Strategies of Wal-Mart and Carrefour
1. 1. 1 The development and history of Wal-Mart On July 2, 1962, the first Wal-Mart store was opened by Sam Walton in Rogers, Ark. After 28 year’s development, Wal-Mart became the nation’s number-one retailer by 1990. Wal-Mart’s 10,900 stores under 69 banners in 27 countries and e-commerce websites in 10 countries are visited by more than 245 million customers and members each week. Wal-Mart International is currently the fastest growing part of its business and it leverages its global resources to meet local needs. With fiscal year 2013 sales of approximately $466 billion, Wal-Mart employs 2.
2 million associates worldwide(Wal-Mart,2013). 1. 1. 2The development and history of Carrefour The Carrefour supermarket company was set up by the Fournier, Badin and Defforey families who run a discount supermarket in Annecy in 1959. More than 9900 company-owned and franchise stores are run by Carrefour Group currently, and now the Group operates on three major markets: Europe, Latin America and Asia. Because its stores spread in more than 30 countries, Carrefour generates more than 55% of its sales outside France.
Strategies of Wal-Mart and Carrefour Essay Example
At the same time, the Group gives priority to local supply chains, So 75% of all its food products are from local suppliers in the countries(Carrefour,2013). 1. 2 Definition The competitiveness of enterprises is a competitive ability that an enterprise can be more efficient than other firms in providing products and services, and obtain profit and its development (Man, T. W. , Lau, T. , & Chan, K. F. ,2002). The marketing mix of 4P strategy plays a very important role in the competitiveness of enterprises. 4P strategy has four elements.
The first element is price that can be defined as the monetary amount a buyer pays for a good or service and the revenue expectation from a sale(Anderson, C. H. , & Vincze, J. W. ,2004). The second element is place, which is concerned with setting an efficient way of storage and handling finished products and of making them to the target market effectively(Businessdictionaries,2013). Product , the third element,means that the anything that can be offered to a market that might satisfy the need (Kotler, P. ,Brown, L. , Adam, S. , Burton, S.
, & Armstrong, G. ,2007). The fourth element is promotion, which is used to describe all marketing communications activities, including personal selling, sales promotion,direct marketing, trade exhibition, public relations, advertising and sponsorship(Marketingteacher,2007). 1. 3 objectives Through the analysis and comparison of Wal-Mart and Carrefour in 4P strategy, this project can obtain the strengths and weakness of competitiveness about those two retailers. 2. 4Ps of Wal-Mart and Carrefour 2. 1 The similarities and differences about price strategy
2. 1. 1 Wal-Mart’s price strategy The major price strategy of Wal-Mart is “Everyday low prices” practice that can offer low price products to customers. In order to ensure the customers get the lowest price products, Wal-Mart improve the efficiency of logistics system and control the transportation, storage and costs strictly, so that it can get cheap goods from all over the world every day. And Wal-Mart has been insisted “Everyday low prices” for a long time, which makes customers prefer to buy things here(Mujtaba, B. G. , & Maxwell, S. 2011).
Further, its high quality and low price products have made itself get high reputation of its company and the loyalty of customers. Because of it, Wal-Mart could cut down the cost on advertisements and promotions and also increase turnovers of products. At the same time, in order to maintain the promise of “Everyday low prices” to customers, most of its competitors’ profits has been injured by Wal-Mart’s low price strategy(Gereffi, G. , & Christian, M. ,2009). 2. 1. 2 Carrefour’s price strategy Compared with the traditional retail stores, Carrefour has a lower price, average about 5 to 10 percentage points.
High quality and inexpensive price in Carrefour’s business strategy remains unchanged all the time. In order to reduce the cost and inventory, Carrefour constantly improves the efficiency of logistics system and try their best to decrease the price, so that it can offer low price goods for consumers(Baek, J. ,2005). What’s more, Carrefour’s everyday low prices, in fact, is the integration strategy that combines low price goods and high price goods. As for the good that customer often buy, Carrefour often provide comparatively lower price than its competitors, but other goods may be higher than its competitors(Dupuis, M.
, Chul Choi, S. , & Larke, R. ,2006). 2. 1. 3 The similarities and differences Similarities: Wal-Mart and Carrefour are committed to provide consumers with low price goods by improving the efficiency of logistics system. Price is the most sensitive factor for consumer’s shopping choice. Low price product is more attractive for consumers than high price product. In order to improve the sales and get more marketing share, Wal-Mal and Carrefour cut down the price as much as possible. Therefore, the price competition has become the focus of retail competition.
Differences: Wal-Mart, the founder of “everyday low prices”, has insisted that all the goods remain stable of low prices for a long period of time, which can reduce the volatility of consumption demand, the cost of organizing goods, and help to realize the scale of procurement. However, Carrefour’s price strategy is that not all of the goods are low price, just for some hot-sale products but other goods’ price may be higher than other retailers. Thereby, Carrefour’s price strategy has more flexibility and adaptability than Wal-Mart. 2. 2.
The similarities and differences about place strategy 2. 2. 1 Wal-Mart’s place strategy 10,900 stores under 69 banners are run by Wal-Mart in 27 countries (Wal-Mart,2013). In addition to Wal-Mart stores, community stores, discount stores and other business model, Wal-Mart has shopping plaza and Sam’s club stores. Sam’s club store is a warehouse club store, whose operating characteristic is low price. Its service objects are groups, families, small shops (Graff, T. O. 1998). While Wal-Mart’s online retail stores began to run in February 1996 , a limited number of goods sold online.
Early 2000, the online store of Wal-Mart was revised , which had 24 categories of online goods, including clothes, appliances, toys,etc. Then Wal-Mart took all possible measures to expand its network sales market. In 2008, Wal-Mart launched the e-commerce business in the highest broadband penetration countries, Latin America and Brazil. Next, Wal-Mart launched e-commerce business in China and Japan in 2010. The constant expansion of the online business to new worldwide markets made Wal-Mart gradually improve its overall sales and marketing share(Gereffi, G.
, & Christian, M. 2009). 2. 2. 2 Carrefour’s place strategy Carrefour has more than 9900 stores in the world now, while it still has more than 4000 chain stores in France. With a presence in more than 30 countries, it generates more than 55% of its sales outside France. Its sales accounted for about 30% of French retail enterprise(Carrefour,2013). Several business models are established by Carrefour. In addition to Carrefour’s stores(Carrefour),champion supermarket (Champion),there are convenience store, warehouse style shopping mall, and so on.
The operation of discount store and membership rule make Carrefour retail business into intensive development(Durand, C. , & Wrigley, N. ,2009). With the rapid development of information technology in 2000, Carrefour worked with Sears and Oracle company, creating an electronic market, the world’s first retail” GlobalNetXchange”. Later, Carrefour launched an online supermarket, called “Ooshop”(Carrefour,2013). 2. 2. 3The similarities and differences Similarities Carrefour and Wal-Mart both are in the chain business mode, and they have some same business models, such as, warehouse stores and discount stores.
Those different business models can meet the demands of different customers. Meanwhile, Wal-Mart and Carrefour all developed the online grocery that can supply customers with various goods the same with real stores. So, they combine retail and e-commerce business to meet the consumers’ demands. Differences Wal-Mart and Carrefour’s business models have its own characteristics. For example, Wal-Mart has shopping plaza and Sam’s club stores, but Carrefour has Carrefour stores (Carrefour), champion supermarket (Champion). Their business model can reflect their own culture and history.
Like “Sam’s club stores”,Sam is the name of Wal-Mart’s founder–Sam Walton,which allows Wal-Mart’s customers and employees to remember the great leader and it also belongs to a part of enterprise culture. 2. 3 The similarities and differences about product strategy 2. 3. 1 Wal-Mart’s product strategy The product of Wal-Mart has almost 20000 species, including food, clothing, cosmetics, appliances, toys, auto parts, and so on. It has its own brand product, which account for about 10%(Wal-Mart,2013). But not any products are allowed to be sold in Wal-Mart,because Wal-Mart will select some products
that have good quality for their customers. Meanwhile, Wal-Mart lay emphasis on the quality of product. Total Quality Management is used by Wal-Mart to ensure the quality, which focuses on improving the quality of an organization’s products and services. Wal-Mart is constantly seeking the best products and the lowest price supplier from domestic and international. markets through Total Quality Management (Mujtaba, B. G. , & Maxwell, S. ,2011). Therefore, Wal-Mart can provide consumers with various and high-quality products. 2. 3. 2 Carrefour’s product strategy
The stores of Carrefour can satisfy all the customers’ shopping needs, such as clothing, sports equipment, auto parts, and so on. In 1976, Carrefour introduced “manufacturing free” concept, selling high quality and inexpensive but no brand goods, but this is a subtle challenge for people’s shopping habits. More than 75% of all Carrefour grocery products are offered by local suppliers, so Carrefour can provide its customers with local products which are from producers located close to stores. For example, 100% of all food products come from national suppliers in Turkey and Argentina’s Carrefour stores now(Carrefour,2013).
What’s more, Carrefour’s sales have its unique side, for instance, the company launched the sale of gasoline at a low price in the parking lot (Lindgreen, A. , Palmer, R. , & Vanhamme, J. ,2004). This is a kind of innovation, and it also an effective means to attract customers. It is more convenient for consumers, because consumers do not need to go to the gas station deliberately. 2. 3. 3The similarities and differences Similarities: Carrefour and Wal-Mart both can provide a variety of products that have low prices but high quality for the consumer to choose.
In addition, all of them pay much attention to the development and sales of their own brand products. According to the difference of people living habits in different regions, Carrefour and Wal-Mart can provide products that can meet local consumer habits. Differences: In order to offer high quality products to customers, Wal-Mart will select the goods that have good quality before the sales. So those bad quality products cannot be sold in Wal-Mart. The selection of products can guarantee that customers get high quality products anytime in Wal-Mart.
Nevertheless,various goods that have high quality or low quality can be found in Carrefour. 2. 4 The similarities and differences about promotion strategy 2. 4. 1 Wal-Mart’s promotion strategy Due to the strictly control of marketing costs, Wal-Mart also tend to be very careful in reckoning, even in some new stores opening ceremony. Therefore, the goods promotion strategy of Wal-Mart is relatively conservative. Although Wal-Mart reduces the cost and expenditure on advertising, it never be stingy on public welfare donations.
A large number of long-term investment in public welfare activities greatly enhance its brand awareness and successfully created excellent brand image in consumers’ minds, which will eventually become the earnings and profit figures(Baek, J. ,2005).. At the same time, Wal-Mart has effectively made use of the strategy of market segmentation by partnering with National Gay and Lesbian Chamber of Commerce to cater to that group of customers, as well as employees. What it did is to correct the customers’ previous error information and position of Wal-Mart and establish a good corporate image.
(Mujtaba, B. G. , & Maxwell, S. ,2011). Besides,Wal-Mart attracts customers go shopping in its stores by low price but high quality products and it has also developed various ways to keep customers in their stores as long as possible, which include: exclusive concerts by various bands on Wal-Mart TV, plus in store radio and special broadcasts. The reason why Wal-Mart does this is that it believes the more time spent in its stores, the more money customers will spend (Mujtaba, B. G. , & Maxwell, S. ,2011). 2. 4. 2 Carrefour’s promotion strategy
Carrefour uses its best selling products for its promotion, Which not only can attract customers but also can build good image(Sunanto, S. , Tuninga, R. , Kaynak, E. , Harcar, T. , & ASSOCIATION-IMDA, I. ,2009). Further, in addition to hold large-scale promotional activities at the opening ceremony and celebration occasions, Carrefour also focus on a variety of promotional methods , such as TV ads, newspaper ads and posters. Besides, Carrefour also issued a lot of direct mail advertising and promotional advertising, sending to the residents, in order to let residents know the latest promotion
information and attract customers to shopping(Colla, E. , & Dupuis, M. ,2000). 2. 4. 3The similarities and differences Similarities Wal-Mart and Carrefour both use their own goods for promotion. As retailer, the main purpose of customer come here is buying products. Price and quality are the main factors for the customers to buy the product. If company can make the customer know that this product in its store always have high quality and low price, customer will come to its shop automatically to buy this kind of goods, when he needs.
Differences Wal-Mart is very careful in reckoning and strictly controlling the cost in its promotion. But Wal-Mart set up a responsible corporation’s image, through joining the community and social welfare undertakings. However, Carrefour adopts various means of publicity, such as TV ads, newspaper ads, and posters, which is a good publicity for the product and the enterprise image. 3. Conclusion The aim of this project is to compare the 4p strategy about Wal-Mart and Carrefour. Certain conclusions can be drawn.
First of all, both Wal-Mart and Carrefour can provide low price products. While all of the good price in Wal-Mart is low, Carrefour combines low price product and high price product. Next, Wal-Mart and Carrefour are chain retails, but they maintain their own characteristics about business models. Then, various low price but high quality products can be got in Wal-Mart and Carrefour. Finally, Wal-Mart does its promotion by improving its corporation’s image, nevertheless Carrefour adopts various means of publicity for its promotion, such as TV ads, newspaper ads. References