Chain growth guides ad, marketing plan - Wal-Mart Stores Inc - Wal-Mart

Discount Store News, June 7, 1993

Wal-Mart's approach to advertising and marketing mirrors its no frills approach to merchandising: it appeals directly to its customers with a basic price message and plays by its own marketing rules.

Wal-Mart's television ads don't feature David Glass the way that Kmart's star Joe Antonini. Wal-Mart doesn't light up billboards the way Target has in some markets. It doesn't spend as much money on advertising as Sears (at least not yet). But the message gets across through weekly circulars, in-store marketing and national TV exposure as it branches out in new markets.

LNA/Arbitron, which traces advertising spending, estimates that in 1992 Wal-Mart spent $93 million in both print and broadcast advertising in 10 different media sources (magazines, Sunday magazines, newpapers, outdoor, network TV, spot TV, syndicated TV, cable, network radio and national spot radio). That was up from the $76 million it had spent in 1991.

In Advertising Age's ranking of the 100 leading advertisers by dollar volume, Wal-Mart ranked 57th in total broadcast and print advertising. That figure placed Wal-Mart far behind Kmart, 21 and Sears, 3. Montgomery Ward ranked 83. Target did not make the Top 100.

Wal-Mart isn't very forthcoming about its advertising spending, either for its core discount stores or its fast growing chains: the Wal-Mart supercenters, Sam's Club or Bud's.

The figures that are available confirm one definite Wal-Mart trend: advertising is becoming increasingly more important to the retailer as it grows.

Advertising Age estimates that Wal-Mart's ad spending-to-sales ratio is only .43%, compared to about 1.8% for Kmart and 2.7% for Sears,

But today, Wal-Mart stands poised to become one of the largest network television advertisers in the country. For 1992, Wal-Mart spent $95 million, double the $17 million spent on network TV in 1991, according to LNA/Arbitron.

Wal-Mart does not disclose what it spends for its weekly, mail-delivered circulars, which are the backbone of its advertising. These are used as a vehicle for weekly promotions and also manage to be a showcase of some of its "good employer" policies: The circular are printed on recycled paper with soy ink and include blurbs about charitable and environmental activities. Wal-Mart now exclusively uses its own associates and their families as models for its circulars, a practice it began two years ago. All this good will, however, has not been able to keep Wal-Mart from creating controversy. * Earlier this year an NBC Dateline report said that despite its Buy American policies, Wal-Mart had misidentified imported goods in-store as American made; and it accused Wal-Mart of contracting its overseas manufacturing to some factories using child labor: Wal-Mart denied both allegations. In fact, following the broadcast a number of Wal-Mart's vendors took out ads in USA Today praising its "Buy American" programs and manufacturing policies. * Target ran ads blasting Wal-Mart's price comparisons with Target, saying that prices were often wrong arid noting that "this never would have happened if Sam Walton were alive." Wal-Mart rapidly responded, noting that it still maintained and followed Sam Walton's policies and Target was simply wrong.

Recent actions suggest a policy change, if ever so slight. The Wal-Mart tag line: "Always the lowest price. Always" is being changed to "Always low prices. Always," which is a little more ambiguous.

Some negative publicity is inevitable at a company the size of Wal-Mart. As it continues to grow and expand it is realizing it has to take a more proactive approach to its advertising and marketing plans.