When looking at the two department stores Walmart and Nordstrom’s, it is much easier to contrast differences than compare similarities. This is because they are at opposite ends of the economic spectrum; Walmart specializes in discounted prices, while Nordstrom focuses on quality at a higher price. Both companies enjoy much success, however. To attract customers that are more interested in each company’s characteristics, their marketing strategies differ from one another greatly. A marketing mix is defined as “product, price, place, and promotion – the controllable set of activities that a firm uses to respond to the wants and needs of customers”. . The differences in these four areas become obvious when we look at them at a glance.
Walmart offers many different products to suit every possible need of their customers. From automobile repair services to groceries to a variety of products in between, it is a one-stop shopping excursion for most of their customers. They also produce private label goods, such as Great Value, Sam’s Choice, and Equate. They even have a real estate division for commercial development. Walmart jumps on the bandwagon whenever they see an opportunity – and seem to prosper because so.
Nordstrom’s also strives to meet customer satisfaction through offering an array of products. “Our goal is to offer a well-edited range of products for a variety of lifestyles.”. While they don’t offer common, everyday needs like toiletries, groceries or cat litter; they do offer more upscale products such as apparel and home décor. Nordstrom, like Walmart, offer a private label – but without the notable discount.
Walmart has developed quite the reputation in our country for its low prices. Many name brands are apprehensive of Walmart’s private label. “In July (2006), Coca-Cola disclosed in a lawsuit filed in Atlanta that it changed its distribution of Powerade because it feared if it did not, Wal-Mart would come up with its own, competing version of the beverage.” . Nordstrom’s does not use a low price tag to attract customers; instead they use quality. While it is pricier to shop for clothes and home décor at Nordstrom’s; most designer labels prove to be of better quality, uniqueness, and durability.
Walmart’s private label brands goes directly from the assembly line to their store shelves. Eliminating the middle man helps them to offer such inexpensive store labels. Other suppliers they use to stock the shelves are bought from in bulk quantities. Nordstrom’s, in contrast, has one distribution center located in Newark, California. While they do not have as many stores as Walmart, they can still enjoy sizable profits from selling high-end products at retail prices.
By now, word of mouth definitely works in Walmart’s favor. But they also advertise on TV. “Everyday low prices” is their current slogan, but I think most of us think of the little “Rollback” smiley face cutting all of the prices down. While I have never seen an ad campaign addressed to a television audience, Nordstrom’s does pride themselves in utilizing ‘word of mouth’ from satisfied customers. They also advertise in magazines aimed for the higher-income-bracket female.
The marketing efforts by both companies clearly show that each company aims toward a different audience. There is a difference in the market between customers that want to spend no less than $200 for a pair of shoes, and customers who will pay no more than $10. Each company aims towards their target, and most likely do not share a customer base.
Grewel, D., amp; Levy, M. (2008). Marketing (Second Edition). New York: McGraw-Hill Irwin.
Nordstrom Inc. and Subsidiaries. (2002). Annual Report 2002. Retrieved August 4, 2009, from about.nordstrom.com: http://about.nordstrom.com/aboutus/investor/ar/2002/NOR2002AR.pdf
Nordstrom’s. (2009). Nordstrom’s. Retrieved August 3, 2009, from Nordstrom.com: http://shop.nordstrom.com/c/6011957/0~2377475~6003903~6011957?origin=tab-promo
Reyes, S. (2006, August 21). brandweek.com. Retrieved August 4, 2009, from Study: Wal-Mart Private Brands Are Catching On: http://www.brandweek.com/bw/news/spotlight/article_display.jsp?vnu_content_id=1003020035 imw;=Y