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The purpose of this report is to analyze the marketing strategy of Carrefour UAE. The analysis will begin with a brief overview of the company’s history and background. This will be followed by an analysis of the market segments and the target markets that are served by the company. The company’s product mix and pricing strategies will also be analyzed. The report will end with the analysis of the distribution and promotional strategies adopted by the company.
History and Background
Carrefour is a leading retailer that was founded in France over 40 years ago (Carrefour UAE). In the last three decades, it has achieved rapid growth by joining several overseas markets such as the United Arab Emirates (UAE). The company joined the UAE in 1995 where it currently operates under a franchise agreement with the Majid Al-Futtaim Group (Carrefour UAE). The company’s mission is to offer a wide range of low-priced, high quality products, which include food, personal care, and household goods. In order to achieve this mission, the company operates over 20 outlets in the UAE. Carrefour is considered to be the most dynamic and fastest growing retailer in the UAE. The company’s success is mainly attributed to its ability to offer excellent customer service and to align its products to market needs.
Market Segments and Target Market
A market segment refers to a distinct group of consumers who share homogeneous characteristics and needs. Generally, Carrefour serves three market segments in the retail industry. These include grocery, personal care products, and household goods market. The grocery market caters for customers who are interested in a variety of foodstuffs such as vegetables, meat, and soft drinks (Carrefour UAE). The personal care market caters for customers who are interested in cosmetics, toiletries, and other beauty products. The household goods market serves customers who are interested in various home appliances.
Carrefour identifies its target customers in the three segments based on geographic, behavioral, and psychological variables. In geographic segmentation, the company focuses on serving the urban population in the UAE (Carrefour UAE). In this case, its target market includes the residents of major cities such as Dubai. In behavioral segmentation, the company focuses on serving customers who are interested in high quality foodstuffs and consumer products. In psychographic segmentation, the company considers consumers’ interests, values, and lifestyles to identify its target market. In this regard, the company targets customers who are interested in shopping in a one-stop store that offers a variety of products.
Product Mix and Pricing Strategy
Carrefour’s product mix includes a variety of goods, which include “groceries, manufactured foods, soft drinks, apparel, kitchenware, bakery products, restaurant food, plastic goods, home appliances, and garden equipment” (Carrefour UAE). A diverse product mix enables companies to serve customers with varied tastes and preferences. Thus, Carrefour’s product strategy focuses on differentiation in order to meet the needs of the UAE population that consists of Arabs and expatriates from different cultures. Specifically, the company offers products that are developed according to western cultures and values to cater for the American and European expatriates in the UAE.
The company has also adapted its products to the Islamic culture in order to meet the needs of the Arab population in the UAE. For instance, the Islamic culture prohibits consumption of pork. Thus, the company’s grocery section sells halal-certified food products (foodstuffs that do not contain pork) in order to serve the Arab population (Carrefour UAE). The company also changes its product mix according to the seasons and religious holidays in the UAE. For instance, during festivals such as Eid and Ramadan, the company stocks several gift products that reflect the Arab culture in order to take advantage of the increased spending among Arabs.
Carrefour uses the penetration pricing strategy to gain market share in the UAE. This strategy involves selling products at low prices in order to increase sales by attracting more customers. Carrefour has positioned itself as a discounter that enables customers to save their money. The rationale of adopting the penetration pricing strategy is that the retail industry in the UAE is very competitive and customers are price sensitive. Thus, offering low prices enables the company to overcome competition. Although the company offers low prices, its brand image has not been diluted due to its strong brand name.
Distribution and Promotional Strategies
Carrefour uses three main distribution channels to reach its customers in the UAE. These include hypermarkets, supermarkets, and discount stores (Carrefour UAE). These channels are mainly used to sell consumer goods and groceries. The company also uses convenience stores, foodservice stores, and virtual stores to distribute its products. The convenience and foodservice stores are mainly used to distribute food products. The company’s virtual store is an e-commerce platform that enables customers to shop online through the company’s website rather than visiting the physical stores (Carrefour UAE).
The virtual store improves shopping experience by enabling customers to make their purchases at their convenience. Using several distribution channels has two advantages. First, it enables the company to serve particular market segments. For instance, foodservice stores cater exclusively for customers who are interested in purchasing food products. Second, the distribution channels improve the company’s brand visibility by enabling it to serve as many customers as possible. Since the purchasing culture in the UAE promotes shopping within malls, the company has established most of its stores in large malls in order to increase its sales.
The company’s promotional strategy involves using adverts to create awareness about its products. The adverts are placed in print and electronic media, as well as, the company’s stores and website. Given the cultural diversity in the UAE, adverts can only be effective if they are adapted to the needs of the local market. Thus, Carrefour has adapted its adverts in the UAE by writing them in both English and Arabic to overcome language barriers (Carrefour UAE). As a low price retailer, Carrefour uses discounts as a promotional strategy to attract customers. For instance, holders of the company’s Najm card enjoy up to 4% discounts whenever they purchase items at any of the company’s outlets.
Carrefour is one of the most successful retailers in the UAE. The company owes its success to its pricing strategy that focuses on expanding its market share by offering low prices. The company offers a variety of products in order to satisfy the diverse tastes and preferences of the customers in the UAE. This strategy is supported by the company’s ability to use several distribution channels to reach its customers.
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