Background of the Carrefour

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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