Marketing Plan Phase II ??? Grocery Delivery Eric Delgado, Karen Easley, Mary Balderramos, Melanie Deutsch, and Randy Fordyce MKT/421 July 25, 2011 Denise Levith Marketing Plan Phase II ??? Grocery Delivery The idea of Wal-Mart’s proposed delivery service is an extraordinary way to provide customer service to its customers, but just like all other fantastic ideas there must be a plan in place. Though it may sound simple to implement the service, it is essential to make sure that certain planning is conducted.
There are many considerations to be made to gain the greatest amount of success in implementing the delivery service. The different types of planning consist of identifying the segmentation criteria that will affect the target market selection; the organizational buyers and sellers of the delivery service and any factors that will influence purchasing decisions; finally identifying the competitive plane. Segmentation Criteria and Target Market Wal-Mart’s general target market is families and individuals in the lower and working class.
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However, because of tough economic times Wal-Mart is reaching out to middle-class individuals and families as well by advertising well-known brand names and low prices. The target market for Wal-Mart’s grocery delivery service will be their current customers in larger cities and suburban areas. This means the segmentation criteria will be individuals or families from lower class range to middle-class range urban, suburban, and exurban areas. Rural areas will not be part of the target market at this time unless the service does well and rural area customers show interest in the service.
The target market will focus on families and individuals without transportation, those that have difficulty shopping for themselves for medical or personal reasons, people who are busy and want to save time, or those that want or need to save on gas money by having their groceries delivered. Organizational Buyers and Sellers Organization buyers for Wal-Mart are individuals with the responsibility of purchasing products and services for the store. The buyers have the responsibility of making decisions according to the rules and procedures of the organization.
Buyers need to evaluate and choose brands and products that the customer prefers to be resold in the market for an affordable price to the consumer. Organizational buyers make purchases from wholesalers, manufacturers, and others. The organizational buyer has the responsibility of selecting suppliers and negotiating terms of contracts about providing merchandise at low cost to its customers. Organizational buying involves making decisions pertaining to whether to buy, what to buy, the amount to buy, and from whom to buy (Perner, 1999-2010). The consumer buyers are the customers who purchase the merchandise from the organization.
Wal-Mart works hard to ensure that there is a supply of merchandise that the customer prefers on the shelves. Consumer buyers purchase goods and items for personal consumption, for the home, and the family. According to Chief Executive Officer, Mike Duke, many Wal-Mart shoppers live from paycheck to paycheck. Wal-Mart’s core shoppers are running out of money because of the rising cost of gasoline. If this trend continues, this can become a concern for Wal-Mart (Kavilanz, 2011). Factors that influence the purchasing decisions at Wal-Mart are the Initiator, Influencer, Gatekeeper, Decider, Purchaser, and User.
Several people play important roles in the decision buying process at Wal-Mart. 1. Initiator is the first person who suggests making a purchase. 2. Influencers are the people who influence the buying decisions. 3. Gatekeepers are the members who regulate the flow of information. 4. Decider is the person who has the formal or informal power of choosing or approving the selection of the supplier’s brand. 5. Purchaser is the person who negotiates the purchase. 6. Users are the members of the organization who will use the products. The consumers are the purchasers of the buying process and help to define product specifications.
Purchasing decisions affect marketing strategy in developing and maintain a match between an organization resources and marketing opportunities. Marketing strategy enables those in purchasing to target groups of customers to form a relationship in knowing the consumer’s preference. The Competitive Plane When one thinks about an industry giant such as Wal-Mart, it is easy to forget that the company faces stiff competition. Wal-Mart’s competition is usually right around the street corner and that corner could become the company’s greatest obstacle. Target Target immediately comes to mind when one thinks of Wal-Mart’s direct competition.
On the outside, the two companies seem to operate in an identical manner; big box stores with thousands of products for sale. Target’s resources are its greatest threat to the Wal-Mart grocery delivery service. Target offers near identical products, the company’s website states “stores only” (Target, 2011) when shopping for a standard household product like coffee. This does not mean the company cannot quickly implement a delivery system. As a national corporation, Target has the capital and manpower to invest in a grocery delivery system. If the Wal-Mart system proves profitable; Target will likely hop on the bandwagon.
Kroger Stores like Kroger are typically more accessible than Wal-Mart stores. Whereas Wal-Mart plants a store in larger commercial shopping districts, Kroger’s smaller stores can be found mixed in with large residential sections of a city. This places the store in closer proximity with prospective delivery customers who could eliminate the need for big-box climate controlled delivery vehicles. For such a short trip, an employee’s personal vehicle or a small company vehicle will do. Kroger’s resources may hinder delivery as the company tends to hire younger employees who do not yet have a driver’s license.
In this aspect, the smaller Wal-Mart Neighborhood Store is a force to be reckoned with. Smaller stores provide the same customer to store proximity as the Kroger, but with the human and financial resources to back up the goal. Conclusion In closing, it is obvious that Wal-Mart cannot just simply add a delivery service without many considerations. The above data has made it easier for the decision makers behind the proposed service. The designated target market is families and individuals in the lower working class in the urban areas with possible expansion to rural areas.
The organizational buyers provide merchandise at profitable price for Wal-Mart while maintaining an affordable price for the consumer buyers. Finally, Target and Kroger are among the major competitors that can compete with the delivery service of their own. References Armstrong, G. ; Kotler, P. (2009). Marketing: An introduction (9th ed. ). Upper Saddle River, NJ: Pearson Education. Kavilanz, Parya (2011). Wal-Mart: Our shoppers are running out of money. CNN Money. A service of CNN, Fortune and Money. Retrieved July 22, 2011 from http://money. cnn. com Perner, L. 1999-2010). USC Marshall. Organization Buying. University of Southern California. Retrieved July 22, 2011 from http://consumerpsychologist. com Rao, Naryana, K. V. S. S. (2010). Organizational Buying Process and Buying Behavior. Marketing Management Article Series. Knol 2010Aug 15. Internet Version 10 Retrieved July 22, 2011 from http://knoll. google. com Target. (2011). Maxwell House Breakfast Blend – 34. 5oz: Target. Retrieved July 23, 2011 from http://www. target. com/Maxwell-House-Breakfast-Blend-34-5oz/dp/B0040IIZ00/ref=sc_ri_1? ie=UTF8;node=2335128011