Wal-Mart Pushes Panic Button

Dec 03, 2004
George Anderson

By George Anderson

Wal-Mart admits that it lost the price perception battle to kickoff the holiday selling season but the chain intends to remedy the situation as it launches a new advertising campaign today that focuses on 24 aggressively priced products, including Fisher-Price’s Dancing Elmo, Little Tikes’ Hummer, CD and DVD players.

Company spokesperson Mona Williams told Business Week, the items were chosen because “that’s what people are buying.”

Wal-Mart also announced it was changing its mix of advertising media to drive store traffic that the company has described as flat. It is not going to drop its holiday circular in December. Instead it plans to bring it online to give it more flexibility in lowering prices.

In another twist to its normal advertising practices, Wal-Mart has also said it expects to buy ROP ads in newspapers. The company normally does not run newspaper ads, preferring to concentrate on its circulars and television advertising. The campaign will include television, radio, and newspaper in 15 major markets around the country.

Moderator’s Comment: Is Wal-Mart overreacting to its initial sales performance to start the holiday season? Will the changes it is making achieve the
increase in store traffic it is looking for?

According to Meridian Research’s National Shopping Behavior Study, consumers for four years have been saying that price is becoming less important and finding
the product they want is more important. Could Wal-Mart’s limited assortment be losing out to rivals that offer consumers more options?

George Anderson – Moderator

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