英语专业毕业论文-Carrefour and Wal-Mart pricing strategy analysis.doc

thesis（字号初号对应磅值42，居中）carrefour and wal-mart pricing strategy analysis（以下字号二号对应磅值22，不加粗）department:name: class: no.: advisor: submitted date english（统一：月日，年） defense date _carrefour and wal-mart pricing strategy analysisabstract carrefour and wal-mart are well-known multinational supermarket as a global retail giant, ranked first and second place respectively, occupy, but the strength difference is entirely different. wal-mart in recent years has maintained the top spot in the fortune 500, far outside the carrefour in dozens may be in the same language. therefore, although the oldest one is the second oldest one, carrefour can only be regarded as only brother. however, in the emerging market for the chinese market, is the little brother to the situation completely turned over, much to the brother left behind. some years ago, carrefour has been profitable, and is only profitable to enter the chinese market, foreign retailers. carrefour how can wal-mart in china is far ahead of it? is the pricing, i am from the analysis of pricing differences between the two major supermarket pricing and the same point, to understand why they succeed.key words international; english; business carrefour、wal-mart、pricing 1. carrefour and wal-mart is well-known multinational supermarket as a global retail giant why they succeed.carrefour and wal-mart are well-known multinational supermarket as a global retail giant, ranked first and second place respectively, occupy, but the strength difference is entirely different. wal-mart in recent years has maintained the top spot in the fortune 500, far outside the carrefour in dozens may be in the same language. therefore, although the oldest one is the second oldest one, carrefour can only be regarded as only brother. however, in the emerging market for the chinese market, is the little brother to the situation completely turned over, much to the brother left behind. some years ago, carrefour has been profitable, and is only profitable to enter the chinese market, foreign retailers. carrefour how can wal-mart in china is far ahead of it? is the pricing, i am from the analysis of pricing differences between the two major supermarket pricing and the same point, to understand why they succeed. 2. carrefour and wal-mart history2.1 b2bcarrefour store opened on june 3, 1959, in suburban annecy near a crossroads (carrefour in french). the group was created by marcel fournier, denis defforey and jacques defforey and grew into a chain from this first sales outlet. in 1999 it merged with promods, known as continent, one of its major competitors in the french market.marcel fournier, denis defforey and jacques 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 douard leclerc (e.leclerc), grard mulliez (auchan), paul dubrule (accor), and grard plisson (accor). their slogan was no parking, no business.the carrefour group pioneered the concept of a hypermarketdubious discuss, a large supermarket and a department store under the same roof. they opened their first hypermarket june 15, 1963 in sainte-genevive-des-bois, near paris in france.3）in april 1976, carrefour launched a private label produits libres (free products libre meaning free in the sense of liberty as opposed to gratis) line of fifty foodstuffs, including oil, biscuits (crackers and cookies), milk, and pasta, sold in unbranded white packages at substantially lower prices. may 2011: considering the stagnant growth and has faced increased competition in france from rivals including casino guichard-perrachon sa, carrefour will expense 1.5 billion-euro ($2.1 billion) to change the supermarket with new concept as carrefour planet in western europe. 2.2 sam walton, a businessman from arkansas, began his retail career when he started work on june 3, 1940, at aj. c. penneystore indes moines, iowawhere he remained for 18 months. in 1945, he metbutler brothers, a regionalretailerthat owned a chain ofvariety storescalledben franklinand that offered him one innewport, arkansas.4walton was extremely successful in running the store in newport, far exceeding expectations.5however, when the lease came up for renewal, walton could neither come to agreement on the existing stores lease renewal nor find a new location in newport. instead, he opened a new ben franklin franchise inbentonville, arkansas, but called it waltons five and dime. there, he achieved higher sales volume by marking up slightly less than most competitors.6on july 2, 1962, walton opened the first wal-mart discount city store located at 719 walnut ave. inrogers, arkansas. the building is now occupied by a hardware store and an antique mall. within five years, the company expanded to 24 stores acrossarkansasand reached $12.6 million in sales.7in 1968, it opened its first stores outside arkansas, insikeston, missouriandclaremore, oklahoma.8 3. pricingpricing is the process of determining what a company will receive in exchange for its products. pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. pricing is also a key variable in microeconomic price allocation theory. pricing is a fundamental aspect of financial modeling and is one of the four ps of the marketing mix. the other three aspects are product, promotion, and place. price is the only revenue generating element amongst the four ps, the rest being cost centers3.1competition-based pricingsetting the price based upon prices of the similar competitor products.competitive pricing is based on three types of competitive product: products have lasting distinctiveness from competitors product. here we can assume o the product has low price elasticity.o the product has low cross elasticity.o the demand of the product will rise. products have perishable distinctiveness from competitors product, assuming the product features are medium distinctiveness. products have little distinctiveness from competitors product. assuming that: o the product has high price elasticity.o the product has some cross elasticity.o no expectation that demand of the product will rise.3.2cost-plus pricingcost-plus pricing is the simplest pricing method. the firm calculates the cost of producing the product and adds on a percentage (profit) to that price to give the selling price. this method although simple has two flaws; it takes no account of demand and there is no way of determining if potential customers will purchase the product at the calculated price.this appears in 2 forms, full cost pricing which takes into consideration both variable and fixed costs and adds a% markup. the other is direct cost pricing which is variable costs plus a% markup, the latter is only used in periods of high competition as this method usually leads to a loss in the long run.3.3creaming or skimmingselling a product at a high price, sacrificing high sales to gain a high profit, therefore skimming the market. usually employed to reimburse the cost of investment of the original research into the product: commonly used in electronic markets when a new range, such as dvd players, are firstly dispatched into the market at a high price. this strategy is often used to target early adopters of a product or service. these early adopters are relatively less price-sensitive because either their need for the product is more than others or they understand the value of the product better than others. in market skimming goods are sold at higher prices so that fewer sales are needed to break even.this strategy is employed only for a limited duration to recover most of investment made to build the product. to gain further market share, a seller must use other pricing tactics such as economy or penetration. this method can come with some setbacks as it could leave the product at a high price to competitors. a limit price is the price set by a monopolist to discourage economic entry into a market, and is illegal in many countries. the limit price is the price that the entrant would face upon entering as long as the incumbent firm did not decrease output. the limit price is often lower than the average cost of production or just low enough to make entering not profitable. the quantity produced by the incumbent firm to act as a deterrent to entry is usually larger than would be optimal for a monopolist, but might still produce higher economic profits than would be earned under perfect competition.the problem with limit pricing as strategic behavior is that once the entrant has entered the market, the quantity used as a threat to deter entry is no longer the incumbent firms best response. this means that for limit pricing to be an effective deterrent to entry, the threat must in some way be made credible. a way to achieve this is for the incumbent firm to constrain itself to produce a certain quantity whether entry occurs or not. an example of this would be if the firm signed a union contract to employ a certain (high) level of labor for a long period of time.3.4loss leadera loss leader or leader is a product sold at a low price (at cost or below cost) to stimulate other profitable sales.3.5market-oriented pricingsetting a price based upon analysis and research compiled from the targeted market.3.6penetration pricingsetting the price low in order to attract customers and gain market share. the price will be raised later once this market share is gained. 3.7price discriminationsetting a different price for the same product in different segments to the market. for example, this can be for different ages or for different opening times, such as cinema tickets.3.8premium pricingpremium pricing is the practice of keeping the price of a product or service artificially high in order to encourage favorable perceptions among buyers, based solely on the price. the practice is intended to exploit the (not necessarily justifiable) tendency for buyers to assume that expensive items enjoy an exceptional reputation or represent exceptional quality and distinction.3.9predatory pricingaggressive pricing intended to drive out competitors from a market. it is illegal in some places.3.10contribution margin-based pricingcontribution margin-based pricing maximizes the profit derived from an individual product, based on the difference between the products price and variable costs (the products contribution margin per unit), and on ones assumptions regarding the relationship between the products price and the number of units that can be sold at that price. the products contribution to total firm profit (i.e., to operating income) is maximized when a price is chosen that maximizes the following: (contribution margin per unit) x (number of units sold).3.11psychological pricingpricing designed to have a positive psychological impact. for example, selling a product at $3.95 or $3.99, rather than $4.00.3.12dynamic pricinga flexible pricing mechanism made possible by advances in information technology, and employed mostly by internet based companies. by responding to market fluctuations or large amounts of data gathered from customers - ranging from where they live to what they buy to how much they have spent on past purchases - dynamic pricing allows online companies to adjust the prices of identical goods to correspond to a customers willingness to pay. the airline industry is often cited as a dynamic pricing success story. in fact, it employs the technique so artfully that most of the passengers on any given airplane have paid different ticket prices for the same flight.3.13price leadershipan observation made of oligopic business behavior in which one company, usually the dominant competitor among several, leads the way in determining prices, the others soon following.3.14target pricingpricing method whereby the selling price of a product is calculated to produce a particular rate of return on investment for a specific volume of production. the target pricing method is used most often by public utilities, like electric and gas companies, and companies whose capital investment is high, like automobile manufacturers.target pricing is not useful for companies whose capital investment is low because, according to this formula, the selling price will be understated. also the target pricing method is not keyed to the demand for the product, and if the entire volume is not sold, a company might sustain an overall budgetary loss on the product.3.15absorption pricingmethod of pricing in which all costs are recovered. the price of the product includes the variable cost of each item plus a proportionate amount of the fixed costs. a form of cost plus pricing3.16high-low pricingmethod of pricing for an organization where the goods or services offered by the organization are regularly priced higher than competitors, but through promotions, advertisements, and or coupons, lower prices are offered on key items. the lower promotional prices are targeted to bring customers to the organization where the customer is offered the promotional product as well as the regular higher priced products.33.17premium decoy pricingmethod of pricing where an organization artificially sets one product price high, in order to boost sales of a lower priced product.3.18marginal-cost pricingin business, the practice of setting the price of a product to equal the extra cost of producing an extra unit of output. by this policy, a producer charges, for each product unit sold, only the addition to total cost resulting from materials and direct labor. businesses often set prices close to marginal cost during periods of poor sales. if, for example, an item has a marginal cost of $1.00 and a normal selling price is $2.00, the firm selling the item might wish to lower the price to $1.10 if demand has waned. the business would choose this approach because the incremental profit of 10 cents from the transaction is better than no sale at all.3.19value based pricingpricing a product based on the perceived value and not on any other factor. pricing based on the demand for a specific product would have a likely change in the market place.3.20nine laws of price sensitivity & consumer psychologyin their book, the strategy and tactics of pricing, thomas nagle and reed holden outline 9 laws or factors that influence how a consumer perceives a given price and how price-sensitive s/he is likely to be with respect to different purchase decisions:1. reference price effect buyers price sensitivity for a given product increases the higher the products price relative to perceived alternatives. perceived alternatives can vary by buyer segment, by occasion, and other factors.2. difficult comparison effect buyers are less sensitive to the price of a known / more reputable product when they have difficulty comparing it to potential alternatives.3. switching costs effect the higher the product-specific investment a buyer must make to switch suppliers, the less price sensitive that buyer is when choosing between alternatives.4. price-quality effect buyers are less sensitive to price the more that higher prices signal higher quality. products for which this effect is particularly relevant include: image products, exclusive products, and products with minimal cues for quality.5. expenditure effect buyers are more price sensitive when the expense accounts for a large percentage of buyers available income or budget.6. end-benefit effect the effect refers to the relationship a given purchase has to a larger overall benefit, and is divided into two parts: derived demand: the more sensitive buyers are to the price of the end benefit, the more sensitive they will be to the prices of those products that contribute to that benefit. price proportion cost: the price proportion cost refers to the percent of the total cost of the end benefit accounted for by a given component that helps to produce the end benefit (e.g., think cpu and pcs). the smaller the given components share of the total cost of the end benefit, the less sensitive buyers will be to the components price.7. shared-cost effect the smaller the portion of the purchase price buyers must pay for themselves, the fewer prices sensitive they will be.8. fairness effect buyers are more sensitive to the price of a product when the price is outside the range they perceive as “fair” or “reasonable” given the purchase context.9. the framing effect buyers are more prices sensitive when they perceive the price as a loss rather than a forgone gain, and they have greater price sensitivity when the price is paid separately rather than as part of a bundle.4. carrefour and wal-marts pricing strategy the same point analysis or different point analysiscarrefour and wal-marts pricing strategy the same point analysis in this paper, we are know that two supermarkets in the pricing when they care customers psychological experience psychologicalis very impratant in market carrefour and wal-mart mary skillful use of psychological pricing strategy is the following: 1 low penetrationpricing low prices give customer good first impression carrefour and wal-mart are know this road reason, they opening the imptementation use of low-cost penetration strategy, the implementation of general merchandise supermarkets over the low-cost, general merchandise supermarkets to convey to the consumer price signals, so that consumers form carrefour, wal-marts first impression of low prices to attract a large number of customers come to patronage, word of mouth and through these customers, to a rapid increase in popularity. 2. mantissa pric