[Solution]WALMART’S 5-STEP PLAN: BRINGING INNOVATION INTO MARKETING

Question 1: Critically discuss the role played by innovative marketing strategies for business growth Faced by mounting competition for resources as well as customers, organizations…

Question 1: Critically discuss the role played by
innovative marketing strategies for business growth

Faced by mounting competition for resources as well as customers,
organizations are required to identify and implement strategies that will
enhance their competitive position within the market. Innovation has been cited
as one of the strategies that help organizations to attain sustainable growth
(O’Cass & Sok, 2014 p.2; Herrera, 2015 p.1468; Herrera, 2016 p.1725; Goyal,
Chawla & Bhatia 2016 p.334). Lekovic and Maric (2016, p.3) describes
innovation as “the most stable and long-term source of sustainable competitive
advantage”.  Innovation is said to go
hand in hand with marketing, as reflected in the statement that “neglecting
emphasis on either product innovation or marketing can result in diminished
outcomes” (O’Cass & Sok, 2014 p.2).

In recognition of the role that innovation and marketing play towards
achieving business growth, Walmart has embraced the concept of innovative
marketing. In a case study titled ‘Walmart’s 5-Step Plan: Bringing Innovation
into Marketing’, Subhankar Dutta records that Walmart has initiated innovative
marketing strategies comprising five steps, the aim being to increase business
volume. The innovative marketing strategies were projected to help Walmart deal
with the pressure and competition coming from business rivals such as Amazon
and Target. More importantly, the company introduced innovative strategies of
marketing as a way of providing more customer-centered service, which would in
turn attract more customers thereby making the company grow faster.

To obtain a clearer understanding of the usefulness of Walmart’s
innovative marketing strategies to the company’s growth, it is important to
first explain what innovative marketing means. O’Dwyer, Gilmore and Carson (2009,
p.xix) defines innovative marketing as “the utilization of innovation to
exploit a market opportunity to meet market demand in an innovative manner
through innovation in ideas/products/service/technology”. What this means is
that companies using innovative marketing will focus their marketing activities
on the creation of product or process changes that make customers more
satisfied. This way, profitability is improved.

Innovative marketing may be described as an example of the various
differential marketing initiatives or strategies that have helped organizations
to stay ahead of their competitors. Inasmuch as it is necessary for companies
to spend significant sums of money in developing new products or enhancing the
process through which activities are conducted, cost minimization remains a key
objective of commercial firms. As Mohr, Sengupta and Slater (2010, p.31) put
it, organizations enhance “their competencies in managing the development of
incremental innovation in existing products and processes, with an emphasis on
cost competitiveness and quality improvements”. This may be interpreted to mean
that inasmuch as firms would want to get ahead of rivals by introducing unique,
superior products and services, the cost of doing this is an important factor
that ought to be taken into consideration.

It goes without saying that successful companies are those that are
capable of assessing and projecting the needs as well as wants of their
customers (Price, Wrigley & Staker 2015, p.230; Wilder , Collier &
Barnes 2014 p.446), after which it will be possible to develop products
together with services that fulfill these needs. Among the techniques that
organizations use to ensure that customer needs as well as wants are fulfilled
to the best is technology, which is an element of innovation (Mohr et al., 2010
p.31). Innovation, particularly through use of technology, helps companies to
satisfy customer needs in a manner that is reliable, quick, and cost-effective.
When customers’ needs along with wants are satisfied, this logically translates
into increased business and better sales for companies in the sense that customers
will remain loyal; they are also likely to introduce their friends. This way,
business growth in companies is realized.

A credible explanation for the argument that innovative marketing
strategies play a pivotal role in business growth is the fact that since
innovation is all about introducing new methods of running business, it confers
upon organizations valuable resources together with capabilities that are
difficult to imitate by rivals. More specifically, innovative marketing generates
sustainable competitive advantage to firms, which in turn boosts organizational
growth (Camison & Villar-Lopez, 2014 p.2891).

Several theories have been advanced to explain the usefulness of
innovative marketing strategies in achieving substantial business growth. One
such model is the resource-based view, which fundamentally outlines the factors
that generate competitive advantage to organizations. According to this theory,
firms are said to enjoy competitive advantage over rival firms in the same
industry when they can generate greater economic value as compared to other
firms in the same market (Kozlenkova, Samaha & Palmatier, 2013 p.3). The
theory further holds that the competitive position of companies in a given industry
is greatly enhanced when the companies seek sustainable competitive edge over
rivals, with the term ‘sustainable’ referring to the creation of a huge or
superior economic value using strategies that cannot be duplicated by other
companies (Kozlenkova et al., 2013 p.3).

The innovative marketing strategy taken by Walmart in a bid to stay
ahead of its rivals comprised relaunching its brand. According to Dutta (2014, p.13),
Walmart entered into a partnership with Wild Oats, resulting into significant
reduction in the price that customers had to pay for this particular product.
This price decrease plays a vital role in enhancing growth of the company; more
customers are seeking Walmart’s products because they are cheaper as compared
to those offered by competitors.

In addition to the above, Walmart’s re-launching of its brand facilitates
business growth in the sense that customers now have easy access to natural,
organic products whose taste is amazing.  With the new brand, the company is attracting
more customers who are fascinated with the low prices and unique taste of
products. Without doubt, this has helped the company to make substantial.

A very important observation that is made from the Walmart case study
is that despite being one of the world’s largest retail companies, Walmart
chose to partner with Wild Oats as a way of strengthening business supremacy. As
stated by Dutta (p.13), Walmart’s innovative strategy of partnering with Wild
Oats was intended to reduce the cost of organic foods for customers while at
the same time strengthening Walmart’s business supremacy. What this implies is
that the company was keen to conduct a critical assessment of the various
processes as well as structures that would generate maximum benefit both to
itself and its customers. This way, chances of growth are increased.

Walmart’s strategic alliance with Wild Oats is explained using the
contingency theory of high-tech marketing. The central tenet of this theory is
that “market planning that explicitly recognizes and accounts for the strategic
distinction between market-driven and innovation-driven research goes a long
way toward yielding better corporate performance” (Mohr et al., p.31). This is
today companies witness considerable growth when they design their marketing
strategies such that the strategies match the firm’s strengths and capitalize
on available opportunities while also addressing any weaknesses and threats. From
the case study, it is evident that Walmart applied the contingency model of
high-tech marketing, which enabled the firm to work in collaboration with Wild
Oats as opposed to going it alone. In so doing, the company was in a position
to leverage on its strengths and market opportunities, and to insulate itself
against any risks and losses that would have been incurred if it had gone it
alone.

Question
2: Critically evaluate the Walmart’s innovative 5-Step
marketing strategies

Walmart’s success
in an industry with stiff competition has been attributed to a number of
factors, one of them being its innovative 5-step marketing strategies. Dutta (p.8)
reports that in a bid to increase its market share, Walmart launched five
innovative business strategies in the year 2014. The five strategies that were
introduced are video games stores, novel retail formats, convenience stores,
supermarkets, and home improvement stores. The new retail store formats
launched by Walmart include Walmart Neighborhood and Walmart Express. The
latter are described as some sort of hybrid stores that allow shoppers to purchase
the good they require daily within an environment that is convenient, clean and
friendly.

Besides the novel
retail stores, Walmart’s innovative 5-step marketing strategies also comprise a
video game-in program that “would replace consumers’ old video games in exchange
of gift cards” (Dutta, p.8). The company saw this to be an effective strategy of
generating more customers while at the same time increasing revenue volumes.
The rationale behind the video game trade-in program was that most people today
love gaming; accordingly it was projected that exchanging old video games for
gift cards would attract a large number of people.

The video game
trade-in program launched by Walmart is, without doubt, a very effective
innovative strategy of enhancing growth in the company. The program is an
example of loyalty programs, which have been proven to powerful relationship
marketing tools that have great benefits to companies as well as customers.
According to Magatef and Tomalieh (2015, p.78), organizational success largely
derives from customer loyalty, reason being that it is more costly for firms to
attract new customers than it is to retain existing customers. Research has
established that organizations make over 25% profits when they make even small
strides towards retaining customers (Magatef & Tomalieh, 2015 p.78). A 25%
increase in profits is certainly very important in helping companies to achieve
their short-term goals.

Even though
loyalty programs have invaluable benefits to organizations in terms of
enhancing customer loyalty, it is unfortunate that not many customers keep such
programs active. Magatef and Tomalieh (2015, p.78) assert that one of the
reasons for this is that most loyalty programs lack reward relevance; others
have inflexible reward structures. To make programs more active, the authors
advise companies to design loyalty programs whose rewards are more targeted,
and which offer different benefits to customers depending on their preferences
and needs. By so doing, companies will encourage or stimulate customers to
spend more.

As described by
Dutta (2014, p.9), the design of the video game trade-in scheme launched by
Walmart is such that customers are encouraged to collect their old video games
and present these to the electronics division. After this, workers in the
electronics unit scan the codes on the video games in order to detect any that
may have cracks or serious scratches. Once it is verified that the video games
are in a good working condition, the customers are given a trade-in value. If a
customer accepts this value, he or she is awarded with a gift that can be
redeemed at any Walmart store.

The program
described above has unique features that are bound to help Walmart increase the
number of customers buying from it. For example, with the knowledge and
assurance that one can get some goods without necessarily having to spend some
money, customers will be enthusiastic about collecting old video games and
exchanging them for gifts. Similarly, individuals who used to shop at Walmart
occasionally are likely to turn into frequent customers; they may also
recommend the company to friends as well as relatives (Magatef & Somalieh,
2015 p.79). All these outcomes have immense benefits to the company.

Another strategy
that has been used by Walmart to strengthen its competitive position is the so-called
Savings Catcher online tool. As described by Dutta (2014, p.10), Savings
Catcher is a program that provides customers with a comparison of the various prices
for a given product or service. Guided by the conviction that the company
offers the most competitive prices, Walmart undertakes to refund any difference
that is found to be existing between its prices and other prices. This strategy
has huge benefits to customers because it enables them save time as well as
money. Since the different prices are available for customers to view at the
click of a button, customers are spared the agony and cost of having to move
from store to store checking out commodity prices. Equally important, this
comparative presentation of prices helps buyers to make substantial savings
because they can buy from the least expensive retailer. On the same note,
Savings Catcher is of immense value to Walmart in that it confers enhanced
price transparency, besides convincing customers that they have access to the
best and most cost-effective deals in the market.

It is considered
worth mentioning that although Walmart’s innovative 5-step marketing strategies
seem somewhat related, meaning that one may not detect any notable differences
in them, their effectiveness and relevance is reinforced by the fact that
loyalty programs can easily and effectively be implemented in different
industries. More precisely, it has been found that loyalty programs are popular
in supermarkets, department stores, and convenience stores (Stathopoulou &
Balabanis, 2016 p.5801). To a company like Walmart that is the focus of the
case study being analyzed, such a report is very significant. This is
particularly true when viewed from the perspective that the company is now
offering a variety of retail formats that include convenience stores as well as
supermarkets. It can be argued that the company can make significant
cost-savings by introducing the video game trade-in plan in the different
stores.

Walmart’s innovative
5-step marketing strategies are remarkable, but the position taken in this
paper is that there is still much more that can be done, especially given
trends in technological development. It is somewhat surprising to notice that
no mention of mobile marketing has been made in the case study. It is
pretentious and grossly misleading to ignore or overlook the role played by
mobile marketing in today’s business environment. As observed by Berman (2016,
p.1), “mobile marketing is an ever increasingly important component of a firm’s
overall promotion strategy”. This is because consumers have hands-on,
uninterrupted access and connection to mobile devices, and are thus able to
send and obtain feedback from retailers as and when they need. Secondly, mobile
marketing helps companies to generate offers that take into account the
location of customers. In other words, the use of mobile marketing will help
Walmart generate more sales and retain more customers because it will be in a
position to generate offers that suit prevailing weather conditions and any
specific preferences that customers may have.

References

Top of FormBottom of
Form

Berman, B. 2016,
Planning and implementing effective mobile marketing programs. Business
Horizons, 59(4), pp.431-439.

Camisón, C., &
Villar-López, A. 2014, Organizational innovation as an enabler of technological
innovation capabilities and firm performance. Journal of business
research, 67(1), pp.2891-2902.

Dutta, S. 2014, Walmart’s 5-step plan: bringing innovation
into marketing.

Goyal, S., Chawla,
D., & Bhatia, A. (2016). Innovation: Key To Improve Business Growth Of
Banking Industry. International Journal of Advances in Engineering
& Technology, 9(3), 331.

Herrera, M. E. B.
2015, Creating competitive advantage by institutionalizing corporate social
innovation. Journal of Business Research, 68(7),
pp.1468-1474.

Herrera, M. E. B.
2016, Innovation for impact: Business innovation for inclusive growth. Journal
of Business Research, 69(5), pp.1725-1730. https://www.sciencedirect.com/science/article/abs/pii/S0148296315004683

Kozlenkova, I. V.,
Samaha, S. A., & Palmatier, R. W. 2014, Resource-based theory in
marketing. Journal of the Academy of Marketing Science, 42(1),
pp.1-21.

Magatef, S. G.,
& Tomalieh, E. F. 2015, The impact of customer loyalty programs on customer
retention. International Journal of Business and Social Science, 6(8),
pp.78-93.

Mohr, J. J.,
Sengupta, S., & Slater, S. F. 2010, Marketing of high-technology
products and innovations. Upper Saddle River, N.J: Prentice Hall. https://books.google.co.ke/books?id=8LJwaPuuQagC&printsec=frontcover&dq=Marketing+of+high-technology+products+and+innovations&hl=en&sa=X&ved=0ahUKEwiT4JWBjbjeAhUMNOwKHfJgDdcQ6AEIKDAA#v=onepage&q=Marketing%20of%20high-technology%20products%20and%20innovations&f=false

O’Cass, A., &
Sok, P. 2014, The role of intellectual resources, product innovation
capability, reputational resources and marketing capability combinations in
firm growth. International Small Business Journal, 32(8),
pp.996-1018.

O’Dwyer, M.,
Gilmore, A., & Carson, D. 2009, Marketing the SME: Innovation and
Approach. Newcastle upon Tyne: Cambridge Scholars Pub. https://books.google.co.ke/books?id=x-sYBwAAQBAJ&printsec=frontcover&dq=Marketing+the+SME:+Innovation+and+Approach&hl=en&sa=X&ved=0ahUKEwieh_nrjLjeAhXPuFMKHWNTC5wQ6AEIKDAA#v=onepage&q=Marketing%20the%20SME%3A%20Innovation%20and%20Approach&f=false

Stathopoulou, A.,
& Balabanis, G. 2016, The effects of loyalty programs on customer
satisfaction, trust, and loyalty toward high-and low-end fashion
retailers. Journal of Business Research, 69(12), pp.5801-5808.

Leković, B., &
Marić, S. 2016, Innovativeness as a source of competitive advantage for
entrepreneurial ventures and small business. Strategic Management, 21(3),
pp.3-12.

Price, R. A.,
Wrigley, C., & Straker, K. 2015, Not just what they want, but why they want
it: Traditional market research to deep customer insights. Qualitative
Market Research: An International Journal, 18(2), pp.230-248.

Wilder, K. M., Collier,
J. E., & Barnes, D. C. 2014, Tailoring to customers’ needs: Understanding
how to promote an adaptive service experience with frontline employees. Journal
of Service Research, 17(4), pp.446-459.
The post WALMART’S 5-STEP PLAN: BRINGING INNOVATION INTO MARKETING

Assignment status: Solved by our experts

>>>Click here to get this paper written at the best price. 100% Custom, 0% plagiarism.<<<

Leave a Reply

Your email address will not be published. Required fields are marked *