This marketing mix assignment will address Wal-Mart and its “everyday low pricing” strategy. Wal-Mart employs this strategy and succeeds by demonstrating to its customers that a predictable pricing model is far better and more consistent than temporary promotions.The “everyday low pricing” model is essentially Wal Mart’s guarantee to the customer that they are saving the maximum possible each and every time they shop at Wal-Mart. To support this concept, Wal-Mart offers two incentives to the customer: price matching, and acceptance of coupons from competitors.
These strategies reinforce Wal-Mart’s position that it is indeed offering the lowest pricing to consumers on a daily basis. The fact that the company is willing to price match items found in its stores against competitor prices found online or in advertisement circulars is further proof of how they can deliver the “everyday low pricing.”
While this strategy has clearly been successful for Wal-Mart, there is still the alternative strategy of deep temporary discounting. This is precisely what some of its competitors, like Kmart or Target might employ. Through the deep discounting or temporary price cut model, a different consumer might be more responsive. There are clearly shoppers who will only purchase items on sale, and who could be considered deal junkies, buying even what they don’t need, simply because it is on sale. Trust me, I have seen this in my own family.
In any event, this deep discounting likely cuts into the retailers profit margins and is probably not as sustainable in the long run, as offering everyday low pricing to customers. The Wal-Mart strategy would also seem to promote more consistent availability of products—products that customers are depending on the store to carry. Otherwise, the model might be like a dollar store that carries off brands they find at deep discount wholesale. Wal-Mart’s strategy is solid.