Marketing at heart of all retail success

When Wal-Mart admitted defeat in 2006 after eight years of trying to make Germany one of its key markets, it was clear then that the US giant needed help. Its approach to business, so successful on the other side of the Atlantic, had not translated into German.

Pulling out of Germany cost the company $1bn, despite the sale of its 85 stores to rival retailer Metro. Even with operations in China and Japan at the time, Wal-Mart was finding overseas expansion a tricky skill to master. The announcement that it was withdrawing from Germany followed a similar departure from South Korea only months earlier.

Wal-Mart Germany’s then CEO, David Wild, was frank about the failure in an interview with the Welt am Sonntag newspaper. “Many of our Wal-Mart acknowledged that it required a better understanding of retail marketing. It needed to find a way of leveraging the knowledge built up by its best executives in regions outside of the US to grow share in those markets.

It needed a plan.

Following the Germany debacle, Wal-Mart sent some of its American executives to the UK to see what, if anything, they could learn from the way Asda, the grocer it purchased in 1999, was being run. What they saw shook the global business to its core. Asda was demonstrating every day how a retail business can function if it places marketing at the heart of everything it does.

Fast forward three years to May 2009. Wal-Mart promotes Asda’s chief marketing officer Rick Bendel to the role of international chief marketing officer. Rick takes up the story on page 18, and talks about the challenge of helping change the culture of the world’s biggest company, with marketing experience and know-how as his main tools.

A new marketing academy (see news story, page 6) means that retailers from every different market you can imagine are going to come and learn their trade here in the UK.

And with overseas expansion crucial for any brand that has outgrown its home borders (ask Tesco, whose recent £3bn profits were built on a platform of 14% growth in international sales), I wager Wal-Mart will not fail in too many new markets like it did in Germany three years ago.

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