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This assignment is based on Walmart’s retail marketing in India. This assignment is made with the topic Walmart’s origin, their market position throughout the world especially in India. In how many countries they are operating their business, how many employees are working for Walmart, the business situation in India at present. I discuss three major things.

First of all, I discussed 6 elements of retail mix. These are product, price, place, promotion, personnel and presentation. I also discussed competitive advantage of Walmart in India.

Second task is that discussing main theme of competitive advantage and sustainable competitive advantage. I analyze 4 criteria of sustainable competitive advantage. These are benefit, unique, sustainable and profit of Walmart.

Third task is that evaluating PEST factors, identifying growth objectives and growth strategy of Walmart India. I also discussed how Walmart face some problem to enter in the Indian market. Solving the problem, they become market leader.

1 Introduction

Walmart is an American multinational retail corporation which works as a chain of discount department stores & warehouse stores. Headquarter of Walmart is situated at Bentonville, Arkansas, United States. Walmart was first launched their business in 1962. Founder is Sam Walton. They has now over 11,000 stores in 28 countries and has under 65 banners throughout the world. According to Fortune Global 500, in 2014, Walmart is the world’s largest company by income. Now worldwide 2.2 million employee work for Walmart in 28 countries. They offered various types of products like fresh food, grocery, dairy items, households etc. As a retailer Walmart launched their business in 2009 in India. When they enter in India, they faces different barriers like political, social, economic and technological. They find out demand of people and then they collect various product to meet the local demand and also demand of brand products. Now they become market leader because of their quality product and low level price of products. To sustain in the market they follow market penetration strategy.

2 Task 1

2.1 The analysis of marketing mix of Walmart

Every retailer follow 6 elements of retail mix. These elements are given below.

v Product

v Price

v Place

v Promotion

v Personnel and

v Presentation

Figure: elements of marketing mix

Now I am analyzing how Walmart manage elements of retail mix with competitive advantage they get.

2.1.1 Merchandise range and assortment in India

Walmart India provide different types of products on the basis of different categories like consumer packaged goods, general merchandise, household electronics, fresh product (fruits, vegetables, mutton, fish), dairy (milk and milk products).many more products are existed under one roof. Over 90-95% source of these products are local. It helps determining minimum level of price and adding local economic growth. Walmart offers wide range of items that can be defined as depth of Walmart.

Depth product range of Walmart in India

Walmart offers relevant categories with competitive pricing:

ü FMCG foods

ü Non Food

ü Electronics

ü Stationeries

ü Fancy items

ü Staples

ü Grocery

ü Home Appliances

ü Home Furnishing

ü Fresh Meat

ü Vegetables and Fruits

ü Dairy & Confectionery and many more.

Figure: Depth product range of Walmart in India

Breadth product range of Walmart

Walmart not only deliver local products but also brands products to the customer. These brands are included

Apparel
Homelines
Play day
Dr. Thunder
Equate
Great Value
Sam’s Choice and many more.

Various brand products they offered in order to meet the demand of customer beside local products.

Competitive advantage of Walmart

Walmart get some extra benefits than other existing retailer in the market like Tesco. Tesco provide quality service & product but it is not to the marginal level of customer and even they can’t maintain reasonable price in compare to Walmart. Even Tesco can’t meet the demand of the local product. So in competition Walmart get extra benefits.

Product life cycle stages of Walmart

Development stage: In this stage, Walmart take some initiative to introduce their product in the market and also talk about pricing strategy & quality.

Introduction stage: in this stage, product is introduce to the market to capture the market by providing quality product. Here, in this stage number of customers gradually increase.

Growth: Walmart already capture their growth stage and also well known in the market.

Maturity: Walmart is now in the stage of maturity. Here in this stage, sales are near about highest and make profit more and more.

Decline: Final stage of this cycle, sales begin to reduce. Though Walmart is not facing like that situation in the market.

Assortment and merchandise strategy

To control the market of India by Walmart, Walmart providing a wide range of products and services to marginal level of customer with affordable price and leading their position in the market.

2.1.2 Retail communications in India

Walmart as a retailer handles communication tools in order to create its brand name in the mind of consumer.

These communication can segment into two parts. These are

1. Store based and

2. Market based

Store based: Store based communication tools are given below

§ POS display: different categories product like local and brands are displayed to consumer who come to Walmart.

§ Personal selling: personal selling by employee who are employed for influencing customer to buy the product. Personal selling is one kind of promotional activity.

§ In store sells promotion: people who come to Walmart to buy product, they can choose product which he or she intends to purchase. This intended product, consumer collect from store.

§ In store advertising: In this tool, various messages is shown before shoppers at Walmart to capture attention of customer.

§ The retail sell: to promote sell, the retail sell is a tool used for promotional prices for a specific period

Market based: Different market based promotional tools are discussed below

§ Sales promotion: sells promotion means induce customer to purchase product applying some incentives like discount.

§ Advertising: advertising means give message to shoppers through newspaper, television, and magazine to attract shoppers.

§ Direct marketing: Walmart provides direct message to shopper or contact directly for promotion.

§ Sponsorship: To attract customer interest they sponsor in different international events like football, cricket.

§ Public relations: Walmart uses different forms of social media to promote public relations

§ Exterior design: sometimes they communicate directly with passers-by to give the message about company.

Competitive advantage in marketing communications of Walmart in India

Walmart use promotional tools so that they can capture a wide range of market by offering low level of price and quality product.

2.1.3 Store layout, Store design and visual merchandise

Three popular store layout design commonly used by retailers are shown belo

v Grid pattern

v Free-flow pattern

v Boutique

Figure: store layout pattern

Among the three Walmart, use grid pattern. Walmart’s following fixtures are placed in long rows or runs throughout the store. Consumer can easily look for everything what they need. Walmart has store division of each department. For instance, grocery areas that include bakery, frozen food, dairy food.

Figure: grid pattern

Store design: two ways are followed in store design. These are

External Design:

v Location: Walmart India select 20 best price wholesale stores in 8 states. A best price store is about 50,000 square feet and sells a wide range of fresh, personal and home care, clothing, and groceries.

v Signs: Walmart India uses their own board as an indicator.

v Windows: Walmart India uses glass around the whole retail store so that consumers can get refreshing environment.

v Entrance: entrance system of Walmart India is made easy so that consumers can easily enter.

Interior design

v Floor covering: Inside Walmart India, the whole ground is used tiles.

v Ceiling: They decorates their whole store ceiling with lighting and ornamented frame.

v Mirrors: Walmart India uses glass around shop and made an opportunity to see inner scenario from outside.

v Checkout: In India, Walmart store keep checkout point for collecting money from customers.

v Display: Inside the Walmart shop, every items of product display so that shoppers can easily choose product.

Visual merchandising

Walmart India use visual merchandising to capture customer attention. By seeing product, customers sometimes motivated to buy product and easily purchase by choosing. In the shop all product items are displayed before customers.

Competitive advantage in store layout, design, visual merchandising

Walmart India attract a wide range of customers and also motivate, by using Competitive advantage in store layout, design, visual merchandising. For this reason, they get some extra benefit in competitive advantage.

2.1.4 Customer service and facilitating services in India

Walmart provides expert in logistics, supply chain management
Lowest possible price.
They give discount on various items of products.
Products is hygiene and safe.
All products well packaged.
Trained salesperson for providing good service with good body language and good manner.
Separate washroom on the basis of sex.
Providing after sales service
Keeping local products beside brand products in the store for customers.
Well decorated, well display

Competitive advantage in Customer service and facilitating services:

After providing sales service, keeping reasonable price, maintaining quality product and meet the demand of local and brands products in terms of Customer service and facilitating services, Walmart get competitive advantage than competitors in the market.

2.1.5 Store formats and locations in India

Various store format based on merchandising categories and pricing. Some formats are given below.

Family store

§ Specialty store

§ Departmental store

§ Supermarket

§ Superstore

§ Shopping mall

§ Shopping Centre

§ Hypermarket

Figure: store format

Among all format Walmart follow specialty store as they are retailer. Specialty store is that some specific products are categorized under segment of unique product like grocery items fresh, frozen and chicken food.

Retail location

Location is important as a retailer in the market. Location works as a key factor to attract customers. A good location also increase brand name. To determine location of well-established brand like Walmart, they has to cost highly. Some factors work to choose location. These are

Ø Income of people

Ø Traffic

Ø Number of population

Ø Geographic situation

Competitive advantage by using formats and locations in India

Establishing retail shop in the crowded area, near to road and in the area where disposable income is high, Walmart get extra competitive advantage in the market though local and established brand are existed.

2.1.6 Pricing strategy and tactics

Two pricing strategy are followed in terms of retail marketing. These are

Skimming pricing: skimming pricing is that making higher profit by setting higher price of products. Following this strategy, a company get more profit within short time.

Penetration pricing: Penetration pricing is that setting low price of products a company can easily capture maximum number of customers. Walmart apply or follow this strategy.

Competitive advantage by using pricing strategy and tactics:

Walmart follow penetration pricing. They determine low level price in every categories of product. By applying this policy, they get maximum number of consumers and enjoying competitive advantage.

3 Task 2

3.1 Competitive advantage:

Competitive advantage is that a firm stay over its competitors by generating more sales or by attaining more customers than its competitors. For instance, IKEA get competitive advantage by providing product quality and products at low price

3.1.1 Sustainable Competitive advantage of Walmart in India

When a firm get long term competitive advantage than other competitors it is said sustainable competitive advantage. Four criteria which are enjoyed by Walmart India and that’s why Walmart can be said sustainable competitive advantage over their competitors in India. These four criteria are discussed below.

Customer benefits: The offering like product quality and low price given by Walmart is important to them. Customers always search for that kinds of importance which Walmart provide.

Unique: Walmart is obviously unique in collection of products and in service. Walmart maintain quality product as well as demand of customers. Their location is also attractive.

Sustainable: Walmart give trained to their employee, their brand name, after sales service and reasonable price what they maintain properly that’s why Walmart can gain sustainable advantage.

Profitable: Walmart maintain interest of both own and the customers by providing low level price and quality products. By selling products to customer Walmart get profit. Here they also provide after sales service.

3.1.2 The strength and the weakness of the retail mix of Walmart in India

Retailer mix	Strength	Weakness
Merchandise range and assortment	Different types of items like grocery, dairy, fresh product (fruits, vegetables, mutton, and fish) etc. are delivered by Walmart.	Ø Walmart India’s weakness is that they can rarely provide brand products. For example, Equate, Sam’s choice, Dr. thunder’s product which are well known to customer as brand product
Pricing strategy and tactics	Walmart follow penetration pricing. That’s why they can maintain large number of customers. They provide Low price to customer.	By setting lower level price for every categories of product they can earn less profit.
Store layout, design and visual merchandising	Walmart follows super center design in store layout pattern and visual merchandising allows Walmart in order to maintain large scale of customers.	Customers sometimes face problem in store layout pattern that Walmart follow.
Retail communications	Walmart advertise to daily newspaper, magazine and television for their better communication with customer and sometimes give message via mobile phone	Walmart can’t capture marginal level of customer using limited media and spend more money in the communication system they follow.
Customer service and facilitating services	Quality products at low level price with safely packaging. After sales service facility, timely delivering are the strengths of McDonalds.	Sometimes they can’t meet the demand what customer want. become unable to deliver the ordered food within time period for traffic jam or other reasons that demotivate consumer to deal with McDonalds
Formats and locations	McDonalds all retail store in India are in the roadside area where thousands of people are passing for their job. All the retail store of McDonalds is in the busy store.	Sometimes they do not get enough place for the target location because in India, it is necessary to open the restaurant covering a wide area but here they do not get target place always.

Some factors are affecting to be the market leader in the market by Walmart. These are

Customer loyalty: Walmart be able to create brand name in the market and also able to create customer value that’s why they achieve customer loyalty.

Location: Walmart select attractive location in India where people’s income level is high and this area is crowded.

HRM: Walmart has expert with experience and well trained

Distribution and information systems: Walmart obviously follow attractive distribution system.

Unique merchandise: they unique in collection of local and brand products.

Customer service: they always provide customer oriented service so that customer feel comfort to purchase.

4.1 Challenges to continued international growth

If a company want to get entered into foreign market, this company normally has to face some challenges. These challenges are discussed below

4.1.1 PEST factors

Pest factors deals with four elements. These are

v Political factors: Walmart has to face some political problem in India when they want to enter in Indian market, though this type of problem they face is not common in other country. Political problem like clash between rebel parties, political unrest etc. By knowing political problem they enter in the market.

v Economic factors: Walmart consider Indian people’s economic condition. By considering economic condition, they keep the product price low level so that consumers can easily purchase

v Social factors: when Walmart first introduce in India, they have to think different types of question like could they meet the local demand? From where the will collect product? Walmart find the answer of different question on facing problem.

v Technological factors: Walmart launched their business in India in 2009. After 2009, there are many technology has changed. Time to time Walmart has to cope with technology, its great challenge for Walmart.

4.1.2 The competitive context:

High

Resource similarity

Market

Commonality

Low

High

Before entering in the market place, Walmart totally analysis four types of competitors then enter. There are two other dimension. These are given below.

Market commonality: market commonality indicates that to which competitors are competing in common markets.

Resource similarity: Resource similarity indicates that the ability to serve the needs of defined market mostly current and potential.

4.1.3 Growth strategy

Walmart has already develop their outlet in 8 states of India and in different cities. Almost 120 million people are living in India. So it is big opportunity for Walmart to give concentration on market development and product development because Walmart successfully set outlet in 8 states of India being profit.

Market development: In this stage, Walmart can develop new outlet in other states of India because existing outlet set in the market successfully with profit. Now they should come closer to customer by putting their outlet. The number of loyal customer is increasing by their service of product and after sales service. So they should develop their market.

Product development: consumer taste is always changeable. So Walmart should increase various types of newly local product because India is a developing country and people’s income is middle & higher middle level. Walmart should also keep brand product for higher level income generated people.

4.1.4 Growth objective

The growth objective follow Walmart as a retailer is to sustain their present market position because they are now market leader among the competitors. Walmart is increasing market share by selling products and getting profit.

4.1.5 Market entry method

There are different market entry method entering in foreign market.

From all the market entry strategies, Walmart follows contractual agreement for reducing political unrest, cultural and social variables & risk. Walmart carry out their business franchising with business people in India.

5 Conclusion

Walmart is doing their business successfully as a retailer not only in United States but also in non-domestic like India. In this assignment, I discussed the components of retail mix and also evaluate the challenges to continue international growth that a retailer has to face. Discussed reasons of getting sustainable competitive advantage and strength & weakness of retail mix in Indian market by Walmart. Here I also discussed PEST factors, growth objectives and Walmart’s entry method in India. As a retailer, when Walmart enter in Indian market, they have to face various obstacles to establish their business. They have to find out different types of answer of the question like what Indian’s people demand. How we can meet the demand? What’s the sources? After solving such problem, they become market leader.

Walmart’s Retail Marketing in India

Executive summary