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1. Background of the Carrefour.
A hypermarket or multi – department store is a superstore which combines a
supermarket and a department store. The result is a very large retail facility
which carries an enormous range of products under one roof, including full lines
of groceries and general merchandise. When they are planned, constructed, and
executed correctly, a consumer can ideally satisfy all of his or her routine weekly
shopping needs in one trip. The example of hypermarket have been set up in
Malaysia is Carrefour, Tesco, Jusco, and Giant (foreign hypermarkets) besides
other local hypermarket such as Mydin. Following are background of the
Carrefour hypermarket and Mydin hypermarket.
The first Carrefour store opened on 3 June 1957, in suburban Annecy near
a crossroads (carrefour in French). Today it is the smallest Carrefour location in
the world. The group was created by Marcel Fournier and Denis Defforey and
grew into a chain from this first sales outlet. In 1999 it merged with Promodès,
known as Continent, one of its major competitors on the French market.
Marce Fournier and Denis Defforey had attended several seminars in the
United States led by "The Pope of modern distribution" Bernardo Trujillo, who
influenced other famous French executives like Édouard Leclerc (E.Leclerc),
Gérard Mulliez (Auchan), Paul Dubrule (Accor), and Gérard Pélisson (Accor).
Their slogan was "No parking, no business."
The Carrefour group pioneered the concept of a hypermarket a large
supermarket and a department store under the same roof. They opened their
first hypermarket 15 June 1963 in Sainte – Geneviève – des - Bois, near Paris in
France.
1976 Carrefour introduces “produits libres” which are unbranded product but
“just as good, and cheaper”. In 1992, Carrefour creates filiere quality systems,
which quarantee product origin and traceability. Carrefour opened their first
hypermarket 1994 in Malaysia.
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In Malaysia, Carrefour is a leading hypermarket chain selling a wide range
of household grocery products ranging from frozen goods and fresh products to
textiles, garments and shoes, as well as electrical goods such as home kitchen
items and audio - visual appliances. Carrefour is widely recognised as a
convenient one - stop shopping centre that caters to a mix of consumers from
housewives to students and working professionals.
MYDIN and its first store were introduced by Tuan Mydin Mohamed in 1956. The first
store started by selling toys from Thailand in Kota Bharu, Kelantan. The second branch
in Kuala Terengganu in 1979 saw Encik Murad Ali, the eldest son of Tuan Mydin in
charge. In less than 10 years, the third of MYDIN branch which marked MYDIN’s rooted
presence in the Klang Valley was opened at Jalan Masjid India by Dato’ Ameer Ali.
MYDIN was incorporated on 23 July 1991 under the Companies Act 1965, as a private
limited company under the name of Melati Makmur Sdn Bhd. The reason to
incorporating the business was to take over the business of Syarikat Mydin
Mohamed, which was a sole proprietorship, founded in 1957 by Encik Mydin Mohamed
and Syarikat Mydin Mohamed Brothers, a partnership formed between Encik Mydin,
Rowshan Bhai a/p Kassim Bhai, Murad Ali bin Mydin Mohamed, Dato’ Ameer Ali bin
Mydin, Ahimmat bin Mydin Mohamed and Salim bin Mydin Mohamed.
The Company, on 17 January 1992, had changed its name to Mydin Mohamed & Sons
Sdn. Bhd. Subsequently on 25 June 2001, the company became Mydin Mohamed
Holdings Sdn Bhd and is presently known as Mydin Mohamed Holdings Bhd.
From then on MYDIN has grown steadily and at a commendable pace. With its vision, to
be the leading Malaysian Wholesale Hypermarket in Malaysia, it is now known as
MYDIN MOHAMED HOLDINGS BERHAD. From establishing its headquarters in 1991 in
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WISMA MYDIN at Jalan Masjid India, its Board of Directors have worked towards the
company’s vision and mission which in 47 outlets nationwide inclusive of 3
Hypermarkets, 19 Emporiums, 2 Superstore (Bazaar), 14 Mini Markets (MYMydin), 4
Convenient Stores (MyMart) , and 5 Mydin Mart which is part of its franchise program.
With the continuous belief that hard work, teamwork as well as strong customer
relationship are the fundamentals to a successful business, this is what led to the
opening of MYDIN WHOLESALE HYPERMARKET in USJ 1, Subang Jaya on 19 August
2006. Far from resting its laurels, MYDIN is still forging ties with the guide of its vision
and the next MYDIN wholesale hypermarket is already at the finishing stages.
Carrefour vision of the world at the dawn of the 21st century
In the 21st century, hundreds of millions of men and women will become part of
the consumer society within a globalized economy. Globalization does, however,
pose new types of risk for both human society and our planet. Faced with such
risk, and in order to improve prospects for future generations, it is crucial to
follow the path of sustainability, which combines economic profitability, respect for
the environment and both social and ethical development.
Vision of Carrefour in Malaysia
“The” hypermarket for Malaysia, with a strong sense of belonging and ownership
thus upholding a unique identity led by price & service.”
Mission
Carrefour are totally focused on meeting the expectations of their
customers. Carrefour mission is to be the benchmark in modern retailing in each
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of their markets, by offering :
Their customers: the best prices and the best merchandise, in every banner
and every country.
Their staff: the possibility of growth and fulfillment in a trusting environment, with
interesting jobs and motivational compensation.
Their shareholders: a sustained return on their investment and the growth
prospects of a global, multi - format retailer.
Their partners, franchisees or affiliates: leading banners and brands, marketing
and sales expertise, purchasing power and constantly improving techniques.
Their suppliers: markets, customer intelligence, and cooperation to improve
products through long - term, mutually beneficial relationships.
Public, local and national authorities: a deep commitment to the community,
as a socially responsible economic actor and good corporate citizen.
Objectives
Improve customer satisfaction
Improve profitability
Significant reduction in excess inventory
Carrefour core values
Carrefour core values are the heritage of all the people and companies that
have built the Group.
• Freedom: Respect the customers’ freedom of choice through a variety of store
formats and a diversity of products and brands. Develop this freedom by
providing thorough, objective information. Give consumers the freedom to buy at
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prices consistent with their purchasing power. Provide the largest number of
people with the opportunity to purchase consumer goods. Empower all staff to
take initiative.
• Responsibility: Fully assume the consequences of their actions on customers,
their company and staff, institutions and the environment.
• Sharing: Leverage their expertise and strengths to create value, which is
shared among customers, staff, shareholders, partners and suppliers.
• Respect: Respect their staff, suppliers and customers. Listen to them and
accept their differences. Understand and respect the lifestyles, customs, cultures
and individual interests in all countries and regions where we do business.
• Integrity: Stand by their commitments and act honestly towards customers, staff
and suppliers. Act with integrity, both as individuals and as a group.
• Solidarity: Contribute to the development of the local economy, job creation,
training and the fight against social exclusion in the communities, countries,
towns, cities and neighbourhoods where they operate. Implement a policy of fair
trade by developing value sharing. Express professional solidarity within the Group
regardless of their personal skills, function or banner.
• Progress: Support progress and the development of new technologies to serve
the needs of people. Embrace change in a pioneering spirit and encourage
innovation.
Carrefour shareholders
Carrefour is a public limited company with a share capital of
1,790,354,427.50 euros divided into 716,141,771 shares and with some 460,000
shareholders. Carrefour’s employees own 2.98% of the Group’s share capital.
Their attention to social and environmental performance preserves their share
price and attracts new investors sensitive to social and environmental issues.
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Carrefour strives to guarantee to its shareholders the transparency of its corporate
governance. Ethical, social or environmental issues are dealt with by Carrefour’s
key decision – making bodies :
The Board of Directors is Carrefour’s main governing body. It comprises 11
members of whom 3 are independent directors, and is assisted by a Strategic
Steering Committee, an Audit Committee and a Wages and Salaries Committee.
The Executive Committee is the “backbone” of Carrefour’s management
structure. Under the impetus of its chairman, it recommends strategic directions
and guidelines and organises their deployment. Its membership reflects the way
the Group is structured per geographic area with cross - sector support functions.
The Quality & Sustainable Development department, which manages the
sustainable development programme, reports directly to the CEO and advises the
Executive Committee on sustainability issues.
Carrefour products
Besides, With its customers needs in mind, Carrefour decided in 1985 to
replace its "produits libres", generic product line created in 1976, with an own -
brand line, which is produced for the most part by small - and medium - sized
businesses and manufacturers. Today, Carrefour sells over 2,000 products that
meet very strict specifications with regard to their price / quality ratio, taste,
authenticity, food safety, traceability and innovation. Carrefour also sells 5,000 non
- food products under its own brand names. Outside laboratories conduct quality
audits of our non-food products at various stages in their production to make sure they
meet our specifications. Carrefour's organic line now offers 130 products in its fresh
food, grocery and frozen food aisles. All products in the Carrefour organic line
are inspected and certified by the independent certification organization ECOCERT,
and must meet organic farming specifications (no chemical fertilizers, no synthetic
pesticides). Everyone who works with Carrefour to produce its organic line makes
a long - term commitment to adhere to demanding production control and product
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tracking specifications. Regular inspections are conducted at every stage of the
manufacturing process, up to and including inspections of the finished product.
Carrefour market positioning
Carrefour does business, its stores have further moved its market
positioning towards the discount end through a policy of low prices and
largescale promotions. The banners concerned by the conversion to the euro
locked in their prices through May 2002 and maintened a freeze on own brands
over the whole year. The price positioning was supported by many promotional
campaigns. In the first half, Carrefour won back market share in Brazil by
conducting three short promotional campaigns a week. In the second half, the
group’s 40th Anniversary offered a worldwide opportunity to display the
competitive nature of the product range. Other international promotions such as
the ones in countries involved in the World Football Cup, helped to boost
the stores’ financial performance.
Carrefour branches
With operations in 30 countries, Carrefour is the world’s second largest
retail group. It is the number one retailer in Europe. Carrefour has also been
present in the Americas since 1975 and in Asia since 1989. This success stems
from their ability to adapt their strategy to fit local markets and to make
globalisation an Opportunity for progress. Wherever they do business, they strive
to raise local standards in terms of quality, service, working conditions and
preserving the environment. They also mindful of their contribution to the labour
market, in some countries, like Argentina. Carrefour is the largest private sector
employer. Following are Carrefour branches surrounding world:
Americas
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CountryFirst store
Hypermarkets
SupermarketsHard
DiscountersConvenience
Stores
Cash &
Carry
Argentina 1982 59 103 395 - -
Brazil 1975 150 38 300 5 34
Colombia 1998 46 - - - -
Dominican Republic
2000 1 - - - -
Asia
CountryFirst store
Hypermarkets Supermarkets Hard Discounters
China 1995 122 - 275
Indonesia 1998 37 - -
Japan 2000 7 - -
Jordan 2007 1 - -
Kuwait 2007 1 - -
Malaysia 1994 12 - -
Oman 2000 2 - -
Qatar 2000 3 - -
Saudi Arabia 2004 5 - -
Singapore 1997 2 - -
Taiwan 1989 48 - -
Thailand 1996 25 - -
United Arab Emirates 1995 11 - -
Africa
Country First store Hypermarkets Supermarkets Hard Discounters
Algeria 2005 1 -
Egypt 2002 5 -
Tunisia 2001 1 2 -
Europe
Country First store
Hypermarkets Supermarkets
Hard Discounters
Convenience Stores
Cash &
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Carry
Belgium 2000 56 280 - 257 -
France 1960 218 1,021 897 3,245 134
Greece 1991 28 210 397 216 -
Italy 1993 59 485 - 1,015 20
Poland 1997 72 277 - 5 -
Portugal 1992 - - 471 - -
Romania
2001 11 21 - - -
Spain 1973 161 87 2,912 3 -
Turkey 1993 19 99 519 - -
ii. Market positioning strategies used by Carrefour
Market positioning is the act of designing the company’s offerings and image
to occupy a distinctive place in the mind of target market for its product, brand, or
organization. It is the 'relative competitive comparison' their product occupies in a
given market as perceived by the target market. Market positioning strategy used
by all retail industry such as foreign hypermarket. Below type of market
positioning strategy used by retail industry .
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Market Positioning Strategy.
In Malaysia, Carrefour became a top four retailer, in terms of sales, pushing
out the local retailers. Although Carrefour has been successful had many local
department stores and small l- scale supermarkets, there were large - scale chain
stores or large – scale discount shops selling electrical household appliances or
clothing. Without differentiation, Carrefour has not been successful in Malaysia.
Carrefour used to differentiate products that are offered based on following
aspects :
The product itself
Services offered
Company staff or personnel
Distribution channel used
Company image
A competitive advantage can be gained through hypermarket, brand and
store image. For example, brand such as Carrefour have worked hard to
establish a strong global brand. Likewise, in Malaysia , Carrefour have
established a clear store image that is associated with high quality. Besides,
Carrefour developed a strong image through the use of slogans and symbols. For
example, the 'Lebih Jimat Lebih Hemat ' slogan have enhanced the image of this
hypermarket.
Based on products differentiation
Product offered by Carrefour is a basis to differentiate other hypermarket product.
The bases used in Carrefour hypermarket are :
Quality
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Quality is one of Carrefour main source of competitive differentiation and is part
of the fundamental policies defining the implementation of the Carrefour’s
strategy. It always corresponds to what the customer explicitly or implicitly wants
and must be clearly perceived as such. The value for money must be the best.
Controlled products whether banner brands or own brands, offer exemplary quality
and safety. A product must demonstrate the required quality level before it can
be approved for purchase.
Guaranteeing food products safety and quality
The best possible value for money is offered at every price level (first price
products/ own brand and banner brand products). For own brand and banner
brand products, the quality process includes signing a set of specifications,
approving production sites and product control plan, processing and archiving any
con-compliant products and following up of customers claims. To complete this
system, Carrefour has deployed in 2005 a Quality Scorecard available on the
intranet site, which enable all the Carrefour to track products at every stage of
their marketing and to react more efficiently in case of a crisis.
An approach shared with our suppliers
To guarantee the quality of its food products and its own brand and banner
brand products, Carrefour systematically conducts audits on its suppliers’
production sites, which are audited health and safety conditions. Suppliers’
production sites are audited by Carrefour, its service providers or certification
agencies. Suppliers are audited with respect to health and safety conditions, risk
control, traceability and compliance with specifications. In addition, Carrefour
endeavours to verify progress in product development . In 2004, specific criteria
for environmental factors were set up, along with the training of auditors in
several countries also Malaysia.. These audits are followed by action plans
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arranged with suppliers to improve the production process. Moreover, thanks to
analysis made by its customers services, the Carrefour shares with its suppliers
the points of satisfaction or of improvement reported by the claims.
Providing their customers with freedom of choice
Carrefour is committed to offering its customers broad freedom of choice by
structuring its product mix to include major national brands, regional, own - brand,
retail banner and first price products. The Carrefour’s own brand, retail banner
and first price products give the customers a selection of non – GMO and organic
products as well as the opportunity to choose quality at price that suit every
pocketbook.
Quality at the best price: first price products
First price “No1” products launched in Malaysia. Drawing on synergies and
purchasing volumes at the Carrefour, these products are intended to offer
consumers quality products at a price that is 5% to 7% below hard - discount
prices. In addition to meeting existing legal requirements, No1 products also
reflects the quality and safety approach that characterizes all their own brand
and banner brand products. Carrefour has decided to apply the same position for
No1 products as for own brand and banner brand products by excluding
genetically modified organisms from the composition of all products.
Quality information on non - food products labels
To promote the quality of its own - brand products and retail brand products
among consumers, Carrefour hypermarkets decided to optimize the quality of
information on the packaging of its Carrefour brand non - food products. Four
criteria, symbolized by four icons, were adopted, referring to usage, safety, health
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and the environment or social conditions of production. The packaging points out
the most striking criterion for each product by explaining in one or two sentences
the product’s added - value. This is signed with the commitment logo of
Carrefour, which provides Consumer services with evidences of its procedures.
Carrefour has already used this method on paints, backpacks, toys and scents.
This approach will be extended to include children’s products, paper goods,
sporting goods and food containers.
Ensure in store safety and quality
The proper upkeep of stores and the respect for the cold chain and food safety
are key elements of the Carrefour’s policy in Malaysia . Thus the Carrefour
mobilizes all its employees to ensure respect for health and safety rules. This
involves training, establishing procedures, and systematic hygiene and quality
audits in stores and warehouses.
Improve nutritional information on food products labels
Facing with a disturbing rise in food-related problems and to help customers to
combine food products better for a more balanced diet, in early 2005, Carrefour
has optimized the labelling of its Carrefour brand products. The Carrefour’s
Commercial Department has worked with the CLCV to develop a more accessible
and helpful presentation of nutritional information. The packaging has now a
“nutrition box” indicating the share of daily needs for six main nutrients ( fats,
sugar, carbohydrates protein, fibre and salt) provided by the products.
This “nutrition box” has been deployed in several countries and in Malaysia.
Brands
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Carrefour brands are comparable in quality of perhaps better – known market
leaders, they boast of innovative, value - added features that enhances the quality
of life. All product categories are represented by the Carrefour Brand, from daily
necessities such as cheese and pasta, to cosmetics and clothing. Carrefour
making the brand work harder because Carrefour want:
Increase CUSTOMER Awareness
Increase EMPLOYEE Pride
Increase SHAREHOLDER Returns
Carrefour have only begun to capitalize on the strengths of the brand
because making the brand work harder will help Carrefour grow sales and profits
in Malaysia. Carrefour understand Customer knowledge that Single brand to serve
all customer needs and even further the performance of their growth markets.
The brand has a crucial role in the economic model and the relationship with
the customer. The brand guarantees for each product the values of the Carrefour.
Besides, after the initiatives launched in 2005, Carrefour own label is ready to
play the role of a true brand, recognised for its quality, its commitments, and its
accessibility to the customer, (not simply a copy or an alternative price point).
The quality and safety of products sold in Carrefour stores is one of the
Carrefour’s priorities, notably for their store brand food products and retailer
brands. For these items, Carrefour works closely with its suppliers to ensure the
traceability and their bacteriological quality of products as well as the
implementation of the precautionary approach and a rapid recall procedure. In
2002, Carrefour set up a “Safety Observatory” for its own store brand products.
Carrefour also developed a Quality Management Chart, a data processing tool
that can predict and manage risks by monitoring controlled products throughout
preparation.
Based On Staff Or Personnel Differentiation
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The Carrefour has had successful financial results, has gained market share,
and makes customer happy. This is a reward for all employees, as all of them
play a role in this result. In fact, over 90% of the employees work in contact
with customers. That means that customer happiness is closely linked to the
employees’ performance. The Carrefour has developed various tools, depending on
the employee’s position to assess the employee’s performance. For instance,
tools for cashiers include such indicators as turnover and absenteeism.
Participating in the strategic plan
A number of teams participated directly in the preparation of the strategic
plan through participating. In task forces that brought together people from all
store formats and all geographical areas. Being linked to the global strategy is a
great motivation for store managers. Moreover, the strategy is probably more
appropriate this way, so it is in turn easier for managers to implement the
programs with the employees.
Listening to Employees tool
Since 2000, hypermarkets have systematized listening to employees to
assess their satisfaction. Over 8,000 persons, both managers and employees,
used it to express their point of view. It enables the Group to have a fair
overview of labour relations, to adjust its management style and to draft action
plans that factor in employees’ recommendations and comments. Besides, general
staff benefits include such as
Contractual Bonus
Service Awards Programme
Out Patient Treatment Benefits
Group Personal Accident Plan
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Group Health Plan (Cover includes immediate family members)
Structured Skills Career & Development (Programmes Structured Skills
Caree)
Additional benefits for Non-Executives include allowances for:
Transportation
Attendance
Punctuality
Cashier ( cashier only )
Festive incentive ( ie: Hari Raya, Chinese New Year, Deepavali)
At Carrefour, they constantly strive to be a responsible corporate citizen and
undertake various measures to give back to the community and society as a
whole. Carrefour strive to make a difference in the lives of the community from
the urban to the rural and they are driven by the belief that all life is special and
deserves attention. Carrefour believes in operating business with integrity and
commitment to quality. This conviction that begins with us as an individual and
through this inward conviction, Carrefour will make a difference in the lives of
people around Malaysia.
Personnel Differentiation
The Carrefour Group has formalized its progressive approach based on
three key commitments: quality and safety, respect for the environment and
economic and social responsibility.
Safety commitment on Drug Perfume and Hygiene products (DPH)
All suppliers are required to abide by Carrefour’s policy on cleaning,
detergent and cosmetic products. No cosmetic product has been tested on
animals by Carrefour’s purchasing office or on its behalf for 10 years. Products
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and their formulas are rigorously scrutinized by a team of six internal specialists,
with the support of an additional team of recognized external experts. Some of
the group’s banners are taking this approach even further.
Safety commitment on textiles and clothing for babies and children
In 2003, Carrefour has developed specifications to improve the safety of
clothing and textile products intended for children and babies. In two years, more
than 5,000 textile products involving over 200,000 substances were tested by
independent agencies. This safety requirement has been boosted by regular
monitoring conducted with the help of specialists, toxicologists and allergists for
all textile products.
Based On services Differentiation
The Carrefour puts its customers at the heart of everything it does. To this
end, it has simplified its organization, giving more independence to store
managers to enable them to adapt their business as closely as possible to the
needs of their catchment area. Alongside this, the Carrefour has expanded
customer choice, adapted its store brand ranges and increased its service
offering. New store concepts have been introduced to respond to evolutions in
their customers’ lifestyles. For some years now, the Carrefour has also been
strengthening its loyalty programs around this country to ensure that they reflect
the latest consumer and social trends.
Over the years, Carrefour has added numerous practical and accessible
services to its offering. The Carrefour has thus become a competitive player and
the benchmark in several areas of activity outside of its core business line.
Carrefour made significant capital expenditures in 2002 to reconfigure its stores to
make them more attractive and improve customer service. Reorganized sales
areas and product staging make the best of the Carrefour’s various areas of
expertise. This applies to both the food and non – food areas in hypermarkets. At
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Carrefour, they welcome customer views and comments which will help them
improve their service to customer. Services given by Carrefour are :
Extended Warranty
Free parts & labour on items repaired within the extended warranty period.
Replacement Plan
Free 1 new replacement for items in 2nd year within the extended warranty
period.
Easy Payment Scheme
Interest rate at 1% to 1.5% monthly. Please visit our Easy Payment Scheme
counters for more information. We have payments schemes for durations of 6, 9,
12, 15, 18, 24 & 30 months.
0% Interest Free
Terms & Conditions apply. For Maybank & Southern Bank Card Holders only.
Free Delivery Service
Free delivery for selected items within 30km radius of our stores.
Textiles Alteration Service
Hemming alteration for Carrefour customers.
Wrapping Service
Cutting Service
Scalling / Cutting service for meat products upon request
Handicap Friendly Store Facilities
Wheelchairs, lifts and parking spaces is available for disabled customers.
Automated Teller Machines
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Food Court
Surau / Moslem Prayer Room
Baby Changing Rooms
Taxi Stand
Bus stand
iii. Carrefour success analysis.
As in many other businesses, it is a crucial point for the Carrefour to learn
about their customers and to do everything they can to satisfy them. Thus
Carrefour has defined what builds up a positive experience for the customer;
apart from the differentiation strategies, price positioning strategies, distribution
channel and marketing mix, can see that the success factors contribute on its
products or services. The Carrefour mostly sells consumer goods and services
such as:
Convenience goods (food products, gas) which are sold by all formats of
retail stores.
Shopping goods and services (household appliances, electronic devices)
which are sold by hypermarkets only.
Cash & Carry and wholesale stores sell industrial goods (mostly food) as
they sell to businesses (food trade professionals).
Carrefour’s success factors used on its product are:
The Carrefour’s product be unique and different from the existing
products in the market.
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(CG Home theatre system very unique and different from other Home
theatre at market).
The product has sales in needed and wanted by the consumers.
(Carrefour arrange different product in festival seasons such as Hari
Raya, Chinese New Year, Deepavali and Christmas. Example: Lucky
Bamboo, cai Shen scoll, honey mandarin and assorted paper card - in
Chinese New Year and Christmas table, Christmas trees and colourful
lights – in Christmas.)
The product have high consumer demand and a high growth rate. ( all
kind of product).
The product has to be reasonably priced and affordable to the majority
of consumer. ( all kind of product).
The Carrefour have sufficient funds to build consumer awareness and
carry on other promotional activities. ( Carrefour Gift Vouchers, Carrefour
Bonus ) .
Analysis on type of product
Carrefour Home Products
Products designed to completely furnish a house, with each style of product
found in general merchandise, consumer electronics, and apparel, with a
permanent range supplemented by seasonal ranges. For examples, wardrobe,
electronic devices such as Home theatre, automatic washer, vacuum cleaner,
Digital jar rice cooker and etc.
Differentiation strategies on Carrefour Home Products are based on product
differentiation.
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Form
The product’s design different from other products, example GC product.
Quality
Carrefour always guarantee that all products they sales are safety and good
quality.
Brand
At Carrefour they sales CG brand products, which one mostly unique and
different from other brand products at market. Besides Carrefour also sales other
product such as TOSHIBA, PENSONIC, ELBA, FABER, SAMSUNG, SHARP, LG,
Goldsonic and etc.
Durability
A product that can last for many years is perceived as a product of good
quality.
Features
CG products have various attractive features such as CG television set with loud
stereo sound, clear picture quality , remote control and a big screen falls into the
good quality product category.
Carrefour Fresh Food
Carrefour also offer fresh food to consumers which one given the opportunity to
consumer to make many choices, an opportunity which has so far been lacking
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in Malaysia Carrefour. In terms of fresh produce, choice also pervades. Pursuing
the unconventional, for example, Carrefour will carry those items that other stores
shy away from: at Carrefour one can find curved cucumbers, freshly harvested
cabbage (ones that have not gone through any additional processes), and other
items that suffer from no real, discernible defect in quality. Besides Carrefour
also carry fresh food like fresh chicken, fresh fish, fresh Australia Beef, fresh
prawn and etc.
Differentiation strategies on Carrefour Fresh Food are based on product
differentiation.
Quality
The "Quality Way" products are the result of the collaboration between Carrefour
and chosen producers, who have committed themselves to strictly follow a quality
letter statutes agreement. The aim of the collaboration is to provide consumers
with healthy and safe products. The products certified with the "Quality Way" sign
are quality and safety guaranteed, from the first production stage until the final
positioning on the shelves. Some fresh food in Carrefour certificated as "Quality
Way" are :
"Halvah quality way",
"Chicken quality way",
"Free Range Eggs quality way",
"Fresh Fish tsipoura quality way",
French beef,
Salmon,
Biological bread,
"Barrel Feta quality way",
"Pork quality way",
"Apples Ζagorin quality way",
"Peaches and Nectarines Veria quality way",
"Seabass quality way",
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"Kiwi quality way,
Feta Tin quality way
Based on services differentiation.
Carrefour also provide customer service such as Cutting Service (Scalling / Cutting
service for meat products upon request).
Carrefour Family Goods.
Carrefour also carry family Goods such as Carrefour Baby Goods (Food range,
hygiene, perfumery, childcare products, toys, apparel developed under the advice
of a committee of pediatricians and specialists, in order to guarantee the baby’s
development from 0 to 36 months with security and comfort.), Carrefour Kids
Goods ( Food range, general merchandise, apparel, designed to develop good
habits (fight against obesity with less fats, sugar and salt), as well as developing
autonomy, satisfying the tastes of children between 4 and 10 years old through
adapted packaging and the use of the mascot: Genius), Men’s clothes, Lady’s
clothes (variety of clothes) and etc.
Differentiation strategies on Carrefour Family Goods are based on product
differentiation.
Quality
Carrefour always guarantee that family goods they sales are safety and good
quality specially Baby’s Goods. To guarantee the quality of its products and its
own brand and banner brand products, Carrefour systematically conducts audits
on its suppliers’ production sites, which are audited health and safety conditions..
Suppliers are audited with respect to health and safety conditions, risk control,
traceability and compliance with specifications.
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Based on services differentiation.
Carrefour also provide customer service such as:
Free Delivery Service
Free delivery for selected items within 30km radius of our stores.
Textiles Alteration Service
Hemming alteration for Carrefour customers.
Wrapping Service
price positioning strategies
One of Carrefour's most distinct characteristics is its low - price strategy by
dealing directly with manufacturers that allows it to undercut rivals by 20 - 50%.
Although negotiations with manufacturers ran into some difficulties and the
percentage of directly negotiated goods sold at the Carrefour store reached only
55%, it is still a figure that has not yet been attained by any other retailer.
Stimulated by low prices, stores have found effective and inventive tools to drive
the sales momentum. Below table of price positioning strategies.
P/Q Higher Price Lower Price
Higher Quality
Premium Strategy
Good Value Strategy
Lower Quality
Overcharging Strategy
Economy Strategy
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The good value strategy is a way to attack the premium pricer, i.e. " Carrefour
have high quality, but at a lower price." If true, and if the quality - sensitive
segment believes the good – value pricer, they will sensibly buy the product and
save money -- unless the premium product offers more status or "badge value"
(snob appeal). Carrefour presenting lower prices for their product offerings.
Besides, Carrefour avoid offer their products at Premium Strategy, Overcharging
Strategy and Economy Strategy.
Carrefour Home Products
In this type product Carrefour follow good value strategy. For those think this
type product very expensive in Carrefour can get money back from Carrefour but
need follow Terms & Conditions. The services offered by Carrefour is “Lowest
Price Guaranteed Or Twice Your Money Back!” (Carrefour will give two times the
price difference if consumer ever find any item they have purchased at Carrefour
being sold cheaper elsewhere.)
Carrefour Fresh Food
At Carrefour low price does not mean low quality. Quality is one element which
is never compromised in their quest to provide the best deals for consumer. Their
value for money Brand Values & Assurance gives you the assurance that the
entire range of Carrefour’s competitively priced product range has withstood the
stringent quality control standards developed by Carrefour. So that fresh food at
Carrefour also have Higher Quality with Lower Price.
Carrefour Family Goods
At this product also Carrefour offer low price with high quality and services
given by Carrefour are ; "Consumer will still get a refund from Carrefour even if
they changed my mind or made a wrong purchase" (If consumer are not happy
with their purchases or bought the wrong item, simply return it to Carrefour.
They'll refund 100% of consumer money. No questions will be asked!).
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Distribution Channel
The Carrefour as a whole is an efficient channel of distribution: it is a whole set
of marketing intermediaries that have joined together to transport and store goods
from producers to consumers. The Carrefour acts as a wholesaler as the Group
sells products to franchises. All the retail stores are other intermediaries. Some of
the producers are local while other goods are bought by bulk purchases or
global sourcing. That means that Carrefour has to organize the whole
transportation to its retail stores. Carrefour is mainly concerned with outbound
logistics as they manage flows of finished products to ultimate customers (and to
business buyers for cash & carry). This is a critical activity for Carrefour: they
just cannot have empty shelves because that would not make customers happy!
Each day, 8 trucks are needed to deliver products to one hypermarket! They use
sophisticated software to create an efficient link between sales and purchases.
They use “push – pull - push” logistics. It means that they both do forecasts and
they also control what is sold in order to adapt. Before the merger Carrefour –
Promodès, both firms had their own channels of distribution. After the merger,
they decided to organize a common and efficient channel of distribution. It can be
divided into three networks:
grocery products which stay a very short time in warehouses for
hypermarkets
the same products for supermarkets, convenience stores and Promocash
products which stay a bit longer in warehouses, and that are delivered to
all formats of stores
This new system enables to reduce the distance over which the products are
transported (thus reducing the cost), and also shortens the time for the delivery.
Moreover, with the “multidrop system”, only one truck is used to transport
products from a manufacturer to two close warehouses. Carrefour owns many
huge logistics platforms (also called distribution warehouses). They gather
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products from different manufacturers (which are suppliers for Carrefour), and
redistribute these products to the different stores when they need them. They
have introduced technological tools: those who prepare orders are helped by a
vocal recognition tool, in order to avoid any mistakes. Manufacturers used to
store finished goods in their own warehouse, and then, the goods were
transferred to Carrefour warehouses. Carrefour now wants to transport directly the
finished goods from the manufacturers’ to Carrefour warehouses.
Marketing mix
The marketing mix looks at the four main factors that go into a marketing
program (Product , Price , Place , Promotion ) , which are referred to as the 4 Ps.
PRODUCT
The Carrefour needs to design their stores so that they meet customers need.
This includes having the right store format , helpful services , the appropriate
product mix , and a reliable private label brand.
Carrefour have adapted the kinds of products they sell to the local culture. For
instance , Chinese people do not always have a huge refrigerator , so they
appreciate fresh products. Thus , Carrefour , by guaranteeing both prices and
quality for lots of fresh products has a real advantage : it is much easier and
practical to buy fresh goods.
Moreover , in Carrefour , they also sell western products for the western people
living here . This market segment needs were not yet fulfilled, as western
products are not sold elsewhere. In Carrefour Malaysia, people can buy such
goods as chocolates, wine, and even cheese or cookies just like in France. The
group also adapted its services to local shopping habits. For instance, in
Malaysia , people often drive to hypermarkets , only once a week. They buy
everything they need for the week, and a car is very useful to transport the
goods back home. That is why big parking lots are needed.
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Although the Carrefour sells a lot of goods with a manufacturer ’ brand names
(such as Danone , Yoplai t or Nestlé ), they also sell dealer (private - label)
brands: Carrefour (in Carrefour hypermarkets) , Champion ( in Champion
supermarkets ) and Grand Jury ( in convenience stores ). Thus, these products do
not carry the manufacturer’s name. The Carrefour product range now includes
11,000 mass-market products and miscellaneous household goods.
They have paid a special attention to the packaging so that the brand is
immediately recognizable . It has a special colour code , displays the Carrefour’s
quality commitment, complete labelling information and a display of the Carrefour’s
“satisfaction or consumer money back” policy. In order to improve these brands
equity, they use widely recognized labels to promote trust among customers. The
brand loyalty is very high. The Carrefour brand is the best - selling brand in
Carrefour hypermarkets, representing 25% of the total sales. Nine out of 10
customers fill their shopping carts with Carrefour brand products.
PRICE
This is a very important P in Carrefour’s strategy, they even talk of the “price
image” of the group.
The objective of the Carrefour is to reduce prices in all formats of stores.
In 2005, the clearly stated objective of each hypermarket was to be the least
expensive store within its market radius. This is a competition - based pricing,
their strategy is based on what other competitors are doing (including hard
discounters and informal traders), and the Carrefour tries to set the price below
the competitors.
However, they also seem to have a demand - based (or target) pricing as they
constantly try to reduce prices to meet or exceed customers expectations, even
though they are already under their competitors’ price. The objective of this price
reduction strategy is to attract more people to the stores, thus gaining market
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shares. The objective can be explained as a virtuous circle: the more they sell,
the more economies of scale they can do, the more they can lower prices thus
attracting more customers. The Carrefour has reduced the necessary time to
analyze the research data and to adjust price displays in each department to 24
to 72 hours maximum. They pay a particular attention to the pricing of “sensitive”
categories of products (those that the customers notice). They have also studied
what factors contributed to this image. The main ones are fresh product price
competitiveness, reliability and quality of the price indications, price
competitiveness of the private label range.
PLACE
This P is about putting the product in a place where people will buy it.
The Carrefour adds value to goods or services by different means.
Form utility. The fresh bakery department in hypermarkets uses various
ingredients to make croissants, bread and baguettes on the spot. Other
departments such as the butchers’ and the fish department also perform form
utility.
Time utility. In order to make products available when they are needed, the
Carrefour has developed a new format according to consumer needs and wants.
Place utility. In order to sell products where people want them, the Carrefour
has different store formats. For instance, in Malaysia , hypermarkets are in
town suburbs easily accessible by cars.
Possession utility. The group provides credit. With the PASS Card, customers
can spread out their payments and make their purchases on credit. The
Carrefour also helps to take a loan to buy a car for example. When you buy
big goods, hypermarkets can deliver them to you.
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PROMOTION
Promotion is the effort to inform and remind people in the market about products
on sale in the stores, and to persuade them to buy. Carrefour uses various tools
(advertising, public relations, sales promotion) which altogether are called the
promotion mix. It is worth noticing that as other big retailers, they do not use
personal selling.
Advertising
Carrefour slogan (Lebih Jimat, Lebih Hemat ) is probably one of the best known
among Malaysian people. It is quite simple to remember. It just means that with
Carrefour, can be very optimistic as everything is so great in these hypermarkets.
As they target the local market, it is highly efficient as people see the billboards
many times. Time to time, they use other medias such as the TV to promote
nation – wide events.
Public relations
In order to inform the public of the changes that are being made by Carrefour,
and to show how this is a good thing to customers, Carrefour has a very
efficient information programme. Moreover, as Carrefour is one of the biggest
firms, there are many newspaper articles about the Carrefour. Overall, these
publications are a good publicity for the Carrefour.
Sales Promotion
Sales promotion is the promotional tool that stimulates consumer purchasing and
dealer interest by means of short - term activities. Carrefour Hypermarkets
regularly send catalogues to all households that live nearby. In each hypermarket,
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they have a reserved zone where they make special displays to present new
products. There are also reduction coupons for those who have the loyalty card
Carrefour. They can have reductions of 20% on most popular products. Special
events are organized each time they open a store. They also use bonuses (buy
one, get one free), especially one they want to get rid of their stock
Marketing management strategies
1. Using Technology To Manage Information
The development of technologies has been very important for the
development of Carrefour. The main technology that has been useful is the
computer, and then the Internet. The Internet, for example, allowed Carrefour to
develop new kinds of activities like the online supermarket. But the most
important point with the Internet is the creation of a B2B extranet. Suppliers can
manage their relations with Carrefour more easily and more efficiently. The
development of computers has been very useful for logistics reasons too. Faster
computers can generate more accurate delivery schedules, for example, and thus
reduce significantly the costs. The use of servers has also allowed developing
giant databases of customers. And these databases are very important in the
strategy of Carrefour. Carrefour keeps information for each customer that has a
loyalty card, and whichever shop are going to consumer are known and can use
the advantages of their loyalty card (for example, for which all the shops are
separated). Finally, Carrefour created a website for recruitment purposes, so that
people can easily access to work offers and have information about them, no
need to browse lot of time to find a simple information.
2. Increasing purchasing power
The overall trend of the distribution sector in the world is mergers and
acquisitions. The global market for distribution companies is very competitive
because customers are always looking for the cheapest products for everyday
live purchases. For most formats of retailers, the market can best be described
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as an oligopoly, as only a few sellers dominate the market. The only exception
may be for district shops which could have been described as a perfect
competition, as there were many different brands. However, even this market
tends to be an oligopoly nowadays. So, Carrefour needs to make SWOT analysis
to increasing purchasing power. Almost everyone would agree on a simple
statement that prices never go down. If that were the complete truth, purchasing
power would have a hard time moving up. Decreasing purchasing power is also
a classic reason for players to cut prices. Carrefour must see the market place
by place, by demographic, geographic, and psychographic to be first retailer in
Malaysia.
iv) Wal- Mart Stores, Inc. and Carrefour’s SWOT analysis
Mart Stores, Inc. is an American public corporation that runs a chain of large,
discount department stores. It is the world's largest public corporation by revenue,
according to the 2007 Fortune Global 500. Founded by Sam Walton in 1962, it
was incorporated on October 31, 1969, and listed on the New York Stock
Exchange in 1972. It is the largest private employer in the world and the fourth
largest utility or commercial employer, trailing the Chinese army, the British
National Health Service, and the Indian Railways. Wal-Mart is the largest grocery
retailer in the United States, with an estimated 20% of the retail grocery and
consumables business, as well as the largest toy seller in the U.S., with an
estimated 22% share of the toy market.
Wal-Mart operates in Mexico as Walmex, in the UK as ASDA, and in
Japan as Seiyu. It has wholly - owned operations in Argentina, Brazil, Canada,
Puerto Rico, and the UK. Wal-Mart's investments outside North America have
had mixed results: its operations in South America and China are highly
successful, but it sold its retail operations in South Korea and Germany in 2006
after sustained losses.
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Wal-Mart has been criticized by some community groups, women's rights
groups, grassroots organizations, and labor unions, specifically for its extensive
foreign product sourcing, low rates of employee health insurance enrollment,
resistance to union representation, and alleged sexism.
Wal-Mart Stores Strengths
The slogan, "Save Money Live Better," replacing the "Always Low Prices,
Always" slogan, which it had increase purchasing power.
Wal-Mart's goal was to be a "good steward for the environment" and
ultimately use only renewable energy sources and produce zero waste.
Sell products at prices lower than those asked by traditional retail outlets.
Wal-Mart is a powerful retail brand. It has a reputation for value for
money, convenience and a wide range of products all in one store.
Wal-Mart has grown substantially over recent years, and has experienced
global expansion (for example its purchase of the United Kingdom based
retailer ASDA).
The company has a core competence involving its use of information
technology to support its international logistics system. For example, it
can see how individual products are performing country – wide, store-by -
store at a glance. IT also supports Wal-Mart’s efficient procurement.
A focused strategy is in place for human resource management and
development. People are key to Wal-Mart’s business and it invests time
and money in training people, and retaining a developing them.
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Carrefour is the second largest retail group in the world in terms of revenue and
sales figures after Wal-Mart, and the first in Europe. Wal-Mart is one competitor
of Carrefour in the world, so that Carrefour in Malaysia need to improve market
positioning and make SWOT analysis as well before Wal–mart operate in
Malaysia.
SWOT analysis
Strengths
Carrefour Offer low price with high quality products.
Providing their customers with freedom of choice.
Guaranteeing food products safety and quality.
Fully assume the consequences of their actions on customers, their
company and staff, institutions and the environment.
Respect their staff, suppliers and customers.
Give more services to consumer such as Extended Warranty, Easy Payment
Scheme, 0% Interest Free, Free Delivery Service, Textiles Alteration Service,
Wrapping Service, Cutting Service, Handicap Friendly Store Facilities,
Automated Teller Machines, Food Court, Surau / Moslem Prayer Room, Baby
Changing Rooms, Taxi Stand and Bus stand.
Have good working conditions, and good health care.
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Offering excellent value for the customer’s money, the Carrefour ’s own
brands met with undeniable success, attracting an ever more demanding
clientele.
Weaknesses
Carrefour always located at town side. (people stay at out of town need to
make long travel to purchasing in Carrefour).
Opportunity
New locations and store types offer Carrefour opportunities to exploit
market development.
Carrefour will provide new services in Malaysia as soon such as in
France. The services are “self check - out” system which offers customers
the option of scanning their purchases themselves, paying for them at
automatic checkout facilities and then bagging them themselves.
Threats
Being second retailer means that they are target competition, locally and
globally.
Being a global retailer means that they are exposed to political problems
in the countries that they operate in.
Carrefour can make repositioning strategies to reduce the impact of the
competition. Repositioning may be required to change consumer's perception of a
brand relative to competing brands. For example, if Carrefour consider that a
certain product to be high in fat and sugar, then that Carrefour manufacturer
need seek to reposition the product by modifying the product to be lower in fat
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and sugar, and then communicating the lower fat and sugar content to
consumers. Sometimes consumers have misperceptions about the brand or do not
adequately value a particular product attribute. The Carrefour can seek to change
consumer's attitudes through promotional activities that educate the consumer on
the product's attributes and benefits.
The Carrefour’s need to attract the greatest possible number of people to
their retail stores. As different market segments have different needs, they need
to have different formats of retail shops to fulfill these needs. For instance,
elderly person often do not have a car and live alone, so they need a store
near their house, they need district shops. However, large families with children
are looking for hypermarkets where they can buy goods at a cheap price, just
once a week. So that Carrefour need deploying an ongoing and aggressive low-
price policy by expanding its in – store promotions and communications.
Besides Carrefour need to:
Making the brand work harder will help Carrefour grow sales and profits
in Malaysia.
Offer a more diversified product mix than traditional with hard discount.
Strengthen environmentally conscious product and packaging design and
develop a range of products with social and environmental added - value.
Ensure product safety and quality, and customer and and employee safety
at our store locations.
Guarantee respect for human rights internally and along their products'
supply chain.
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Promote staff training and development, and inform staff of their view of
the world, and their core values, their policies and their approach to
sustainability.
Respect customers' freedom of choice by offering them a wide range of
products at attractive prices with full, factual information.
References
1. Euromonitor 1995: World Retail Directory and Sourcebook. (1995). London,
Great Britain: Euromonitor plc.
2. Anonymous. 1995h. (UBS Research Limited, March 29, 2995). Carrefour-
Company Report. In Investext [Database on CD-ROM]. Distributed by
Information Access, Foster City, CA. 1995.
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3. Anonymous. 1995g. (Salomon Brothers, Inc., October 11, 1995). Wal-Mart
Company Report. In Investext [Database on CD-ROM]. Distributed by
Information Access, Foster City, CA. 1995.
4. Anonymous. 1995h. (UBS Research Limited, March 29, 2995). Carrefour-
Company Report. In Investext [Database on CD-ROM]. Distributed by
Information Access, Foster City, CA. 1995.
Websites
1. Carrefour Malaysia. (online). Available: www.Carrefour.com.my
2. Carrefour Group. (online). Available: www.Carrefour.com
3. Wal-mart store inc. (online). Available: www.Wal-mart.com
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