Bus 530 - Marketing Management

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Human needs

As described in the text, needs are basic human requirements such as food, shelter, air, clothing and water (Kotler and Keller, 2012). Kotler and Keller further describe that when a specific object is desired to satisfy a need, that need becomes a want.

When it comes to marketing products to consumers there are five types of needs that are distinguished. Kotler and Keller use the example of an auto purchase to distinguish the five needs. First are the “stated needs” such as the customer wants to buy and inexpensive car. An effective marketer will probe further to reach the “real needs” of the consumer. As described, this might be the desire for a car whose operating cost is low. Third there will be the customer’s “unstated needs.” The unstated need would be along the lines of the desire for good service from the dealer. Satisfying the first three needs leads to what is considered the “delight need.” Using the auto purchase example, this would equate to the desire for the dealer to throw in an onboard GPS navigation system (Kotler and Keller, 2012). Satisfying these four needs and the fifth, “secret needs” can be addressed. In Kotler and Keller’s example, this would be the need for the customer to be viewed as a savvy consumer by others.

SBU

There are three characteristics to a strategic business unit (SBU):

1. Either as an individual business or group of related businesses they are separate from the rest of the company so they may be planned separately (Kotler and Keller, 2012). Doing so has the advantages of transferring responsibility for the SBU to those tasked with managing it, creating accountability for the success or failure of the SBU, a separate profit/loss statement, independence and the ability to focus marketing strategy solely on that SBU (Bhasin, 2016).

2. The SBU has its own set of competitors. Focusing the SBU on competitors for the products it brings to market again highlights the advantages that come from separating from the parent company.

3. The SBU will have a manager responsible for the strategic planning and will also control the factors affecting profitability. Instead of relying on funding and allocation from the parent company, the SBU management can create its own strategy and manages its own resources to drive profitability.

Wal-mart’s Mid-life Crisis

This refers back to the period from 2000-2005 when Wal-mart stock price fell 27 percent and remained low through 2007 (Kotler and Keller, 2012). During this period in time Wal-mart’s image was suffering, Target was reemerging on the retail scene and other competitors like Costco, CVS and Walgreens were growing two to five times faster (Bianco, 2007). Suffering from declining stock prices and competitors gaining market share, gives Wal-mart management plenty of recent to be concerned. Coupled with the negative publicity Wal-mart was receiving from accusations of pay discrimination for women, lawsuits over unsatisfactory working conditions and driving businesses out in small communities, Wal-mart was suffering a brand identity problem that would not be easily overcome (Kotler and Keller, 2012). Addressing these issues and restoring its brand image in a more positive light were of paramount importance for Wal-mart to remain competitive and not lose its grasp as one of the top retail companies. The basis behind Wal-mart’s success over the years of offering extremely low prices had been threatened by the allegations of discrimination and substandard working conditions. Correcting those issues would not be cheap and served to negatively impact Wal-mart’s growth and profitability.

Wal-mart’s Holistic Marketing

It really wasn’t a matter of how Wal-mart might use holistic marketing to address its mid-life crisis, but a matter of it must to change public perception, restore consumer confidence, address employee concerns and return to sustainable growth. For starters, Wal-mart needed to explore internal marketing to address employee discontent and concerns. A good plan arising from this would be to offer more generous wages without adversely impacting profitability, create an in-house wellness facility to offset employee healthcare expenses and encourage employee support of charitable organizations to restore a perception of being a responsible corporate citizen (Hartley, 2014).

Because Wal-mart needed to restore public perception of its brand, taking an integrated marketing approach to ensure their message to consumers was consistent throughout all forms of marketing and consistent with the company’s policies and values. Wal-mart as the giant in the marketplace had become stagnant and did not respond timely to the changing culture of the workforce and other marketplace dynamics that led to the negativity experienced in the first decade of the 21st century. By ensuring consistent messages were communicate through it marketing strategies, Wal-mart could utilize relationship marketing to begin to rebuild confidence and trust with its consumers, employees and stakeholders. Doing so would require admitting to mistakes and communicating the steps taken to correct and ensure they don’t rise up again (Hartley, 2014).

Finally, by addressing performance marketing, Wal-mart can address how its strategies impact profits. As evidenced by its recovery, Wal-mart, while still focus on low prices, shifted away from focusing on the just the lowest priced products and began offering different product choices. Doing so would and did serve to change the perception of Wal-mart as a low end product retailer. Expanding its marketing to a variety of products expanded Wal-mart’s appeal to different consumer markets and allowed it to recover its brand image.

Flash forward to today and we still see Wal-mart as the giant retailer. Addressing another competitive challenge from the non-brick and mortar world of Amazon shopping, Wal-mart has ventured into appealing to the e-commerce consumer market and challenging Amazon head on for market share by leveraging its distribution network with a similar shipping promotion as Amazon. This highlights that Wal-mart learned from its recovery and continues to utilize internal marketing to assess its current and future strategies.

References

Bianco, A. (2007, April 30). Wal-Mart’s Midlife Crisis. Retrieved from https://www.bloomberg.com/news/articles/2007-04-29/wal-marts-midlife-crisis

Bhasin, H. (2016, Nov. 30). What are Strategic Business Units and Their