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Wal-Mart: The Second-Largest Retailer in the United States
Due to its sales capability, Wal-Mart is known as the second-largest retailer in the United States. Given that it provides its target consumer with products like groceries, apparel, household essentials, gadgets, and artifacts, among other things, it may be said that its product mix is general. Wal-Mart can be described as a cheap retailer based on the products and services it provides. This is due to the fact that most goods offered under its brand have prices that are marginally below those of the competition.
The Typical Wal-Mart Customer
The ordinary consumer qualifies as the typical Wal-Mart customer in its target market. This means that it targets individuals of diverse ages and those from middle to lower income earning individuals who are its frequent customers. However, this does not mean that the rich cannot buy from its stores. Additionally, those looking for a bargain in order to save more make up part of the typical customers for Wal-Mart. Given this understanding, the segmentation method the retailer uses to identify its target market has to be geographical.
Types of Competition in the Free Market
From the free market, the four types of competition that can be found are monopolistic which means there are many sellers offering differential products and services. Oligopoly competition where there are a few sellers supplying a large portion of the market. Monopoly competition where there is only one seller serving the entire market. Lastly, there is a perfect competition where the market is served by many small businesses and market prices are determined by demand and supply.
Wal-Mart's Competition: Perfect Competition
Given the above, the type of competition Wal-Mart is facing is that of perfect competition. This is because there are other retail businesses such as Target and One Dollar stores that offer the same products and services as Wal-Mart. Given this type of competition, the impact it has on the prices Wal-Mart can set for its products, is that they have to align to those of their competition. That is why there is usually no huge difference in prices between Wal-Mart and its competition.
Factors Considered by Wal-Mart in Setting Wage Levels
As a retailer, the factors that Wal-Mart must consider when setting its wage level for its employees are the prevailing minimum wage, employee value, and the position rank for the employee. All these factors are to be considered as a means of ensuring both the employee and the retailer are satisfied with the outcome of their professional relationship. Still, on employees and in consideration of the Hertzberg's model, it is possible that Wal-Mart's employees are motivated. This is evident from the hygiene factor of job security and salary as presented to the employees. As for the motivators, Wal-Mart's employees enjoy growth potential in terms of job promotion opportunities.
Impact of Increase in Minimum Wage to $15 an Hour on Wal-Mart
The impact an increase in the minimum wage to $15 an hour would have on the demand or supply for Wal-Mart is to increase it. As the wage-price goes up, employees will be motivated to perform better which will further improve the performance of the retailer thus an increase in demand and/or supply. The prices at the stores will perhaps also increase in order to enable the retailer to meet the new minimum wage for its employees.
Responsibilities of Wal-Mart to Its Customers
Three responsibilities that Wal-Mart has to its customers start with providing quality goods and services in order to meet and satisfy their needs and wants. Secondly, it has the responsibility of living up to its mission statement which is to provide a one-stop shopping experience where it has to provide an array of products and services under their stores so that its target consumers get everything they need within the same premises. Lastly, Wal-Mart has to be socially responsible and care for the environment around it as well as the people within its environs.
Relationship Marketing and Its Benefits
Relationship marketing makes up part of customer relationship management and its main focus on ensuring and retaining consumer loyalty and engagement for any brand (Ruiz). Its benefits include the creation and maximization of value for the customer. There is also the benefit of increased profitability for the company because of customer loyalty to ensure sales. Relationship marketing also allows for solutions to consumer problems given royal consumers will be able to give feedback and air out the some of their dissatisfaction with products and services.
Sales Promotional Tools for Wal-Mart
Two sales promotional tools that Wal-Mart could use are that of free samples and buy one get one free strategy. Free samples will enable its client to experience different products and services with the aim of making them buy it later on thus increasing sales. For the buy one get one free promotional tool, it is a saving point for the target market while increasing sales as a product movement strategy. A look at Wal-Mart's SWOT analysis shows that it has the strength of effective strategies that allow it to grow its investment and employees. The weakness is its lack of flexibility because it focuses on several elements at the same time. It has the opportunity for continual globalization and its ultimate treat is the increase in competition as the main target.
Apple Inc.: Computers and Telecommunication Devices
Apple Inc. is the retailer's name, and the product mix it offers to its customers is computers and telecommunication devices. Apple Inc falls under the category of merchandise as it mainly produces and offers electronic appliances. As a retailer, the characteristics of its typical customer from the target market include being young and wealthy.
Segmentation Methods Used by Apple Inc
The type of segmentation method Apple Inc uses to identify its target market is geographical and behavioral. This is because it tends to locate its stores in highly populated areas and now globally. Behavioral looks into how its target market looks into the kind of benefits the products have to offer.
Types of Competition for Apple Inc
Four types of competition available for the free market are perfect competition which allows for the existence of small companies serving the entire market. Monopoly where there is only one seller, oligopoly for a few sellers, and monopolistic where many sellers offer differentiated goods (Goodwin). Given this, Apple Inc. is facing an oligopoly type of competition. Reason being there are only a few companies offering the same products as the retailer. The impact this has on its prices is that it allows the retailer to determine its own prices for products and services.
Factors Considered by Apple Inc in Setting Wage Levels
When setting wage levels for its employees, Apple Inc must consider the skills and experience of the employees as this is important in its market and salary determination. It should also consider competitive salaries within the same industry because most of its competitors sure this as a strategy of getting the best employees in the market.
Employee Motivation at Apple Inc
Based on Hertzberg's model, Apple Inc's employees are highly motivated. This is because of the hygiene factor recognition for efforts and good work and motivators such as competitive salaries based on one's skills. Given the equilibrium of price and quantity, the impact that an increase in the minimum wage to $15 would have on Apple Inc is basically the same, an increase. The impact on prices will be an increase also.
Responsibilities of Apple Inc to Its Customers
Three responsibilities that Apple Inc has to its customers are to be innovative because this is what its clients look for in their products. It also has to be socially responsible and lastly offers effective products that are great quality and performance.
Benefits of Relationship Marketing for Apple Inc
Relationship marketing is all about consumer loyalty and its benefits include an increase in market share for the retailer. Customer satisfaction is also increased as well as marketing efficiency for goods and services.
Sales Promotional Tools for Apple Inc
Two sales promotional tools that Apple Inc could use are that of contests to win products as this will appeal to its market especially when new products are being launched. This tool increases sales because more people will opt to buy to increase their luck. Another tool is the use of premium programs such as loyalty and discounts for its consumer. This will make the target market more engaged with the brand thus an increase in product and service sales. Lastly, the strength of Apple Inc is its global presence while its weakness is over relying on the sale of iPhones. It has the opportunity to advance telecommunication innovation but has to face the threat of stiff market competition.
Work Cited
Goodwin, Kimberly. “Types of Competition in Economics.” Bizfluent, 26 Sept 2017. Web. 28 Nov 2017 https://bizfluent.com/info-7904519-types-competition-economics.html
Ruiz, Joseph. “5 Benefits of a Relationship Marketing Strategy.” Strategic Marketing Solutions, 20 Feb 2012. Web. 28 Nov 2017. http://www.strategicdriven.com/marketing-insights-blog/5-benefits-of-a-relationship-marketing-strategy/
