Write about the Marketing in an International Environment for Globalization.
In the modern era, globalization has become one of the integral parts of the business in order to expand the business in the international market. To understand the marketing in the international environment, the Carrefour Company is chosen which is a leading hypermarket with it’s headquarter in France. Carrefour operates in more than 300 countries and operates in India. In France, the company is one of the leading retailing stores and holds the fourth position because of revenues and profit earning. The success in the market of France induced the managers of the company to enter into Asian market. Since, Carrefour already existed in India and operated effectively, the managers of the company chose to enter into the markets of Bhutan.
The brand required Bhutanese partner that shared the ethics and the organisational values of the company. The market of Bhutan can be observed as cultural crossroads that supports the Carrefour Company to enter into the market. Furthermore, Bhutan has a huge population that supports the company to attract many potential customers’ towards the brand. In order to increase the profit, the company tries to offer products to the customers based on the demand of the market. The intention of the company to provide low cost products helps the company to achieve a competitive advantage in the new Asian market of Bhutan. It is therefore important for the managers of the company to make strategic decisions before entering into the market of Bhutan to establish a sustainable position.
SWOT analysis is a management tool that helps the managers of Carrefour to understand the current marketing position of the company. The analysis is carried out in order to evaluate the internal strength and weakness of the company. Based on the SWOT analysis, the company is able to make decisions and develop strategies that will allow carrying out business in the new Asian market in an effective and efficient manner.
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Strength · Largest hypermarket chain · Second highest revenue · Joint ventures in different countries · Large network of discount · Own private brand |
Weakness · High operating expenses · Poor labour relation · Taking long time to open new stores · Poor e-commerce performance · Weak own brand sales |
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Opportunity · Joint ventures and acquisition for further expansion · Development of discount stores · Implementation of cost effective strategies · Enhanced research and development |
Threats · High competition · Low priced products of Wal-Mart is the biggest threat · Instability in the markets of Asia · New brands entering into the market · Slow expansion outside France |
Carrefour is the largest hypermarket chain according to the size. After Wal-Mart, it is the second highest revenue earning retail industry. There are a number of joint ventures in different countries across the globe that helps the company to achieve a stable partnership in order to carry out effective business (Koh and Wong 2015). Moreover, the company has large network of discounts, convenience stores and grocery that is capable of meeting the demand of the market in which it operate. This helps the company to achieve a strong brand image. The company has huge number of efficient employees working for the company all over the globe, which increases the productivity of the company (Fletcher and Crawford 2013). Maximum products offered by the company to the customers are of their own private brand and thus the revenue collected is relatively higher.
The operating cost of Carrefour is high due to the ineffective implementation of the strategies. The revenue earned is high since the sales are more with respect to its competitors. However, the profit earned by the company is not as high as compared to the revenue since the operating cost of the company is high that drives down the profit level of the company. The relation between the labours and the management is not that effective and therefore the productivity decreases (Hallbäck and Gabrielsson 2013). The performance level of the company in the e-commerce sector is not satisfactory. In addition to that, the company takes too much time to operate new stores in the market that reduces the profit level further.
Carrefour has the opportunity to initiate joint ventures and acquisition that will help the company to expand into new markets. There are enough scopes to develop the departmental stores of the company. There are further opportunities for the company to introduce technologies that helps to implement cost effective strategies and develop the research and development department of the company (Cavusgil and Cavusgil 2012).
While operating in the market of France, India and as well as Bhutan, the mangers of the company faces a number of threats such as the high level of competition. The rival companies of Carrefour provide its customers low cost products that impose threats on the company. On the other hand, the Asian market in the company operates is highly instable that restricts the company to achieve high provide and new customers (Skarmeas, Zeriti and Baltasn 2016). Thus, the company is unable to expand much outside France.
With a vast diversification of commodities, Carrefour looks forward to intervene into the Bhutan market. In order to grab a large section of the market, managers in the company object to develop high quality product that would meet demands in a more efficient way. The large chain of hypermarket is filled with goods ranging from electronics to food to household stuff to every possible thing (Gilligan and Hird 2012). The large variation in the product line caters to every section of the society. The Bhutanese tradition and culture greatly affects development of the products. Also, the uncommon goods tend to gain attention from the people in the foreign market. In addition to primary goods, the enterprise focuses on secondary goods that gain a large section of the market structure. A difference between the products and orientation between the parent and the host country plays a key role in expansion of business.
Concerning business prosperity in the Asian market, the management focuses on supplying food, clothing and electronics as their main line of products. Electronics include goods of several and trusted brands like Apple and Sony. Not only does the firm promote buying of phones but also many accessories. In addition to grocery shopping, the good quality wardrobe products are among specialties of the firm (Yang, Su and Fam 2012). Furthermore, Carrefour masters in supplying of fresh food to the people. The differentiation among several food ingredients from around the world and also goods like juices, dairy, fish, spices, fresh breads, and many others attracts consumers.
The managers work in collaboration with business experts to segment Bhutan`s market structure to be able to position its products depending on several fluctuating factors. Carrefour careful observes and studies the prevailing conditions in order to enhance business prosperity (Cavusgil et al. 2014). The several demographic, psychographic, geographical and cultural aspects of the foreign country greatly affect decision making of the firm. A vast cultural and traditional difference in Bhutan allows the managers to build subsections of the geographically spread market structure. Further, age, sexual orientation, literacy levels, wealth distribution and behavioral features in the nation grabs a special attention of the Carrefour management (Chandra, Styles and Wilkinson 2012). In order to intervene in a new country and carry on business in a sustainable way, the brand tends to grasp the available opportunities. A proper break down of the market to target customers and provide them with their desired goods, decides the success of a company.
Carrefour greatly highlights the need for a stronghold positioning strategy to be able to perform in a smooth manner. Despite of the process being a time consuming mechanism, the location statement is a beneficial factor for business (Turnbull and Valla 2013). The managers recognize a presence of substitutes in the market produced by rival firms. In addition to analysing the competition, managers scrutinize business feasibility in several parts of Bhutan. The increased tourism in the industry contributes effectively towards expansion of the company. Additionally, Carrefour targets to set up branches specifically in the western and eastern regions of the nation. An organized positioning of the brand will not only allow it to meet domestic needs of the people but also spread in the neighbouring countries. Concerning the central Bhutan, supervisors target to build business in areas like Bumthang, Jakar, Sarpang and Trongsa (Chung et al. 2012). Developing stores near tourist location also contributes effectively towards revenue generation of the enterprise.
Target markets are referred to the group of customers that Carrefour tries to sell its product. The company aims to identify the market needs and the demands in order to deliver high level of customer satisfaction. The company targets the women of the age group 20-45 mainly as they are more concerned about the current fashion. Further, the apparel section of the firm is a subject of interest to the women of the nation. The company further targets the young children and the kids to sell the toy products. Specifically, the young generation tends to more of electronic goods as compared to clothing products. Being a leading hypermarket company, the firm takes into consideration the local residents of the operating markets that include, men, women, and children (Samiee, Chabowski and Hult 2015). Furthermore, the company produces goods and services for the upper section, middle section and the lower section of the society by offering products at a very reasonable and affordable price range.
As Carrefour enters into a new Asian market that is Bhutan, the company implements the penetration pricing strategies in the business. The strategy helps the managers of the company to capture the maximum market share by entering into the market with low priced products. A comparatively lower price than the rival companies helps to attract larger number of customers towards the brand. The strategy is therefore capable of raising the awareness of the customers and inducing them to purchase as well as use the products of Carrefour Company. Czinkota and Ronkainen (2013) mentioned that although this pricing strategy creates a loss in the beginning, it is an effective strategy to increase profit in the long run by building customer loyalty and brand image of the company.
The penetrating pricing creates a barrier to enter the market for the other companies. If Carrefour is able to continue penetrating pricing, the new entrants that have a possibility of entering into the market are automatically deterred by the low price of the product (Cadogan 2012). The managers target to follow a cost effective pricing strategy while setting product costs. Further, in order to attract more customers towards the company, the supervisors study pricing patterns of competitive firms and set prices at a low level.
Carrefour takes into consideration both direct as well as indirect distribution as the company sells their own brand product and other brand products to the customers. The indirect distribution process involves selling the products by using intermediaries while the direct distribution method implies selling the products directly to the customers (Clark et al. 2016). Carrefour tries to implement the penetrating pricing strategy in order to provide the potential customers with low priced product. Therefore, the managers further implement the intensive distribution strategy that is mainly used to distribute low price products to the customers (Hollensen 2015).
The company also implements the selective distribution strategy as the company has a number of small outlets in the market to sell its products. This strategy helps the company to achieve a large geographical spread and allows the customers to shop from different locations. However, Papadopoulos and Heslop (2014) mentioned that as the managers of the company uses the selective distribution strategy, it is necessary for the company to choose appropriate and reputable intermediaries, distribute similar products and choose a intermediary that is recognised by the customers. An efficient distribution strategy enables managers to spread its goods among several parts of Bhutan. With a well-defined set of rules and regulations the strategy forms an integral part of the firm.
There are various promotion strategies that Carrefour uses in the market of Bhutan in order to attract more customers towards the market. The company uses the social networking websites in order to promote the products. The social Medias such as the website of the company, Facebook and Google as promoting media as these are more relaxed environment. This marketing strategy is considered to be the most effective promotional strategy as it offers direct marketing. The promotion through social media helps the company to create a more appealing image of the product.
The company further offers point of sale promotion and end cap marketing. These promotional strategies help Carrefour sell products and promote goods and services in the stores of the market in Bhutan. The impulse and the convenience are the ideas working behind the strategy. On the other hand, the end cap marketing is the strategy that supports the company to promote the featured products at a faster pace in the stores of Carrefour. When the company needs to promote the new products introduced into the market, it uses the point of sale promotional strategy. Additionally, door to door pamphlets and online registered website of the company form a major aspect of the promotion strategy.
The company also provides customer referral incentive programs and customer appreciation events in order to achieve effecting promotion of the products offered by the company in the market of Bhutan. The referral incentive programs help the company to induce the existing customers of the company to refer the brand and its products to the new customers. This helps the company to increase the sales and the revenue earnings. The several programs and schemes organised by the company tends to benefit the firm and the society as well. The company tries to attract more customers towards the market by providing free refreshments and prizes to the customers.
Although Carrefour has been able to build a successful market position in the market of France, it has been incapable of creating the same successful market position in the Asian market and especially in Bhutan. The managers of the company face a number of issues that are related to financing of the company and the political issues. In order to establish the company in the international market, the company requires a huge funding. Entering in the market of Bhutan needs proper market research, which is necessary to understand the market position clearly. The market research involves high cost, which needs to be planned effectively. In order to reduce the financial issues of the company so that the profit level is not hampered much, the company has to plan and design a financial budget (Zeriti et al. 2014). Planning and implementing the budget plan in the workplace and working according to the budget plan will help the company to reduce the financial issues and its impact.
Moreover, there is presence of political and ethical issues during the international marketing of Carrefour. The company is considered to follow the political rules and regulation of the market in Bhutan so that smooth continuation of the business is achieved. The ethical issues are also to be maintained by the managers of Carrefour that restricts the company to give the maximum level of performance. The culture of the Bhutanese market further limits the company to promote their products in the market. Since, the company enters the market of Bhutan, it remains unknown to the customers for a long time (Paliwoda and Thomas 2013). The customers are also not able to trust the brand and purchase goods from the company. Thus, the company suffers from certain amount of loss, which can be solved by incorporating effective strategies to increase customer satisfaction level.
In the opinion of Terpstra, Foley and Sarathy (2012), the management control system (MCS) is an effective system that helps the managers of the company to gather and use the information to evaluate the performance level of the various organisational resources such as the human, physical and the finances. The management control system influence the behaviour of the resources in the organisation that supports the company to implement strategies in the organisation. The management control of Carrefour is apprehensive of the coordination, resource allocation, performance measurement and motivation of the company. The future management control and the measurement system include extensive measurement that needs to be relating to the management accounting system of the company. The process further includes the resource allocation decisions, which is based on the managerial economics of the company (Majaro 2013). The management control system also includes communication and motivation that infers that these are related to the must draw contribution from the social psychology.ecommendation and timeline
As the company aims to provide low cost products to the customers it is necessary for the company to incorporate cost effective strategies that help the company to produce goods and services at a relative low price and also maintain the quality of the product. Primarily the strategies and policies of the company are developed at the time of incorporation. The company can also implement the economy pricing strategy. This strategy is used by Wal-Mart in France that helps them to achieve more sales by attracting more customers. The company also needs to maintain a stable relationship with the labours that provides higher satisfaction level to the customers and thereby increase the productivity of the organisation. Further, managers incorporate pricing strategies from one month time of incorporation.
Conclusion
From the above study, it can be inferred that the market position of Carrefour in France is high. The company therefore tries to expand its market by entering into the market of Bhutan. The company implements various strategies that support the company to build a sustainable position in the market. The implementation of the recommended strategies will further help the company to achieve the organisational goals related to the international marketing in Bhutan.
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