Present Situation
Wal-Mart Asda is one of the biggest retailers in the UK. It is necessary to note that Wal-Mart as well as its subsidiary Wal-Mart Asda is facing numerous constraints and the growth of the company has slowed down. Officials of the company note that the UK consumer is “under pressure” and people’s spending ability has decreased considerably (Thesing n.p.).
At the same time, in the second quarter of 2013, Wal-Mart Asda had new customers (26% of the visitors were new customers) who spent more than average customers. Admittedly, it is tempting to focus on the new customers who spend 40% more. Nonetheless, it is crucial to take into account a number of issues.
Opportunities and Threats
Notably, at the period of the slowdown, the company has to consider new ways and approaches. However, the major marketing problem is whether the company should focus on the new group or stick to the target group of its customers. Focusing on the customers who spend more in the stores can be beneficial and can lead to a new wave of growth.
However, it is necessary to remember that this trend can be short-lived and the new customers can stop spending more. The company’s officials admit that lots of their customers have been affected by the rise of prices, which has a negative impact on their spending ability (“Wal-Mart Results Hit” n.p.). It is important to pay attention to this trend while developing new strategies.
Furthermore, the number of new customers is significant but even 30% of new buyers will not be able to spend more than 70% of the average customers of Wal-Mart. The company will have to develop a new approach to attract more new customers. However, it is unlikely that the number on new customers can increase significantly as the UK is facing various financial constraints.
Effective Strategy
Therefore, it is not wise to focus on attraction of the new customers. This strategy is too risky and can lead to huge losses as it can cause the loss of old customers. Thus, the retailer should not change the strategies employed. It is necessary to focus on the old customers. It can be helpful to develop new strategies to facilitate the old customers’ purchasing. At present, countries have to cope with financial constraints so it is not wise to change the focus and lose the target group of customers.
At the same time, it is impossible to waste such an opportunity. It is important to attract the new customers. This direction should also be developed. Nonetheless, it requires certain research.
It is possible to identify a number of research questions:
- to explore the extent to which the new group can increase the company’s profits;
- to compare the profits gained from the new group and the target group of customers;
- to look into the nature of the new group of the customers (socio-economic status, their preferences, expectations);
- to look into the factors that affected the new group’s interest to the company;
- to explore the target groups’ preferences, expectations as well as spending ability.
Thus, Wal-Mart Asda should invest into the research to understand whether the trend can be lasting. In other words, it is important to understand whether new customers will be able to spend the same amount of money. Moreover, it can be helpful to find out what exactly attracts new customers. This can help develop appropriate strategies which can foster new customers’ spending.
Conclusion
On balance, it is possible to state that the company should invest into certain research to identify whether the trend can be lasting. The company can also develop certain strategies to attract such customers. However, Wal-Mart Asda should still focus on its target group of customers as changing the strategy can be too risky and can lead to huge losses.
Works Cited
Thesing, Gabi. “Wal-Mart’s Asda Says Sales Growth Slowed as Consumers Struggle.” Bloomberg. 2013. Web.
“Wal-Mart Results Hit by Tough Markets as Asda Growth Slows.” BBC News. 2013. Web.