| The City of Bristol is very unique in that it is one | | | | In the case of Bristol, opportunities existed by |
| very few American cities whose borders | | | | reaching out to the South American, Latin |
| transgress a state line. Some of the city is in the | | | | American, and African students attending the local |
| state of Tennessee while the rest of the city is | | | | colleges. Creating a cultural experience for these |
| located in the state of Virginia. What is not unique | | | | customers along with the local instrument-making |
| about Bristol, TN/VA, is that the local newspaper, | | | | and grass roots musical talent would have |
| The Bristol Herald Courier, quoted store manager | | | | resulted in a differentiated marketing plan -- one |
| Leon Peters as blaming the business failure on | | | | that Wal-Mart would not even attempt to |
| Kmart and Wal-Mart. | | | | compete against. |
| In an interview with Peters, Multicultural Business | | | | Local communities will continue to suffer the loss |
| Council's Together News discovered that although | | | | of local businesses if they do not realize that local |
| he did mention to national retail chains, he | | | | demographics are changing faster been Wal-Mart |
| emphasized it was only part of the problem. The | | | | can or will adapt, according to Multicultural Business |
| root problem, according to Peters, is that | | | | Council (MBC). |
| competition of the major chains and Internet | | | | "Wal-Mart's distribution and merchandise philosophy |
| businesses caused deterioration in JJ's sales | | | | prevents it from addressing localized |
| volume. | | | | sub-demographics," says Rick Weaver, MBC |
| Once known for offering custom guitars and | | | | spokesman and retail expert. "For Wal-Mart's |
| other musical instruments, the store eliminated | | | | pricing structure to work, they need to ship |
| those items from their merchandise mix about a | | | | truckloads to a single distribution center. For |
| year ago. They were finding it difficult to sell | | | | example, in some suburbs of Metropolitan Detroit, |
| these items while the chain stores offered | | | | the South Asian population represents up to 15% |
| opening price points at mass-production retails as | | | | of the population. This is far below what Wal-Mart |
| opposed to JJ's higher-priced handmade products. | | | | can address, however it is hundreds of millions of |
| People tend to want to believe discounters like | | | | dollars in annualized shopping power throughout |
| Wal-Mart are detrimental to local businesses. This | | | | the region -- certainly enough to support |
| view fails to understand guiding principles behind | | | | anywhere between 100 and 200 local businesses." |
| the Wal-Mart merchandise philosophy. The secret | | | | MBC works with local and international companies |
| behind Wal-Mart is very simple -- sell only items | | | | helping them develop strategies to compete in the |
| they create tremendous volume. Each | | | | local and international marketplace. They find local |
| merchandise category consists of the best-selling | | | | businesspeople tend to focus on competing with |
| items that can be ordered in bulk. This creates | | | | Wal-Mart on a price basis. With Wal-Mart's volume |
| tremendous efficiencies throughout their entire | | | | and low mark-on structure Wal-Mart is guaranteed |
| distribution network. | | | | to win any price-war. However local businesses |
| Their philosophy requires Wal-Mart to carry only | | | | are successful when they reach out to customers |
| those items appealing to broad demographics. This | | | | with products and services that cannot fit |
| leaves local businesses with the outstanding | | | | Wal-Mart's high-volume requirement. When this |
| opportunity to reach out to sub-demographics. | | | | occurs, local businesses become more successful |
| These sub-demographics include unique local | | | | than they were before Wal-Mart entered their |
| cultures, ethnic diversity, and other categories not | | | | community. |
| reported by the U.S. Census Bureau or Nielsen. | | | | |