Case Study- International Business
1. Do an analysis of the German food retail consumer. How do consumers in Germany differ (or do they?) from consumers in the United States? Wal-Mart Believed that the German market was similar to the United States and that the German consumer would desire low prices with excellent customer service. Wal-Mart wanted to take price leadership through cost leadership. By offering free shopping bags in a market where consumers pay for bags and bah packing services. They also allowed credit card acceptance, baby trolleys and hospitality such as greeters at the door. Wal-Mart completely misunderstood the Germans. In Germany the shoppers like to bargain hunt on their own, without cheerful assistance. They also placed the low-price Wal-Mart in a low-price marketplace which made Wal-Mart look rather luxurious. The Germans consumers differ from the US consumers by the way they like to bargain hunt and want to do it on their own. They do not like the cheerful greeters or the smiley logo. In Germany they are not quick adapters as they tend to have set habits and it is very difficult to get them to switch retailers if they do not consider themselves to be underserved. Also another big differentiation between US consumers and German consumers is the German consumer is not familiar let alone has the benefit of the loyalty programs we in America are so strongly offering. Which is why the Germans were not overly excited about this benefit where they typically pay with cash.
2. What assumptions did Wal-Mart make regarding German consumers that were incorrect? Why did the company make erroneous assumptions? As I listed many cases in the first question about features Wal-Mart offered but was unsuccessful. I think Wal-Mart based their assumptions off of the American culture and thought they would be just as pleased and excited about the prices and services as we are in America. They looked passed Germanys restrictive policies on store hours and new development,
2. What assumptions did Wal-Mart make regarding German consumers that were incorrect? Why did the company make erroneous assumptions? As I listed many cases in the first question about features Wal-Mart offered but was unsuccessful. I think Wal-Mart based their assumptions off of the American culture and thought they would be just as pleased and excited about the prices and services as we are in America. They looked passed Germanys restrictive policies on store hours and new development,