Bob Ulrich

Editor

Bob Ulrich was named Modern Tire Dealer editor in August 2000. He joined the magazine in 1985 as assistant editor, and has been responsible for gathering statistical information for MTD's "Facts Issue" since 1993. He has won numerous awards for editorial and feature writing, including five gold medals from the International Automotive Media Association. Bob earned a B.A. in English literature from Ohio Northern University and has a law degree from the University of Akron.

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Black Friday brings out the best(?) in Wal-Mart

By: Bob Ulrich

Wal-Mart Stores Inc. claims it "always " has low prices. In order to keep its prices low and stock price high, it has to minimize its own costs.

I know the company refrained from newspaper advertising for many years. I'm guessing the same can be said for its television advertising, but I don't remember.

However, I do know that when Wal-Mart began advertising in print, tires were never part of the ads. Until now. And it took Black Friday 2011 to bring about the company's change in philosophy.

In the latest ad, Goodyear tires were featured. The prices, at least based on the flyer, were extremely low. Here are some examples.

$59 each:

Eagle LS-2,195/65R15 (was $98);

Eagle RS-A, 195/60R15 (was $93);

Integrity, 195/70R14 (was $97).

$65 each:

Eagle LS, 205/55R16 (was $120);

Eagle LS, 185/60R15 (was $118);

Integrity, 185/65R15 (was $103).

$74 each:

Eagle LS, 225/60R16 (was $147);

Wranger ST, 225/75R16 (was $159);

Integrity, 225/60R17 (was $142).

The biggest discount was nearly two thirds off -- 66% -- for the Eagle LS, size 235/55R17. It was advertised for $74 but was originally $217!

There is a four-tire limit per customer while supplies last. And the pricing is available only in Walmart Tire and Lube Express outlets. (The legal name of the company is hyphenated, but it spells it as one word as often as possible.)

Why did the company do it? Wal-Mart does not treat any of its products as a loss leader, but the margins on tires have always been pretty low compared to some of its other products. That makes advertising too costly.

In addition, Wal-Mart's pricing tends to stay the same nationwide. In that way, the company can take advantage of economies of scale by printing ads that are exactly the same regardless of which newspapers they appear in.

But tire pricing is all over the map across the United States. That makes advertising too unpredictable.

Maybe Wal-Mart has some excess inventory. If that is the case, then the advertising probably will stop after the holidays are over.

We'll see. Now that the dam has broken, however, my guess is the tire advertising will continue, maybe even in Wal-Mart's TV ads.

Related Topics: Goodyear Eagle, Goodyear Integrity, Goodyear Wrangler, Newspaper advertising, Tire prices, TV advertising, Walmart Tire & Lube Express

comments

1. John L. | November 29, 2011 at 01:14PM
   I guess that is one way to improve the product mix----screw you loyal customer base.

2. Edwardo | December 04, 2011 at 05:25PM
   One correction please? Walmart does not have universal pricing among it's stores. From one small town to another they set the prices as high as the market will bear...terribly high if they have destroyed their competition. They WILL NOT MATCH the lower price of another Wal Mart store!