1. Evaluate Walmart’s new marketing campaign and tagline. Did the company make the right decision to drop “Always Low Prices. Always.” as a tagline? Why or why not?
2. Walmart does very well when the economy turns sour. How can it protect itself when the economy is on the rise? Explain.
1. Evaluation of Walmart’s New Marketing Campaign and Tagline
The traditional retail chain, Walmart, introduced their new marketing strategy on 2007 having the tagline, “Save Money. Live Better”, to ensure a better growth in their business. The new campaign has aimed to minimize the expenses of the consumers resulting in increase of their savings. Walmart made their new marketing campaign through television commercials to reach the mass. Those commercials denoted that in the current economic state, no other organization can help to maintain a proper family budget as Walmart (corporate.walmart.com, 2016). The company has made the expense structure in such manner so that a family can save at around $3100 a year, which is quite reasonable in the case of shopping.
Walmart has also communicated through its TV commercials that it has a substantial impact on decreased energy costs. Apart from that, it has been depicted that by a reduction in energy costs has also led to increasing in retirement savings and coverage of health care. The company took some measures at the time when the recession was prevailing by inducing massive price cuts during shopping to enhance the assurance of new customer enlistment (Steen, 2015). They also reduced the cost of the electronic goods and toys during the holidays by renovating the store structure. It was done through an effort named Project Impact. The project was initiated to maintain the stores cleaner, easy for mechanization leading to create a feel-good effect on the customers (Brea-Solis et al., 2015). Thus, the customers shop their product with the ultimate satisfaction as they desire. In a weak economic structure, Walmart has initiated a good strategy of having a product mix of forty-five percent consumables compared to its competitor Target’s twenty percent (Yee & Yazdanifard, 2015). Therefore, Walmart has become able to reach its target audience at the optimum level by imposing its new campaign.
The tagline denoted that increased savings can result in the better satisfaction of a customer. If a customer can save money from a particular expenditure, then he can utilize the same for some other purpose (Anyon, 2014). The savings of the money from a segment and investing the amount in some other category makes a person feel better as he can think of investing his financial resources as per his desires. Therefore, more savings indicate the more buying power of a customer.
Walmart decided to drop the tagline “Always Low Prices, Always” in the year 1996. As per the changing business scenario, the decision was right to take.
In the year 1992, when Walmart opted the tagline to promote their activities, they were keen to get the maximum number of customers to buy products from their retail chain. At that point of time, to enhance the revenue at a constant acceleration, Walmart aimed to lower the price of its products (Truss et al., 2012). Due to that reason, a vast number of consumer base was created where customers affordability to buy products was much higher. But as time passed, the company realized that offering products at very low prices were eventually affecting their profitability. The margins were quite small which was hampering the position of the company in the competitive market (Steen, 2015). It was a wise decision to turn down the policy of making the price of the product low always as it ensured to sustain the company's excellence in the market. The company launched a campaign on price rollback where they highlighted the simple yellow smiley. The company exposed the smiley not only in the TV commercials, but also in the uniforms of its employees (Truss et al., 2012). It has been noticed that the campaign leads the business to recover its stock up to 1173 percent in the nineties.
2. Explanation on Protection of Walmart during Economy Rise
Walmart has proven that it can flourish in its activities, even the economic conditions are not favorable. It maintained its prosperity when the recession was existing. When the economy is on the rise, it implies that customers have more liquid cash in hand indicating more buying power. Such conditions are favorable to sell the products more even at a much higher price. It denotes that there is a clear-cut chance of increased competition in the market as all the competing retail chains, jump with their full force to be the leader (Brea-Solis et al., 2015). In such conditions, Walmart should offer attractive discounts to its customers while selling the product. They should more concentrate on the visualization of their stores by making them clean, bright and readily available for proper mechanization as their competitor Target did during 2005 to 2007.
Walmart should also make their TV commercials more attractive by launching favorite faces to gain more concentration from the target audience. As it has been noticed in the late nineties that, Walmart earned more revenue by adopting the smiley face campaign. Therefore, it should maintain it during the upward economic situations. Although the company should provide discounts, still the price should be reasonably high to achieve a good margin (Yee & Yazdanifard, 2015). Moreover, to have a lead in the market share, the company should empower its activities like construction of buildings from recycled items, reduction of energy usage and transportation costs and also attract consumers for buying more green products.
In the upward rise of the economic conditions, Walmart should maintain a healthy work culture for its employees (Anyon, 2014). They should do it by providing a reasonable pay structure to them. They should offer flexibility in shifts and leave, healthy work environment for women workers and a sufficient grooming to the entire workforce so that they can serve their customers in a better way (Truss et al., 2012). In February 2015, Walmart decided to invest $ 1 billion in training and grooming of the workers.
The company should also enlarge the number of its associates which will spread their business throughout the globe. They should also develop a good relationship with the suppliers to ensure continuous delivery of products. Increasing the number of vendors will maintain the level of inventory in the stores meeting customer’s requirements. The company should also make an effort for the development of the manufacturing process so that more products can be launched (Anyon, 2014). They should advance for procuring renewable energy, should aim to reduce wastage and should start sustainability leaders shop to maintain their market share.
Anyon, J. (2014). Radical possibilities: Public policy, urban education, and a new social movement. Routledge.
Breaâ€Solís, H., Casadesusâ€Masanell, R., & Grifellâ€Tatjé, E. (2015). Business model evaluation: quantifying Walmart's sources of advantage. Strategic Entrepreneurship Journal, 9(1), 12-33.
Corporate.walmart.com,. (2016). Sustainability. Retrieved 24 February 2016, from https://corporate.walmart.com/global-responsibility/sustainability/
Steen, J. C. (2015). How Customer Shopping Motivation Influences Perceived Design of the Retail Environment.
Truss, C., Mankin, D., & Kelliher, C. (2012). Strategic human resource management. Oxford University Press.
Yee, M., & Rashad Yazdanifard, F. (2015). How Consumer Behavior is Affected by Sight and Hearing in Terms of Promotion?. Global Journal of Management And Business Research, 15(4).