1. Introduction
This article analyzes Walmart marketing strategies in light of marketing mix strategy model.
Marketing mix model has four key dimensions- product, price, place and promotion. The article discusses each Walmart marketing mix element, analyzes its marketing implications, and proposes recommendations about how Walmart can improve its marketing strategy to strengthen competitive positioning in the market.
2. Company overview
| Company | Walmart Incorporation |
| Year founded | 1962 |
| CEO | Doug McMillon (2014 to present) |
| Headquarters | Arkansas, USA |
| Number of countries | 24 |
| Number of stores | 10,500 |
| Number of employees | 2,300,000 |
| Market capitalization December 30, 2022 | $382.38 billion |
| Revenue (2022) | $572.754 billion |
| Net profit | $13.673 billion |
Source: Macro-trends
3. Walmart marketing mix
3.1 Walmart product strategy analysis (Product)
The ‘product’ aspect of Walmart marketing strategy focuses on offering a convenient, efficient and effective service delivery experience. Walmart makes sure that it puts almost everything on its shelves that its customers require. Each Walmart store carries broad ranging product categories.
The stores are designed in a way that customers can smoothly find the product they require without much hassle. High product visibility encourages customers to spend more to meet their current and potential needs.
3.1.1 What is Walmart product mix?
Here is a snapshot of Walmart product and service mix:
| Products | Dry & wet grocery, apparel, pharmacy, jewelry, automotive accessories, home appliance, gaming accessories, home appliance, consumer electronics, outdoor living, home improvement category, toys etc. |
| Services | Financial services, optical services, pharmacy, e-commerce, studio service, logistics, entertainment, cellular service plan, Sam’s club |
| Brands | Walmart supercenter, Walmart discount store, Walmart express, Walmart neighborhood market |
3.1.2 New products/services launched in 2022
Investing on automation and latest technologies is part of Walmart strategic plan. Some examples of most recent innovations are:
• In December, 2022, Walmart launched ‘Trend Getter’ a new visual search tool.
• In same month, Walmart expanded its drone service delivery areas.
• In 2022, Walmart introduced virtual queueing technology to enhance customer experience
3.1.3 Walmart unique selling proposition
Everyday low prices for wide ranging products that are conveniently available and always in stock
3.1.4 Walmart best-selling categories 2021
Source: CED Commerce
3.1.5 Walmart product strategy- key differentiation points
• Offering wide product variety
• Maintaining strong supplier relationships to ensure products do not get out of stock
• Buying products in large volumes to achieve economies of scale
• Offering white labelled products that are only available in the Walmart stores
• Offering smooth product search experience to encourage spending
3.2 Walmart pricing strategy analysis (Price)
3.2.1 Walmart pricing strategies
As Walmart offers multiple product categories, so it employs different pricing strategies for different categories.
• Company’s primary pricing strategy is ‘Every Day Low Pricing’ that grabs the attention of price sensitive customers
• Walmart also charges market-oriented pricing strategy for many products- like media content and house branded goods
• For unlimited deliveries and online purchases, company charges flat-rate subscription pricing strategy
3.2.2 Factors determining pricing strategy
Walmart considers ‘affordability’ element while adopting different pricing strategies. The prices are determined by considering multiple factors, like:
• Time
• Demand
• Events
• Consumer behavior
Change in the pricing component of Walmart marketing mix strategy relates to the external environmental changes that are discussed in the Walmart PESTLE analysis.
3.2.3 Walmart pricing objective
To attract large number of customers, achieve high sales volume & increase profitability despite having thin profit margins.
In Walmart marketing mix– pricing component directly contributes to the firm’s competitiveness
3.2.4 How low prices benefits Walmart?
Walmart is considered the cost leader due to efficient pricing strategies. By charging low prices, Walmart:
• Expands its customer base.
• Beats the competition.
• Encourages in-store consumption.
• Promotes the customer conversion and loyalty.
3.2.5 How Walmart charges low prices?
Walmart business strategies do not entail manufacturing; rather, Walmart purchases in bulk from different world regions to achieve economies of scale. Resultantly, company charges 15% lesser than competitors for the same products. The strong supplier relationships also enable company to charge lower than competitors.
3.2.6 Walmart pricing strategy- key differentiation points
• Charge prices lower than competitors
• Maximize supply chain efficiency to reduce costs and charge low prices
• Adopt effective procurement strategies to increase bargaining power against suppliers and reduce costs
• Offer different payment plans and purchase options to the corporate customers
3.3 Walmart distribution strategy analysis (Place)
3.3.1 Walmart distribution strategy
Walmart employs intensive distribution strategy to sell its wide-ranging products through online and physical stores.
The ‘place’ or distribution element of Walmart marketing mix focuses on convenience, as company chooses strategic locations for its physical stores, and offers seamless shopping experience through online stores.
3.3.2 How distribution strategy works?
Retail suppliers directly distribute the items (in bulk) to the Walmart stores. Company has 210 distribution centers that use cross-docking approach. By employing hub and spoke approach, company orders the commodities centrally, and then distributes to the individual locations.
Walmart distribution strategy focuses on reducing transportation costs, enhancing supply chain efficiency, and integrating sustainability.
3.3.3 Walmart distribution channels
Company uses both- online (through website) and offline (through physical stores) distribution channels to ensure convenience and maximize reach to target customers.
3.3.4 Walmart distribution segments
Here are four main distribution segments:
• Walmart express stores
• Walmart neighborhood markets
• Walmart discount stores
• Walmart supercenters
3.3.5 How effective distribution strategy benefits Walmart?
• Shopping convenience attracts more customers
• Maximizes reach to the market
• Reduces logistics/transportation costs
• Minimizes supply chain disruptions
This component of Walmart marketing strategy is considered one of the company’s key strengths, which is discussed in the Walmart SWOT analysis (internal linking when next article is published).
3.3.6 Walmart distribution challenges 2022
As per Forbes, Walmart is currently struggling with distribution inefficiencies. High inventory level, variations in the product mix (customers buying more low margin products, and few high margin products in response to inflation), and last-in-first-out inventory management system are some factors responsible for supply chain challenges.
An article by Wall Street Journal considered inflation directly responsible for reduced consumer spending, and too much unsold goods that lowered the Walmart’s profit. These external forces are discussed in detail in Walmart PESTLE analysis (internal linking when next article is published).
3.3.7 Key distribution initiatives 2022
• In 2022, Walmart installed tracking tablets in its 9,000 tractors for efficient distribution. The company has more than 80,000 trailers and 12,000 drivers in 2022.
• Walmart is employing high-tech technology to upgrade its distribution centers. In 2022, company announced deploying automation and AI powered robotics to streamline the regional distribution centers
• As per Fortune, Walmart aims at reducing a gigaton of emissions from distribution and supply chain activities by 2030 by launching Project Gigaton.
• In 2022, Walmart announced unlimited free in-home delivery option at an extra cost of only $7 a month to its Walmart+ program members.
3.3.8 Walmart distribution strategy- key differentiation points
• Well-designed e-commerce platform offering reliable, seamless online shopping experience
• Strategically located and well-managed distribution centers
• Advanced tracking systems for inventory control
• Reduced operational costs through cross-docking
• Strong branding of the store outlets
• Efficient and quick home delivery
3.4 Walmart promotional strategy analysis (Promotion)
3.4.1 Walmart advertising strategy
Walmart adopts aggressive brand promotional strategy. The in-house promotional activities involve product bundling and pricing discounts. Walmart’s e-commerce website drives sales by offering gifts to customers.
Company designs advertising and promotional content by understanding consumer psychology. The advertising content creates a push on the consumers’ minds to purchase from Walmart.
Take a few examples:
• The company uses ‘Lowest Price Store’ and ‘Everyday-low-price’ slogans to communicate the company charges lowest prices, and customers do not have to wait for the special sales events.
• Walmart’s ‘save money, live better’ slogan also depicts its low pricing strategy.
• The promotional slogans like ‘Grab before it is done’ induce customers to purchase before deal expires.
Every Day Low Pricing is Walmart’s most successful promotional strategy.
How does Walmart advertise to implement the above promotional strategy? To know this, take a look on Walmart’s promotional mix.
3.4.2 Walmart promotional mix
3.4.3 Walmart promotional strategy objectives
• To increase the sales efficiency
• Encourage consumers to spend more
• Increase brand/product awareness
• Maximize the public exposure of brand and products
3.4.4 Walmart promotional strategy- key differentiating points
• Frequent discounts and promotions throughout the year
• Reliable warranties and replacement policies to make purchase decision easier (Ex. Walmart 90 day return policy)
• Secured shipping methods for online purchases
• Free-shipping facility to A-graded customers
Walmart promotional strategy is considered company’s one of the core strengths, which are discussed in Walmart SWOT analysis article.
4. Recommendations
• Ensure that marketing mix efforts are well-integrated and consistent with overall business strategy
• Enhance the consumers’ product/service consumption experience by investing on technology and automation
• Expand drone services in other areas as well to ensure quick delivery
• Resolve distribution inefficiencies by managing variations in product mix
• Strengthen online presence by focusing more on the social media marketing
5. Concluding remarks
Walmart marketing strategy is its core business strength that differentiates the brand from others. Read Walmart SWOT analysis to know more about the company’s strengths and weaknesses.
6. References
Walmart Revenue 2010-2022 | WMT. (n.d.). MacroTrends.
Khullar, K. (2022, September 1). Back to School & more: Walmart’s Bestselling Categories in 2021. CedCommerce Blog.
Banker, S. (2022, August 17). Walmart’s Supply Chain Woes. Forbes.
Nassauer, S. (2022, July 26). Walmart Cuts Profit Outlook as It Lowers Prices to Move Goods. WSJ.
Ames, B. (2022, June 20). Walmart installs tracking tablets in the 9,000 tractors of its private fleet. DC Velocity.
NACS Daily. (2022, October 28). Walmart Goes High-Tech in Distribution Center Upgrade. NACS.
Bernabe, D. (2022, December 2). How Walmart plans on reducing a gigaton of emissions by 2030. Fortune.
Walmart+ and InHome Combine To Become the Ultimate Membership. (2022, July 6). Corporate – US.
