Lessons in Customer Service from Wal-Mart

PRESENTED BY:

SIDDHARTH handa ABHINANDAN surana

DEEPANKAR kataria

SHAHNAWAZ siddiqui GAURAV sharma

Sam Walton opened the first store in 1962 in Rogers, Arkansas.

First store opened in Bentonville, Arkansas

Within 5 years there were 25 Wal-Mart stores earning a total

revenue of $12.6 million in sales.

In 1972 Wal-mart was listed in the NYSE.

1.3 million people working by now.

In 2005 Wal-mart incorporated sustainability in it’s business under

their CEO H Lee Scott Jr.

INTRODUCTION…

Mike Duke succeeded Lee Scott as president and chief executive

officer on February 1, 2009.

Presently 7,800 stores and club locations in 14 markets worldwide

in countries like – (Honduras, Japan, Mexico, Nicaragua, Puertorico,

Argentina, Brazil, Canada, China, Costa-rica, El-salvadore, Guatemala,

the U.K. and India.)

employ more than 2 million associates, serving more than 176

million customers a year.

They don’t have a formal mission statement

They are most interested in the customers needs

The culture consists of

• Respect for the individual

• Service to our customers

• Strive for excellence

If they did have a formal mission statement it would be,

“To provide quality products at an everyday low price

and with extended Customer service…always.”

THE MISSION STATEMENT…

In year 2001,

Fortune company named Wal-Mart as the 3rd most admired company of America.

The Financial Times and Price water house coopers ranked it as the 8th most admired company in the world.

In year 2002

Rated as the no.1 company on the fortune 500 list.

Presented with the Ron brown award for corporate leadership.

AWARDS AND RECOGNITION…

The world's largest public

corporation by revenue, according

to the 2008 Fortune Global 500.

The largest private employer in

the world and the third-largest

utility or commercial employer.

The largest grocery retailer in the

United States, with an estimated

20% of the retail grocery and

consumables business.

Wal-Mart operated according to following rules :

1. Commit to the business;2. Share the profits with all associates;3. Motivate your partners, vendors, and suppliers;4. Communicate everything about the business to everyone in the company;5. Appreciate the associates and let them know they are appreciated;6. Celebrate success;7. Listen to everyone;8. Exceed expectations;9. Control expenses;

BUSINESS MANTRA…

WAL-MART STORES IN US…

Wal-Mart Discount Stores.

Wal-mart Super Center.

Neighborhood Market By Wal-Mart.

Market Side.

• In 1990, Wal-Mart opened its first Bud's Discount City location in Bentonville

• As of December 2009, there were 810 Wal-Mart Discount Stores in the United States.

WAL-MART DISCOUNT STORES.

• Wal-Mart Supercenters are hypermarket.• The first Supercenter opened in 1988 in Washington• As of December 2009, there were 2,737 Wal-Mart

Supercenters in the United States. .

WAL-MART SUPER CENTER.

• Began in 1998

• Located in market with Wal-Mart

Super centre

• Offers customer groceries,

pharmaceuticals & general

merchandise.

• Provides 28000 items to customers

NEIGHBORHOOD MARKET

MARKET SIDE

• Market side is a new chain of grocery stores opened in

October 2008, the stores are said to be less than half the size

of a conventional supermarket.

• As of December 2009, there were four Market side stores, all

within the state of Arizona. Each of these stores is open from 7

a.m. to 10 p.m.

• Family apparel • Automotive products• Health and beauty aids• Home furnishings• Electronics • Hardware• Toys • Sporting goods• Lawn and garden

items• Pet supplies• Jewelry• House wares, etc.

PRODUCT OFFERED

MARKETING MIX…

• Vision centers

• Health clinics

• Fast food restaurants

• Hair salons

• Portrait studios

• one-hour photo centers

• Pharmacies, etc.

SERVICES OFFERED

PRICE: Always low prices EDLP (every day low pricing)

PLACE: general merchandising and one-stop shopping is a part of their placement issue.

PROMOTION: TV and print adv. Sponsorship and Events in USA.

MARKETING MIX cont…

MARKETING MIX cont…

PEOPLE: more than 2 million employees, ..called associates ..specific training, knowledge of products and IT tools.

PROCESS: simple and streamlined processes. .. backed by IT tools. .. Availability of goods always taken care of.

PHYSICAL EVIDENCE: With the help of their high quality products, different form of stores, and facilities. They are evident

Q:-1- Explain the role of Walton’s leadership in

developing a customer centric culture at Wal-mart. Do

you think in order to provide the best customer service

organizations must always follow a top down approach.

POINTS TO PONDER… & DISCUSS

Sam laid down three principles- respect for the individual,

striving for excellence, service to customers

Customer was the focus. Rule said-• 1)Customer is always right.• 2)If the customer happens to be wrong, refer to Rule 1

Employees were asked to display aggressive hospitality which

was beyond the expectations of customers

The company was known for greeters who greeted customers

with a warm welcome and friendly smile.

Customers were not only shown the way to product but also

accompanied to the correct location

All customers were allowed to exchange products or seek

refunds for products if they wished.

Sun down rule-Associates had to resolve all service related

customer requests before sunset.

1o foot attitude rule- If a customer was within 10 feet from an

employee, he had to attend him.

Tagline- “We sell for less and satisfaction guaranteed’’

EDLP-was attractive among customers and was the key

contributor to success.

Adding to customer delight

Started building database of customer information

Installed customer information Kiosks

Launched website www.walmart.com

Yes the top down approach was key to success at Wal-Mart.

These days it depends on company and situation as to decide

whether bottom up or top down will contribute the most.

Q:-2- Wal-Mart’s focus on customers led to the development

of customer centric policies. Explain how these policies

both the customers and the company. Do you think that

providing the best customer service is always a win-win

proposition?

Wal-Mart….Leader of change…

Policies adopted-

1. Customer is always right.

2. The employees being treated as associates.

3. Motivating associates.

4. ‘Aggressive hospitality’

5. Greetings, warm welcome, complete individual attention.

6. Policies like ‘Sundown rule’ and ‘10 foot attitude rule’.

7. ‘We sell for less’ and ‘Satisfaction guaranteed’.

8. Heavy investments in technology and IT.

Policies benefited the customers

• Greater customer satisfaction.• Happier customer, happier company and happier the returns.• Reduction of costs because of efficient procurement and

streamlined supply chains.• Improved brand image.• Greater brand loyalty.• Penetrating reach into the markets.• Online presence ensured Wal-Mart catered to a wide range of

people.• Use of IT ensured that no customer returned empty handed

because inventories were always maintained..

Exterior of the retail stores

Customer Support Staffs

Cashier

Security Department

Security support staffs

Staff Trainers

Basket Trolley

Products andOther interiors

Product display Counters

Selected Products

Payment Counter

Payment Slip

Purchased products

Exit and product withdrawal counters

Get things you brought) submitted,

Arrive at Wal-Mart retail store

Submission counter

Customer Support staffs

Get a pulling basket trolley

Go inside the products gallery

Select the products which are needed

Put down the selected products in the basket

Go with the basket trolley to the payment counter

Pay money according to the bill

Get your purchases with you

leave with your purchases and other brought things

Counter staff

Staff management Committee

Finance Department persons

Cost and Selling Price calculating staffs

cashier

SERVICE BLUEPRINT AT WAL-MART…

SERVICE GAP

Gap model applied…

No such discrepancy exists between the expectations of

the customer and the services offered by the organization, only

that sometimes the overwhelming crowd that the stores draw

tends to scare people away.

Q:-3- Wal-Mart’s was one of the few retailing companies to

use IT in its operations as early as the 1980s. Wal-mart

used IT for the benefits of its customers.

Customer Information

Kiosks

• To find out the price of any product and a brief description about it.

• To locate if the product was out of stock.

Introduction of 960

• A Product not available, then the associate would enter the item number in 960. It would locate the nearest Wal-Mart store that had the item, the location of the store, its phone number, and the quantity left at that store.

Website: www.walmart.co

m

• To provide info to its customers on all products it stocked ad to enable online sales

• Tie up with FINGERHUT, a direct marketing company.

INFORMATION TECHNOLOGY TOOLS… USED…

• Computer at Stores- Distribution Centers.• Helped tracking movement of goods in real time, quickly

replenishing the stock at stores.• Eliminated the inconvenience to customers.• Minimizing chances of stock-outs, better inventory

management.

Electronic Data Interchange(EDI)

Introduction of electronic data interchange systems at stores and the distribution centers.• Helped quick replenishment of the stocks by tracking the movement of goods in real-time.• It helped in better inventory management.

Installation of satellite communication system: Connecting the stores, distribution centers, suppliers systems and automated the entire distribution process.

Creation of data warehouse system: Served as a storehouse of data.

Usage of tools like data mining: Helps in analyzing the needs, preferences and buying patterns of consumers.

BENEFITS OF IT…

STRENGTH:

Distribution CentresUse of technologySupplier support and networkingInventory control and distributionCorporate cultureStandardization of stores

WEAKNESS:

High dependency on technologyLow marginsHigh cost of distributionNon personalized purchasing

OPPORTUNITIES:

Backward expansionCatalog shoppingProduct packagingExpanding store formatPotential technology for home shopping

THREATS:

Economic environmentMany discount businessesCompetition from other discountersCable “home shopping”

SWOT ANALYSIS…

• On November.27 2006, Bharti enterprises and WAL-MART entered into joint venture of equal partnership to function in the ‘Cash And Carry’ format.

• Aug.2007 - first store in India. (Amritsar)

• They also plan to open at least 140 outlets across the country

• Plan to hire 1,100 employees

WAL-MART and BHARTI DEAL

ENTRY IN THE INDIAN MARKET

Advantage Wal-Mart

Companies innovative information technology .

Highly efficient service channel management which makes it

possible to buy directly from the producers.

Company has tremendous sourcing efficiencies which will bring

economies of scale from day one.

Advantage Bharti

Huge ground network in the country already through its

telecom business

Knows the Indian landscape and understands the demographics

in this country.

Knowledge of where to get the real estate for the business.

WILL WAL-MART SUCCEED IN INDIA ???

It will succeed because :

It has the best know how to

provide the right set of products

to the right set of customers.

Customers are also hungry for

new ways of shopping.

THANK YOU