Branding
Issues & Positioning of Wal-Mart:
Wal-Mart has long been positioned as the low-price
leader. Wal-Mart is an incredibly strong brand. It has very high awareness and
an exceptionally clear positioning. Wal-Mart stands for low prices. The company
is relentlessly focused on reducing costs and giving consumers the lowest
prices. Just a few weeks ago Wal-Mart changed their positioning statement…and
there’s an important lesson here for all of us. For years Wal-Mart’s positioning
statement, has been “Low prices…Always low prices!” It appeared on their
stores, in their ads and on their website.
But earlier this month they quietly changed their slogan
to, “Save money. Live better”. This is a
small but beautiful change. In fact,
it’s brilliant. It defines a clear
benefit “live better”.
Wal-Mart has a very big problem; many people no longer
think Wal-Mart has the lowest prices. The Wall Street Journal is reporting
that recent studies indicate most consumers in the United States think other
stores are cheaper. A Morgan Stanley study, for example, revealed that 60% of
Wal-Mart shoppers don’t think Wal-Mart has the best prices. This is a huge
problem for the Wal-Mart brand. The biggest problem is that this is a
perception issue. People have trouble keeping track of exact prices, so
perceptions are important. If people think a price is low, then it is appealing
regardless of the actual price. If people think they could get a lower price
somewhere else, then they will likely go somewhere else, regardless of whether
the prices actually are lower. So Wal-Mart won’t be able to fix this issue by
just ensuring that prices are low, or even by advertising that prices are low.
Wal-Mart has a major problem indeed.
To minimize the problem and risk, the Wal-Mart has taken
some initiatives that are given below:
Wal-Mart had been founded on Sam Walton’s belief that:
“There is only one boss: the customer.” For Wal-Mart, the essence of customer
service was low prices. Hence, Wal-Mart’s marketing strategy has been built
upon its slogan “Everyday Low Prices”: Wal-Mart’s customer appeal is as a price
leader across its entire product range, all the time—it does not engage in
promotional price cutting. The centrality of “Everyday Low Prices” to
Wal-Mart’s relationship with its customers had important implications for its
marketing activities. Wal-Mart is able to rely on word-of-mouth communication
of its merits and is able to spend comparatively little on advertising and
other forms of promotion.
Wal-Mart increasingly became a target for politicians and
pressure groups, former CEO Lee Scott initiated a major shift in the image that
Wal-Mart project to the world. Wal-Mart launches a company-wide image makeover
that involved a new corporate logo and a redesign of its stores. Wal-Mart is a
pioneer in applying information and communications technology to support
decision making and promote efficiency and customer responsiveness.
Point-of-sale data analysis also assists in planning store layout.
Wal-Mart has determined that corporate executives should
keep closely in touch with customers and store operations. The result is a
structure in which communication between individual stores and the Bentonville
headquarters becomes both close and personal. Wal-Mart’s regional vice
presidents are each responsible for supervising between 10 and 15 district
manager. The key to Wal-Mart’s fast-response management system was linkage
between the stores and headquarters. This way Wal-Mart is trying to gain their
brand equity and brand image.
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APA Documentation:
