E

Wal*Mart

space and note sale Prices at Ames- walton knew his competitors intimately and copied their best ideas' He got to know Sol Price, who created Price Club, ar,a uren redid

the.6.,."pt

as Sam,s Club.

To Walton, the most important ingredient in Wal*Mart,s successi was the way it treated its associates' He believed that if you wanted the people in the stores to take care of the custorners, you had to make sure that you weie taking care of tlie people in &e stores- There was one aspeq of the Wal*Mart culture that bothered Walton from the time'wal*Mart became really successful. ,,We,ve had lots and lots of millionaires in our ranks," he said, -and it just drives *".;";;L;;", ;i;;. it' Every now and then someb-ody will do something particularly showy, undi do.,,t heiitate to rant and rave about it at the saturdaymorni4q mgeting."f don'taririk that 6ig mansions and flashy cars are what the Wal*Mart crrlture is supposed to be ab-out-+ewing tlre custoier.,,s - r ,; i
walton described.his management style as "management by watking and flying around.,, otheis it as -managemeLt b-y wearing"you down- and -managrr,"it b)r lo"kir,;;;;, your shoulder'" On g people, Waiton said,"'&ou've got to give.fcilki responsibility, arlugit you,ve got to trust them, tld then you'vu g"-t.jg check ,p teir-fi"r-r.auitt partnership with its 9lr associates meant sharing the nutnbers-walton ran the business as an open book and maintained an open-door policy' wal*Mart aimed to excel-by empowering associates, maintaining technological superiority, and building loyalty among associaies, customersland suppliers.
at Wal*Mart described

Merchandising wal*Mart merchandise was tailored to individual markeb and, in many cases, to individual stors' Information systems made this possible through "traiting,a procss *r,i.n indexed product movements in the store to over a thousand store and-market traib- Th" local store manager, using inventory and sales data, chose which products--to disqilay based.on customer-preferences, and allocated shelf space for a product category according to the deriurnd at his or her store. wal*Martt promotional strategy of "everyday-low-prices,, meait offering customers br;;;;"=*"',.'#H; 'wirir.airt for.less than department-and tpqurty prices. n"atrern, prorr.otio*. whil other ltore major competitors typically ran 56 to 100 advertised circulars io J.riIa traffic, wal*Mart offered 13 maior circulars "*,";u, Per year. In 1993, wal*Mart's advertising J*;; Ls 1.s% of discount store sales, compared to ZJlo for direct competitors.e In additioru fo"du".t offered a ,rsatisfaction guaranteed'-PolicY, which meant that merchindise could beretumed to any wal.Mart store with no questions asked.
wal+Mart *u" prices, and qave iE store rurnagers more latitude in ^ 1,:.y.of setting prices than ',".?,:omlretitive did "centiilly priced" chains such as calho, and venture. s[o." managers priced products to mi5et local market conditions, in order to *".i*r" *r"r,tory turnover, minirnizing gxPe-nses.- A study in the r"ia-rga0r-i";d that ";i"r;;il;;.rii lvhile when wal+Mart and Kmart were located next to each other, wal*Mari's,p.i._T roughry ry"ro*ur, ygle war*Mart, Kmart, and Target were seParated by ++ niitls, wal*Mart's l""''"g" and,z.6o/olower, respectively' [n remote locations, where wal*Mart had no dirtt competition from large.discounters, its prices were 6"/o higher than at locations where.it was next to a Kmait-

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Competitive changes in discount retailing were reflected in wal*Mart,s decision to change its marketing slogan from "Always the low p.rici-Alwayg," (which Wal*Mart had used when building its chain by offeri.g better prices than smill-town *".'.i ur,ii, ,o "Always

to* p.i..r-Alwavs.,,

(see

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IIr,lManagerncrri Venturcs, Inc