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Companies such as Wal-Mart and Costco have faced a consistent amount of criticism over the years due to the massive impact they have on the communities around them. As a result, much backlash from the communities in which these companies operate has boiled over, due to the low prices that have caused smaller stores to lose a considerable amount of business. Over the past decade or so, social media has improved the general public’s ability to relay concerns about corporations, and this has caused companies such as Wal-Mart and Costco to improve their social corporate responsibility by changing their marketing strategies. Their marketing strategies, which need to become progressively more socially and environmentally responsible, are changing. Social media has fought back against these firms and have created an environment where they need to think of their impact on the community around them.
Wal-Mart and Costco have similar responsibilities. They are so large that they control massive interests in the American economy. That much control is dangerous for democracy. For example, if the company decided to end operations, hundreds of thousands of people would be out of work, not because of the decisions of elected officials, but because of corporate heads. This has caused greater government scrutiny over what these megastores can do, and they have adapted, and this scrutiny has raised eyebrows. For example, in many states, Wal-Mart is responsible for conducting environmental impact studies (Team, 2011). While this appeases “big brother,” it also improves the company’s marketing strategy, even if inadvertently. Following are some of the specific marketing examples that have come out of the massive amount of attention these companies have received.
Wal-Mart Wal-Mart has made changes to its practices. The company faced scrutiny over its lunch break policy, as well as the practice of hiring illegal labor. This has kept negative press about Wal-Mart largely out of the news, and the company has been viewed as helping Americans support themselves and find work during the recession. Efforts donating money to the victims of Hurricane Katrina also appear to have helped, (Laird, 2013).
These stores are also facing competition from the Internet, which is changing their marketing strategy. For example, Costco is only selling a limited number of items. Even though Costco has a considerable amount of space, it sells a limited amount of its product in order to encourage people to buy the product, due to the fact they could be concerned they won’t be able to get it in the future, (Lutz, 2013).
Costco also ensures that it is selling in bulk. This marketing strategy helps Costco ensure that it is keeping its costs low. Furthermore, the company has people pay for membership. With people paying in order to shop at the store, Costco markets its brand to be for a select membership, which not only encourages people to shop there, but also increases revenue from membership sales. Furthermore, this creates brand loyalty, as customers will want to use the membership for which they paid to continue to shop, (Lutz, 2013).
Wal-Mart is responding to online competition by rolling out e-commerce. The company aims to attain $9 billion in online sales by 2014. The company plans to increase marketing, while featuring various commercials on layaway, and ad-matching guarantees. The company also participates in price comparison against its rivals on some goods.
The company is also using Facebook and various other social media sites in order to help drive up sales. This includes allowing 22 million Facebook fans to vote on the toys that they would like to see the “rollbacks,” on. These are temporary discounts that Wal-Mart doles out, (Cheng, 2012).
Works Cited
Cheng, A. (2012). Wal-Mart Outlines Strategy. The Wall Street Journal. Retrieved from
http://online.wsj.com/news/articles/SB10000872396390443749204578048842451207454
Lutz, A. (2013). Costco’s Unorthodox Strategy to Survive the Big Box Apocalypse. Business
Insider. Retrieved from
http://www.businessinsider.com/costcos-unorthodox-business-strategy-2013-3?op=1
Team, T. (2011). Discount Strategy Delivers for Costco. Forbes. Retrieved from
http://www.forbes.com/sites/greatspeculations/2011/01/13/discount-strategy-delivers-for- costco/
