E-mart is the largest supermarket chain in Korea run by Shinsegae. E-mart is considering opening gas stations because the government is encouraging more firms to enter the oil distribution market to have price competition. Koo Hak-su, who is the chairman of Shinsegae said they are considering opening gas stations at about 10 stores in other than Seoul region. They will start next year at the earliest. A spokesperson of the company told that the objective of opening gas station is to offer better service to customers because they are not seeking to make profits by just 10 gas stations. They wanted to help retail giants run fuel stations under their own brands after the government announced plans in March. It is because the government is trying to reduce gas prices that is a burden for customers. E-mart will offer gasoline, diesel and other oil products at lower prices than other pumps. Other retailers like Samsung Homeplus and Lotte Mart are also consider to opening gas stations.
Opinion.
This is one of marketing strategy called diversification strategy. It is introduces a new product or service to a market segment that currently is not served. E-mart is introducing new product and the segment also changed because the target of supermarket E-mart is more focus on house wives and the gas station is on husbands. I think this strategy will help customers because they are having hard time on oil prices in these days. This will also give benefits to the E-mart on advertising because customers will have image of E-mart as cheap price on gas and also supermarket. Another benefit is the customers will have information about supermarket when they visit gas stations. This is the merit of scope. The one thing they have to look out for in future is the competition of Samsung Homeplus and Lotte Mart.
This is one of marketing strategy called diversification strategy. It is introduces a new product or service to a market segment that currently is not served. E-mart is introducing new product and the segment also changed because the target of supermarket E-mart is more focus on house wives and the gas station is on husbands. I think this strategy will help customers because they are having hard time on oil prices in these days. This will also give benefits to the E-mart on advertising because customers will have image of E-mart as cheap price on gas and also supermarket. Another benefit is the customers will have information about supermarket when they visit gas stations. This is the merit of scope. The one thing they have to look out for in future is the competition of Samsung Homeplus and Lotte Mart.
E-mart considering opening gas stations,
By Jin Hyun-joo,
2008.05.20,
The Korea Herald.
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