Reference no: EM133214431

The Issue Compared to July 2019's net profit of USD 2.6 billion, Amazon reported in July 2020 that it had doubled its net profit year over year to a staggering USD 5.2 billion. That number doesn't include the over USD 4 billion that the company spent on COVID-related costs to keep employees and customers safe. As more people turn to online shopping for groceries and other goods amid the COVID-19 pandemic, it can often feel like there isn't a competitor in sight for the world's biggest retailer-a contentious topic recently covered in a congressional antitrust hearing involving powerhouse tech companies, including Amazon, and their apparent dominance in their markets.On September 1, however, Walmart announced it would be throwing its hat in the ring by debuting Walmart+, their version of Amazon's popular Prime service. The membership program costs USD 98 per year compared to Prime's USD 119 fee. Both services have a UDS 35 minimum order for sameday delivery. Another key difference: Walmart's service will not include streaming entertainment, but it will offer a 5-cent-per-gallon fuel discount with its gas station affiliates. Also, while Walmart's service will offer a total of 160,000 items that would qualify for same-day delivery, Amazon has 3 million products in comparison. Why Is It News? The release of Walmart+ had been delayed multiple times due to COVID-19, with an original launch date of late March/April 2020. While the pandemic caused the delay, the resulting panic-buying of groceries and household goods boosted Walmart sales to record highs. The release of the Amazon Prime alternative has been eagerly anticipated, but some analysts are saying that the new service isn't as exciting as it seems. "For a $35 minimum and $98 annual fee, this is a thin gruel," Craig Johnson, president of Customer Growth Partners told The New York Times. But Walmart's chief customer officer Janey Whiteside says that most grocery delivery services require minimum orders and that shoppers' orders usually exceed the USD 35 minimum. On September 9, it was reported that the retailer was testing drone delivery of grocery and household items from its Fayetteville, NC stores. The news comes weeks after Amazon was granted approval from the Federal Aviation Administration to operate drone deliveries-one of only a handful of companies allowed to do so by the U.S. government. In the battle between Amazon's online dominance and Walmart's traditional retail, there's also the issue of labor. Throughout the early months of the pandemic, Amazon's poor labor practices made headlines. Unprecedented employee protests, internal controversies over the firing of a warehouse worker, lawsuits from workers, and public petitions brought the company under fire for not doing enough to keep its employees safe. In April, The Intercept reported that a coalition of workers from both companies, as well as Target, Whole Foods, FedEx, and Instacart, went on strike to protest working conditions. What's unknown is whether Walmart-which has also come under fire for labor practices-will have a strategy for employee safety and sustainability that will be any different than its rival's. There doesn't appear to be anything substantial that sets Walmart+ apart from its competitor, but as their recent ad campaign suggests, the company perhaps isn't trying to highlight that. Its first ad about the membership service focuses on the time families can save by using it, instead of trying to sell its features.

1. Define push and pull strategies with 2 pros and 2 cons for each strategy. Explain to Walmart CEO how she could use each of the strategies to expand her new program in the market. Support your answer with relevant examples.

2. Walmart CEO followed the new product development process. Please list the steps and identify the step Walmart CEO is at currently with Walmart + program. Explain your reasoning.

3. The Walmart+ is incredibly competitive, especially with Amazon prime. What pricing strategy did Walmart CEO likely follow when she decided to launch the product? Explain your answer.

4. Walmart CEO is discussing about using the different distributors of her Walmart+ program. Explain the 3 possible distribution channels she might be using. Describe the major difference between a wholesaler and a broker.

5. Walmart CEO might be using different promotion mix to reach out her target customers. List three basic goals of promotion for Walmart CEO? For each of these three goals, give examples.