Wal-Mart Is America's Largest Retailer and an Business Proposal

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Wal-Mart is America's largest retailer and an epitome of business success. The corporation was founded in the 1960s by Samuel Walton, with a vision of quality products at affordable prices. For most of its existence, the company has been a specialized retailer, centralizing products of virtually any category into a single stop store format.

In recent years however, the company has commenced to create its own products and sell them to customers. This move into the private label sector allows the company to create and retail cost effective products, to attract the cost sensitive consumers, and also to retain them.

Currently, a consideration is being made relative to the corporation's possibility of launching a line of bio bakeries, all baked in-house. In other words, the primary features of the new product line would be that they are private label and ecologic. Still, at this stage, it is necessary to devise a plan for their introduction.

Marketing considerations

Market analysis

As it has been mentioned previously, the bio bakeries fall into two categories at the same time as they belong to both private label industry, as well as the market for bio products. The private label industry is characterized by an increasing popularity of private label products, as more and more retailers come to devise their own versions of already existent products. The advantage of such items is that they are produced in-house, and as such incur lower costs. They are ultimately sold at lower retail prices, which stimulate buyer interest (Lincoln, 2009).

The bio market is also following an ascendant path, with more and more players present in the sector. The bio products are characterized by a production mechanism which supports the health of the consumers, as well as that of the environment. The general perception over these items is that they are costly and reveal a lower quality in comparison to traditional products (Ianuzzi, 2011).

In the field of private label products, the barriers to entry are rather high and this is the result of the scale advantages created by Wal-Mart and other such retailers in the industry.

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In the case of the ecologic products however, the barriers to entry are rather low, resulting as such in an increasing number of industry players of all sizes.

2.2. Target market

The bio bakeries by Wal-Mart would address the target market formed from mature women, as these are the primary home shoppers. In other words, they are normally the ones who complete the grocery household purchases. Women are also more sensible consumers since they place an increased emphasis on the cost of the purchase as well the greater impact of the purchased item (Barletta, 2011).

2.3. The marketing mix

Before actually launching the bio bakeries, the marketing team at Wal-Mart would have to decide on several aspects of the product, the price, the place and the promotional strategies. These are revealed below.

a) Product

The bio bakeries are food items produced within the Wal-Mart bakery laboratory, sold within the company and packed in paper bags with the inscriptions of Wal-Mart

The items have a high quality due to the fact that they only use ecologic ingredients and this represents the point of difference in comparison to other similar products

b) Price

The pricing strategy decision is made more complex due to the combination of two seemingly opposite product traits, namely the private label feature, which stimulates lower prices, and the ecologic product feature, which generates higher prices

The pricing strategy to be selected and implemented is represented by the variable pricing strategy, which disregards the initial expectations and establishes a retail price in accordance with the costs incurred in the manufacturing and delivery of the items. In such a setting, a modification of the costs incurred would be immediately reflected in a modification of the retail price (Mills, 2002).

The pricing strategy would also have to consider the relative inelasticity of the products, as an increase in the price would not be followed….....

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