Walmart , Vlasic Pickles Case
MAR331 – Week #3 Wal-Mart, Vlassic Case
Antonio DoSouto
Background
Marketing a company’s products or sales is a multi-faceted activity that must be well thought out and planned for, in order for a company to succeed. Wal-Mart being a market leader in the United States has to adopt appropriate marketing strategies that are competition-oriented in order to achieve a sustainable market size growth. Wal-Mart has been working in close association with its partner Vlasic, and being among the most important customers for Vlassic, they are concerned with developing a marketing strategy that serves to improve sales and profitability for both companies. In an effort to promote the company’s brand name and thus achieve a high level of customer attention, Wal-Mart entered into a deal with Vlasic. This deal aimed at ensuring that Wal-Mart would offer a gallon jar of pickles at $2.97 in the Food Service section. The low-end pricing strategy aimed at increasing the products’ customer awareness and consequently increases profitability for the two companies. However, this marketing strategy has turned out to be less than successful, especially for Vlasic, and the deal is at the verge of being cancelled. Wal-Mart is now faced with the problem of how to restructure its marketing activity and strategy as its customers considered the $2.97 deal to be a Wal-Mart Every Day Low Price and have been extremely satisfied and enthusiastic with the offer. This deal has led to increased Vlasic prickle sales by 80 percent, and in addition, it increased Wal-Marts business to Vlasic Food International by more than 30 percent. However, a major problem now faces Wal-Mart because despite the increased business that it conducts with Vlasic, Vlasic Food International blames Wal-Mart for the decline in its profits by 25-50 percent. In addition, Vlasic blames Wal-Mart for a more than 500 million dollar debt that it has incurred in the process of running its business and financing the low pricing
Antonio DoSouto
Background
Marketing a company’s products or sales is a multi-faceted activity that must be well thought out and planned for, in order for a company to succeed. Wal-Mart being a market leader in the United States has to adopt appropriate marketing strategies that are competition-oriented in order to achieve a sustainable market size growth. Wal-Mart has been working in close association with its partner Vlasic, and being among the most important customers for Vlassic, they are concerned with developing a marketing strategy that serves to improve sales and profitability for both companies. In an effort to promote the company’s brand name and thus achieve a high level of customer attention, Wal-Mart entered into a deal with Vlasic. This deal aimed at ensuring that Wal-Mart would offer a gallon jar of pickles at $2.97 in the Food Service section. The low-end pricing strategy aimed at increasing the products’ customer awareness and consequently increases profitability for the two companies. However, this marketing strategy has turned out to be less than successful, especially for Vlasic, and the deal is at the verge of being cancelled. Wal-Mart is now faced with the problem of how to restructure its marketing activity and strategy as its customers considered the $2.97 deal to be a Wal-Mart Every Day Low Price and have been extremely satisfied and enthusiastic with the offer. This deal has led to increased Vlasic prickle sales by 80 percent, and in addition, it increased Wal-Marts business to Vlasic Food International by more than 30 percent. However, a major problem now faces Wal-Mart because despite the increased business that it conducts with Vlasic, Vlasic Food International blames Wal-Mart for the decline in its profits by 25-50 percent. In addition, Vlasic blames Wal-Mart for a more than 500 million dollar debt that it has incurred in the process of running its business and financing the low pricing