Background of Metro AG
Discuss aout the Consumer Behavior of Czech Republican Market.
The transition in the functioning of the company helps in determining the different aspects of the improvements. The companies introduce new products based on the understanding of the change in the requirements of the consumers to which the product is being offered. The determination of the needs of the people helps the organization in bringing forth improvements. The report focuses on the understanding of the situation of the organization Metro AG in the Czech Republic. The report will be helping to understand the customer segments of the organization for introducing a new product.
The main purpose of the report is to understand the prospects of the company, Metro AG to undertake steps for introducing a new product in Czech Republic. It is based on the understanding of the market segments and the strengths and the weaknesses of introducing the product, which helps in determining the demand of the customers in the market.
Czech Republic is a landlocked nation in Central Europe, which is bordered by Germany, Austria, Slovakia and Poland. The nation is counted among the developed economies, which has flourished due to the establishments in the industrial sectors. It has helped in enabling the inhabitants to be efficient as per the requirements of the economy (Annualreports.com. 2018). On the other hand, the region is characterized by the growth of companies, which has brought about changes based on the innovation and the sustainability of the enterprises. According to the census 2016 the GDP (Purchasing Power Parity) of the nation is estimate to be some $368.659 billion. It has helped in the growth of the organizations in the Czech market (Annualreports.com. 2018). However, the organizations face issues relating to the tax payments and the cost of establishing the organizations in the market. The universal health care options and the tuition free university education have helped in determining the growth of the people through the influence on the income of the people living in the nation.
Metro AG is a German based globally diversified retail and wholesale selling organization located in Düsseldorf. Ernst Schmidt and Wilhelm Schmidt-Ruthenbeck established the company in the year 1964 (Annualreports.com. 2018). Since its inception, the organization has faced its continuous growth in the markets. As per some reports, it is one of the four largest retailers in the world based on its revenue structure and the net income of the organization. The organization offers a range of products and services at the most favorable price for adhering to the needs of the middle income households. The major aspects of the sustenance of the organization is due to its careful selection of commodities and selling the same based on the analysis of the needs of the consumers and the target market segmentation (Annualreports.com. 2018). In the year 2016, the company decided to split its functioning into international wholesaler food specialist and consumer electronics. It has helped the organization in understanding the needs of the people and adhering to their needs in order to predefine the objectives of growth and sustainability of the organization in the international markets (Annualreports.com. 2018).
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Price |
16.05 EUR |
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Earnings per share |
1.15 EUR |
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Equity per share |
8.39 EUR |
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Net Profit (mn) |
414 EUR |
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Total Equity (mn) |
3,020 EUR |
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ROE |
13.70% |
SWOT of the company while operating in Czech Republic
The table portrays the return on the equity of the organization, which is characterized by the fall in their price by -3.60%. It has affected the growth of the organization in the market (Annualreports.com. 2018). On the other hand, the organization offered offered a yearly return of 0.00%, which was lower than other retailing companies in the market that have offered a return of 7.45% (AG 2018).
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Strengths · Largest retail chain in the world · Varied number of stores based on the requirements of the customers · Option of retail operations through the functioning of the cash and carry stores · Brand equity of the organization in the market resulting to increased brand loyalty among the customers |
Weaknesses · Increase in the operational costs due to the increased need of localization of its stores in the market · Lower investments made by the organization for enhancing the IT facilities in the retail stores (Annualreports.com. 2018) |
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Opportunities · Growth and expansion in the international markets (Annualreports.com. 2018) · Wide scale advertisements and promotion activities in order to make the people aware of the situation of the organization in the market |
Threats · Rising labor costs in the international markets (Annualreports.com. 2018) · Uncertain economic condition in the international markets |
The SWOT analysis of the organization will be helping the development of the strategies in order to support the growth of the organization while operating in the markets of the Czech Republic. The enumeration of the weaknesses and the threats will be helping the organization to build on to the aspects of the change that must be entertained by the organization in order to make improvements in the market of its operations (Businessculture.org 2018). The proper understanding of the needs of the customers helps in determining the change in the structure and the functioning of the organization. On the other hand, the company must take steps to develop the IT services for facilitating the needs of the customers (Annualreports.com. 2018). The increasing operational costs of an organization affect the growth of the same in the market. Therefore, the company must introduce a new range of products in order to suffice to the needs of the consumers and thereby helps in coping up with the operational costs that are incurred by the organization in the market.
On the other hand, the opportunities of the organization to grow in the markets is facilitated through the undertaking of the promotional activities that helps in making the customers and the target groups aware of the existence and the situation of the organization. It also helps in keeping the consumers aware of the product offerings of the organization, which will be helping the organization in maximizing its sales in the international markets and particularly in the Czech Republican markets.
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Segmentation |
Geographic- the organization must make plans to support the needs of both the urban and the rural customers of the Czech Republican markets Demographic Age- 18- 25 years of age Gender- female customers Income- the net income at the end of the year starts from the 2000 CZK Family size- the company must plan to support huge family sizes so as to expand their scopes of business in the markets Education- the higher educational qualification of the inhabitants of the region will be helpful for the organization while promoting their products. It affects the personal choices of the customers in the economy. Psychographic Lifestyle- the determination of the high lifestyle of the people will be helping the organization while designing their products as per the needs of the customers. The determination of the needs of the customers will be helping the organization in bringing forth improvements in the functioning of the business in the Czech markets. Personality- the personality of the female customers will be determining the type of products that are being preferred by the customers in the market. Behavioral Customer behavior- the determination of the market trends will be helping the organization in understanding the customer behavior towards buying the products. The demand for the commodity is based on the need of the customers. Therefore, the company must undertake steps in order to identify the need for facilitating the demand of the female customers. |
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Targeting |
The customers that might be targeted by the organization are the female customers based on their preferences of the styling options. The proper identification of the culture and the preferences of the female customers have helped n determining the different aspects of the change in the modifications in the structure and the functioning of the business. |
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Positioning |
The positioning of the commodities will be based on the accessibility of the products in the market. The major aspects of the positioning is based on the determination of the centers and the retails which attains the most of the female customers. The company must undertake steps in order to access the channels as that will be helping the organization in reaching out their product offering to the female customers in the market. |
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Internal factors |
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External factors |
Strengths
· Brand equity of the organization in the market resulting to increased brand loyalty among the customers |
Weaknesses
· Lower investments made by the organization for enhancing the IT facilities in the retail stores (Annualreports.com. 2018) |
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Opportunities · Growth and expansion in the international markets (Annualreports.com. 2018) · Wide scale advertisements and promotion activities in order to make the people aware of the situation of the organization in the market |
(SO) Wide scale marketing of the products to promote sales of the organization in the Czech markets |
(WO) To make a decrease in the lead time through the replacement of the old machinery by new and advanced machinery that will help the organization in optimizing the outputs |
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Threats · Rising labor costs in the international markets (Annualreports.com. 2018) · Uncertain economic condition in the international markets |
(ST) Expanding the scopes of the organization in the international and more specifically the Czech markets |
(WT) Inclusion of modernized machinery to cut off labor costs |
The company must take steps to include fashion and accessories commodities as their new product offering which will help the organization in expanding their scope of operation in the Czech market. The company primarily undertakes the venture of operating in the Food and drug retailing. Recently, the company has also take steps in order to promote the electronic goods for the consumers as per the demands. It has helped the organization in understanding the requirements of the target consumer groups. It has helped the organization in maintaining their standards as per the requirements of the consumers in the operating market.
The change that might be taken by the organization is based on the understanding of the applicability of the new product launch, which will be helping the organization in broadening their scopes while functioning in the Czech markets (Annualreports.com. 2018). The introduction of the fashion and accessories commodity will be helping the organization in keeping up with the operational costs that are being undertaken by the organization while functioning in market structure. The determination of the strengths and the weaknesses of the organization will be helping the same in understanding the applicability of the product launch as per the requirements of the customers in the market. The design of the product is based on the understanding of the preferences of the female consumers in the Czech market. The company might take steps to collect commodities from the local and the German manufacturers in order to distribute and circulate the products as per the preferences of the customers in the market. The introduction of the products in the market will be helping the organization in earning a revenue based on the proper functioning of the processes.
The proper understanding of the 4Ps of marketing has helped in the determination of the various aspects of the promotion that might be undertaken by the organization for launching their product in the Czech markets.
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Product |
The product that is being offered in the market of the organization is based on the understanding of the needs of the consumers in the market. The determination of the needs of the consumers helps the organization in expanding their scope of the business in the market. The introduction of the fashion apparels and accessories for the female customers of the organization will be helping the organization in reaching out to most of the consumers in the market. |
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Promotion |
The promotional strategy that might be undertaken by the organization is through the digital media platforms and the traditional media for advertisements. It will be helping the organization in maintaining a steady relation with the customers through the undertaking of proper communicative procedures. The modes of promotion that might be undertaken by the organization will be helping the same in making the customers aware of the product that will be offered by the organization. It will be helping the organization in maximizing its sales in the market. |
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Place |
The determination of the place will be helping the organization in understanding the various aspects of the change in the functioning of the organization in the market. It will be helping the organization in determining the market structure and the customer segments while launching their new products as per the needs of the female consumers. The determination of the fashion and the preferences of the female consumers will be helping the organization in the determining the modifications in the products. The Czech republican market is the place where the organization might bring in the new product. Therefore, the determination of the needs of the customers has helped in the determination of the different factors of the change in the market. |
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Price |
The majority of the people in the market base the pricing strategy that might be undertaken by the organization on the understanding of the needs of the consumers and the organizational culture of moderating the price so that the products are affordable. Therefore, the organization must implement the penetration pricing strategy in order to reach out their product offering to the majority of the customers in the market. It will be helping the organization in maximizing the scopes of business in the market structure. |
Conclusion
Therefore, from the analysis it can be stated that the proper identification of the different aspects of the demand of the female customers will be helping the organization in undertaking new scopes of expansion in the market. On the other hand, it will be facilitating the organization Metro AG in sustaining in the Czech markets. The report enumerates the manner in which the organization can undertake steps in order to facilitate the functioning of the same in the new product launch.
References
AG, M. (2018). Home. [online] Metroag.de. Available at: https://www.metroag.de/en [Accessed 29 Mar. 2018].
Annualreports.com. (2018). [online] Available at: https://www.annualreports.com/HostedData/AnnualReportArchive/m/OTC_MTAGF_2015.pdf [Accessed 20 Apr. 2018].
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