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INTERNATIONAL MARKETING MANAGEMENT Case 3: Carrefour: Entry into India Kim, June Eun RA6997422 1. What lessons should Carrefour India learn from the Japanese and Chinese markets? Chinese market: Key success factors 1) Know what people want most - Chinese want most are familiarity, friendliness, and satisfaction of local tastes. - By using appropriate name, which was derived from the translation of its English pronunciation with three commonly use Chinese characters and the combination implies that this supermarket can provide happiness and pleasure, Carrefour can state its mission and show the company‟s respect for local culture. 2) Localization - To fit the Chinese price conscious consumers, Carrefour offers discounts, which is being the most important offering. - The company offers its merchandise in a traditional Chinese fashion. - It has employed a large number of locals, and has created greater local career-development opportunities. - The stores rely on locally purchased goods in order to ensure product freshness. 3) Strong bargaining power - Carrefour‟ s strong bargaining power with suppliers helps guarantee its price advantage, and the price advantage ensures rapid turnover in goods, reducing the cost of capital. - However, because the company not only has strict price control but also charge a number of fees to suppliers, unjustifiable charges forced on suppliers became issue recently. 4) Government marketing - The Chinese government has offered preferential tax rate to attract overseas investment and the local government provide protection for the enterprise especially aimed at adverse regulation. - Carrefour tried to establish good relationships with the governments by leading economic develo pment and increasing employment, however, Government‟s
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overprotection may have negative consequences in the long term for a short-term gain. Japanese market: Key failure factors 1) Ignorance of Japanese retail culture - Carrefour failed to meet the needs of Japanese retail consumers with its existing competencies. - Japanese consumers are very “trend sensitive” and due to lack of storage space prefer to purchase smaller amounts more frequently. - Aside from the fact that sales trends typically do not last long, Carrefour also had to deal with the regional differences in Japan and their effects on local culture. 2) Its inability to expand its business - Carrefour failed to expand its business in Japan because it did not choose a local partner. - Since Carrefour decided to invest without a partner, it faced several problems including finding real estate with enough space to build its huge stores. 3) The lack of consumer trust - Trust became an issue in 2004, when the company got caught mislabeling substandard Japanese pork as higher-quality American produce.
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