domingo, 20 de noviembre de 2016

Mercadona's pricing strategies

Mercadona is a spanish supermarket company founded in 1981 in Valencia, when Juan Roig bought a company of meat to his parents. Juan Roig transformed the shops into supermarkets and expanded them to the rest of the country. Nowadays, Mercadona is the leader in its sector, with anual revenues of 19.000 million euros, 1400 shops and 74.000 employees. It is known as a company with low prices, but it hasn't always had the same policies.



At the beginning, Roig considered the possibility of establishing a reduction in prices complemented with strong advertising campaigns, in order to attract new customers. But the results were not the  expected ones: with te revenues obtained by selling the products he could not finance the process of advertising. So he implemented another policy...



The new pricing policy started in 1993, and it consisted in "Always low prices", what allows customers to buy products of a high quality and at the lowest prices. By this method, Mercadona satisfies the 5 components of the company: customers (The boss), suppliers, employees, society and capital.

Because of the bad experience investing in advertising, Roig distrusts in it. Promotions are not usual in this company as prices are always low.

Finally, I have to say that competitors have increased in the last few years, and they have also implemented policies of low prices. Will Mercadona be able to maintain its position in the market without decrease the quality of the products?

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