nearby abiding challenges to merchant. Foremost, retailers must identify the strong proposition of a ‘buyers market. Customers presented in a spacious choice of shopping experiences, but no one contrive can capture them all. Therefore, it is incumbent upon supervision to characterize their target market and direct their energies toward solving that specific market’s problems. Technology, demographics, customer position, and the advent of a global country are all hatch up to rewrite the rules for success. Triumph in the next century will relay upon the level of thoughtful retailers have about the new values, expectations, and needs of the shopper. If Wal-Mart prolongs its customer-driven background, it should remain a retail commerce organizer well into the next decade.'(Cravens, 2009)

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