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Walmart Company’s Measuring Marketing Performance Essay


Introduction

Timely and correct evaluation of production indicators is the key to business success since accurate forecasts regarding the development of a certain company can be made about specific indicators. If it is the world-famous retailer like Walmart, its metrics need to be monitored since failures in the operation of such a large network are fraught with significant losses for its management. Moreover, each of these metrics has a separate purpose and is analyzed both in terms of efficiency and appropriateness. Marketing techniques used by corporate leadership are not always effective. However, small firms can quickly eliminate the consequences of illiterate planning, but when it is about such a global corporation, it is problematic to quickly rebuild the strategy of work. Reasonable measurements of Walmart’s marketing indicators will allow assessing the level of importance of this large trading network for the market and also tracing the consumer interest in this world shop group.

Portfolio of Metrics

The marketing metrics of Walmart should be taken into account because this retailer is rightfully considered one of the most popular in the world. The evaluation of this corporation’s indicators can be very useful for both start-ups and experienced market players. The first metric is the distribution of investments.

Distribution of Marketing Investments

One of the most important marketing indicators is the distribution of investments because this sphere is the main basis for planning and any financial forecast. Thus, even though judging by the official data, at the beginning of 2017, Walmart’s gross profit was slightly more than $ 120 million, there is no significant growth (“Wal-Mart Stores Inc. (WMT)”). Nevertheless, this amount has not become smaller, which confirms a little progress for one year of work. The significance of this metric is that the marketing budget should be fully recorded in the calendar, indicating which percentage of the budget is used in each channel, and what goals are planned to be achieved through each campaign.

Cost of Customers’ Attraction

If the analytics department knows this metric, it is possible to calculate the effectiveness of any channel of customers’ attraction or a marketing campaign. Based on the findings, there is an opportunity to abandon inefficient channels and focus on profitable directions. The cost of customers’ attraction is calculated simply enough. As Rollins et al. note, it is necessary to divide the price of any marketing campaign (the number of investments in a certain channel for attracting customers) by the number of attracted clients (2729). According to the customers’ rating, it is possible to trace the degree of clients’ satisfaction of specific services, and based on particular results (Walmart’s indicators are 4.29/5) it is possible to take appropriate measures (“The Seller Scorecard”).

Payback Period of Investments

To understand how quickly the investments in attracting new customers will pay off, it is significant to know a few additional indicators. According to Ailawadi and Farris, they are the average amount of sales, the percentage of margins, and the average number of purchases per year (124). When analyzing these data, it is possible to take statistics for a certain time, for example, for one year. Walmart offers its customers to estimate the percentage of their orders, compare the number of purchases for different periods, and share ideas on some improvements or remarks (“The Seller Scorecard”). This approach to marketing policy will allow the leadership to better calculate the profit from attracting customers and not to waste money.

Lifetime Value

This metric deserves particular attention, and it should not be ignored as it is the indicator of what profit clients will bring to a certain company for the entire period of cooperation. Certainly, it is essential to take into account additional costs, which include the cost of attracting customers, as well as the price of consumer retention programs. However, the most important thing is that this indicator helps the management and the whole sales department to value their customers because only with their help, it is possible to competently estimate the real price of income brought by grateful buyers. As Cohen and Muñoz note, “more than 40% of U.S. consumers participate in the $ 300 billion conscious consumer market” (23). A significant part of this amount is provided by Walmart customers. According to statistics, the return on investment at the beginning of 2017 was 17.54% (“Wal-Mart Stores Inc. (WMT)”). This figure is high enough and confirms that a very significant amount of profit comes from a well-chosen client-oriented policy.

Net Present Value

When projected cash flow values ​​for investments are determined, the next step is to quantify these flows, which will show whether the expected profit overlaps the risk. A quantitative estimate can be made, for example, using the net present value method. This metric allows identifying the amount of excess cash generated by an investment, taking into account the cost of financing. According to Spiller and Tuten, the principle of discounting cash flows is used here (115). In early 2017, Walmart’s indicator was 2.83%, which was the lowest one for the past five years. Nevertheless, the retailer demonstrates a successful policy of attracting customers; therefore, the analyzed metric is applied.

Application of Metrics

When paying attention to the activities of Walmart, it can be noted that the corporation actively uses the described metrics since constant innovations in the field of marketing are observed. The company successfully promotes new mechanisms of goods transportation, introduces electronic communications, and regularly evaluates the used advertising strategies, which is important enough (“The Seller Scorecard”). Also, a large staff of specialists ensures that appropriate measures are timely implemented. Therefore, it can be claimed that all the described metrics are used in practice and are an effective mechanism for assessing the retailer’s current success.

Relationship Among the Metrics in the Portfolio

All the considered metrics complement one another and are a single method of evaluating and developing an efficient marketing program. If any indicators are ignored, success is unlikely to be significant. It is essential for each of the stages of work to be correctly performed by the exact strategy; in this case, no shortcomings in the work process can be traced. The sources of most of the metrics described in the portfolio are the online platforms of Walmart where accurate and up-to-date information is provided (“The Seller Scorecard”).

Conclusion

Thus, a competent evaluation and the research of special indicators called metrics allow receiving an accurate picture of the marketing policy of the world-famous retailer Walmart. All the described indicators are applied in practice, which helps the corporation management to take necessary and timely measures to promote their products in the market. These metrics correlate with one another and allow building a competent and relevant development strategy.

Works Cited

Ailawadi, Kusum L., and Paul W. Farris. “Managing Multi- and Omni-Channel Distribution: Metrics and Research Directions.” Journal of Retailing, vol. 93, no. 1, 2017, pp. 120-135.

Cohen, Boyd, and Pablo Muñoz. “Entering Conscious Consumer Markets: Toward a New Generation of Sustainability Strategies.” California Management Review, vol. 59, no. 4, 2017, pp. 23-48.

Rollins, Minna, et al. “The Impact of Economic Downturns on Marketing.” Journal of Business Research, vol. 67, no. 1, 2014, pp. 2727-2731.

Spiller, Lisa, and Tracy Tuten. “Integrating Metrics Across the Marketing Curriculum: The Digital and Social Media Opportunity.” Journal of Marketing Education, vol. 37, no. 2, 2015, pp. 114-126.

“The Seller Scorecard.” Walmart, Web.

“Wal-Mart Stores Inc. (WMT).” Stock Analysis on Net, Web.

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IvyPanda. (2020, November 27). Walmart Company's Measuring Marketing Performance. Retrieved from https://ivypanda.com/essays/walmart-companys-measuring-marketing-performance/

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1. IvyPanda. "Walmart Company's Measuring Marketing Performance." November 27, 2020. https://ivypanda.com/essays/walmart-companys-measuring-marketing-performance/.


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IvyPanda. "Walmart Company's Measuring Marketing Performance." November 27, 2020. https://ivypanda.com/essays/walmart-companys-measuring-marketing-performance/.

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IvyPanda. 2020. "Walmart Company's Measuring Marketing Performance." November 27, 2020. https://ivypanda.com/essays/walmart-companys-measuring-marketing-performance/.

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IvyPanda. (2020) 'Walmart Company's Measuring Marketing Performance'. 27 November.

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