Product and Pricing Strategies

Paper Summary:

This paper discusses how Wal-Mart has created its success on two fundamental core competencies: discounting and efficient operations. The paper goes on to discuss how some industry observers state that Wal-Mart has taken the concept of discounting to new levels through its excessive use of loss-leader strategies (Grant). This strategy essentially assures that the retailer that employs such a strategy will take a loss on some product lines in order to capture traffic and sales in other product lines and categories. This paper further reviews how Wal-Mart uses this promotion and pricing strategy lure consumers into locations where it is virtually assured of netting correspondent sales because a shopper's tendency is to make other purchases out of convenience as well as on an impulse basis.

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