International Journal of Advanced Educational Research
International Journal of Advanced Educational Research
ISSN: 2455-6157; Impact Factor: RJIF 5.12
Received: 27-05-2020; Accepted: 16-05-2020; Published: 29-06-2020
[Link]
Volume 5; Issue 3; 2020; Page No. 38-42
Comparative analysis of price policy of Coopmart and Big C in Vietnam retail industry
Nguyen Hoang Tien1, Nguyen Minh Ngoc2, Rewel Jiminez Santural Jose3, Phan Minh Duc4, Tran Minh Thuong5,
Nguyen Thanh Vu6
1
Saigon International University, Vietnam
2
Ho Chi Minh City Finance and Marketing University, Vietnam
3
Saigon International University, Vietnam
4
Da Lat University, Vietnam
5
Thu Dau Mot University, Vietnam
6
Nguyen Tat Thanh University, Vietnam
Abstract
In developing countries with low average per capita income like Vietnam, price policy is one of the important marketing tools
to attract customers and satisfy consumers. Coopmart and BigC are two of the main groups that successfully and successfully
apply this business strategy to serve a large number of Vietnamese consumers. This article analyses the pricing policies of
these two groups and identifies the differences between them as the basis for other FMCG corporations to turn to this low-
price competition strategy to increase market share and boost sales volume, and this is also the basis for foreign corporations to
enter the Vietnamese market for planning their business strategies in this market.
Keywords: price policy, retail industry, Coopmart, BigC, Vietnam
1. Introduction 2. Theoretical framework
Today, price competition is shifting to compete for product 2.1. Price
quality, delivery time. However, price competition is still Prices are expressed in the currencies of commodity value;
fierce. In the field of capital construction, fierce bidding it is the amount payable for the goods. On the broad sense it
competition takes place, showing the competition, economic is the right amount to pay for a commodity, a service, or a
benefits and monopoly position of enterprises in the market. particular asset. Prices of goods generally revolve around
The pricing policy for each product of the business units is the quantity change value. When supply and demand of a
to set a selling price, or it can be a sale price for a specific commodity or an essentially fit together, the prices reflect
object. Price policy is one of the parts of the marketing and conform to the value of such goods, such cases rarely
strategy and it plays an important role in linking among occur. Prices of goods will be higher than the value of the
other marketing instruments. At the same time, it plays an goods if the supply lower than demand. Conversely, if
influential role in promoting or restraining the effects of oversupply then prices will lower the value of the goods
corporate marketing policies (Tien, 2012; Tien, 2012a; Tien, (Tien et al, 2019; Tien et al, 2019a; Tien & Anh, 2017;
2013; Tien, 2015). Tien, 2019; Tien, 2017).
If the enterprise sets a reasonable price policy or the selling
price is consistent with the value of the product, the goods 2.2. Price policy
will be accepted by consumers. If the business offers an The pricing policy for each product of the business units is
unreasonable price policy or the selling price is too high or to set a selling price, or it can be a sale price for a specific
too low for the value of the product, consumers will not buy object. If the enterprise sets a reasonable price policy or the
it. This means that price policy can have a positive or selling price is consistent with the value of the product, the
negative impact on the implementation of the overall goods will be accepted by consumers. If the business offers
strategic goals as well as the marketing strategy goals of the an unreasonable price policy or the selling price is too high
business. Furthermore, price is important position of or too low for the value of the product, consumers will not
production and business activities of enterprises, it is an buy it (Tien et al, 2019; Tien, 2015; Tien, 2017; Tien &
important factor in the decision process of manufacturing Anh, 2017),
and supplying products to the market or whether to replace
the old with new products or not? Price determines how 3. Research results and discussion
much the business will bid for to dominate the market. Price 3.1. Policy price analysis of Coopmart
is the decisive factor to the volume of products it sells out. Coopmart is a retail supermarket system of Vietnam under
Therefore, the topic "Comparative analysis between Ho Chi Minh City Union of Trade Cooperatives (Saigon
CoopMart pricing policies and Big C" will help us learn [Link]). Coopmart is currently the business with the most
more about pricing policy of some of Vietnamese retail operating supermarkets in Vietnam, with more than 110
brands in general and CoopMart, Big C in particular. supermarkets and hypermarkets (including CoopXtra and
CoopXtraplus) nationwide. In addition, in Ho Chi Minh
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City, Hanoi City, Can Tho City and many other provinces BigC opened the first hypermarket in Vietnam in 1998, in
and cities, there are about 360 CoopFood convenience Dong Nai province. Since then, BigC always kept
stores. In Ho Chi Minh City, there are also modern commitment to bring Vietnamese consumers high quality
CoopSmile grocery stores, 24-hour convenience store products at the best prices. In April 2016, Big C Vietnam
Cheers ready to serve customers from Vietnamese products, joined Central Group Thailand, one of the leading retailers
private labels and imported products from Singapore, in South Asia. To date, it possesses 35 hypermarkets / Big C
Thailand and South Korea with many shops in the central supermarkets, 31 shopping malls across Vietnam, with a
districts of Ho Chi Minh City to cater to customers wishing staff of more than 8000 people. With more than 18 years of
to shop or eat at night [2,4]. presence in Vietnam market, Big C has made important
Coopmart supermarket prices are set by the Union, so the contributions to the development of the retail market in
prices of products are the same in every supermarket, so particular and the socio-economic development of the
customers can buy at any supermarket in the system without country in general. We always monitor our business
worry about the price difference. For the goods purchased performance as well as other activities to bring sustainable
locally, the price is set by the Union, and for the fresh goods benefits to the local community. Therefore, Big C has
(vegetables), the supermarket is entitled to price depending implemented a series of programs to benefit Vietnam,
on the quality of the product. including [3, 15]:
With the overall goal is to make everything affordable, - Actively participate and interact with local communities
Coopmart always considers very carefully to fit the needs of where supermarkets operate across the country.
customers. Besides, in compliance with State regulations, - Actively participate in business enhancement activities
the set price must be equal to or lower than the market price. including promotion months, mobile sales programs in
In general, the pricing at Coopmart is not necessarily carried remote areas, quickly respond to government's price
out the same way, but it depends on the type of product. stabilization policies, support the development of
Coopmart has launched its own brand name with products Vietnamese products and participate in a series of activities
such as Jasmine rice, Napkin paper towels, dishwashing to develop the retail system in Vietnam.
liquid, frozen foods (spring rolls, fish balls), clothes with the - Actively implement social and community activities to
price 3-20% lower than the market price. With a help the local people.
competitive price policy along with quality assurance, there - Efforts to rise to the leading position in protecting the
are often seasonal direct promotions (such as Opening environment in shops and offices, building a sustainable
Season, Mid-Autumn Festival, October 20, Noel) so these living environment.
products favoured by a large number of consumers,
contributing to improving the Coopmart name in the hearts Skimming price strategy
of customers. BigC charges high prices for products in market segments
where customers easily accept the price. When consumption
Advantages of Coopmart pricing policy decreases, BigC reduces prices to attract more customers in
For a long time, Coopmart often has advantages over the lower market segment. For example, Big C is famous for
foreign competitors in the ability to understand the habits of "Bakery by Big C" bread and for grilled chicken. The price
Vietnamese consumers. With the financial potential and of a packed chicken is 2.5 USD. That is the price for the
available system administration experience, foreign product being made right away, the consumption at that
investors such as Central Group are aiming to acquire time is often very high, when we go to Big c to buy grilled
Vietnamese brands to quickly form large chains. With the chicken If you do not hurry, you will not be able to buy it.
advantage of cheap compared to the same products, the When the consumption decreases, especially at the end of
brand name products are gradually becoming familiar to the day, the price of a box of grilled chicken will be reduced
consumers. Coopmart also strongly developed its own by 2 USD.
brands, focusing on household goods such as housewares, “Grip the market” price strategy
towels, paper, essential goods, food and fresh vegetables. Customers always consider BigC as a trusted friend in
Thanks to the cooperation of the supermarket with inflation, because BigC products are always at a fixed price,
businesses such as Kinh Do Company, Lix Detergent if inflation rises, BigC will try to adjust prices so that buyers
Company, Saigon Paper, Phong Phu Textile, San Miguel do not feel too sock with price increases. Underestimate the
Company, many products are promoted and reduced in goods to grip the market, gain a large market share. As a
price. With private label products, consumers have many locality with a long cultural tradition, Hanoians stick to the
opportunities to choose high quality products of Vietnam traditional distribution method, it is going to the market
produces cheaper prices. when shopping. However, modern delivery methods such as
supermarkets and trade centers are also increasingly chosen
Disadvantages of Coopmart pricing policy by more consumers. The number of people going shopping
Coop Mart is proactive at low prices by reducing interest at shopping centers, supermarkets also increased from 2005-
rates and using the soft power of the major distributors to 2007, an average of about 5.2%. In particular, Hanoi is the
negotiate prices with suppliers. For example, when milk locality that people regularly goes to the supermarket once a
prices are about to rise, Coop Mart does not wait for the week, the second after Ho Chi Minh City and this number
intervention of the authorities, but organizes a negotiation. tends to increase. A study by Nielsen also shows that, In
If dairy companies pledge not to raise prices, Coopmart will Vietnam, the number of people occasionally shopping at
give priority to milk manufacturers with large display space, supermarkets has increased by 40% from 66% in 2007 to
nice location. 96% in 2008. The number of people using the supermarket
channel as main shopping channel which has increased from
3.2. Analysis of price policy of Big C 11% (in 2007).
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the initiative to set price higher for scarce items, coping with
Discount price strategy the possibility that demand is greater than supply.
Discount when buying in bulk, when buying items at BigC
with a high total product value of 50 USD or more, Advantages of BigC pricing policy
customers will receive a gift card of flowers. After that, BigC with the slogan "Cheap for all" often choose to set
customers will be given priority and discount for their prices lower than competitors' prices. Big C always tries to
products. BigC also provides customers with a card when make supermarket prices 5% to 10% cheaper than other
shopping that is BigC Preferential Card. Customers will supermarkets and 10% to 15% cheaper on the market. Big C
receive a discount on some items in the supermarket with also made four price commitments:
this card. For example, when customer buys "Bakery" bread ▪ Big C commits that Big C's selling price is always cheaper
at BigC supermarket, which costs 0.33 USD you will get a or equal to the manufacturer's price printed on the product
discount of 0.11 USD if he or she has a Preferential Card. packaging. If Big C's selling price is higher than the
Producer's price printed on the product packaging, Big C
Promotion price strategy will apply the Manufacturer price printed on the product
For new products launched on store shelves, Big-C usually packaging, and at the same time offer a voucher worth VND
low prices for customers to buy new products. Grasping the 10,000 for each product with selling price omissions
psychology of discounted promotion of Hanoi Big C people (Regardless of the number of products that customers buy)
also always have many sale discounts to attract customers to ▪ Big C is committed to unit pricing on each price label for
the supermarket. For example, the Summer Solution April 6 easy comparison and selection.
to April 17, 2011 promotions offer discounts up to 45% on ▪ Big C designed a yellow promotional price tag to make it
over 500 items. Big C discount on many occasions of the easy for customers to recognize the items that are being
year such as International Women's Day, Vietnamese promoted at Big C. These price stamps also announce the
Teachers' Day, Christmas, National Day, or Big C's end date of the promotion.
birthday, participating in the promotion month, etc. This ▪ Big C offers Wow brand at 10% to 70% cheaper than other
supermarket event On January 23, 2011 Big C Thang Long domestic brands.
carried out a 50% discount program for 200 items compared Choosing cheap prices as a slogan for supermarkets is a
to the regular day price, creating a shopping effect above fairly familiar approach for supermarkets. In the past, the
expectations. After a day of stimulating shopping, the sales world's leading retailer Wal-Mart also adopted this approach
of the supermarket increased by 40% compared to the and has achieved success in the many countries they travel
previous days, customers increased by more than 70%. through and with its strength and potential, Wal-Mart has
Through the big discount campaigns BigC, on the one hand, also defeated many big rivals. Taking cheap prices as a
attracts many customers to the supermarket, on the other slogan and commitment of Big C prices makes consumers
hand is also one of the best advertising methods of the not looking for better prices in other supermarkets.
supermarket. There are many customers from many Disadvantages of Big C pricing policy
provinces and cities across the country gathered at BigC However, Big C also has a weakness that it has not
supermarket to shop for cheaper prices. According to diversified in its pricing strategy, the pricing method still
Nielsen research on consumer behavior in Hanoi and Ho depends on competitors. Currently, Big C does not provide
Chi Minh City in 2009, Hanoians respond well to cards for regular customers, does not have preferential
promotional campaigns, especially on prices. In addition, policies for customers attached to the supermarket nor has
they also like to be included with the product. Big C often collected information about customers and their systematic
has promotions with products such as buying 2 packages of purchases at the supermarket.
Ajingon powder, getting a glass bowl, or buying a lot of
Nam Ngu fish sauce, giving a bottle of Trung Thanh chili 3.3. Compare prices policy of [Link] and Big C
sauce, etc. often make consumers buy more and also make Positioning and market segmentation
them feel that they get more than they buy in traditional BigC's position is the cheapest product in the retail market
markets. Traditional markets almost never receive any and the market segment they target is the market of
promotions or giveaways. This also made them change from customers with low or above average income. Big C
the habit of going to market to going to the supermarket. introduces consumers across the country with modern, cool
Installment pricing: At electronics stores, BigC often has and comfortable shopping spaces with a wide range of
policies to support shoppers with installment payment, products, rich quality, quality control and reasonable prices,
buyers can choose to buy and not necessarily pay accompanied by great services. Customer service is
immediately. BigC offers an opportunity for the buyer to effective. In addition, all Big C stores nationwide provide
pay by instalments for items such as laptop computers, shopping experiences with many convenient services for
televisions, refrigerators with 0 interest rate and discount up Coop Mart's locating customers to become close friends of
to 5-10%. consumers, and the market segment they target is mainly
married customers. Coopmart have the common
Price change strategy characteristics of being friendly, close to customers, giving
BigC proactively cuts prices due to excess production convenience and many added services. With the motto
capacity and market share decline. For example, pastries "Quality goods, affordable prices, considerate service",
that are baked in BigC's bread racks at the end of the day Coopmart has been increasingly chosen by customers to
without being sold out and are often subject to that policies. shop and relax with their families every day. Fresh and fresh
BigC consumption goods at the end of the day are not of food, diverse technology food, rich appliances with many
low-quality but sold at discount prices to win market share. new designs, fashionable, quality, affordable garments,
When inflation increases, the marketing managers also take along with rich, convenient and customer service
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friendliness of Coopmart employees is the reason that more than 200 private label products, but still has a higher
Coopart becomes a reliable shopping place, friend of every price than Big C.
home. Big C's pricing strategy is to introduce exclusive trademark
"WOW! Attractive price” with the same quality as domestic
Commodity products brands but is 10-70% cheaper. Big C has really affirmed to
BigC is positioned as a low-cost product, so they constantly Vietnamese consumers. Big C is positioned as a cheap
offer promotions, products with low prices, suitable for the product, so they set the criteria "Refund if they can buy
pockets of many people. In addition, BigC also cooperates cheaper" and constantly offer promotions, products with
with major manufacturers to reduce product costs to the cheap prices, suitable for pockets of many people. Besides,
maximum level for consumers, to have price stabilization Big C also cooperates with large manufacturers to reduce
policies in times of crisis, creating conditions for convenient production costs to the maximum level for consumers, to
for the purchase of customers. Coopmart is targeting mostly have price stabilization policies in the current crisis, to
married customers and young customers, busy with work. create favorable conditions and convenience for consumers
Therefore, in addition to the traditional products of a in purchase products and services.
supermarket, Coopmart also expanded the cafeteria system
right at its supermarket, as well as providing ready-made or
processed dishes, bringing comfortable choices for 4. Conclusions and Recommendation
housewives as well as customers who do not have much Price strategy is not decisive but whether it is immediate or
time. In addition, Coopmart has very strict requirements on long-term, present or future it always plays an important
the quality of the supply of products for supermarkets, they role in the overall development of the company. A proper
have once stated: “All products on supermarket shelves pricing strategy is a necessary condition to ensure hh, sp of
must meet Vietnamese high quality standards”. the company come to those who bring revenue and profits
for their own. Through analysis, evaluation of price strategy
Product pricing game shows the influence of many factors on price issues in
Big C's positioning is the cheapest product on the retail general as well as strategic decisions of CoopMart and
market. Big C now seems to be in favor of promotion but it BigC. The success of these two supermarkets is marked by
is also a supplier race, the strategic nature of Big C is EDLP choosing and applying a price strategy that is consistent
(Every day low price). The EDLP pricing strategy will with the industry's characteristics, but still making a certain
always maintain low prices for most products, rarely difference with each other's rivals. Coopmart and Big C
offering discounted promotions. Retailers who follow the both take advantage of all possibilities to link with farms,
EDLP strategy must focus on building customers' trust in manufacturers, businesses to increase the presence of more
their low-cost motto. Vietnamese products. Business innovation and innovation
In general, [Link]'s strategy is not only relying on cheap are the key factors to attract customers that are also fully
prices. The customers they are targeting are those who do exploited by these two brands [1, 2, 3, 4, 15].
not have much time, they seek convenience and timely
response to a wide range of products. Therefore, they are Recommendation for Big C
willing to pay for this rather than wanting the lowest price. Big C products are always at a fixed price, if inflation rises,
Big C always tries to adjust its prices so that buyers do not
Marketing advertising game feel too shocked with the price increase. Underestimate the
Regular large-scale sales promotions are used by BigC to prices of goods to grip the market, gaining a large market
promote the big brands. For example, BigC regularly share. In the general difficult situation of the economy, Big
organizes the programs "New product month at Big C", C supermarket has a flexible business strategy, in
"Good weekend prices" or organizes mass promotions to accordance with market movements and shopping habits of
attract consumers. Big C also has a strategy to advertise consumers. It can be said that the customer service provided
promotions in the newspaper, broadcast the catalogues of by Big C supermarket has achieved a lot of achievements
goods down to consumers' homes. Big C with the strategy and proved to be superior to other domestic supermarkets in
"Affordable price for every family" should apply low-cost the city. With the "cheap for everyone" strategy, the
and strong strategy to competitive price. supermarket has captured a large number of customers and
With the quality policy "a reliable shopping place, friend of strengthened its position in the retail market. By ensuring
every home" Coppmart is rich in quality goods, affordable business efficiency, actively participating in stabilizing
prices, considerate service and always bringing added market prices, always paralleling and protecting customers'
values for more customers. Coopmart always prioritizes interests, overcoming challenges and challenges, Big C
products selected by manufacturers that meet European supermarket has steadily developed, ensuring strong growth
quality standards or at least reach Vietnamese quality and continued to receive increasing trust from consumers.
management system. As the home of all employees, all
Coopmart activities are always community-oriented. Recommendation for Coopmart
Although the market is witnessing the emergence of many
Current price strategy large retail groups from abroad, the competition in the
[Link]'s pricing strategy is to set average price to meet current supermarket channel is still a confrontation between
consumer demand for customers. Designing mass discount Coopmart and Big C. If Big C chooses "Cheap prices" for
promotion programs for all holidays, big and small in the every home, Coopmart is "A Friend of Every Home". Not
year to encourage consumption and increase sales to considering cheap goods as a competitive way to increase
compete on price with Big C but not because of price, market share in the retail market, but Coopmart also
product quality is reduced. [Link] has also produced cooperates with manufacturers to "reduce costs, create
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International Journal of Advanced Educational Research [Link]
reasonable prices and the best prices". Coopmart has been
cooperating with hundreds of manufacturers and suppliers to
rotate the "Good price every day" program, focusing on
fresh food and necessities to practically support customers.
Brand experts believe that Coopmart understands the
consumer psychology of Vietnam and BigC is also very
knowledgeable about Vietnamese retail market as well as
shopping habits and customer tastes, so it should be
captured and welcomed and effectively serve that need.
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