SCML 5700 Marketing MIDTERM
#1. Wal-Mart Supercenters Impact on the Marketing Environment;
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“Wal-Mart being the largest retailer in the world has an ever changing role in the U.S. economy.67% of all retail stores in the US are located within five miles of a Wal-Mart, and Wal-Mart’s are strategically placed in areas where it is likely to be profitable, taking into much consideration information about demand, cost factors, environment, and demographic factors” (Basker, 2007).
a)Competitive Forces: The Wal-Mart Supercenter is a difficult competitor for smaller businesses to go up against. So called mom and pop shops can’t compete with Wal-Mart on the fact that it offers a one stop shopping trip where many purchasing needs of the consumer can be met. In addition to the rollback prices, and the price matching Wal-Mart does for items that are advertised cheaper at other stores, they also have licensing agreements from numerous companies that allow them to sell product lines that other stores may not carry. Smaller businesses in a community may increase other areas of customer satisfaction, service, and experience to compete with this overpowering force. Supreme specialization can also be a competitive force for small shops that are trying to stay afloat by offering unique products that one cannot find at Wal-Mart Supercenters.
b)Economic Forces: Changes in the economic forces are affected by supply and demand, buying power, willingness to spend, consumer expenditure levels, and the intensity of competitive behavior (Pride Ferrell, 2008). Consumers’ traveling several miles to the closest Wal-Mart Supercenter is something that is very common when their town doesn’t offer products that are wanted. If the Wal-Mart’s low prices can attract neighboring shoppers to cross city lines and bring their dollars with them, the community can win the economic sweepstakes. Wal-Mart Supercenters create hundreds of various skill level jobs for people in a community and in some cases could increase prosperity and influence the consumers’ willingness to spend.
c)Political Forces: Union pressures come to bear on local officials when Wal-Mart wants to enter a community. Unionized grocers are threatened by Wal-Mart’s low cost non-union labor selling the same groceries. Lawsuits and accusations ranging from low benefits, poor working conditions and discrimination are publicized to inflict reputational damage. In some states, local governments have intervened with the expansion of Wal-Mart Supercenters in their area.
d)Legal and Regulatory Forces: Wal-Mart’s dependence on global suppliers relies on a US trade policy that eases importation of goods. “Wal-Mart has participated and helped to shape the (CAFTA) Central American Free Trade Agreement. In the 2004 election cycle Wal-Mart donated over $2.7M to political campaigns”(Basker, 2007) Economic development offices try to attract Wal-Mart to relocate in their
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