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Growth at Wal-Mart

Wal-Mart is the largest retailer in the United States and in the world. It was founded by Sam Walton in 1962 who determined that mass merchandising would be a successful marketing strategy in rural America; an area populated with small and medium-sized towns that were considered too small to be served by national retailers such as Sears. These areas were served by Sears' catalog, which had proved successful, but residents depended on small local retailers with limited selections of goods if they wanted to purchase and take home an item immediately. Wal-Mart recognized that if it could move goods to these communities effectively, and offer a greater variety, it could offer low prices and immediate gratification to shoppers. Walton did not pioneer mass merchandising; Kmart and Sears both preceded him in this area but Walton refined the idea by combining a highly efficient distribution system with a new analysis of demographics to generate a new business model for mass merchandisers.

Currently, Wal-Mart operates more than 8,100 retail stores in 15 countries and with annual revenues for the fiscal year ending 2009 of more than $401 billion. In addition to the retail stores, Wal-Mart also operates Sam's Club, a membership-only warehouse club that caters to customers who would otherwise shop at Costco. Sam's Club customers are able and willing to purchase in bulk and to forego the traditional organization and amenities of a mass merchandiser in exchange for large warehouses with limited brands but lower prices than are available even at Wal-Mart's traditional stores. Sam's Club are an example of demand side marketing in that the company is using a business model invented by others in order to take customers away from the competition. The goal is to meet the demand for low prices that individuals and businesses are willing to pay an annual fee to get. Wal-Mart is able to use the same distribution network and supply c...

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Growth at Wal-Mart. (1969, December 31). In LotsofEssays.com. Retrieved 08:00, March 28, 2024, from https://www.lotsofessays.com/viewpaper/2001425.html