Presented by :AreeshaSadiqAli Javed

METRO Cash & Carry

INTRODUCTION TO METRO: Unique wholesale business-to-business model of METRO

Cash & Carry is focused only towards professional customers such as hotels, restaurant, and caterers as well as small and mid-sized retailers. a leading international player in self-service wholesale

METRO Cash & Carry offers this target group a greater efficiency thus helping them to improve their business, By offering them

-A one-stop solution for their purchases-To improve their assortment-By offering them high quality products at reasonable prices-By offering them a consistent supply source.

METRO offering

Offers an exceptionally wide range of high-quality products under one roof

The assortment includes up to 20,000 items in the food range and 30,000 items in the nonfood sector.

Is a reliable partner for more than 20 million professional customers worldwide.

Gives a clear competitive advantage in their own markets.

Customers select their own items and take them with them to their restaurants and shops.

Company History

METRO Cash & Carry is a leading in self-service wholesale and operates more than 600 outlets in 29 countries.

Dealing With 100,000 employees worldwide, achieved sales of € 31.7 billion in 2007, generating 50 percent of the total sales.

Is the top-selling sales brand of the METRO Group.

The company offers to retailers a high level of assortment competency both in food and nonfood as well as attractive wholesale prices.

METRO in Pakistan

Announced its operations in Pakistan in January 2006.

It has established itself as a potential market leader in wholesale.

Pakistan has opened its first store in the city of Lahore in October 2007.

The company’s country head office is in Lahore and currently employs over 400 people in two offices.

The company donated €100 000 in January 2006 towards President's Earthquake Relief Fund.

Issues:Tactical sales issues & queues

They have to change their inventory after every 14 days on Thursdays.

They need very active workforce which shifts inventory from the top into the shelf space for this.

On the cash counter they face problem of queues.

Sales force motivation and activate participation is shrinking.

Giving sales force up to date product knowledge in shorter span of time is a problem.

 

Cont…Positioning or segmentation Issue

 Metro position it self as a wholesaler brand in Pakistan but people who don’t have retail stores they also come here and do shopping , the target only businesses.

Competition’s Prices issues  Metro prices are less than makro in order to

maintain prices metro face problem during setting customer prices because customer select those whole sale markets who offer maximum discounts on quantity and transportation.

External and Internal AnalysisKey success Factors;  -Focus on professional customers 

-One-stop shopping -Efficient store concept designed for

professional needs -Advanced customer service -Enhanced customers’ competitiveness-Excellence in supply chain and quality

management-Strengthening of local suppliers-Development of national infrastructures-Career opportunities-Internationally transferable concept

Competitive analysis:

There is one major competitor in Pakistan’s whole sale industry and that is Makro.

Both use News papers, internet, pamphlets and book lets because it contains detailed introduction about the business and its products.

Both Metro and Makro are in a wholesale business.

Both Spent not much on Marketing campaigns.

Metro believes in the concept of in source while Makro outsources its food production

 

Cont…. Metro has trained staff while Makro has just hired sales

person.

They both have teams for customer service

Metro has proper shelf placement of products whereas Makro does not

Metro follows the same layout all over the world and Makro does not.

Metro places its inventory in its store and warehouse, while Makro places inventory only in store it does not has any warehouse

Cont…. Metro hire logistics for transportation

Metro focus on proper shelf placement of products while Makro has not practicing this.

SWOT Analysis of Metro:

 Opportunities: Changing trend of shopping, people prefer to

go the place where they can find maximum variety under one roof.

Metro is planning to open new stores at different locations.

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

People are coming more towards hygienic food

Cont…

Threats: Launch of Wal-Mart in Pakistan. Inflation Government instability Terrorism

   

Strength:

Largest whole seller platform. They are selling few products with their

own brand name. Metro don’t spend money on

advertisements through electronic media. Metro is operating their business

according to the buying pattern of the customers.

Metro Values its Employees and Customers.

Defined format adapted to local market needs

Efficient and low-cost operations

Weakness

Not providing goods on credit bases. Location of the store is quite far away. Only deals in wholesales. Relatively poor security check and balance on

few items. High priced imported items.

METRO DEFINING QUALITY Value for price paidPeople who purchase products from Metro feel that they

charge the right amount for goods that they usually buy.

 Support servicesMetro gives warranty depending on the type of product

purchased. Example it gives warranty on its electronics.

 Psychological It has a good ambience, staff is friendly &

responsive

Sales management practices

At the heart of the Company’s strategy are customer focus, positioning and expansion along with efficient processes and structures.

Objective is to boost the value of METRO GROUP in the long term by means of profitable, sustainable growth.

Strategies ;The Company’s management culture encourages each individual employee to act autonomously.

As decentralized as possible, as centralized as necessary’ is the guiding principle.

Cont… In 2009, METRO GROUP launched the efficiency and

value-enhancing program me Shape 2012 to tap existing potential for further growth within the Group.

With this scheme, the Group hopes to improve

earnings by €1.5 billion per annum from 2012 onwards. Cost cutting will account for some €800 million of this.

METRO GROUP aims to generate the remainder by taking steps to increase productivity and improve customer relations, Shape 2012 had a tangible effect on profits even in the first half of 2010.

Personal selling

Personal selling involves direct relationships between the seller and the prospect or customer.

Personal selling can be defined as a two-way flow of communication between a potential buyer and a salesperson that is designed to accomplish at least three tasks: (1) identify the potential buyer’s needs; (2) match those needs to one or more of the firm’s products or services; (3) on the basis of this match, convince the buyer to purchase the product.

Cont…

Steps of SalesP± Positive state of mind O± Open discussion U± Understand customer needs C± Close the discussionH± Handshake

Personal selling techniques: Personal selling function depends partially on the

nature of the product ,goods that are new and different, technically complex or expensive require more personal selling effort.

The salesperson plays a key role in providing the consumer with information about such products to reduce the risks involved in purchase and use.

Metro have active sales force standing in each row to help customer.

Company is publishing the Metro magazines of new items.

Cont…. Pre-approach (Preparing) Review key decision makers especially for

business to business. assess credit histories prepare sales presentations Identify product needs.

Helps present the presentation to meet the prospects needs.

Approaching the Customer

Sales force objective is to strive to develop a relationship rather than just push the product.

First impression of the sales person is Lasting and therefore important, Sales force wore proper uniform. Neatness and cleanliness important.

Sales force use referrals, cold calling or repeat contact.

Making the Presentation

Metro try to get the prospect to touch, hold or try the product.

Sales force is trained so they are able to change the presentation to meet the prospect needs

Overcoming Objections Seek out objections and address them. Anticipate and counter them before the prospect can raise

them. Try to avoid bringing up objections that the prospect would

not have raised. Price objection is the most common

Cont…. Need to provide customers with reasons for the

prices , build up the value before price is mentioned

Must be convinced of price in sales force  mind before sell to customer.

Get budget info. Before try to sell, must know what customer want,

must sell service on top of product to create value.

Must know value of product, provide warranties etc.

Closing

Use trial closes, Metro ask about financial terms, preferred method of delivery. 20% sales people generally close 80% sales. The following are popular closing techniques: Trial Close (Minor decision close) Assumptive close (Implied consent

close) Urgency close Ask for the sale close

Following Up

Metro follow up sale, determine if the order was delivered on time, installation OK etc. Also helps determine the prospects future needs. Accomplishes four objectives: customer gain short term satisfaction referrals are stimulated in the long run, repurchase prevent cognitive dissonance

Benefits to metro:

 From customer’s point of viewi. Personal selling provides an opportunity to the consumers to know about new products introduced in the market. -It informs and educates the consumers about new products.ii. It is because of personal selling that customers come to know about the use of new products Business Studies in the market. -The sellers demonstrate the product before the prospective buyers and explain the use and utility of the products.

Cont….iii. Personal selling also guides customers in

selecting goods best suited to their requirements and tastes as it involves face-to-face communication.

iv. Personal selling gives an opportunity to the customers to put forward their complaints and difficulties in using the product and get the solution immediately.

Relationship selling:

Metro move beyond functional relationships, they develop strategic partnerships or strategic alliances.

These are long-term, formal relationships in which both parties make significant commitments and investments in each other in order to pursue mutual goals and to improve the profitability of each other.

Marketing managers and sales managers must make some very important decisions regarding how the sales fore should be organized.

Continuous Improvement & Metro

Proper shelf placement & training of staff Metro trains its staff by two process:

ProcessSystem

  -It has its own in-house training organization called HOT (House of Training)

-They also send their staff abroad for proper training

-They use “train the trainer” approach  Team Approach  They have a team of more than 300 employees

working as a team

Service departments support the sales departments in their vending activities:

 

Customer entrance and after sales services: Welcoming customers check & issue customer cards at the entrance. Sales force is dealing with goods returns and After Sales Service, Customer Care.

 Customer manager: Acquiring new customer and visiting

registered customers. Human Resources: Manager is dealing with all human

resources topics for the stores staff. Decoration and maintenance : Settling of demonstration

furniture, display material and signage for the presentation of goods

Recruiting and Selecting Salespeople

Metro have assessment centers--intense training environment that places candidates in realistic problem settings in which they give priorities to their activities, make and act on decisions.

Recruitment should be a continual activity aimed at reaching the best applicants. Applicants chosen that most match the demographics of the target market

Compensating Sales People To attract, motivate and retain sales people that

facilitate and encourage good treatment of the customers.

Metro try to understand personalities of sales people. Strive for proper balance of freedom, income and

incentives. They know the Need to determine the best level of

compensation required, and the best method of calculating it. Straight salary straight commission (selling insurance)--single percentage

of sales or sliding rate Combination plan

Motivation

Motivating Sales PeopleProviding systematic approach, must

also satisfy non-financial needs: Job security Working Conditions Opportunities to succeed

Forecasting

An S-curve pattern implies that product sales initially grow at a rapid rate, then the rate of growth tapers off, and finally declines with time.

Historical analysis of product sales curves indicates this is one of the most common, if not the most common pattern of new product sales over time

Cont…. S-curve the cumulative percentage of the

potential market (i.e., total number of adopters) that has made an initial purchase of a products.

As move up and to the right of the S-curve in look at the rate of adoption of a new product over time by first time purchasers, initially have the innovators buying the product, then early adopters, and so on as if move up the S-curve, until you get to the point of market saturation.

displays S curves developed from alternative types of product sales forecasting models.

Shows the time of adoption of buyers for the product. If the buyer is to the left of the vertical line in their time of adoption they are innovators, early adopters or part of the early majority, if to the right they are the late majority or the laggards.

Evaluating Sales force Performance:

To ensure that compensation and other reward disbursements are consistent with actual salesperson performance.

To identify salespeople that might be promoted.

To identify salespeople whose employment should be terminated and to supply evidence to support the need for termination.

Diagnosis and Alternatives Metro is very well serving their customer.

Analyze that why the retailer are not going to metro.

The issue the customer are facing is time consuming visit, outside city (transportation) .

The corrective action need to take like online shopping and rickshaw scheme that will help retailers to transport goods to metro.

Recommended Sales Strategy

 To get the long term benefits Metro need to focus on Relationship building strategy.

Like consultancy service for the retailers. Those wanted to open a business regarding the

retail shop with the low initial capital , Metro consultant give them the complete idea, graphical layout of the store how they can effectively run with the business with low cost .

Not only facilitate retailer but Metro will develop partnership with many retailers, Help Metro with goods and strong image and standing in the market

CONCLUSION:

Metro Cash & Carry Pakistan has proved itself as to be a company for investment.

Taking in hand flag of satisfaction Metro are heading towards professional advancement and competency by providing high quality services to customers

Prove to be a successful company from investment point of view