Walmart’s Market Segmentation and Market Sizing in Vietnam
Walmart as the leading global retailer is motivated by market positioning, segmentation and targeting as its integral marketing strategy (Baines, Fill & Page, 2010). Segmentation can best be described as the general division of a given population into different groups based on specific features while targeting involves the selection of specific consumer groups established from segmentation as the products buyers (Baines, Fill & Page, 2010). On the other hand, positioning is the most appropriate market mix for the chosen consumer segment and target (Baines, Fill & Page, 2010). In order for Walmart to perform well in Vietnam as the selected expansion country will be required to analyze its market in the quest of surviving, growing and securing a competitive positioning over all its competitors in the country.
Market Segmentation, Targeting, and Position In Vietnam
Market Segmentation
Marketing segmentation is essential in findings consumers who are suitable for Walmart’s products as well as services in Vietnam. Segmentation approach is essential as it facilitates the general understanding of distinct divisions of consumer and the consistently varying need (Ferrell, Fraedrich & Ferrell, 2013). Vietnam was selected because it is associated with a huge population and less retailing foreign and domestic competitors. The firm’s marketing strategy will mainly be based on ensuring the availability and accessibility of products to the suitable markets. The company will focus on demographic and psychographic segmentation approaches since it will be dealing with electronic products that require high segmentation. The company understands that the consumers are sensitive to both quality and prices and they require cheaper services and products every day (Ferrell, Fraedrich & Ferrell, 2013).
Specifically, the company will be segmenting its target consumers based on Psychographic, lifestyle, and demographics. Psychographic segmentation comprises of the division of the market into distinct segments on the basis of distinct personality features, standards, perceptions, interests, and lifestyle of the buyers (Lamb, 2012). This type of market segmentation is beneficial for Walmart’s expansion since it will permit the form to participate in products marketing that is focused. To start with dealing with electronic products will require the segmentation to be based on interests such as entertainment, quality, and affordability (Lamb, 2012). It was established from research that the market has a few small electronic retailers particularly located in the urban centers. The competing retailers such as Big-C are not focused on products varieties or differentiation particularly of the electronic ones based on the associated expenses. Walmart will not only be providing quality but also highly innovative products that are acquired from different brands to match with the different tastes, preferences, and demands. In this context, the segmentation is for the working organizations or individuals who are mainly triggered by entertainment lifestyle.
The purpose is to ensure that for those that desire to live entertaining and yet affordable lifestyles are considered. It is apparent that electronics particularly the entertainment and kitchen appliances are highly demanded by consumers in the society today but most consumers hold their needs due to the high costs associated with the products (Lamb, 2012). In Vietnam electronic products are expensive because the retailers do not have international or reliable supplies to offer brands variety at good prices that motivates buying. Offering affordable products generally implies that the consumer will be willing to change the items more often to acquire related updates thus making their lives better (Ferrell, Fraedrich & Ferrell, 2013). In general, the perception of the consumers in regard to innovation should be a positive one for this segmentation. Innovators, early adopters, and laggards are the behavioral segments that will be utilized. Innovators refer to the foremost individuals in the adopting fresh products. This group has high potential since the members are willing to take all kinds of risks despite the fact that it might fail. Early adopters create undeniable influence in the market with a representation of about 15 percent. On the other hand, Laggards are those that are not influenced by trend and usually the last to adopt most products after having analyzed the risks.
Market Targeting
The electronic specialty actually has an extensive range of consumers but the target has to be right in order for value to be acquired. In this context, Walmart will mainly be utilizing targeting because the market is large. Walmart in this context will be targeting the low and middle classes individuals across Vietnam. In that, because most of the retailers are situated in the urban location, the company will be offering distribution and online services to increase its access and availability of products to most consumers. Walmart’s emphasis is not only specializing on products variety but quality and affordability are also at its center (Scott & Hawkins, 2011). This means that the company will mainly be targeting those that are sensitive to both qualities as well as prices who are particularly the low and middle-class persons. This group was selected because more close to 50 percent of individuals in Vietnam belongs to the middle socio-economic classes while close to 20 percent is comprised of low-class people (Latova, 2017). This, therefore, implies that the group is categorized with the highest potential.
Actually, these groups are associated with the highest rate of disposable income and this shows that with affordability, quality, variety, and convenience as the central values of the Walmart its target consumers are likely to be easily enticed. In that most individuals from these groups are interested in quality, quantity, and affordability (Lamb, Hair & McDaniel, 2012). In addition, Walmart will be targeting single, family and young and older populace. In that, all these people are likely to purchase the products mainly electronic and kitchen alliances based on technology demand and the need for efficiency and quality living. According to Lamb, Hair & McDaniel, (2012) young buyers are likely to purchase entertaining and high-end products such as television and music systems whereas family individuals will include entertainment and kitchen products.
Market Size
Vietnam middle and low-class buyers comprise of more than just 65 percent of its entire population (Latova, 2017). It is anticipated that these individuals spend at least 6 dollars every day on disposable buying. Back in 2014, the electronic market in Vietnam accounted for approximately 23.4% of the country’s GDP which was categorized as the largest in the Asian market. This was associated with a general sales volume of 21 million items (Latova, 2017). In this context, it is apparent that Walmart has the utmost potential if it expands into the market with more strategic penetration to attract the large consumer base. In addition, the company will acquire competitive positioning especially because it will be providing more extensive services across the nation in addition to a variety which will make the company’s operation more different because it cost leadership approach is not easy to beat.
Positioning
Walmart’s positioning plays an essential role in its global success (Scott & Hawkins, 2011). In that, the company positions itself as the leading corporation that offers the least prices (Scott & Hawkins, 2011). In this context, in Vietnam, the company will utilize cost and differentiation leadership. In that, while consumers are highly interested in the general variety that a company provides pricing is also essential. The company will focus on providing products variety by acquiring adequate supply for different brands so that it can provide more options for the consumers. Walmart will at all times uphold quality given that this aspect cannot be affected by low prices because its operative expenses are particularly minimal (Scott & Hawkins, 2011). Walmart’s use of its pricing strategy has been effective in beating competition from major as well as small firms from the global context (Ferrell, Fraedrich & Ferrell, 2013). The integration with differentiation in Vietnam the company will be able to acquire a wider market based on the diverse consumer necessities as well as sustainability for the long run.
Conclusion
Based on the analysis above it is clear that Walmart has great potential of being highly competitive in Vietnam. In that Vietnam provides a huge electronic market that has not been exploited fully and the market players are characterized by relatively higher prices which makes them vulnerable to its expansion. The country is also associated with the utmost educated populace of the middle and lower classes persons which implies that they are highly interested in technology products. The increasing income earning is offering more opportunities for the company due to high disposable income. Differentiation and cost leadership are the most appropriate approaches for the company while focusing on lifestyle, demographic and psychographic market segmentation for the long run growth.
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Baines, P., Fill, C., & Page, K. (2010). Marketing. Oxford: Oxford University Press.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics: Ethical decision making and cases. Mason, OH: South-Western/Cengage Learning.
Lamb, C. W. (2012). Marketing. Toronto: Nelson Education. Nelson Education.
Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2012). Essentials of marketing. Mason, Ohio: South-Western Cengage Learning.
Latova, E. (2017). Electronics Production in Vietnam: A Guide to Emerging Opportunities. Retrieved from http://www.vietnam-briefing.com/news/electronics-production-vietnam-guide-emerging-opportunties.html/
Scott, B., & Hawkins, J. (2011). Retail is detail: A retailer's playbook for beating Walmart. NewHebron, MS: NewHebron Publ.
