Marketing Report Of Metro

Presented to: Sir JALAL KHAN Presented By: RIDA SHEIKH (61573) UMER MANZOOR (62442) MUZAMMIL KHUWAJA (62433)

METRO Cash And Carry

Page 1

EXECUTIVE SUMMARY: In this report the marketing strategy of Metro Cash and Carry is explained that how Metro segmented its market and how they do their positioning in customer minds. We have discussed the marketing plan and the competitive advantage of Metro in the market. We have surveyed about the product range of Metro and how they compete in the market by providing the required products of each targeted segment in the market.

INTRODUCTION: METRO CASH AND CARRY is an international self- service wholesaler. It operates across Europe and in some countries of Asia and North Africa. METRO Cash & Carry is a leading international company in selfservice wholesale and operates more than 600 outlets in 29 countries. It is 3rd largest trader in world, 2nd largest in Europe and the Largest in Germany. METRO Cash & Carry announced its operations in Pakistan in January 2006 & since then it has established itself as a potential market leader in self-service wholesale. The company’s country head office is based in Lahore at Thokar Niaz Baig near motorway. The current head count of employees is approx. 1176 including Head Office & 5 wholesale center. It is a unique business in Pakistan since there are no direct competitors of its scale. In Pakistan, 95% wholesale industry is unstructured and METRO Habib Cash & Carry is considered to be the giant in the structured wholesale industry.

METRO Cash And Carry

Page 2

VISION STATEMENT: "METRO will dominate the Cash & Carry wholesale segment internationally, through our unique business formula which improves the competitiveness of our customers all over the world."

MISSION STATEMENT: "METRO is a Cash & Carry Wholesaler for businesses and professionals. METRO provides quality products and business solutions at the lowest possible prices."

THE CASH AND CARRY CONCEPT: Cash and carry wholesale is primarily defined by its customer base and the unique business model. This means, registered business customers visit the outlet, select their own purchases and carry these back themselves instead of placing orders with multiple vendors. Every day at METRO outlet across the world, more than one lack employees serve business customers with a wide assortment of up to 50,000 food and non-food products available under one roof at wholesale prices.

PRODUCT RANGE: METRO provides a wide range of food and non-food items. . In the food range, freshness is their first priority. This is guaranteed by the efficient supply-chain and quality control management they have inplace. In non-food, they offer only products that are up-to-date in terms of technology and design, and meet all safety standards.

FOOD ITEMS:

METRO Cash And Carry

Page 3

At the METRO wholesale center people can find a wide range of food products        

Dairy, Frozen Meat Fresh Fish & Seafood Fruits & Vegetables Edible Groceries, Canned Goods and Bakery Sweets and Confectionary General Grocery Tobacco and Beverages

NON FOOD ITEMS:

           

Office Equipment Media , Radio & Accessories Home Electronics/House Hold Household Goods Pots & Pans Tableware Glass Cutlery & Cutting Tools (Cocktail, Kiwi) Kitchen Utensils & Serving Articles The range also include decoration products (Walther Glass), Candles Cleaning items.

METRO Cash And Carry

Page 4

METRO MARKET SEGMENTATION:

DEMOGRAPHIC: METRO targets the people with minimum 25000 income level.

PSYCHOGRAPHIC: Social Class Working Class (Retailers and Professionals) Buying Habits Convenience Perception High Quality with low price Personality Profit Conscious

BEHAVIORAL: Benefits shopping at one place, Customer Care Usage rate weekly Occasion Regular Loyalty status Strong customer relationship Readiness Stage Desirous.

TARGETING: The targeting strategy of METRO cash & Carry depends upon the segmentation. METRO carries the differentiated market targeting strategy. They take the whole customers as a market and carry out the marketing strategy same for the whole. At this time METRO cash and carry is concerning with the differentiation strategy. They can also come up with the focus strategy for the retailers so that they think that METRO cares them and conducting a major portion of business just for the retailers. It will convince and internally force them to come to METRO just to admire its services and respect to the retailers.

POSITIONING: Positioning is as much important in formulating marketing strategy as designing a product. Metro portraits the image of this cash and carry whole sale departmental store as the lower price with the high quality and availability of everything at a same place.

METRO Cash And Carry

Page 5

PEST ANALYSIS:

POLITICAL ENVIRONMENT: These are the factors regarding the government which influences the workings of METRO Cash and Carry. The management always keeps in mind the threat of change in government. They analyzed several times before doing further expansion in this market. The tax rebates and certain other favors given by the previous government can be set aside by the change in the government. The ineffective control of every government regarding the prices of products and inflation creates certain problems because customers' demands product at the same and low price while in such conditions prices changes rapidly. Any political activity regarding labor and political matters strikes creates hurdles in the way of the METRO's success.

ECONOMICAL ENVIRONMENT: Control over economical environmental factor can provide opportunities to Metro to enhance the profit level up. Proper calculation of money exchange and currency rates can give the arbitrage profit to the Metro. Switching cost matters a lot in the buying decision behavior of customer. The switching cost can be higher in terms of time and the distance competitively the other specialized whole sale markets. Unfair distribution of wealth is the key factor of purchasing and also the major characteristic of third world countries. A person's spending only shifts from necessaries to luxuries with the increase in money it does not increase his spending.

METRO Cash And Carry

Page 6

SOCIO-CULTURAL ENVIRONMENT: The culture of Pakistan is at this time not too much favorable to the cash and carry business so they have to come up with the certain marketing awareness campaigns to force the retailers to think about the monthly purchases for the store with the convenience and economics at a same place.

TECHNOLOGICAL ANALYSIS: Metro cash and carry does not have any threat of technological changes in 30 countries. They have state of art technology and hi-tech technology such as RFID and real time inventory change etc. Pakistan in technology sector is quite far so technological change won’t affect MCC in case of Pakistan. MCC is already using customer card for entry and exit, they have cameras and walk through gates for security purposes, e -tag on every possible valuable product and batch processing system. These activities indicate that they are pioneer in Pakistan of introducing these kinds of technologies.

THE 4 Ps:

PRODUCT: The existing set of products (services) is focused around the wholesaler's market. And each store is customized to address. Metro offer a wholesale price that leaves the customer room for healthy margins and provide a one-stop-shop for the customer. In the food range, freshness is Metro's first priority. This is guaranteed by the efficient supply-chain and quality control management Metro have inplace .In non-food, Metro offer only products that are up-to-date in terms of technology and design, and meet all safety standards.

METRO Cash And Carry

Page 7

PLACE: Place ensures that the product is available at the right time, right place and in an effective and efficient manner. For METRO Place decisions are important due to two aspects. First, they require long term commitments in buildings and facilities, which means that mistakes can be difficult to correct. Second, these decisions require large financial investments and can have a large impact on operating costs and revenues. Poor location can result in high transportation costs, insufficient supplies of raw materials and labor, loss of competitive advantage and financial loss.

PRICE: METRO cash & carry follows the pricing strategy of Markup Pricing along with Competitor base Pricing. Mark Up pricing strategy in such a way that they charge 3% profit on each item. The prices are displayed inclusive and exclusive of taxes to facilitate and to create awareness among retailers and professionals that they can get the tax credit on the resale of the items which are purchased from METRO Cash & Carry. METRO is also following the Competitor base pricing because it is not working in lonely system and its products are not unique so it has not only to follow the prices which are being charged by the competitors but try to charge lower prices as compared to competitors.

PROMOTION: METRO cash and carry promotes its product not intensive marketing campaign because their customers are just retailers and professionals so they just opt that media sources which directly hit target market. They are promoting by the following ways: Billboards: METRO place billboards at the outside of the store. Newspaper: METRO advertised in newspaper such as Jang and The Nation to create awareness. Catalogues: METRO provides products and new offers catalogue not only at the stores but also mail it to the customers and members. Personal selling: METRO has staffs who visit restaurants and professionals to convince them and create interest to purchase products for the use of their business.

METRO Cash And Carry

Page 8

SWOT ANALYSIS:

STRENGTHS: 

Serving the customers with the wide variety of products



Covering all business solutions under one roof named “METRO”



Having the strong cash and carry business background



Efficiently using the place and excellent layout



Sufficient parking and security measures



Friendly and co-operative staff



Computerized data base system which help customers and Metro



Cafeteria in the building for the refreshment of the customers



Providing facility for online shopping

WEAKNESSES: 

Encourage the commercial customers



No proper transportation for customers to carry their products far away



Gaps in the goods display and constant goods rearrangement



Frequent lack of necessary information about merchandise in the store



Low wages of line employees

OPPORTUNITIES: 

Growing market of cash and carry

METRO Cash And Carry

Page 9



Expansion in major cities



Online shopping is much better option to save time



Contracts with hotels and restaurants



The new govt. policies can significantly impact the way of doing business and can open new opportunities.



Weakness of competitors



Changing trend of shopping, people prefer to go the place where they can find maximum range under one roof.



Metro is planning to open new stores at different locations.



Company name itself as an opportunity as “Metro” itself is a very popular name and they can expand business with any company they like to.



Seek growth through expansion into newer markets.

THREATS: 

No regular supply of innovative products



Intense competition with existing competitors



Rising pay level



Customer buying decision behavior



High inflation rate



Government instability



Law and order situation



Precarious economic condition

COMPETITORS' ANALYSIS: METRO – Cash & Carry Pakistan operates as a wholesale and retail business. It has 10 stores in total but still possess a very small share in the wholesale industry due to a large proportion of unstructured market. When questioned the management of METRO - Cash and Carry Pakistan about the major competitors of METRO the answer was that they do not have any direct competitors. It is true since their target market is completely different from other wholesale businesses present in the industry with an entirely different business model. Other wholesale businesses are small in size, specialize in specific commodities, and cater particular segment of the market.

METRO Cash And Carry

Page 10

After the Merger between METRO and Makro Cash & Carry, only one indirect competitor is considered important, namely Hyperstar. METRO - Cash & Carry compare their prices and assortment levels with Hyperstar frequently in order to make sure they are providing quality products in cheaper prices than Hyperstar (which is basically a retail facility not wholesale facility). Hyperstar concentrates more on end customers, unlike METRO - Cash & Carry Pakistan which targets professional customers and businesses. Hyperstar do have some similarities as well with METRO Cash & Carry Pakistan.

METRO Cash And Carry

Page 11

METRO Cash And Carry

Page 12

QUESTIONNAIRE:

1. What does Metro Cash and Carry offer? 2. What is the market strategy of the Metro Cash and Carry? 3. What is the branding polices of Metro Cash and Carry? 4. How many product they have in Metro Cash and Carry? 5. How do they segment their market? 6. What is the strategy of advertisement? 7. What services they provide to customers? 8. Who are the Competitors of Metro Cash and Carry in market? 9. What is the Product Strategy of Metro Cash and Carry? 10. What is the Pricing Strategy of Metro Cash and Carry? 11. What is the Promotion Strategy of Metro Cash and Carry? 12. What is the Placing Strategy of Metro Cash and Carry? 13. What are the strengths of Metro Cash and Carry? 14. What are the weaknesses of Metro Cash and Carry? 15. What are the opportunities of Metro Cash and Carry? 16. What are the threats of Metro Cash and Carry? 17. How do Success of Metro Cash and Carry can be concluded?

METRO Cash And Carry

Page 13