The semester is coming to an end, and this is the last required blog for the assignment, and I must admit, that makes me a bit sad. Doing the blogs were actually quite an entertaining alternative from other strict, well-defined assignments. On a brighter note, at the end of this semester, I realized how much I gained out of this marketing course! As I was reading through this article online, I said to myself on several points in time, “Wow, look at all these terms I could apply – targeting, segmenting, direct and indirect competition, consumer behavior, branding, the marketing mix (product, price, place, promotion)!” Well, maybe, this is also due to the fact that all these terms have been drilled in our minds from the Group Assignments, and the various presentations we’ve had in the past two classes.

Now, let’s get back to the real subject, marketing, and how everything comes together in this one article, “The Consumer Trends that are Slowly Killing Wal-Mart”.

Wal-Mart, the world’s biggest and most famous retailer is facing a crisis. What? Well, simply put, changes – changes in economic conditions, changes in consumer behavior, and changes in technology. Through its cost-based pricing, Wal-Mart is known as a provider of low-priced, heavily discounted products, the major segment it focuses on targeting is low-middle income households. It is known to carry 100 000+ items in its huge stores.

So this seems all good and rosy, but, what is exactly the problem here? As summarized in the article, first of all, consumer behavior is changing; “even Wal-Mart’s core customer base of low-income households is now a significant part of this epic shift in shopping behavior”. Consumers are on a hunt for even better bargains. The term “bargain” I refer to not only includes better prices, but, convenience.

The deadliest convenience factors that are currently threatening Wal-Mart is the convenience of online shopping, which is provided by the online pioneer, Amazon.com, and secondly, the convenience of purchase in bulks with smaller scopes of alternatives which makes purchase decisions easier which is provided by the direct competitor, Costco. Amazon is able to thrive because it has kept up with technologic advances – the convenience of being able to shop online through one click on the computer, surfing through the iPad or Smartphone has been a major advantage for the online giant. Costco is fairing off better as it promises to have mark-ups that are guaranteed to be less than other retailers, and it has less variety of brands in its selection which is sometimes a plus for consumers who wants to make an easier purchase decision. They also have limited and irregular stock of products that attract buyers because there is a “fresh” feel each time they shop at Costco.

I personally have not shopped through Wal-Mart in whole, maybe sometimes to just pick up a few items because it was the only convenient place at the moment, and especially if the product I needed did not have to be of great quality (therefore, I could buy something that is cheaper, as compared to buying it from Shoppers Drug Mart). The amount of selection in the store overwhelms me, and the disorganization of many stores is also another factor that turns me away. Staff is always around shelving products, but when you need help, they are miraculously gone. Just from a personal point of view, I would prefer to shop at Costco instead. Easy, clean, simple stores, friendly services, and let’s not forget, food sampling!

Gone are the old days of traditional marketing for companies promoting only one brand at a time. Why raise awareness for one product when you can do double the duty in one single promotion? What is this new strategy? Cross promotion.

This increasingly popular tool has been used by various companies recently. Parent companies are realizing that attaching the corporate name behind each brand not only raises awareness of their presence in different products, but also solidifies the “loyalty branding” in consumers’ minds. Just like what Lisa Hsieh said in her blog – No Name vs. Brand Name – “that warm fuzzy feeling” we get when we recognize and associate with a known brand name verifies our confidence in the functions and expectations of the product.

Let’s take a look at Proctor & Gamble. How many people actually know that besides its well established position as the parent behind Tide and Bounty but also own the brands Pringles, Braun, and Duracell? In the Bounce – Old Spice cross-over commercial, P&G adopts a new marketing strategy. They use this “interruptive” twist on its “often bland” advertisings to not only add excitement to its product, but spark that recognition in our brain that says, “Hey, I know Bounce. I’ve used it before, that means Old Spice must also be trustworthy.”

Just that one little association in consumer thought results in enormous benefits – confidence in product, loyalty of another category under the same parent name, promotion of the brand(s).

In class we talked about the importance of branding; of positioning yourselves in the minds of consumers and imprinting your stamp on them. However, with competition so fierce, and the endless list of products available on the market, it is hard for companies to differentiate themselves. Confidence of products is even harder to justify especially due to the number of alternatives available. But, with a well established parent company attached behind each product, I think loyalty can be secured. Cross-promotion is truly a genius and interesting idea.

For those as wow-ed as I am about this topic, take a look at how P&G uses this strategy in the article “We interrupt this ad to bring you…another ad”!