Marketing Audit & 360° marketing Campaign
TABLE OF CONTENTS
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Executive Summary Mission and Vision Statement Introduction of departmental Store & Metro History of METRO METRO in Pakistan Objectives of METRO Competitive Advantage & Core Competencies
1 2 6 10 10 11 12 13 14 16 17 18 19 22 29 30 31 31 34 36
METRO Cash and Carry Guiding Principle
Segmentation, Targeting & Positioning PEST Analysis Porters Five forces Model Customer & Market Competitors Internal Environmental Analysis Marketing Plan Product Place Price Promotion Process People Physical Evidence
16 17 18 19
Segmentation, Targeting & Positioning PEST Analysis Customer & Market, Competitors Internal Environmental Analysis Marketing Plan 2 0 Product Place Price Promotion People Process Physical Evidence
39 42 43 44
45 48 48 48 53 53 54 56
21 22 23 24
SWOT Analysis Monitoring and Control Conclusion Questionnaire
This report is about the significance and objectives of a Strategic Marketing and implementations in the real market. This report is mainly concerned with the marketing plan for METRO Cash & Carry, the departmental chain business. In this report we have discussed that on what grounds the METRO has divided its market into different segments, how they present the product in the mind of the customers. We have surveyed the market and identified such segment of market which is not responding in that way which the company is expected from it. And after this process we select the retailers as customers of METRO store. Moreover, this report shows the competitive advantage of METRO and we check it out whether this advantage is actually working efficiently. Analysis of external (task and macro environment) or PEST analysis and Porter’s five forces model and focused internal environmental audit is included in this report. Detailed discussion about the marketing plan and the factors of that like (Product, Price, Place, Promotion, Physical Evidence, People, and Process) and 360◦ promotional plan is the part of our report. After assessing all these things we identify that in which sector the problem arises and after analyzing we suggests certain recommendations to the company to become more efficient and profitable company and satisfy their retail customers. At the end of the report we also embarked upon our existing competitors which may be hazardous for us. A brief SWOT analysis and Porter’s Five Forces Model regarding our company is also attached with our report. Monitoring and control section is also included.
“METRO is a Cash & Carry Wholesaler for businesses and professionals. METRO provides quality products and business solutions at the lowest possible prices”
“METRO will dominate the Cash & Carry wholesale segment globally, through our unique business formula which improves the competitiveness of our customers all over the world.”
Introduction of Departmental Store
A departmental store is a retail establishment which specializes in selling a wide range of products without a single predominant merchandise line. Departmental stores usually sell products including apparel, furniture, appliances, electronics, and additionally select other lines of products such as paint, hardware, toiletries, cosmetics, photographic equipment, jewelry, toys, and sporting goods. Certain departmental stores are further classified as discount department stores. Discount departmental stores commonly have central customer checkout areas, generally in the front area of the store. Departmental stores are usually part of a retail chain of many stores situated around a country or several countries.
Introduction of METRO
METRO Cash & Carry is a leading international company in self-service 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 with a turnover of €59.9 billion in 2006. METRO is operating around 2,378 locations in 29 countries, with employees numbering over 263,000 At the operational level, the group’s five sales divisions conduct business independently in their respective markets. With over 100,000 employees worldwide, the company achieved sales of € 31.7 billion in 2007. By generating almost 50 percent of the total sales, METRO Cash & Carry is the top-selling sales brand of the METRO Group. Assortment and service of METRO Cash & Carry’s unique business-to-business model are targeted only towards professional customers such as hotels and restaurants as well as small and mid-sized retailers or institutions. The company offers these special groups a high level of assortment competency both in food and nonfood as well as attractive wholesale prices. An efficient and internationally conferrable concept ensures success in entering new markets. Following is the structure of METRO Group:
Simple and efficient business concept The business concept of METRO is very simple and efficient. It consists of the following: Wholesale for professionals and businesses The point of sale is a large warehouse The customers pick the merchandise, pay and transport the goods. Cash & Carry as a wholesale business is the most suitable purchasing centre for all types of businesses and professionals. It allows customers to satisfy their professional, commercial as well as their personal needs.. From a wide range of products At competitive wholesale prices In a target-customer oriented packaging (bulk/ multi-packs as well as single item packs) At the most suitable time (extensive business hours)
Focus on Professional Customers
Cash and Carry
The term "Cash & Carry" means that professional customers do their own order picking in the warehouse type, "no frills" stores, pay in cash and carry the merchandise away. The advantages over traditional delivery wholesale operations are the better price/performance rate, the scope of the food and nonfood assortments, the immediate availability of the merchandise and the longer business hours per week. The stores each offer a food assortment of up to 17,000 items as well as some 30,000 items in the nonfood segment. Particularly strong is the fresh food offer, comprising fruits/vegetables, fresh fish, and meat and dairy products.
METRO Cash & Carry's target customers range from Gastronomy and Hotels, Food and Nonfood Trader to Service Businesses and large institutional Buyers. They find the bulk packaging sizes to accommodate their particular professional needs .
Successful financials 2007: Strong foundation for future valuecreating growth strategy METRO Cash & Carry will press ahead with international expansion Real’s head Joël Saveuse to be appointed to Management Board of METRO Group; Systematic restructuring started: turnaround within a set two-year timeframe Media Market and Saturn will maintain high expansion speed: increase in strategic flexibility Galeria Kaufhof: Trading-up strategy continued; department store business no longer strategic part of portfolio Sales increase by 10.4% to €64.3 billion in 2007 EBIT grows by 8.8% to €2.1 billion Net debt significantly reduced by €947 million Dividend increase of 5.4% to €1.18 proposed METRO Group expects to increase sales by more than 6% and EBIT before special items by 6 – 8% in 2008 – medium-term EBIT growth of more than 8%
History of METRO
The first METRO Cash & Carry store was opened in Germany in 1964, the first store abroad in 1971. Since then, the concept has continuously proven to be robust and apt for successful operations in all kinds of market environments. Three different store formats, "Classic", "Junior" and "Eco" allow choosing the best solution for a given environment. They differ in store and assortment size. Lately, the expansion into new markets has been on Eastern Europe and Asia, using mainly the middle sized "junior" store format. Till now, METRO Cash & Carry has had stores in the following countries:
First Wholesale Center Number of Wholesale Centers 1964 1971 1972 122 86 48
34 33 32 26 23
United Kingdom1 1971 1998 1994 1996
Ukraine Netherlands1 Hungary
2003 1968 1994 1971
18 16 13 12 12
Czech Republic1 1997 Belgium1 Portugal1 1970
Turkey Greece1 Bulgaria
1992 1999 2002 1991 2001 1971
8 8 8 6 6 5
2002 2003 2004 2007
3 3 3 2
Metro & Makro all over the World
METRO in Pakistan
METRO Cash & Carry announced its operations in Pakistan in January 2006. Since then, it has established itself as a potential market leader in wholesale. Under the supervision of Managing Director Mr. Giovanni Soranzo, METRO Cash & Carry Pakistan has opened its first store in the city of Lahore in October 2007.The Company’s country head office is also based in Lahore and currently employs over 400 people in two offices. It has done total Investment of US$ 180 Million and plan to build & operate 10-15 Cash & Carry Stores in Pakistan. There are about 250–300 employees per store and the head office is at Multan Road.
The Core Values:
Acknowledged first choice Cash & Carry Wholesaler Continuous focus on customer needs and satisfaction Commitment to ethical and environmental values Open communication Innovative in all we do Commitment to give our customers more value for their money Win-win partnership with our suppliers Our employees are our main asset Defined format adapted to local market needs Sustained growth of Shareholder Value Strive for reliability and transparency Efficient and low-cost operations
The competitive advantage on which compete in the market is the low Prices with high level of Quality at a same place with convenience. METRO provides each and every thing of household use like food items, electronics, automobile parts and much more at the same place and the major factor is the low prices and they maintain the high quality level. And for this purpose they directly deal with the companies for the supply of their products so that the competitive advantage can be enhanced more.
10 good reasons why you should become a customer Lowest possible prices Stock availability One-stop shop Extensive business hours Quality guarantee Free parking After sales services Promotional activities Simple but comprehensive billing system Great value for money
METRO Cash and Carry Guiding Principle
1. Trust and Respect • Everybody's opinion counts • We treat every person the same way 2. Open Door Policy • We avoid organizational barriers • Two-way communication • We encourage change and sharing of ideas 3. Empowerment to Personal Responsibility • We allow people to take risks • We consider "making mistakes" as part of the game 4. Be a Role Model • We demonstrate commitment and enthusiasm 5. Setting Clear Personal Objectives and Tasks • We have implemented a management-by-objectives concept 6. Recognition and Reward • We consider honest and transparent feedback as a "must" • We reward high performance (not only with money) 7. Team Spirit • We encourage maximum team engagement and knowledge 8. Positive Working Environment • We guarantee a safe and healthy working environment • We encourage innovation and creativity 9. Corporate Social Responsibility • We are committed to the principles of social responsibility
METRO segmentation of customers is mainly concerned with the two factors, Retailers, and professionals of every sector and kind.
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.
Positioning is as much important in formulating marketing strategy as designing a product. METRO portrait the image of this cash and carry whole sale departmental store as the lower prices with the high quality and availability of everything at a same place. You just visit it and you can get every thing what you can think to buy.
The following are the factors regarding the Pakistani government which influences the workings of METRO Cash and Carry. The political instability is the major factor of low foreign investment in the Pakistan. Same is the case with METRO. The management always keep in mind the threat of change in government. They analyzed several times before entering this country and before doing further expansion in this market. Inauguration of Lahore branch was conducted by former Prime Minister Shaukat Aziz and the new government can create certain problems for METRO. The tax rebates and certain other favors given by the previous government can be set a side 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. The rules and policies govern by the government also changes by the change of the authority and which have to follow by the organization and the problem is that it changes on the yearly basis. Government is encouraging the new entrant in the field of departmental stores and cash and carry concept which may be the huge dilemma because Wal - Mart and such chains are planning to enter this market.
Economical changes of Pakistan effects METRO Cash and Carry in such a way that the interest rates charged by banks can not only restrict the spending power of customers but also in the fund raising for the company. Interest Rate is about 14.5% on deposits and 17% on loans.
The rapid growth in inflation rate is the major factor influencing the spending power of buyer. Inflation rate in Pakistan is about 9.3% yarely while inflation rate of 3rd quarter was 21.5% approximately. Devaluation of money and increasing exchange rate discouraging the investors to invest in Pakistan’s market. Policies of state bank can be influenced by the existing political party and government and every person either business or a separate citizen entity holder has to follow these rules govern by the State bank. 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.
First of all society and the culture of Pakistan and its markets is not as much adapting to change. They do not easily accept the new arrivals in any field of the product or services. So METRO Cash and Carry for cash kind of product still there is not a huge market. Although departmental store concept is already good here but it will take time to understand and develop the kind of shopping culture. The habit of Pakistanis is to buy goods from the nearest market on the day to day basis and needs. They do not purchase the whole month grocery and other things. Secondly they prefer to buy on credit. And to pay in installments.
METRO Cash and Carry, a huge departmental store chain more than in 29 countries is already using the up date and high tech mechanism for the shifting of products and for other purposes. They have not too much threat of any technological changes. Customer’s card is already in use along with the entry with that card, precautionary measures like cameras are installed for safety reasons.
They have not any proper or main manufacturing which requires machines so their use of machines is just the cranes and folk lifters and such that machineries.
Porter’s Five Forces Model
We discussed the factors of five forces model of Porter in perspective of METRO cash and carry. We analyze that how these factors invoke on the workings of METRO.
Bargaining Power of Buyer
As far as the bargaining power of METRO buyer’s is concerned, METRO is not in a strong position. They have low power against the customers because customer influence in pricing and shifts towards other sellers if he/she is not satisfied with the quality or price of the product or services.
Bargaining Power of Supplier
METRO has many options to buy products from any supplier. So suppliers try to make possible their products at their store. So we can say that METRO has high bargaining power with respect to the suppliers.
Threats of Substitutes
METRO has the close substitute like Makro in Lahore and other substitutes the specialized whole sale markets are the great threat to the organization. If the customer is not satisfied with any factor they can easily switch to the other because he/she has the almost exact or the same kind of substitutes.
Threats of New Entrants
Government is allowing certain new investors to invest in the cash and carry business. Although initial investment for this industry is much high but for such
kind of chains like Wal – Mart and others have no problem in that. So METRO also has a high threat of new entrants.
Rivalry among Existing Competitors
Presently, the existing competitor of METRO is only the Makro in the same capacity and also the whole sale markets of every product. But the specialized whole sale market dealers cannot run any customers’ concerning marketing campaign so in this regard METRO has to face a stiff competition with Makro. Makro is almost the same services and it is also the foreign investment. METRO should focus on customer’s satisfaction to compete the Makro.
Customer Buying Decision Behavior
The main customers of METRO are the retailers and the hotels, restaurants and other professionals who do not buy goods for their own use but to serve their further own customers. METRO is expecting the Variety Seeking/ and convenience shopping behavior from their customers. Because it is such kind of product that the customer can change its mind just on a factor of pricing and shift on the other exactly direct competitors Makro and also has the option of specialized wholesale markets. Customer has full knowledge along with the choices.
METRO cash and carry business lies in the Monopolistic Competition. There are few sellers and each has its own specialization and it charge the prices according to the product quality and characteristics. There is no entry or exit barrier in this market. Even five more cash and carry businesses are allowed by government to open their branches in Pakistan.
Makro is a chain of self-service wholesale stores, so called cash and carry. The first one opened in 1968 in Amsterdam. In the following years stores were opened in the Netherlands and in several other countries within Europe. During the 1970s and 1980s Makro extended its business to America and Asia. Makro later closed its North American sites, however. The stores are not open to the general public, only to businesses which must be registered members in order to gain entry to the store. The still privately owned SHV originated in 1896 from a merger between a numbers of large coal mining companies, some of which had been active since the 18th century. In 1998 the European Makro stores were acquired by METRO a German based retail and wholesale company founded in 1964. The Non-European Makro stores are still owned by except for the ones in South Africa and Zimbabwe.
Internal Environmental Analysis
Marketing Strategy Audit
Marketing strategy audit is conducting to analyze and identify the significance of mission statement and the vision and objective of the METRO cash and carry and the consistency and interrelation between them. The METRO cash and carry has the clear mission statement. It has no any ambiguity. They clearly stated that the professionals and retailers are their customers and they try to serve them with high quality products along with low prices. Apart from this the objectives and goals are almost accordingly. They also
describe their objectives along with the principals of METRO which has to follow by every staff member and these principals give the respect and care to the customer and this thing is already stated in mission and objectives.
Marketing Organization Audit
The organizational audit of METRO cash and carry is the audit of formal structure in the capacity of hierarchy. The structure comprising of several executives for the Pakistan region and for the Lahore. Many foreigners are also here at the top level management for the decision making and strategy designing for the Pakistan. Most of the staff is young and there is no any techno phobic environment in it. As in every organization the informal structure and communication also exists in METRO. It provides sometimes much important information that opens the new horizons for METRO.
Marketing System Audit
The information system in any organization gives the boost not only to its sales and profits but in managing the activities and the employees work and performance. The sales reporting and analyzing system is placed here which starts from the purchasing of products to the sales and generating profits. All the purchases are recorded on it and placed in ware house, from it takes out as per requirement by the data entry. It not only facilitates for keeping records about purchases but also about the misconducts by employees or any breakage or spoilage. Then the products are placed into shelves and the sales are recorded that which item sale less and which sale more. On the basis of theses sales next purchases are made. This inventory control system smooth the progress of the METRO Cash and Carry.
Marketing Productivity Audit
METRO has the profit ration of 3% on every product of the store so it’s difficult to say that which is more profitable and which is not. And they are much efficiently utilizing their resources that its cost is already at lowest level.
Resource and Competency Audit
As far as the resources of METRO cash and carry are concerned they are efficiently using their resources. They have utilized their space for the store as a proper layout and the proper parking is situated for the convenience of the customers. Their efficiency and competency regarding the resources allocation is also related to the customers’ satisfaction and care as they mentioned in their objectives and mission.
Marketing Mix Strategies
Product Life Cycle METRO in Lahore
If we talk about the METRO branch at Lahore then it lies in the initial stage of growth. It is now enter in the growth stage.
METRO in Islamabad
If we talk about the METRO branch at Islamabad then it lies in the introduction stage.
Growth stage in Lahore
cost is reduced due to economies of scale sales volume increases significantly profitability public awareness competition begins to increase with a few new players in establishing market prices to maximize market share
Introduction stage in Islamabad
high cost low sales volume no/little competition competitive manufacturers watch for
acceptance/segment growth losses demand has to be created customers have to be prompted to try the product
Boston Consulting Group Matrix METRO in Lahore
If we analyze the Boston Consulting Group Matrix with respect to our company METRO cash and carry in Lahore, then it lies in the ending stage of question marks and beginning stage of stars. It has almost covered that period which has the element of risk and uncertainties. Now after certain months it will be in stars and generating huge profit margins from it.
METRO in Islamabad
The inauguration of METRO cash an carry has conducted just before some days. So it is much clear according to the Consulting Group Matrix that it lies in the question marks or we can say the problem child. Still there is an element of risk exist. No body can predict the actual results and future of this store in Islamabad.
Non Food Department
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 sizeable financial investments and can have a large impact on operating costs and revenues. Poor location can result in high transportation costs, inadequate supplies of raw materials and labor, loss of competitive advantage and financial loss. METRO is located at the suburbs of Lahore, at Thokar Niaz Baig on Multan road which is also the entrance of the Lahore Motorway. The location is important as it covers a lot of areas such as Sahiwal, Okara, Sheikhupura and all the small localities in between.
Place decisions are also important to ensure the closeness of distribution channels, suppliers, and customers.
Proximity to Distribution
METRO is located in the suburbs of Lahore but has access to the motorway, the inner city and Multan road. This allows easy transportation of goods as the location is connected to the most important road network of Pakistan, i.e. the motorway and the GT road. Therefore it is cost effective to transport goods to and from the store to other parts of the province.
Proximity to Suppliers
As far as branded items are concerned METRO directly purchases products from the companies and these are delivered to the warehouse of METRO which is located at the back of the store. However, to ensure stocks of fresh fruits and vegetables, METRO has established a collection point at Sharakpur, where they receive and pack fruits and vegetables. These packed items are then transferred to the store in refrigerated vans in order to maintain their freshness.
Proximity to Customers
Locating near the customers is often critical for many organizations, particularly service firms. To capture their share of business, service firms need to be accessible to their customers. METRO does not provide any transport facility to its customers. As it is Cash & Carry store so customers purchase the products and take them in their own vehicles.
METRO cash & carry follows the pricing strategy of Mark up 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 isolated 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.
METRO cash and carry is promotion its product in just two areas of Pakistan with 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, at MM Alam
road and at Mansoora.
Newspaper: METRO advertised in newspaper such as Jang and The Nation to
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.
Process audit tells that whether the company is following such procedures in purchase and sales that facilitates not only customers and suppliers but also the firm. It consists of two phases at METRO.
Customer at METRO
The process of customers to purchase in METRO is not too much complicated. Just enter in the store and go for the relevant racks for which you come here to purchase products. Pick up the products according to your needs and go to the counter to pay the bill. The staff of METRO just verifies the bill with the
respective purchases. And after that customer is on his will to go however and wherever he /she want to go.
Supply Chain at METRO
The supply chain management at METRO is the most important function in their business as their cost advantage is gained through this function. The following diagram shows the supply chain function at METRO:
METRO deals with local as well as international suppliers, therefore it has to manage its supply chain function through the coordination of local as well as foreign suppliers.
They believe that “Margins Do Not Come From Increased Price To Customers, But By Bringing Efficiency To The Supply Chain”
The supply chain process at METRO includes communication and order placement with suppliers, the inventory management at METRO and also the transportation of inventory. The supply chain management process is as follows:
The supply chain management function helps the organization to: • • • • • • To improve forecast accuracy To improve planning and scheduling capabilities To reduce inventory levels To Increase asset utilization To reduce manufacturing/replenishment lead-times and accelerated supply chain response times To enhance customer satisfaction through higher order fill rates
People are an integral part of any organization. In fact these are the people who make the differences among organizations. That is why METRO cash & carry places much importance on the hiring retaining and development of employees. METRO cash & carry has planned to open 10-15 stores in the Pakistan with 250300 employees at each store which shows its growth in the market and thus making it a place of opportunities. That is why it has established separate human resource department which deals with the various issues and interests of employees and increase their loyalty. Employees are oriented, when they join METRO, and trained followed by a probation period of 3 months. Following kind of behavior is expected from employees during training, No smoking in classroom Respect time schedules Switch off mobile phones or keep them on silent mode Respect your colleagues and their contributions Ask questions if something is unclear Enjoy group activities during and after the training This training helps METRO to exert the following qualities in their employees
Courtesy and friendliness
Every aisle at METRO has at least two staff members ready to guide their customers for any kind of assistance needed. Moreover, they have a separate customer service department where friendly staff is always willing to help customers over the phone or in the store.
Promptness to resolving complaints
A separate return and exchange counter is maintained with makes sure that all customer complaints are catered to whenever they rise. Besides that, exchange of any good within 48 hours of purchase is also entertained there.
METRO empower all employees to seek out quality problems and correct them. Managers of the different departments at METRO stay in constant contact with the suppliers in the market and ensure that only the highest quality goods are accepted to be sold at its stores.
Facilities at METRO METRO provides the following facilities to its employees
Provident fund Leave Annual Casual Sick Sick (inpatient) Maternity Educational/Con Special Sick Leave =10% of basic salary = 14 = 10 =8 = 16 = 12 week = 10 = 3 months
PHYSICAL EVIDENCE AUDIT
Physical evidence is a proof of the purchase of a product. It is important because it indirectly reflects the firm’s position to satisfy the needs of its costumers efficiently. As METRO is a service oriented organization it places much importance at providing such physical evidence that reflects its image as the part of third largest retailing and trading industry. Three types of formats are being followed by METRO in the world Classic (Minimum 10,000 sqm)(1) Junior (5,001 – 10,000 sqm)(1) ECO (2,500 – 5,000 sqm)(1) In Pakistan they are following Junior format
METRO group applies a standard model of layout in most of the countries, depending on the size of the store. The store in Lahore is based on the basic following model.
As we can observe that the layout is primarily divided into two parts. One is the food department and the other is the non food department. The layout of the store is planned according to these departments and the management of the operations is also focused around these departments.
FEATURES OF THE LAYOUT
Following are some of the distinct features of the layout at METRO The store has a large parking area with a capacity of 5000 vehicles which is ample for large as well as small vehicles. The store has a very remarkable ambience, which facilitates customers in their shopping. The isles of the store are spacious provided easy mobility of customers as well as products. The isles of the store are well lit in order to provide better visibility of the products and also to facilitate the customer in evaluating the products.
The prices are displayed with and without GST. This is done to facilitate the retailers. The retailers pay the full price, but the product actually costs them at the price without GST, as that amount is refunded to them through tax refunds. The bakery section is well layout and had its kitchen is not visible, which look clean and it is easy to shop for bakery products. The meat section is temperature controlled section. All the cutting and packing is done in a separate section. This made the section clean and there is no stink. The dairy section is also refrigerated which increased the shelf life of all the products. The fish section is also automated in the sense that it had automatic water sprinklers, which kept the products fresh. The isles in the middle of the store are not fully filled to the top, which gave a spacious feel to the place. A large number of customer payment counters at METRO reduces the amount of time a customer has to wait to pay for his purchases.
METRO ensures optimal temperature and hygienic conditions for all fresh food items from the producer/grower to the customers. This guarantees the best quality at every stage of the supply chain.
Apparently, METRO appears a planned and controlled environment but room for improvement is always there. We suggest the following recommendations to METRO which will help it to sustain its market position and to become market leader in Pakistan.
We design the proper segmentation of the METRO Cash and Carry: Geographic Region Country State City South Asia Pakistan Punjab Lahore, Islamabad
Demographic Occupation Income Level Economic factor HoReCa Minimum Rs.20000 Inflation, reduced Productivity
Psychographic Social Class Working Class (Retailers and Professionals) Buying Habits Perception Personality Convenience High Quality with low price Profit Conscious
Behavioral Benefits Care Usage rate Occasion Loyalty status Readiness Stage weekly Regular Strong customer relationship Desirous Shopping at one place, Customer
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.
METRO at this time although trying to get the low price as the image of this services but they are not properly using the positioning strategy. They have to come up with the positioning statement that conveys the true picture of the METRO along with the benefits of the customers. The following can be a good positioning statement for METRO Cash and Carry.
“Provide wide range of quality products at lowest prices.” SLOGAN
“METRO hay to sub kuch hay”
Availability of Products
We have observed the market and we come to know that people think that METRO is much bigger than Makro and has much more products than Makro. There is not a huge difference of both prices but people think that METRO has a bit lower prices of then Makro.
The political instability of Pakistan cannot be overcome by this single firm they can only minimize the effect of political changes in the country. They should develop such strong relation with every party and influence group in politics so that they will not be affected by their policies. File up the agreements that continuous whatever the government is regarding the tax rebates and certain other favors given by the last government. METRO is a huge group so it has to contact with the parties that can influence in the policy making regarding their market. Try to have certain policies to stop more big giants in cash and carry business in order to eliminate the competition.
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. They should keep their money in the form of Euros. Because it is a European based organization and second thing is that the value of euro is increasing on daily basis.
The culture of Pakistan is at this time not too much favorable to the cash and carry business sot 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 economies at a same place.
METRO has the limit of minimum Rs. 2000 on shopping which restrict the customer mentally to think before visiting so it should be eliminated. It has the membership fees of Rs.300 which is also be demolished. It also has the limit of 3 persons at a single card, it may be happen that more than three retailers want to come on a single card which restrict them to come together so also remove this one.
Makro is our main competitor with the almost similar kind of product and it is also a huge multinational group so we can only compete it by the perceptions of the customers which can only be created by the intensive promotion with the image of low prices with wide range of product along with high quality.
Suggested Mission statement
We suggest the following mission statement for the METRO.
“METRO is a Cash & Carry Wholesaler for businesses and professionals. METRO provides quality products and business solutions at the lowest possible prices through the excellence and intensive care of our employees”
We just included the employees’ part in the mission statement so that the employees feel that their company thinks about the betterment and excellent performance of its people.
INTERNAL ENVIRONMENTAL ANALYSIS
Marketing Organization Audit
The organizational structure of METRO is at this time consists only on hierarchy structure and it could only allows the information either from top to bottom or up ward. It travels step by step and the information takes too much time to reach up to the concerned authorities. And up till then the effectiveness of information reduces. We can introduce the organismic structure which allows flowing the information in any direction and at any level. It is much effective in sales department as any sales personnel come to know about the customers’ requirement and needs it can directly talk to marketing or consulting manager to take quick and immediate action in order to capitalize the information.
Marketing System Audit
METRO has huge inventory control and sales record system installed to control the inventory and the stores working but there are certain areas where the improvement can make system better. They can maintain an online sales and inventory system, through which the customer place the order and he/she can get his/her desired products just visiting the store without wasting time. Store staff can pack the entire luggage and just hand over to him/her just by making payment. It will not only attract the several segments of our potential customers who do not visit just due to the time constraints. And also facilitate the customer by providing him/her the complete record of his/her purchasing from which he/she can identify that for this month he/she what to have to buy.
Marketing Mix PRODUCT
In the growth stage the firm seeks to build brand preference and to increase market share. Product quality is maintained and additional features and support services may be added. Pricing is maintained as the firm enjoys increasing demand with little competition. Pricing to cover development costs Place and distribution channels are added as demand increases and customers accept the product. Promotion is aimed at a broader audience
In the introduction stage the firm seeks to build product awareness and develop a market for the product. The impact on the marketing mix is as follows: Product branding and quality level is established and intellectual property protection such as patents and trademarks are obtained. Pricing may be low penetration pricing to build market share rapidly of high skimming pricing to cover development costs Place is selective until consumers show acceptance for the product.
Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product.
promote aggressively expand your product or service invest in R & D
As far as pricing is concerned METRO is doing well in this section because METRO has not its own product. It just acts an intermediary for the manufacturers, so it charges very nominal profit on the prices given by the manufacturers.
It should provide carriage facility to the customers on reasonable charge. It should open another branch in Lahore at Gulberg so that people of DHA , Cannt, Garishahu , Shadman and Gulberg can easily visit it.
The employees at METRO are aggrieved that they are less paid, so METRO should increase the salaries of employees. It should hire more people for both indoor and outdoor selling. Training should be given to poor performing employees after evaluation. Job description should be provided to the employees. Employees must be given some bonuses on EIDs.
We are suggesting the three months promotional campaign for the METRO cash and carry. For this purpose we suggest the following media and their significance to capture and target the retailers and professionals.
We will publish our ads on the back side of the electricity commercial bills through out three months all over the Lahore and Islamabad.
Per month charges
Total charges for the three months campaign
Our customer is the retailers so we just confine our promotion in newspaper ads in AWAZ in Lahore. Because retailers usually read this newspaper. Ads will be published on Friday and Sunday. Per day charges Weekdays Sundays =Rs 963 =Rs 1060
We publish 27 cm by 4 columns ads on the back page. Ads for the three months campaign Weekdays (13 ads) Sundays (13 ads) = (27*4*963)*13 = (27*4*1060) *13 =Rs 1352052 =Rs 1488240
In Islamabad we opt the Daily Jang newspaper for these two days for initial two months campaign. Ads will be published in colors on Friday and Sunday on the back page. Per day charges Weekdays Sundays =Rs 2850 =Rs 3270
We publish 27 cm by 4 columns ads on the back page. Ads for the three months campaign Weekdays (13 ads) Sundays (13 ads) = (27*4*2850)*8 = (27*4*3270) *8 =Rs 24,62400 =Rs 28,25280
We are placing the billboards at the specialized whole sale markets with the respective products, such as Shah-Alam Market we will place the different house
hold accessories ads and in Abid market the electronics ads and Akbari mandi the grocery ads and at the liberty round about in Lahore and in Islamabad in G-9, Faizabad and commercial markets. Lahore Abid Market (quarterly) Ichra (quarterly) Akbari Mandi (quarterly) Liberty Round About (quarterly) Islamabad G-9 Sector (quarterly) size 90*30 =Rs 1,250,000 =Rs 1,325,000 =Rs 5,00,000 size 90*30 size 60*30 size 60*30 size 90*30 =Rs 12,00,000 =Rs 9,00,000 =Rs 9,00,000 =Rs 2,125,000
Faizabad near Ojari camp (quarterly) size 90*30 Commercial market (quarterly) size 60*30
Outside transport advertising
Print the METRO ads along with the product lines and features on the local public transport of Lahore Deawoo service at the rout no 10 and 16 and New khan services on route no 22. Four buses on each route Daewoo rate for 500 sq ft (quarterly) Total 8 buses on different routes New Khan rate for 500 sq ft (quarterly) Total 4 buses on different routes =Rs 1,56,250 =Rs 1,250,000 =Rs 6,8750 =Rs 2,75,000
We will send our representatives to the professionals, restaurants and hotels and large bakeries to visit our store and purchase the products from METRO for their uses in services. We also provide carriage facility to our key accounts.
METRO will organize the games, cooking and painting competition for the families of retailers and professionals and the passes will be given free on the shoppingof minimum of Rs 25000 per month. We set the budget of Rs 40,00,000 for the sponsorship program.
We will provide discounts on specific items such as grocery, clothes and shoes in the month of Ramadan. We will confine our profit margin from 3% to 1.5% just in Ramadan. We will introduce a sales promotion week after every two months in which we will drop our profit margin by 1%.
Caps T-shirts Flex Hangings / Mobile Cards Wall Clock Calendars Pads These items will be given to Customers on shopping.
QINGQI Rickshaw Scheme
We will launch a strategy regarding the carriage of goods because many retailers have the problem of transportation from the METRO to their stores. They hesitate to come here because they are in doubt that will there be any benefit after paying the freight? And sometimes they have fewer luggages while he/she have to hire the big cartage. For this purpose we will introduce the METRO owned Qingqi rickshaws which will be provided to the people at installment basis to give the employment opportunities to the society and the Rickshaws will charge Rs.12 for one kilometer distance from METRO. This not only will solve the problem of retailers but also provide jobs to the other people and this will also help in corporate image building of METRO.
Free consultancy to the retailers
For the purpose of societal marketing, METRO for the first time in Pakistan coming up with the free consultancy services for the retailers. If a person wants to open a business regarding the retail shops in his own area with the low initial capital, METRO consultants give them the complete idea, graphical 3D layout of the store and how he/she effectively run his/her business with the low capital. This not only facilitates the retailers but also helps METRO for their good and strong image and standings in the market. And ultimately these retailers will surely come to METRO due to the free society betterment services.
The layout of METRO cash & carry is very good and requires no recommendation.
METRO has adopted an excellent process in supply chain management and in costumer dealing. The process ensures that the quality of product remains high.
METRO has the basic strength of low prices with high quality. 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. Best location for such kind of big store and also covering many areas. Efficiently using the place and excellent layout. Sufficient parking and safety and security measures ensure the quality in every sector. Friendly and co-operative staff. Computerized data base system which helps both customer and METRO. Cafeteria in the building for the refreshment of customers.
Less awareness in Pakistan regarding cash and carry business. Although location for a big store is suitable but outside the city and not suit for all customers. No proper transportation for customers to carry their products far away. Limit of 3 persons on a single membership card Restriction of shopping minimum Rs 2000 Membership or subscription fees for cards. Shopping from METRO is much time consuming because the traveling and in store visiting time.
Growing market of cash and carry Expansion in major cities. Online shopping is much better option to save time Contracting with major hotels and restaurants. Proper METRO owned convene facilities.
Up coming stores like Wal mart and many others Poor law and order situation of Pakistan High inflation rate in Pakistan Instability of the country
Action and Control
Action and control is the basic part of the marketing audit that what are the problems you facing and how you tackle that. We analyze that why the retailers are not going to metro
Time consuming to visit Out side city (transportation)
online shopping Rickshaw scheme
Summarizing on the whole we have analyze maximum points which might be the resultants of failures and we have suggested the methods to rectify them in order to be efficient in every manner and hold its situation and be the market leader of the cash and carry business in Pakistan.
QUESTIONAIRE TO STUDY CONSUMER BEHAVIOUR TOWARDS "METRO"
We are doing a survey on "Metro cash & carry" .we would be grateful, if you could spare a few minutes to fill up this questionnaire.
1. Name: ________________________ 2. Age: _________ __________________ __________________
3. Occupation: 4. Location:
5. Monthly income: Below 10000 10000-20000 above 20000
6. From where you prefer to purchase?
Nearest wholesale store
Cash & carry
7. Have you ever visited Metro Cash & Carry?
8. If no then what is the reason? ___________________________________________________ 9. From where you hear about Metro?
10. Which cash and carry you prefer to visit? Metro Makro 11. Why do you visit it?
12. Do you want any type of services from this? If yes then specify!
________________________________________________________ 13. What do you say about the prices offering metro?
14. What do you say about the quality offering metro?
15. Are you satisfied with the packaging Yes No
16. What is the image of metro comes in your mind?
17. Any other comments and suggestion you want to give! ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
References Jim Blythe, 2003, Marketing Strategy, McGraw Hill & Co. Philip Kotler, 1995, Principals of Marketing, 11 th edition www.metro-cc.com www.google.com www.wikipedia.com www.metro.pk