Friday, January 14, 2005

the risks of Wal-Mart's PR push

Wal-Mart's efforts to influence public opinion in the face of widespread criticism are gaining momentum - Google News currently tracks 285 news stories on the topic. The Globe and Mail's article today, "Wal-Mart strikes back at detractors with new million-dollar PR push" does a good job of laying out the risks and potential rewards the retailer faces:

Marketing experts said Wal-Mart's unusually aggressive PR stance is an acknowledgement that success, as measured by sales and profit, isn't enough for the world's largest company.

"The company is clearly liked by consumers, otherwise wouldn't be doing so well," said Niraj Dawar, a marketing professor at the University of Western Ontario's Ivey School of Business. "In a sense, the company is saying that it isn't enough to be successful. It has to have a positive image in the marketplace."

But other experts said Wal-Mart is adopting high-risk tactics that could attract even more attention to the image it's trying to bury.

David Dunne, a marketing professor at the University of Toronto, said there's a danger that Wal-Mart might alienate just the people it's trying to win over. The strident tone of Mr. Scott, a relative business unknown, is a risky strategy, he suggested.

"I would question whether this is the right approach in an age when people are skeptical of corporate leaders," Prof. Dunne said.

Officials of the United Food and Commercial Workers Union, which has been trying to unionize stores across Canada and the United States, said the campaign itself are misleading.

"They're on the defensive, they have a record they can't defend and think an ad campaign covers up reality," Greg Denier, a UFCW spokesman, told Dow Jones.


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