家乐福营销策略--英文版

IntroductionSeeing from the trends of development in retail industry, hypermarket with its advantages like open-shelf sales, convenient and cheap and one-stop shopping has become the main type in retail industry. After the hypermarket appeared in the mid-20th century, it has made contributions to the extension of international market, the prosperity of global trade and the development of world’s economy. The hypermarket is re-development and re-creation of the supermarket. Compared with the supermarket, hypermarket not only operates larger business areas, but also has more kinds of goods. It uses optional way to sell the daily essentials so that it can meet the customers’ demand for one-stop shopping. Wider and more comfortable shopping environment and complete types of goods makes the hypermarket enjoy the customers’favor. The hypermarket has become one of the fastest growing formats as well as the most dynamic form of retail organization in retail industry.Carrefour is a French international hypermarket chain which is headquartered in Levallois-Perret, France. Carrefour is the largest hypermarket chain in the world in terms of size, and the second largest retail group in terms of revenue and profit after Wal-Mart. As the world’s second largest retailer, Carrefour operates more than 10,300 stores in France and 11,000 stores covered 30 countries and areas around the world. In 2005, the Carrefour ranked the 22nd in The Wealth 500 strong business enterprises. The Carrefour leads the market mainly in three kinds of managing modes as Hypermarket, Supermarket and Hard Discount Store. In China, the main operation type of Carrefour is hypermarket with the discount stores named “Dia” as supplement.This study aims at the research of Carrefour and elaborates the creation, characteristic and development process of Carrefour and makes use of the basic theories of marketing to analyze the existing marketing strategy of Carrefour in detail. In order to face the challenges and chances, the SWOT analysis is made to nail down the advantages and disadvantages of Carrefour. STP analysis is aimed to ensure the target market and market fixed position of Carrefour, thereby get the marketing strategy of the hypermarket. Finally, this thesis put forward several suggestions to Carrefour for its further development, hoping the advice could be useful to the development of the native company and the race retail trade of our country could have sustained, rapid and sound development.1. Background InformationWith the development of economy in China, the retail market has entered into a new period with fiercer competition than ever. In such a situation, however, Carrefour achieves great success in the Chinese retail market.1.1 Brief Introduction of CarrefourCarrefour Group, founded in 1959, is the pioneer of hypermarket format. In 1963, Carrefour opened its first store in France. Carrefour merged with Promodes SA in 2000 and then became Europe’s leading and the world’s second-largest retailer. Carrefour mainly operates three business types, they are: hypermarkets, supermarkets and discount stores. In addition, Carrefour has also developed a number of convenient stores and membership-based discount stores in some countries. The company’s founders created the concept of the hypermarket, an expanded supermarket offering a wide variety of merchandise, including groceries, electronics, clothing, and automotive supplies, that allowed consumers to accomplish most of their shopping at one store. The rapid success of Hypermarkets has revolutionized the retail industry in France and worldwide. In 2004, the whole Carrefour Group sold 72.668 billion Euros after tax, employed over 43 million people, and ranked second only to the Wal-Mart in the world retail industry.Carrefour’s business philosophy is based on low prices, excellent customer service and comfortable shopping environment to provide the vast number of customers for the necessary daily consumer goods. Carrefour implements self-service shopping, free parking, low prices and high efficiency shopping and other series of services. And, it’s “Happy shopping Carrefour” and “one-stop shopping” and other advanced management concepts have got the favor from the majority of consumers.Therefore, the foundation of Carrefour’s development and services is to better meet the shopping needs of consumers. Carrefour shares its advanced business equipments and brand-new retail business concepts with others in the world to actively improve the quality of people's consumption and living standards, stimulate consumers’demands, promote and facilitate the local economic development.1.2 The Development of Carrefour in ChinaIn 1995, Carrefour successfully opened its first hypermarket in China: Beijing ChuangYi store. Due to the store’s new business philosophy, it was successfully accepted by the Chinese consumers. During the past 10 years, Carrefour had maintained the leading position among the foreign retail enterprises in China and led the development of Chinese modern retail industry. At present, Carrefour has opened more than 60 stores with more than 30,000 employees in 26 cities of China. In addition, Carrefour set up its global sourcing headquartersin Shanghai. It also established the regional representative offices in 10 cities so that Carrefour can purchase the local special merchandise at low price level and export to overseas chain stores. In China, 95% of the merchandise in Carrefour’s stores is from local sources. In 2004, Carrefour’s value of export reached 3.235 billion US dollars. Carrefour not only contributed to the state and local economy in terms of taxes, but also brought with the management skills and experience of modern hypermarket after several years of operating in China. Carrefour has realized the modernization and localization in the aspects of the commodity procurement and management, marketing management, human resources development and financial management, and has made great contributions to local economic development.1.3 Market Competition in ChinaWith the further opening of Chinese market and the constantly increasing of economy, China’s position in the global economy becomes more important. In this environment, Chinese retail market has become the focus of numerous foreign retail giants. China has 1.3 billion populations, which is no doubt a huge consumer market. The foreign companies bend over backwards and strive to expand scale advantages in order to get ahead in China. China’s retail industry is in booming progress, and China has become the world’s most competitive retail market.After China entering the WTO, a large number of foreign hypermarkets have stepped into Chinese retail market, including US-owned Wal-Mart, French-owned Carrefour, Auchan and Thai-owned Lotus etc. These hypermarkets which own huge scale, rich experience and advanced management method have become important competitive forces in Chinese retail market. In the multitude of strong competition, Wal-Mart and Carrefour’s competition is no doubt the fiercest. As the world largest and second retailers separated, Wal-Mart and Carrefour have similar business scale and strength as well as the target market, especially in China, an emerging retail market. The two big rival giants all put the Chinese market in first place and have increased to a strategic level. However, it seems that in this competition Carrefour got temporary success. And with the growth of Chinese retail market, new round of competition will be comprehensively launched. So in order to cope with the further competition, Carrefour should be aware of its own situation firstly. SWOT analysis is often used by which a business or its marketing department for planning marketing strategy.2. SWOT Analysis of CarrefourThe enterprises which participate in the market competition in the complex environmen t, must be clear about the position and condition which the enterprises locate in, so that they can better seize opportunities to circumvent risks and achieve enterprises’ long-term developmenttargets. The enterprises need to have clear understanding of their own strengths and weakness as well as the opportunities and the threats which they faces in the market competition so that they can engage in the market competition strongly and realize the enterprise value truly. In the actual utilization, the comprehensive appraisal method which is most used is called the SWOT analysis (strengths, weaknesses, opportunities and threats analysis).SWOT analysis involves looking at the internal strengths and weaknesses of a business and external opportunities and threats. In other words, it is used to analyze the possible internal advantages and problems that a business has, and to determine the external factors of the business which may affect its strategy. The purpose of a SWOT analysis is to conduct a general and quick examination of a business’s current position so that it can help the business to develop or plan a direction of development or a proper strategy in future.SWOT analysis is an effective way of gathering and classifying information, illustrating particular matters, and generating the analysis of strategic planning ideas analysis can be conducted.2.1 Strengths of CarrefourInternal strengths: Things that a business does well or the strong points that a business has.2.1.1. Carrefour Acquires the Starters’ Interests in ChinaAs the first participators of a market, starters can acquire some special interests and more differential advantages and opportunities compared to the marketing followers. The starters always can operate larger scale business than followers in a market. They can make use of scale economy to obtain the superior advantages of original price of goods and marketing management fee. In addition, starters always choose the best locations as their premises and form locate monopoly. As a result, they can keep an advantageous position in attracting customers. Carrefour, as the first foreign retail enterprise entered in China, can enjoy all the interests that the marketing starters owned.2.1.2. Carrefour Owns Talented ManagersCarrefour has many managers who have strategic version, superb po litical bargaining power and clear idea of market positioning. They make full use of the Carrefour’s monopoly position and the expectations generated by the status of purchases in China retail industry to speed up the process of opening new stores so that Carrefour can hold more market share. 2.1.3. Large Scale OperationCarrefour’s large scale operation is an important feature to distinguish from the traditional retail industry. Although there is a consensus in the retail industry for a long time that the supermarket should not own too much areas. Because if the number of target customers can’t reach the scale of the hypermarkets requirements, the hypermarkets can’t make profits or evenhas difficulties to maintain the normal operation. In addition, large investment always with huge risk, once the operation meets problems; the investors will suffer enormous losses. But Carrefour supports the idea that the large scale has its own advantages, it can let the merchants enjoy preferential price discount from large-scale purchasing so that it can reduce the purchase cost.Carrefour’s hypermarkets have a wide variety of commodities; this can let the customers buy almost all the articles for daily use. Thus, it can save the shopping time for customers and can meet the demands of people’s fast-paced working step in modern society. And the hypermarkets’wide shopping environment always makes customer feel comfortable. Furthermore, compared with other types of stores, hypermarkets also have a cost advantage in the use of employees, facilities and space.2.1.4. Carrefour Takes Localization StrategyCarrefour takes the localization strategy in order to occupy the Chinese market faster than its competitors. It breaks the routine centralized purchasing management system to give every branch stores part of the power. Thus every storefront can have some part of purchase and sales system, and the logistic time and cost can be reduced. All of this bring the enough time for the development of Carrefour.2.2 Weaknesses of CarrefourInternal weaknesses: Things that the business does badly or the problems that the business has at present.2.2.1There is loopholes in the process of quality controlIn today’s society, modern enterprise is no longer just a pure economic unit, but in a vast number of interconnected power networks. Carrefour’s “problem pork chops,”“fake LV bag,”“forged and fake commodity of Mao-tai,”caused everybody to pay more attention to the quality problems of commodity. From the view point of enterprise’s social responsibility, Carrefour has the problem of lacking responsibility in these incidents; it also shows the problems in the commodity’s quality management of Carrefour. Only under the multi-pronged combination of government’s regulation, enterprises’self-consciousness and self-discipline and customers monitoring, a safe business environment might be built up.2.2.2 Charge the Supplier High Entrance FeeCarrefour’s admission policy is what the Carrefour says “to earn interests from the upstream suppliers.” Usually if a company wants to enter Carrefour’s distribution channel, it is generally required to pay six kinds of fees which includes characteristic promotion activities, the privilege of entering the store and having the preferential access to the right of strong sales in store location, and the priority of involving the good marketing environment, holidays anddeveloping the market share. It is calculated that all kinds of entrance fees may reach 36% of the suppliers’ turnover in Carrefour. Relying on this supply strategy, Carrefour can replenish its stock with the lowest price all around the world and avoid the costs and risks of long-distance transportation. But it seems that this strategy is impracticable in China.Although local procurement reduces the costs for Carrefour, it also can bring some problems to Carrefour if it doesn’t take into account the existence of counterfeiting problems in China’s current commodity production. Carrefour overemphasizes on low-cost suppliers if it once looses the control of quality management, it would create the opportunity for the inferior products entering market. Once problems happened, although there is supply contact to ensure the direct economic benefits of Carrefour will not to be affected, it will bring negative impact to the reputation of Carrefour.2.3 Opportunities of CarrefourExternal opportunities: Directions that the business could profitably take in the future because of its internal strengths or because of the elimination of its weaknesses.2.3.1 Target Market is ClearThe development of domestic economy and the rapid progress of large and medium cities both point out the clear direction for the development and market positioning of Carrefour. 2.3.2 Restrictions Become RelaxChina has greatly relaxed the restrictions on foreign capital entrance into China. In China, the wholesale and retail industry has cancelled the restriction on the foreign investment proportion, quantity of stores and the locations of stores. This provides a favorable external environment for the further development and expansion of Carrefour.2.3.3 The Potential Market is HugeThe increase of urban residents’ income and consumer expenditure provide the possibility for the Carrefour’s development. China’s economy has entered a new period of development, with the increasing degree of the market and the growing of economy, the domestic demand will further expand, and the consumer policy and consumer environment will also have some changes, all these will have a tremendous promotion to the growth of consumption.C ompared with other countries the Chinese residents’ consumption rate is generally lower to 15%--20%, China belongs to the typical high savings, low-consumption countries. The average consumption rate of Chinese residents’has been lingered about 60% for many years, and the lower consumption rate has become a negative factor for the growth of economy. But in the long run, the urban resid ents’ consumption scale will maintain steady and rapid growth in China, and the residents’ consumption structure has been upgraded to the primarily stage of developmental consumption. And with the development of economy, urbanization, economicglobalization and the improvement of residents’ income level, it will have a large space to promote the consumption. It is expected that in the next 20 years, the consumption demand of urban and rural residents will continue to grow and will make great contributions to the economy increase.2.4. Threats of CarrefourExternal threats: Things that are likely to cause danger to the business or things that may arise and should be avoided or prevented in the future.Environment threat is a challenge which caused by the disadvantaged developing trends, if it doesn't adopt proper marketing activities, this kind of disadvantaged trends will erode the enterprise’s sales or interests.2.4.1 Market Competition is Much FiercerWith the further opening of Chinese retail industry, the competitors in market like Wal-Mart, Lotus Supercenter and Auchan etc which are the powerful international retail enterprises also hold sizable market share. This makes Carrefour encounter much fiercer competition to achieve further development.2.4.2 Carrefour Meets the Threat of Losing Suppliers or CustomersCarrefour charges supplier for high slotting allowance which makes the relationship with suppliers is relatively tight, even outbreak of the “slotting allowance storm”and so on. Carrefour is faced with the threat of loss of suppliers. Meanwhile, Carrefour pursues the low-cost strategy, but in order to compensate for the loss of profits caused by selling at low price, Carrefour demands benefits to suppliers, while the suppliers for their own profits only play tricks on the products, and this will form a vicious circle. Carrefour pursues the goods which may change from the low-cost and high-quality to low-priced and low-quality. Then it’s natural that the customers will complaint and the Carrefour will meets the threat of losing consumer loyalty.From the above, the developing status of Carrefour in Chinese market is the opportunities and threats coexisting. Under this status, improving the enterprise internal management, clearing the direction of enterprise’s development, being familiar with Chinese market environment and determining the enterprise's competitive advantage are the necessary methods for the enterprise to achieve long-term sustained and rapid development.In retail industry which has fierce competition, no one can become the inevitable overlord. The enterprise must constantly keep freshen and changing and monitor the market developing trends. Only on the bases of consolidating the currently owned market share, it can be possible to constantly open up new market space and win the reorganization of the market and finally realize the long-term objective of survival and development.3. STP Analysis of CarrefourSTP strategic analysis (Segmentation, Targeting, and Positioning) was first used for products marketing activities and later expanded to other fields including the retail industry. STP strategy is an important part of the retail company’s overall marketing activities. Retail Company also has experienced a process of retail positioning, product positioning and reaching the positioning of marketing mix elements. Retail enterprise needs to solve the problem of selecting the position and how to realize the position. Market positioning strategy is very important for the retail company. Market position is unclear or lack of feasibility will make the retail business into chaos, thus affecting its market performance.3.1 Market Segmentation and Selection of Target MarketCarrefour hypermarkets regard the medium and large urban middle class families as target customers. The analysis report about Carrefour’s entering into China shows that the consumption structure of modern high-income people is similar with French’s in the 1960s. China’s largest consumer group is the new middle class with the annual revenue of 1500~3000 US dollars. They are high educated and easily to accept new things. This middle class people are the base of developing new customers for Carrefour. Carrefour hypermarkets’target customers mostly are the housewives who pay more attention to the value of goods and services. They are not only concerned about the price but also more focused on the cost performance.3.2 Market PositioningThe propaganda slogan of Carrefour is “happy shopping Carrefour”. And Carre four sets its business idea as: one-stop shopping, ultra-low price, fresh goods, self-service shopping and free parking. The comparative superiority of these five concepts is the combination of ultra-low price and fresh goods. The others are the common features of hypermarket. Carrefour sets the market position as the ultra-low price and letting the customers obtain greater value, and then realizes the purpose of “happy shopping Carrefour”.In fact, Carrefour takes flexible methods and makes great efforts to reach the anchor point of ultra-low price in China. For example, Carrefour established the Chinese commodity department in 2002. It can take unified management of the national brands so that to lower the purchase price. It also can force the suppliers cover more marketing expenses and greatly reduce the operational costs. Carrefour always executes promotion ultra-low price strategy on the price-sensitive goods which hold about 10% of total commodity. Meanwhile, Carrefour assigns employees on Thursday to inquire for the price of competitors and adjust its own price to a competitive low level in order to meet the weekend selling climax. Carrefour gets the favors of the customers on the respects of products and shopping environment. Somecustomers even say they buy goods in Carrefour does not because the low price but because the plentiful goods and comfortable shopping environment. There are more than 20,000 kinds of goods in Carrefour’s hypermarket in China. The hypermarket is always divided into two layers, one layer setting for daily non-food, one for the fresh products.4. Analysis of the Carrefour’s Marketing MixMarketing mix refers to those four elements (products, price, promotion, and place) of a firm’s marketing strategy which are designed to meet the needs of customers. These are often known as the “4Ps”. To meet the consumers’needs, business must produce the right product, at the right price, make it available at the right place, and let consumers know about it through right promotion.4.1 Product Strategy of CarrefourProduct means anything that can supply to market and satisfy people’s need and desire, including tangible products and invisible service. This thesis mainly analyses product strategy of Carrefour from the point of tangible products.4.1.1 Product PortfolioProduct portfolio is a series of particular products that sellers award buyers, which includes the entire product line and product project. “One-stop shopping”is one of the management ideas of Carrefour, and only efficient product portfolio can let consumers have a vaster selecting spa ce and have the possibility of “One-stop shopping”. Whether in any branch of Carrefour, people can see a large scale of business community which includes diet, leisure, entertainment, service, and shopping.Meanwhile, Carrefour also develops its own brands actively to enrich its portfolio, mainly including four categories of hundreds of private brand such as food, groceries, daily provisions and clothing. Carrefour’s tenet is “try every possible means to make customers easily find a cheapie”.4.1.2 Product ProcurementIn order to provide consumers with goods which have super quality and competitive price, Carrefour group established the global procurement network. Carrefour global sourcing headquarters was formally settled in Shanghai, China in September1, 2002. After well understanding new technology exchange, market trends and business information, Carrefour’s purpose is to promote the production of Chinese enterprises and its global sales network at the same time. Nowadays, China has become an important part of Carrefour’s global sourcing. With China’s further releasing its limit on the quota of exporting goods in terms of light industry, textile industry and high-profitable industry, the purchasing amount of Carrefour in China will be greatly increasing.4.1.3 Display of ProductsCarrefour racks brains to pounce product display in stores. In order to give customers more convenience to buy their goods, Carrefour purposely set various sales areas. The layout of Carrefour products are: appliances, clothing and so on, are put on the up layer and food is put on the next layer. Moreover, entry will usually leads directly to the second floor, into layer by layer customers via the cashier, finally leave the supermarket. Carrefour management idea is “one-stop shopping, self-service, fresh quality”through its unique products on display management carried out and implementation.4.1.4 Product Quality ManagementCarrefour knows, only the product quality is the hard truth. Carrefour strictly controls product sources and the quality of supplier stock. For Carrefour, fresh quality is the source of life. Putting the products with the shortest quality guarantee period on the front of the shelf is Carrefou r’s policy and arrangement.4.2 Pricing Strategy of CarrefourThe pricing policy that a business chooses is often a reflection of the market at which it is aiming. Setting the right price must take into account production costs, competitor’s prices and consumers’ purchase ability and demand level.The price is the important factor that influences consumer’s purchase behavior. So as one of the basic means of business transaction between hypermarkets and customers, the commodity price and profits are directly related.With the arrival of the meager profit time, the hypermarkets generally pursue the style of small profits but quick turnover and its ultimate purpose is to maximize sales. Low cost of pursuit is in a popular style “small profits but quick turnover”. Then the price strategy becomes one of the main tools to earn profit for hypermarkets.Generally speaking, in order to assess their effectiveness of price strategy, hypermarkets will study the customer’s purchasing behavior from consumers’ annual con sumption and shopping psychology so that they can use the price strategy to get a unique result. Carrefour develops a very complex pricing management system process to realize ultra-low price of the basic business strategy. For example, in view of the degree of competition for different cities and spending habits, Carrefour develops a different price elasticity index, and sensitive commodity classification standard, and makes different survey frequencies on the competition according to different categories of goods, thus to ensure the stores’ image of the ultra-low price in the business circle. Starting from the low price strategy, Carrefour stores take various channels to achieve ultra-low price. Considering of customer’s needs, cost of goods procurement, competitor’s pricing strategy, and the characteristics of products,Carrefour conducts comprehensive analysis and takes appropriate pricing strategy. In practice, Carrefour uses a large number of sales, lower procurement costs, promotional price and is in conjunction with a high turnover rate of low price strategy to attract customers. Ultra-low price strategy has been the survival of magic weapon for Carrefour. Carrefour always has about 10% of low-priced goods; however these products have promoted sales of the other 90% normal-priced merchandise. These low-priced commodities are mainly daily cosmetics, food and beverage with the features of low profits, high consuming frequency and large quantity purchasing. And, low-price is lower than the normal price by 10%---20%. Carrefour also takes some special low-cost strategies in the stores anniversary and festivals.4.2 .1 Study of the guarantee of implementing the ultra-low price strategyCarrefour is able to guarantee the implementation of ultra-low prices, mainly because of the following reasons:4.2.1.1 Large-scale OperationAs the founder of hypermarket format, Carrefour adopts large-scale mode of operation. Each of hypermarkets is in the area of 5000 square meters, with more than 15,000 kinds of items. In this interval, it is easier to achieve scale effect; the commodity pricing gross margin is higher by 14%---25%, so before reaching the gross margin, the reducing space of the price is larger than other retailers. This is the guarantee of low-priced strategy for Carrefour.4.2.1.2 Flourishing Business EnvironmentCarrefour hypermarkets are generally located in flourishing business quarter. These areas are densely populated, and the target customers’consumption level is higher, which provides adequate space for its low price st rategy. On the one hand, people’s consumption level is higher; they can afford higher prices, so the normal price of most commodities are not difficult to be accepted. On the other hand, Carrefour setting part of the goods’ price obviously lower will make customers feels significant difference. In such a basis, Carrefour also ensures its own interests.4.2.1.3 Commodity Sensitivity ProblemUltra-low price does not mean that all goods are in low price. In Carrefour hypermarket, some commodities’prices will be relatively higher compared with similar stores, but the impression of Carr efour to the customer is still “low price”, which involves the issue of commodity sensitivity. The sensitivity of consumer goods determines the price changes, the level of gross margin. Generally, less sensitive items’ (Frozen fish, dry goods, etc.) prices and margins are high; in this situation high price means high profit. While the common sensitive items (meat, eggs, and vegetables, etc.) have low prices and margins, Carrefour always prices。