Wal-Mart Doesn’t Like Marketing (Shocking!)
There’s good reason why Wal-Mart is in the blog category, brands in trouble, over at Biz Week’s Brand New Day blog.
The CEO, Lee Scott, was recently quoted as saying, “I’m not a big fan of marketing.” He subsequently said he meant advertising. This is a common problem - people say marketing and mean advertising. Advertising should be just one of the (possible) tactics in your marketing plan. (Although Target has done a great job - in my not so humble opinion - with its advertising, they’ve got a lot more going for them than cool ads.)
Tip: Your biggest marketing problem usually has little to nothing to do with your advertising. Here’s a couple of key bits from the Biz Week post re Big Wally (link above):
So after a tumultuous year in the marketing department, Scott told us he wants to stick to Wal-Mart’s low-price image, and focus on things like smart consumer research and store planning. The key is having the right product in the right place for the right price, he said, and there’s no reason to try anything fancy. “I care that we have good ads, but whether we have a good TV ad or a bad TV ad doesn’t make a difference,” he said. “The point is reinforcing the message.”
Earlier, Scott pointed out that despite the sting of negative press, it doesn’t really hurt business. “It doesn’t resonate at the customer level,” he said. “Less than a tenth of one percent of our current customers have said they would or have stopped shopping because of negative press.” I wish they’d share that research with us.
I agree they need far better consumer research. (How about talking to existing customers?) Store planning is always a good thing. Negative press may well have little impact on the core customer group, buying diapers in bulk and such, but what about potential new customers? Wal-Mart’s real problem is its brand with millions is “cheap, mean and predatory.”
So, here are three marketing fixes for Mr. Scott:
1. Implement new employee programs with fair salaries and health care benefits. This will, however, require a bit more than PR spinning about employee commitment. Some fundamental changes in culture, processes and accounting will need to be done.
Big whoop, Mr. Scott, that you’re so - um - on top of ethical behavior when it comes to affairs between consenting adults. How about applying some of that righteous indignation to helping employees access quality health care? And, let’s not have any weaseling around and wordsmithing re shifts and such.
2. Stop sweating vendors for every last dime. Pay a fair price for quality goods. I have clients that will never even consider doing business with Big Wally - they’ve heard and read too many horror stories.
3. Implement a supplier review program. There’s nothing inherently wrong with making some goods off-shore (business is business, after all) but you shouldn’t be contributing to human rights abuse.
Read More: Target’s Cheap Chic Strategy (Harvard Business School, 2004)
Related Posts:
Has Wal-Mart Hit the Wall?
The Anti-Wal-Mart
Note to potential commenters: I don’t believe it’s as simple as “Wal-Mart is evil, I tell you, evil!” They do some good things, but does it balance out - in the long run - on the good side of scale? I don’t think so. And, they really are clueless when it comes to marketing, regardless of how you or I define such.
If you’d like to leave a comment, please do so. It may take a bit to show up since I hate making people type in little letters (I can’t read most of them myself) - so I moderate all comments. Feel free to disagree - debate is healthy. However, I’ve blacklisted the worst obscenities, including the “f” word.
Tags: branding, marketing, marketing troubleshooting, Wal-Mart
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March 29th, 2007 at 12:54 pm
Here’s another interesting question that Wal-Mart needs to be asking itself (or somebody with a clue): how many of our customers would continue to shop at Wal-Mart if they could afford to shop elsewhere?
You see, it’s may not even been that the negative press doesn’t resonate at the consumer level. If I judge by my neighbors, it’s that they hate what they believe Wal-Mart stands for and would shop elsewhere - if they could get the same stuff at the prices Big Wally offers.
If another general store came along and offered that, Big Wally might find themselves in Big Trouble.
March 29th, 2007 at 2:25 pm
Dawn,
Excellent point! As one of my clients said, “I don’t like Wal-Mart either…but when you have three kids under five…they eat a lot of milk and cereal.”
March 31st, 2007 at 3:50 am
Mary, well I have to disagree with you on all of your points here (they were hardly ‘marketing’ anyway):
1.You seem to suggest that something fundamental is wrong with their culture, processes & accounting practices at least as far as their employee programs are concerned. Now Wal-Mart has been following such practices since its inception. Can the firms with such ‘fundamentally wrong’ practices ever hope to succeed like Wal-Mart did (no matter how great a strategy they follow)?
2.Vendor Management is a key issue with a retailer. Given the competitive nature of retail industry & the variety of products Big Wally deals in, means that everyone throughout the supply chain has to pull up the socks & cannot pass on the cost of its own inefficiencies to the consumer. The US Auto industry is learning this the hard way. Of course, not every firm can do this (like several of your clients) and that is fine.
3.One shouldn’t contribute to human rights abuse. None can disagree with. Is there a specific issue that rankles you? Offshoring is something that almost all firms engage in (not out of choice, may be) who want to stay in business.
March 31st, 2007 at 9:59 am
Mohit,
(Thanks for visiting from the Asian Institute of Management in Manila - at least according to your blog. That’s the terrific thing about blogville, millions the world over can converse - disagree, agree and work together.)
“hardly ‘marketing’ anyway”
Thanks for reinforcing my point. People somehow separate marketing from what they do. And, in fact, everything you do in your company is, either directly, or indirectly, marketing. Your brand is what you do, not what you say.
Yes, there is something inherently wrong with their culture. And society in general if we define success as doing whatever it takes to make money, regardless of the impact on people (and our environment.) Other extremely successful companies have a much better record re employee treatment (Google, for one). Of course, no company can be perfect, but there’s a vast difference between Wal-Mart and - say - Costco.
Re Vendor management. There’s a difference between “fair and tough” and predatory. I suggest you read more about Wal-Mart’s practices.
Re Offshoring: Again, I suggest you do your own research on this one. Just because “other companies do it” doesn’t make it right.
Alos, I’d suggest as part of your studies, you read Tom Peters and Peter Drucker. Also, check out Seth Godin. (I’m in good company when I make statements such as, “Everythiing you do is marketing.” Good luck in your academic career!
March 31st, 2007 at 10:27 pm
Well Mary, You did suggest some very good names to complement my academic studies. Those names constitute the staple diet of any management program, aren’t they? I don’t know if you noticed but I’ve links to both Tom & Seth on my blog roll. In fact, I’ve been following them since a long time before I joined my studies here.
I agree that everything we do in our companies, either directly or indirectly, is marketing (just like it is ’strategy’ or ‘operations’). I believe the name doesn’t matter as long as it helps to serve your core purpose. I don’t claim to be an expert on Wal-Mart but somehow the claims that you make about it don’t fit with the reality.
You seem to suggest that Wal-Mart engages in activities disregarding its impact on people & environment. I believe if this were the case, the citizens of US would’ve stopped patronizing Wal-Mart long ago. I strongly believe that for a business to succeed, it has to make a ‘net’ positive impact on the society. (Claiming that something is inherently wrong with the society is, well, a bit too much)
Vendor Management: Well I share accomodation here with a person who worked for six years for a Wal-Mart supplier. So I can claim to have at least some knowledge about Wal-Mart vendors by virtue of my discussions with him.
Offshoring: Are you suggesting that all ‘offshoring’ is wrong & unethical ? In that case, I would not like to push it further. I had earlier thought that some specific cases, where Wal-Mart’s suppliers were contributing to human rights abuse in their factories, disturbed you.
April 1st, 2007 at 9:29 am
Mohit,
I’d love to think that people would cease to patronize Wal-Mart for ethical reasons. However, the majority simply don’t pay that much attention to the issues or corporate practices.
And, I stand by my statement that there is something inherently wrong with our society here in the U.S. (it may be different in Manila) including rampant consumerism, at the expense of the rest of the world, to name just one problem.
No, I specifically stated there is nothing inherently wrong with off-shoring. It’s how and where it’s done that can cause problems. ‘
As for my claims and reality re Wal-Mart, again, I recommend you do more research.
April 3rd, 2007 at 4:51 am
@ Mohit: I definitely have to side with Mary here.
Of course we would like for consumers to stay away from unethical business. It is naive to think that they would though. Most people put their own (financial?) interests first. Being ethical can be a luxury not everyone can afford. Or so it seems.
As to organizational cultures you would be surprised as to how many succesful companies have a dreadful culture. It is their culture that made them strong in the first place, but in a changing environment could also be their downfall. A good culture is one that makes it possible for the organization to deal with its environment. A strong culture is not necessarilly good, just harder to change.
Suggested reading on ethics: Aristotle and Kant. On organizational culture: Schein: http://web.mit.edu/scheine/www/home.html