Market Analysis: Metro AG's New Product Marketing in Czech Republic

This report assesses Metro AG's potential for introducing a new product in the Czech Republic, focusing on consumer behavior and market dynamics. It includes a SWOT analysis to evaluate Metro AG's strengths, weaknesses, opportunities, and threats in the Czech market. The report also features an STP (Segmentation, Targeting, and Positioning) analysis to identify target customer segments and effective positioning strategies. A TOWS matrix is used to develop strategic options based on the SWOT analysis. The report suggests that Metro AG consider fashion and accessories as a new product offering to expand its market reach, leveraging promotional activities to increase customer awareness and sales. Desklib provides students with access to similar solved assignments and study resources.

Running head: MARKETING A NEW PRODUCT
MARKETING A NEW PRODUCT
Name of the student
Name of the university
Author note

1MARKETING A NEW PRODUCT
Executive summary
The report aims at understanding the different aspects of the consumer behavior of Czech
republican market for the expansion of the venture undertaken by metro AG. The proper
understanding of the requirements of the target customers will be helping the organization in
understanding the different issues and challenges that they might face while operating in the
market. The report enumerates a SWOT analysis of the organization, which will help in the
understanding of the strengths and weaknesses of the organization. It will also enumerate the
threats that might be faced by the organization while operating in the market. Therefore, the
purpose of the report is to understand the feasibility of the organization to operate in the Czech
markets.

2MARKETING A NEW PRODUCT
Table of Contents
1. Introduction..................................................................................................................................3
1.1 Purpose of the report..............................................................................................................3
1.2 Background of the nation, Czech Republic...........................................................................3
1.3 Background of Metro AG......................................................................................................4
2. SWOT of the company while operating in Czech Republic........................................................5
2.1 Aspects of the SWOT............................................................................................................6
3. STP analysis of the market..........................................................................................................7
4. TOWS matrix.............................................................................................................................10
5. New Product development.........................................................................................................12
6. Conclusion.................................................................................................................................15
References......................................................................................................................................16
Appendix........................................................................................................................................17

3MARKETING A NEW PRODUCT
1. Introduction
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.
1.1 Purpose of the report
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.
1.2 Background of the nation, Czech Republic
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

4MARKETING A NEW PRODUCT
(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.
1.3 Background of Metro AG
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).
Price 16.05 EUR
Earnings per share 1.15 EUR
Equity per share 8.39 EUR
Net Profit (mn) 414 EUR
Total Equity (mn) 3,020 EUR
ROE 13.70%

5MARKETING A NEW PRODUCT
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).
2. SWOT of the company while operating in Czech Republic
Metro AG SWOT analysis
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)
Opportunities Threats

6MARKETING A NEW PRODUCT
 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
 Rising labor costs in the international
markets (Annualreports.com. 2018)
 Uncertain economic condition in the
international markets
2.1 Aspects of the SWOT
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

7MARKETING A NEW PRODUCT
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.
3. STP analysis of the market
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.

8MARKETING A NEW PRODUCT
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.

9MARKETING A NEW PRODUCT
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.
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.
4. TOWS matrix
Internal factors
External Strengths
 Largest retail
Weaknesses
 Increase in the

10MARKETING A NEW PRODUCT
factors 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
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)
Opportunities
 Growth and
expansion in the
(SO)
Wide scale marketing of
the products to promote
(WO)
To make a decrease in the lead
time through the replacement of

11MARKETING A NEW PRODUCT
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
sales of the organization
in the Czech markets
the old machinery by new and
advanced machinery that will
help the organization in
optimizing the outputs
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