Analysis of competition
What Is The Role Of Marketing In Strategic Planning?
Carrefour S.A. is a multinational retailer which has its origins in France and the headquarter of the organization is located in Boulogne Billancourt. The organization has largest chain hypermarkets in the world which consists of 12,300 self-service based shops. The hypermarket chain has its operations in greater than 30 countries which are located in America, Africa, Asia and Europe. The first shop of the organization opened in the year 1960 within the suburban Annecy near the crossroads. The Carrefour Group is considered to be the first in Europe to have started a hypermarket store, a departmental store and a large supermarket within the same area. The store also has its operations in the United Arab Emirates which will be the major focus of discussion in the analysis. The operations of the Carrefour Group were started in UAE with the partnership of an organization named Majid Al Futtaim Retail Group. The organization believes in conducting its operations in a social and environmentally responsible manner. The company is a participant in the key initiatives that have been taken by the Carrefour Group and are pioneered by Majid Al Futtaim Retail. The Carrefour Group conducts its business activities by reducing the footprint that the operations of the organization have on the environment. The company is believed to be an active contributor in maintaining the environment conservation and the ecological balance as well. The Carrefour Group has many exclusive brands which have been able to acquire high levels of credibility and trust so that a suite of products can be developed. The price and the quality of products have exceeded the expectations of the customers. The products that are offered by the organization are traceable and famous in the industry. The various French products are brought together by Carrefour Group and high trust levels are built among the customers.
The operations of Carrefour hypermarket were expanded in UAE in the year 1995. The company had been quite conscious about the expansion related policies in the various emerging countries. The organization saw huge potential in the market of Dubai, UAE. The retail industry of the Emirate was flourishing and the economy of the country was also found to be strong. The major objective of the organization in this case was to find an entry mode in the country which can be helpful in reducing the risks that are related to the failure of the organization in the market (Armstrong et al. 2014).
Porter’s five forces analysis of the retail industry in UAE
The Porter’s Five Forces model is useful for the analysis of the competitive environment of an organization. The model provides a close look of the competition that is faced by the organizations in the market and the various barriers related to entry that are faced by them. The bakery industry shows that the barriers to entry of the new organizations in the market is quite low. The process of production is also quite easy and the ingredients can also be accessed in an easier manner (Atwong 2015). The model will be used in this discussion for analysing competitive environment of Carrefour Bakery which is a major part of the Carrefour Group in UAE. The major forces of the Porter’s model are as follows,
Intensity of the competitive rivalry – Carrefour Group has to face intense competition in the retail sector of Dubai. The major reason being the presence of large of number of organizations already operating in the sector. The various factors that affect the revenues of Carrefour in the Dubai retail market are related to the large number of firms, the large variety of products that are offered by the firms and the high levels of aggressiveness of the various firms that operate in the retail market which operate in the market. Carrefour Group experiences huge competition from organizations like Walmart, LuLu Hypermarket, Spinneys and Choithrams. These organizations have provided tough competition to the operations of Carrefour group in UAE (Blackburn, Hart and Wainwright 2013).
Bargaining power of the buyers – The power of the buyers in the retail based sector of UAE is quite high. The country has a strong and flourishing economy which has caused huge pressure on the revenues of the group. The population of the buyers in Dubai retail sector is high. This is a strong force that affects the revenues and the profitability of the Carrefour Group due to the discounts that need to be provided to the customers. The individual purchases of the customers are quite low which is a weak force that affects the profitability of Carrefour Group. The buyers of the bakery group are also quite high as there are a large of small organizations which offer the same kind of products (Challagalla, Murtha and Jaworski 2014).
Bargaining power of the suppliers – The bargaining related power of the suppliers are low as the organizations have huge number of suppliers in the industry. The bakery related products of the group are also provided by many suppliers. The large number of suppliers in the market and their levels of rivalry have a positive effect on the prices that are decided by the organizations. The suppliers of Carrefour Group are not able to exert pressure on the organization related to the raw materials that are required for production. The stronger suppliers are however capable of providing pressure on the revenues of the organization based on the cost of the raw materials that are provided by them (Chandra 2016).
Marketing goals for product or service
Threats related to the substitutes in the market – The variety of goods that are offered by the Carrefour Group and the Carrefour Bakery are huge. This factor reduces the force that is created by the substitutes of the products that are offered to the customers. Some of the substitutes of the products that are offered by Carrefour Group are however provided by the other organizations in the retail sector of UAE. The force that is experienced by the Carrefour Group in the retail market from the substitutes is therefore low (Fine 2017).
Threats related to the entry of new organizations- The threat that has been faced by Carrefour Group in the retail market of UAE related to the entry of new companies in the market is high. The major reason behind this factor is that the barriers related to entry of the organizations are low. The new firms are easily able to enter the market and capture a share of that sector. The low costs that are related to conducting business in these areas has reduced the barriers that are faced by the organizations. Carrefour Group has to face the costs that are related to the formation of its brand in the market to face the competition from the new entries (Garoufallou et al. 2013).
The two organizations which will be targeted by the new product of Carrefour Group is Spinneys and LuLu Hypermarket. These organizations are providing huge competition to Carrefour Group and are considered to be the top three in the country based on the revenues that are earned by them.
The major marketing strategy of LuLu Hypermarket was opening the first hypermarket in Dubai. The organization provides a much more opportunities to the customers than a mere shopping place.
The brand of Spinneys has been built by the changes that have occurred in the expectations of the customers. The store works on the strategy offering fresh products to the customers (Kaur 2016).
The two organizations which will not be targeted by the new products of Carrefour Group is mainly Awok and Techlink. The reason behind this choice is that the companies operate only on the online platforms which is not a target area of the product that is being offered by the organization.
The marketing goals need to fit into or further support the overall goals of the business. the marketing goals need to be measurable in nature and the marketing plan mainly provides actions that are used for achieving the goals (Kotler 2015). The marketing related goals of the organizations are related to the achievement of the various objectives like,
- Increasing the sales.
- Building the awareness of the brand.
- Growing the share of the market.
- Launching the new services and products.
- Targeting the new customers.
- Entering the new markets locally and internationally as well.
- Improving the stakeholder relationships.
- Enhancing the relationships with the customers (Lee et al. 2013).
The setting up of marketing goals is related to the proper division and allocation of time and money for the achievement of the various marketing goals. The marketing goals that has been set for the launch of the new product of Carrefour Group are as follows,
- Increasing the revenues of the organization.
- Providing new services or products to the customers.
- Improving the existing product line of the organization.
- Targeting customers from the premium and the economic segment of the customers.
- Achieving at least 10% growth in the market within the next five years (Magrath and McCormick 2013).
The product that is being introduced in the existing product line of the Carrefour Bakery is a Cream-filled Donut”. The product will be offered in different varieties and different types of flavours. The variety of the products will contain high priced and low priced items. The bakery will offer the donuts in various shapes and sizes to address the different needs of the customers of the organization. The huge variety of the donuts can further help in satisfying the needs of the customers belonging to the different groups and areas of the industry (McDonald and Wilson 2016). The two different pricing strategies that can be implemented for the purpose of deciding the prices of the new product and its varieties are as follows,
- Pricing at premium rates – The premium pricing related strategy relates to the process by which the organization is able to set the price of the product that is unique in nature. This pricing process is effective for the new product as it is in the early stages of the entire life cycle of the products. The high quality of the product enables the customers to have good perceptions related to the products that are offered to them. The marketing related efforts of the organization also need to be effective and the packaging needs to be premium in nature (McDONALD 2016).
- Economy pricing policy – The process of economy pricing can be used by Carrefour Group to target the customers who ae concerned about the prices that are offered to the customers. The strategy enables the business to minimize the costs that are related to the production. This helps the company to set low prices for the products so that the price conscious customers. The customers can thereby purchase the products without any frills. The economy pricing policy can help the retail organizations to gain high amounts of profit in the industry. This policy further helps the company to provide high levels of discounts to the loyal customers. The Carrefour Bakery can further offer the cheaper variety of products to the customers who are quite conscious about the prices. These products can be provided at discounted rates to the customers (Mistilis, Buhalis and Gretzel 2014).
The advantages that are related to the premium pricing policy is based on the high quality based perceptions that are provided to the premium customers who are more concerned about the quality as compared to the prices. On the other hand, in case of the new products the high prices can cause a lack of revenues of the organization in case of creating a huge customer base.
The advantages of economy pricing are related to attracting huge number of customers towards the products that are offered to the customers. The drawback in the other hand is related to the association of the products with lower quality (Naeem, Bilal and Naz 2013).
The price that has been decided for the premium range of products is around 20 AED. On the other hand, the prices that have been decided for the economy range of products range from 5 AED to 15 AED. The prices that have been set for the various range of products will enable the organization to gain high levels of profit with the help of huge customer base that will be gained by the company in the process. The projected outcome of the entire operations of the organization and the supply of the new products will thereby help in increasing the market share of Carrefour Group in the retail industry.
Segmentation of the market can be done with the help of the following processes,
- Psychographic segmentation – The lifestyle of the consumers which include the people who belong to the premium group who are more concerned about the quality of the products. The personality of the consumers belonging to this group are also related to the choice of the products that they wish to prefer. The premium customers belong to the high social class and further the products can be able to represent the status that they hold in the society. The lifestyle of people who belong to economy group of people are more concerned about the prices of the products as compared to the quality of the products. The personality of the customers and their social class also affects the choice of products (Paley 2017).
- Behavioural segmentation – The process that is followed by the consumers for taking the buying decision related to the product is a part of this segmentation process. The premium customers have a different behaviour towards the products as compared to the customers who are a part of the economy based group. The buying decision is taken by the customers with the help of the behaviour that they have while purchasing the product.
- Demographic segmentation – The age, ethnicity, gender, neighbourhood and the dwelling classification of the customers help in deciding the purchase related process of the customers. The age of the customers is a major factor related to the purchases that are made in the retail market. The bakery industry is also related to the age of the consumers who visit the stores (Quinton and Fennemore 2013).
The best target segment that of the market with the help of the products that the organization is planning to introduce in the market are the consumers who belong to the age group of 25 to 35 years of age. The middle to high income group of people are the major target segment for the Carrefour Bakery. The products that are being introduced by the company in the market will be mainly used and consumed by the consumers who belong to this group.
The retail marketing implementation based strategy are the various procedures that are undertaken by a retail business to sell the products to the customers. The retail implementation strategy of the organizations is based on the four factors which are, price, product, promotion and place. These factors are related to the controlling of the financial profits that are made by the business organizations in the industry. The marketing mix of the retail implementation of the company are as follows,
- Product – The Carrefour Group is a leading retail store in the international market. The stores offer products to the customers so that the different needs and demands can be solved easily. The hypermarkets of the organization are a major shopping destination for people belonging to different age groups. The new product namely, cream filled donut will be offered in the bakeries of the organization. The products will be provided to the customers with the help of multiple channels (Paley 2017).
- Prices – The Carrefour Group mainly follows the strategy of providing the products at the lowest prices each day. The sensitive products that are offered by the group are low priced. The insensitive products are offered at higher prices. The main portion of the revenues of the company are gained from the brand products which are high priced. The prices of the products are thereby kept at different ranges which include the premium prices and the economy prices. The main portion of the revenues that are earned by Carrefour Group are earned from the premium priced products (Naeem, Bilal and Naz 2013).
- Place – The organization has more than 10,000 stores operating in more than 30 countries of the world including UAE. The traditional format of the organization has been developed with the wide range of products that are offered to the customers. The stores of the company are formulated with the help modern and attractive designs with the help of different banners. The bakeries of the Carrefour Group are chosen for the effective distribution of the products to various customers.
- Promotion – Carrefour hypermarket stores conducts the various promotional activities with the help of marketing campaigns. The social media platforms are used by the organization for the purpose of promoting the new product range that is being launched by the group The loyalty club of the organization is formed for the purpose of providing the products to the customers at discounted rates (Mistilis, Buhalis and Gretzel 2014).
- People – The delivery and distribution related policies of the organization are related to the correct formation of the store designs with respect to the preferences of the customers. The new product range will also be offered on the online portal of the organization according to the convenience of the customers.
- Physical evidence – The organization aims at updating its operations with respect to the preferences of the customers. The products will be offered in the urban and rural stores based on customer preferences.
The various retail stores of Carrefour Group will provide the entire product range to the customers based on their preferences. The products will be offered in the bakery sections of the stores of Carrefour Group. This will help the Carrefour Group to create a loyal group of customers in the bakery sector of the organization (Garoufallou et al. 2013).
The Carrefour Group is a service-oriented retail organization and this is the major reason behind including the distribution based policies and the formats of the stores in the marketing mix related discussion.
References
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