MKT501 MOD5 CASE5-Pricing and Distribution in Marketing Decisions (Walmart vs Nordstrom)

MKT501 MOD5 CASE5-Pricing and Distribution in Marketing Decisions (Walmart vs Nordstrom)

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Running head: PRICING AND DISTRIBUTION 1 Pricing and Distribution in Marketing Decisions: Wal-Mart versus Nordstrom for Women’s Business Suits Mikel A. Stovall TUI University 3/26/12
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PRICING AND DISTRIBUTION 2 Pricing and Distribution in Marketing Decisions: Wal-Mart versus Nordstrom for Women’s Business Suits Established in 1962 by Sam Walton, the company became incorporated in 1969. Publicly traded and employing more than 2.1 million employees, Wal-Mart has 9,667 retail stores, including Sam’s Club warehouses, in more than 28 countries. Wal-Mart’s objective is to offer products at low prices so that consumers can enjoy a better quality of life. Fortune Global 500 has listed Wal-Mart as the world’s largest public corporation on the basis of revenue of 2008 (About Us: Wal-Mart). Alternatively, in 1901, John Nordstrom opened a Seattle-based shoe store called Nordstrom. Thereafter, Nordstrom expanded its shoe store to include apparel. Nordstrom’s is on Fortune’s “100 Best Companies to Work For” list (mynordstrom.com, 2011), is publicly traded, and has more than 200 locations (including Nordstrom Rack) worldwide. Nordstrom’s motto is to “offer the customer the best possible service, selection, quality and value” (About Nordstrom, 2011, p.1). Wal-Mart and Nordstrom’s Pricing Strategy Wal-Mart Wal-Mart holds one of the top positions dominating the discount retailer market and has received the highest rank in Fortune magazine for being the most efficient company in the U.S. This admirable company has mastered the important component of the marketing mix relative to pricing strategy (Pricing Strategy, 2010). The company adopted the mode of lowering its prices so that customers can get the best prices in the market providing Wal-Mart with increased sales. By passing on the savings of the organization to consumers, Wal-Mart’s sales volume was increased over sales of its
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PRICING AND DISTRIBUTION 3 competitors making Wal-Mart the largest retailer in the world. The organization’s pricing strategy drives more customers into Wal-Mart stores promoting increased sales and profits. The following are indicative of some of the pricing strategies Wal-Mart uses: 1) Odd number pricing strategy - this approach has been adopted by the Wal-Mart in motivating consumers to buy products. Wal-Mart catches customers’ attention by marking its products with odd number prices (e.g., $1.76) rather than prices that end with zeros (Low Pricing, 2010). 2) Wal-Mart’s main pricing strategy is the lower price promotional strategy that allows clients to buy more from the organization; hence increasing Wal-Mart’s market share. When Wal-Mart enters a new market it aims at establishing a low price image for the customers, thus gaining a larger consumer base and maintaining customer loyalty. 3) The company uses the higher price allocation strategy when it is not facing
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This note was uploaded on 03/25/2012 for the course MKT 501 taught by Professor Dr.alanflaschner during the Winter '11 term at Trident Technical College.

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MKT501 MOD5 CASE5-Pricing and Distribution in Marketing Decisions (Walmart vs Nordstrom)

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