After this overhaul, Wal-Mart should have a better perspective

Implications: The current drama in marketing is just another distraction from the really big job at hand for Wal-Mart: positioning their brand for health now and in the future. Recently their marketing approach has been schizophrenic, flailing about with one approach and then another, wasting money and confusing the market in the process.

Wal-Mart must find the sweet spot of their market opportunity and then execute against that with tenacious focus and consistency. Hopefully the benefit of this recent drama will be clarity of what they really need to do next.


Analysis: The departure of Julie Roehm, SVP Marketing Communications and Sean Womak, VP Communication Architecture from  Wal-Mart is likely a result of poor decisions in their agency review approach and ‘fit’ (or lack thereof) within the Wal-Mart culture.

After a long agency review for their $570 million U.S. ad account, the business was awarded to DraftFCB in October. Yesterday it was un-awarded and announced that the account would go back into review, with DraftFCB not eligible to participate.

Clearly there was a problem, and the problem got personal. Putting an account back into review after the executive in-charge of awarding the business leaves is not surprising – it makes sense. But to preclude the agency that won the business from even participating in the re-review clearly signals Wal-Mart executives took great exception to a variety of tactics used during and after the review process.

There are now stories of “lavish” dinners and “gratuitous gifts” that changed hands during the review process – considered standard to many in the ad business but serious violations of Wal-Mart’s very strict, and very well known, policy about not accepting gifts, food and drinks from potential suppliers. Then, right after DraftFCB won the account they ran a full-page advertisement showing two lions mating with the headline “It’s good to be on top”. Sources say this was not well received within Wal-Mart, and caused executives to further question and scrutinize Roehm’s judgment and actions in the review process.

No single event was probably big enough for Roehm’s dismissal, but together they proved fatal.

Now what?  The Wal-Mart business is back in play, and no doubt the company will try to make the review as efficient as possible this time.  Going forward, Wal-Mart has clearly signaled that price leadership is going to be a pillar of their positioning again as they have returned to their low price message roots this fall. But they are also committed to doing a better job of attracting shoppers for bigger ticket items like consumer electronics, as well as clothing and groceries to increase their share of wallet among existing Wal-Mart shoppers.

The challenge for a new agency and marketing team is to take Wal-Mart’s price leadership position and build on it making Wal-Mart a place people want to shop. This can be done, but it will take a marketing team and agency that can strike the appropriate balance of respecting and leveraging Wal-Mart’s heritage while building their future into something even bigger and brighter.