International Marketing report : Carrefour

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The women / men / children, Carrefour : tex baby, crossroads premium Discount / crossroads (Reflections of France).

The food corresponds to the second spending category of the households according to the Insee(National Institute for Statistics and Economic Studies), after the accommodation(housing).

The households spend approximately 3500€ a year in the food(supply). Besides, it is the most modest households which spend most.

The food being the main post of distribution of the companies of the retail industry, this information is essential them.

5 PORTER’S

Threaten of new incomers :

Appeared for more than a decade in France, hard-discount, from Germany (Aldi, Lidl) gives a good place in a market nevertheless compound(made up) of big retailing groups.

Hard-discount, to the almost non-existent services but to the unbeatable prices, damage the hegemony of the giants of the mass-market retailing (their market shares do not stop growing).

5 big French groups were nevertheless settled well on the market of French distribution. Nevertheless hard-discount knew how to find their place on this market, taking the segment of the low-priced food market, the crenel which had not been penetrated by a French or international group yet.

Indeed we can call back that these stores have a lower surface in 1000m ² proposing mainly low-priced foodstuffs due to the absence of advertising, marketing, to savings(economies) made on the staff ( few employees), on little of referenced products …

Customer bargaining power

As we saw it previously, the bargaining power of the customers is strong while that of the suppliers is low and it for the reasons expressed in the previous point. However suppliers can sometimes be so powerful as they can allow to negotiate on equal terms with the mass-market retailing.

It is the case of Danone, that by acquiring in particular Evian, rose at the stage of big group: it is the economies of scale which it realizes at the moment who allowed the group Danone to have a strong bargaining power even equal to the brand of the mass-market retailing.

The competition interns in the sector

The competitors of Carrefour are among 4: Leclerc, Intermarket, Auchan and Casino. Every brand knew how to over time take advantage of its advantages to settle down durably on the market.

These 5 groups, in situation of oligopoly (some providers, many applicants), avoid fighting on the prices because the market is ripe and if we lower the prices, the margins decrease and thus it is the profitability which is reduced.

But sometimes some teach do not miss to call back their performance at the level of the prices : it is the case of Leclerc with the slogan ' low prices every day '.

It is thus necessary to agree on prices in a informal way. So brands are going to fight at the level of the sales force, of the advertising, of the conveyed image, of the adopted strategy …

Example of image of brands :

Carrefour : quality products Leclerc: environmental protection

Example of strengths

Leclerc: politics policy of development of customer loyalty, profitability of the space. Casino, Auchan, Carrefour : international strategy.

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Threaten substitute products:

Even if Carrefour proposes products under its store brand, it has not for main function to produce but to distribute. For that reason we cannot define nor even speak about substitute products. However, the e-commerce (remote business via internet) could come in the long term to shade(overshadow) the giants of the mass-market retailing(large distribution) who seem even today untouchable.

PESTEL

POLITICS :

There is an enormous influence on the regulation of the common financiers, the technological flows and the purchasing power of the consumers.

Carrefour thus owes consider certain points in the definition of its strategy of international opening:

A certain political instability which could question the establishment of multinationals (ex: Venezuela, Colombia, Russia).

The influence of the politics of the local governments on the economy (taxation, impositions of the potentially fatal households in the purchasing power of the consumers).

The development of ethical marketing campaigns : (employment of the feminine nudity in the Muslim countries, the elements being a matter of the history)

The economic stability of the country (closely linked to the economic policies implemented on a national scale).

The Narrow correlation enters the political and religious present life in certain countries (Latin America,Asia)

The implication of the governments in several supranational organizations favoring the free exchange (EU, NAFTA "North American Free Trade Agreement", ASEAN " Association of Southeast Asian Nation ").

ECONOMIC:

From the beginning of the economic crisis there is a deterioration of the consumer purchasing power what entraine a reduction in the consumption (economic situation)

The retailing market was recently touched by the scandals on the beef (Spanghero, Findus).

The interest rates fall since a few years at present to 0.5 % (refinancing rate)

There is an increase of the unemployment since the crisis in most of the countries.

It is at present more than 11 % in France.

Market shares evolve only little in the mass-market retailing (large distribution) in France.

SOCIOCULTURAL:

We observe a change of the mentalities on a part of the population in France with possible return to convenience stores.

For a party of the households the food is not priority any