Wal-Mart is the world’s largest retailer and its headquarters is at Bentonville, Arkansas, USA. It was founded by Sam Walton in 1962 and listed in the New York Stock Exchange in1972. It is the largest grocery retailer in USA taking almost 20-21% of retail grocery and consumables business. It is also the highest private employer in USA and Mexico. It is operating throughout USA and other countries like Japan, UK and Mexico. Further it has wholly owned operations in Brazil, Canada, Argentina, UK and Puerto Rico. Due to high competition and continuous losses it closed down its operations in Germany and South Korea some time in 2006.
Due to its specific business policies it has been criticized by labor unions, religious organizations, women’s rights groups etc. Buyers in the same market seek products for broadly the same function. But different buyers have different evaluative criteria about what constitutes the right choice for performing the function. As a consequence different offerings will attract different buyers. Buyers within a segment are more homogeneous in their market wants when compared to those who are in the market at large but differences will always remain in wants among those within a segment notwithstanding this similarity.
A marketer can always achieve additional homogeneity by subdividing the original set of segments further until, theoretically speaking, we have segments to which only one buyer belongs. At the most detailed level, every buyer is a market in himself for every buyer’s ‘want’ is probably distinct in some way. On the basis of similarities and differences, such unique wants can be grouped into sub-classes. What it means is that wants within a sub-class are more related to each other than wants between sub-classes.
DemographicBasis: People in the market can be divided on the basis of demographic variables such as age, sex, family size, income, occupation, education, location, religion, race and nationality. Demographic variables are the most popular bases for distinguishing customer groups. Demographic variables can be combined to form social classes. Social class is defined in terms of a number of demographic variables varying from a single indicator like occupation to the use of a combination of factors like occupation, source of income, type of home or residential area.
Social class has a strong influence on the person’s preferences in regard to clothing, home furnishings, leisure activities, reading habits, and so on. Family life cycle: Another basis for segmentation that draws on demographic factors is family life cycle, where each stage in the cycle is a combination of age, marital status and age of children. A household with a young family tends to have different wants from an older married couple whose family is grown up. Psychographic basis: One can also segment the market on the basis of life style or mode of living.
This helps to understand what those who are in the market do. Some of the products where life style approach has been used for segmenting the market are women’s clothing, cigarettes, cosmetics, alcoholic beverages and furniture. Another basis is need- based segment, with companies making direct appeal to the loyal user. Companies selling in a brand-loyal market have a hard time gaining more market share. Similarly, companies that enter a need based market have a hard time getting in.