CASE INCIDENT 1 Sprucing Up Walmart For more than half a century, Walmart has prided itself on So clothing rules were relaxed, more variety in music was providing value to customers by being a low-price leader. introduced, and thermostats were adjusted. The company But the consumer mindset is changing. Now "value" also hopes improving employce morale will translate into a bet- means convenience, case of finding what you want, and ter experience for customers, thereby changing some of the ability to get exactly what you want when you want it. the negative images. Nationwide dollar-store chains often have lower prices than Walmart, so that point of competitive advantage is fading. changes. Amazon is the store's biggest competitor, and And thanks to Amazon.com and other online retailers, con- McMillon wanted to offer customers more items, pickup sumers can shop from home whenever they like, compare options, and ways to meet their needs and demands-for prices, and know immediately what is available. Contrast this with the experience many Walmart shop- new way of thinking about marketing and inventory across pers previously had when they entered a store-low inven- the board. tory, disorganized aisles, unhelpful staff, and an overall depressing atmosphere. The company's online presence changed not only what they want but also the way they was about the same. The site was difficult to navigate, and want it-whether from the hands of happy employees or attempts to search for products were frustrating at best and with the simple click of a mouse. The question remains: more often fruitless. Walmart's Web presence was another target for big example, an online grocery ordering service. This means a McMillon was able to see how consumers have Will his actions be enough to change the way consumers Named Walmart's CEO in 2014, Doug McMillon set see Walmart? out to change this situation. "What people think about the company is important," he noted. And at the moment, Questions: people weren't thinking about value and low prices when 17-14. What key factors do you think prompted Walmart they thought about Walmart. McMillon enacted a number of changes. First, the company had earned a reputation of treating its store employees poorly-low wages, few benefits-while profits were in the billions of dollars, so 17-15. What results from Walmart's changes do you Walmart announced it would increase its minimum wage. Second, the company asked for and paid more atten- 17-16. Describe how McMillon acted as a change agent in tion to employee feedback. Recurring issues included the dress code, store music, and even store temperatures. to change? Do these factors exemplify the change pressures discussed in the chapter? Why or why not? predict? this situation. Sources: Based on S. Halzack, "Why Walmart Is Ditching Its Celine Dion Soundtrack and Getting a DI" Washington Post, June 3, 2015, http//www.washingtonpost.com/news/business/wp/2015/06 03/why- Walmart-is-ditching-its-celine-dion-soundtrack-and-getting-a-deejay; B. Ritholtz, "Walmart Learns to Live without Everyday Poverty Wages," Bloomberg View, June 11, 2015, http://www.bloombergview com/articles/2015-06-11/Walmart-lives-without-everyday-poverty-wages; and B. O'Keefe, "The Man Who's Reinventing Walmart," Fortune, June 4, 2015, htp://fortune.com/2015/06/04/walmart- ceo-doug-memillon/.

Principles Of Marketing
17th Edition
ISBN:9780134492513
Author:Kotler, Philip, Armstrong, Gary (gary M.)
Publisher:Kotler, Philip, Armstrong, Gary (gary M.)
Chapter1: Marketing: Creating Customer Value And Engagement
Section: Chapter Questions
Problem 1.1DQ
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CASE INCIDENT 1 Sprucing Up Walmart
For more than half a century, Walmart has prided itself on
providing value to customers by being a low-price leader.
But the consumer mindset is changing. Now "value" also
means convenience, ease of finding what you want, and
the ability to get exactly what you want when you want it.
Nationwide dollar-store chains often have lower prices than
Walmart, so that point of competitive advantage is fading.
And thanks to Amazon.com and other online retailers, con-
sumers can shop from home whenever they like, compare
prices, and know immediately what is available.
Contrast this with the experience many Walmart shop-
pers previously had when they entered a store-low inven-
tory, disorganized aisles, unhelpful staff, and an overall
depressing atmosphere. The company's online presence
was about the same. The site was difficult to navigate, and
attempts to search for products were frustrating at best and
more often fruitless.
Named Walmart's CEO in 2014, Doug McMillon set
out to change this situation. "What people think about
the company is important," he noted. And at the moment,
people weren't thinking about value and low prices when
they thought about Walmart. McMillon enacted a number
of changes. First, the company had earned a reputation
of treating its store employees poorly-low wages, few
benefits-while profits were in the billions of dollars, so
Walmart announced it would increase its minimum wage.
So clothing rules were relaxed, more variety in music was
introduced, and thermostats were adjusted. The company
hopes improving employee morale will translate into a bet-
ter experience for customers, thereby changing some of
the negative images.
Walmart's Web presence was another target for big
changes. Amazon is the store's biggest competitor, and
McMillon wanted to offer customers more items, pickup
options, and ways to meet their needs and demands-for
example, an online grocery ordering service. This means a
new way of thinking about marketing and inventory across
the board.
McMillon was able to see how consumers have
changed not only what they want but also the way they
want it-whether from the hands of happy employees or
with the simple click of a mouse. The question remains:
Will his actions be enough to change the way consumers
see Walmart?
Questions:
17-14. What key factors do you think prompted Walmart
to change? Do these factors exemplify the change
pressures discussed in the chapter? Why or why
not?
17-15. What results from Walmart's changes do you
predict?
17-16. Describe how McMillon acted as a change agent in
this situation.
Second, the company asked for and paid more atten-
tion to employee feedback. Recurring issues included
the dress code, store music, and even store temperatures.
Sources: Based on S. Halzack, "Why Walmart Is Ditching Its Celine Dion Soundtrack and Getting a DJ"
Washington Post, June 3, 2015, http://www.washingtonpost.com/news/business/wp/2015/06/03/why-
Walmart-is-ditching-its-celine-dion-soundtrack-and-getting-a-deejay/; B. Ritholtz, "Walmart Learns to
Live without Everyday Poverty Wages," Bloomberg View, June 11, 2015, http://www.bloombergview
com/articles/2015-06-11/Walmart-lives-without-everyday-poverty-wages; and B. O'Keefe, "The
Man Whok Reinventing Walmart," Fortune, June 4, 2015, http://fortune.com/2015/06/04valmart
ceo-doug-memillon/.
Transcribed Image Text:CASE INCIDENT 1 Sprucing Up Walmart For more than half a century, Walmart has prided itself on providing value to customers by being a low-price leader. But the consumer mindset is changing. Now "value" also means convenience, ease of finding what you want, and the ability to get exactly what you want when you want it. Nationwide dollar-store chains often have lower prices than Walmart, so that point of competitive advantage is fading. And thanks to Amazon.com and other online retailers, con- sumers can shop from home whenever they like, compare prices, and know immediately what is available. Contrast this with the experience many Walmart shop- pers previously had when they entered a store-low inven- tory, disorganized aisles, unhelpful staff, and an overall depressing atmosphere. The company's online presence was about the same. The site was difficult to navigate, and attempts to search for products were frustrating at best and more often fruitless. Named Walmart's CEO in 2014, Doug McMillon set out to change this situation. "What people think about the company is important," he noted. And at the moment, people weren't thinking about value and low prices when they thought about Walmart. McMillon enacted a number of changes. First, the company had earned a reputation of treating its store employees poorly-low wages, few benefits-while profits were in the billions of dollars, so Walmart announced it would increase its minimum wage. So clothing rules were relaxed, more variety in music was introduced, and thermostats were adjusted. The company hopes improving employee morale will translate into a bet- ter experience for customers, thereby changing some of the negative images. Walmart's Web presence was another target for big changes. Amazon is the store's biggest competitor, and McMillon wanted to offer customers more items, pickup options, and ways to meet their needs and demands-for example, an online grocery ordering service. This means a new way of thinking about marketing and inventory across the board. McMillon was able to see how consumers have changed not only what they want but also the way they want it-whether from the hands of happy employees or with the simple click of a mouse. The question remains: Will his actions be enough to change the way consumers see Walmart? Questions: 17-14. What key factors do you think prompted Walmart to change? Do these factors exemplify the change pressures discussed in the chapter? Why or why not? 17-15. What results from Walmart's changes do you predict? 17-16. Describe how McMillon acted as a change agent in this situation. Second, the company asked for and paid more atten- tion to employee feedback. Recurring issues included the dress code, store music, and even store temperatures. Sources: Based on S. Halzack, "Why Walmart Is Ditching Its Celine Dion Soundtrack and Getting a DJ" Washington Post, June 3, 2015, http://www.washingtonpost.com/news/business/wp/2015/06/03/why- Walmart-is-ditching-its-celine-dion-soundtrack-and-getting-a-deejay/; B. Ritholtz, "Walmart Learns to Live without Everyday Poverty Wages," Bloomberg View, June 11, 2015, http://www.bloombergview com/articles/2015-06-11/Walmart-lives-without-everyday-poverty-wages; and B. O'Keefe, "The Man Whok Reinventing Walmart," Fortune, June 4, 2015, http://fortune.com/2015/06/04valmart ceo-doug-memillon/.
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