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
INTRODUCTION…
 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.
 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
 The culture MISSION
consists of STATEMENT…
• 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.”
In year 2001,
Fortune company named Wal-Mart as the 3rd most admired
company of America.
AWARDS AND RECOGNITION…
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.
 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;
BUSINESS MANTRA…
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;
 Wal-Mart Discount Stores.

WAL-MART STORES IN US…

 Wal-mart Super Center.

 Neighborhood Market By Wal-Mart.

 Market Side.
 WAL-MART DISCOUNT STORES.
• 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 SUPER CENTER.
• 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. .
NEIGHBORHOOD MARKET

• Began in 1998
• Located in market with Wal-Mart
Super centre
• Offers customer groceries,
pharmaceuticals & general
merchandise.
• Provides 28000 items to customers
 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.
PRODUCT OFFERED • Family apparel
• Automotive products
• Health and beauty aids
MARKETING MIX…
• Home furnishings
• Electronics
• Hardware
• Toys
• Sporting goods
• Lawn and garden
items
• Pet supplies
• Jewelry
• House wares, etc.
SERVICES OFFERED

• Vision centers

• Health clinics

• Fast food restaurants

• Hair salons

• Portrait studios

• one-hour photo centers

• Pharmacies, etc.
 MARKETING MIX cont…
 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…
 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

POINTS
developing TO PONDER…
a customer & at
centric culture DISCUSS
Wal-mart. Do
you think in order to provide the best customer service
organizations must always follow a top down approach.
 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 Submissi Basket Products Product Selected Payment Payment Purchas Exit and
of the on Trolley and display Products Counter Slip ed product
retail counter Other Counter products withdrawa
stores interiors s l counters

Arrive at Get Get a Go Select Put Go with Pay Get your leave
Wal-Mart things pulling inside the down the money purchas with
SERVICE BLUEPRINT AT WAL-MART…
retail
store
you
brought)
basket
trolley
the
products
product
s which
the
selected
basket
trolley to
accordin
g to the
es with
you
your
purchas
submitte gallery are products the bill es and
d, needed in the payment other
basket counter brought
things
Custome
Counter Customer cashier Cashier Security
r
staff Support support
Support
staffs staffs
Staffs

Staff
Finance
manageme
Departmen
nt
t persons
Committee

Staff Trainers Cost and Selling Security

Price calculating Department
staffs
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 To find out the price of any product and a brief
●
●

Information description about it.

To locate if the product was out of stock.
●
●

Kiosks
INFORMATION TECHNOLOGY TOOLS… USED…

Introduction ●
● 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

of 960 quantity left at that store.

Website: ●
● To provide info to its customers on all products it
stocked ad to enable online sales
www.walmart.com ●
● Tie up with FINGERHUT, a direct marketing company.
●
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)

BENEFITS OF IT…

 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.
STRENGTH:
Distribution Centres
Use of technology
Supplier support and networking
Inventory control andSWOT
distribution Non personalized purchasing
Corporate culture
Standardization of stores
OPPORTUNITIES:
Backward expansion
Catalog shopping
Product packaging
Expanding store format
Potential technology for home
shopping
WEAKNESS:
High dependency on technology
Low margins
High cost of distribution
ANALYSIS…
THREATS:
Economic environment
Many discount businesses
Competition from other discounters
Cable “home shopping”
 WAL-MART
• On November.27 2006,and BHARTI
Bharti enterprisesDEAL
and WAL-MART
entered into joint venture of equal partnership to function in the
‘Cash And Carry’ format.
ENTRY IN THE INDIAN MARKET
• 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
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