Big Box Retailer Sees Three Types of Customers
Topic Market Segmentation, Targeting and Positioning
Key Words Socioeconomic segmentation, product-related segmentation, market segment, target market strategies
InfoTrac Reference A159997328
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News Story 

For over 40 years, Wal-Mart customers have been classified as "value-price shoppers." But after concluding a year's worth of marketing research, Wal-Mart has recently concluded that its 200 million customers actually belong in three different groups.

In recent interviews, Wal-Mart officers John Fleming and Stephen Quinn have spelled out details about the new categories. First, there are "brand aspirationals" — low-income shoppers who are obsessed with names like KitchenAid. Second, there are the "price-sensitive affluents," wealthier shoppers who love deals. Third, Wal-Mart maintains its traditional "value-price shoppers," folks who like low prices and cannot afford much more.

The new categorization is significant because it enables the retail giant's marketers to better understand why their customers shop the way they do. As a result of this study, marketers at the $345 billion retailer will begin organizing all product decisions around each of the three groups.

Many changes are already underway. Under Mr. Fleming's direction as chief marketing officer, Wal-Mart has abandoned its single-minded focus on price and made bold moves in new directions, including opening a design office in Manhattan, staging fashion shows, buying ads in stylish magazines like Vogue, and launching into the organics food market.

Questions
1.

Read the article and list one merchandising change at Wal-Mart that is based on the company's new segmentation categories. Do you think the change will appeal to one of Wal-Mart's three customer segments? Explain.

2.

What challenges does Wal-Mart face in attracting more affluent customers?

Source Michael Barbaro, "Defining 3 Types of Shoppers and Finding the Cost-Brand Mix That Sells," The New York Times, March 2, 2007 pC1(L)
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