Company Profile Media Markt: Europe’S Number One Consumer Electronics Retailer

Company profile Media Markt: Europe’s Number One consumer electronics retailer More than 800 stores with sales floors measuring up to 10,000 square meters in 14 countries, an average assortment of 45,000 articles and an integrated online offering – these are the key data of a business enterprise whose extraordinarily dynamic growth has kept the industry holding its breath for more than 30 years. Innovative, customer orient- ed and highly competitive, Media Markt is continually enhancing its position as the number one consumer electronics retailer in Europe. "Ich bin doch nicht blöd" (Hey, I'm no fool), the company’s famous advertising slogan, is known to millions of customers in Germany and across Europe – in their respective national language, of course. “Ik ben toch niet gek“ in Dutch, “Yo no soy tonto“ in Spanish and “Nie dla idiotóv“ in Polish, for example. The swirl in Media Markt’s logo is char- acteristic of the whole company. The permanently low prices and attention-grabbing advertising is constantly causing a stir within the industry. Media Markt’s product portfolio is enormous: from smartphones to tablets, from washing machines to fully-automated coffee machines, from sound systems to curved screen TVs – customers will always find the very latest brand-name products that the consumer electronics, communications and electrical appliances in- dustries have to offer at their local Media Markt stores. In almost all the countries in which Media Markt operates, this offering is supplemented by online shops that are closely linked with the conventional stores. This allows customers to decide, for example, whether they want to have a product delivered to their home or whether they want to pick it up at their local store – regardless of whether they made their purchase at a brick-and-mortar store, online Page 1 of 5 or using a mobile device while on the go. By integrating e-commerce and conventional retailing, Media Market is transforming itself into a true multichannel retailer and can thus profit from the increasing growth in online commerce. Innovative business concept The company’s success story was launched in 1979 in a commercial zone in Munich. The basic concept created by the company’s found- ers Helga and Erich Kellerhals, Leopold Stiefel and Walter Gunz, which is as valid today as it was then, involved a large-scale electrical goods store located outside of the city center and offering sufficient parking space for people wanting to take their purchases home with them. A novelty was the wide range of the latest brand-name products ready for demonstration, because at that time you could only find smaller single-line stores and department store departments offering a limited range of products. Media Markt not only offered customer advice but also an extended portfolio of after-sales services – from repair services to the delivery and installation of devices. Revolutionary at that time was the guarantee of permanently low prices combined with a money-back guarantee if a customer found a better offer at a com- petitor. The novel business concept was an immediate success and the word soon spread. Unparalleled success Driven by the unexpected success of the first Media Markt store, addi- tional stores were opened in the years that followed, first in Bavaria and later throughout Germany. This innovative store concept caught the attention of Kaufhof Warenhaus AG. In 1988, it acquired a 54- percent stake in the holding of the Media Markt stores, which in turn took over the Saturn chain two years later. Since that time, Media Markt and Saturn have been managed as independent brands under the roof of Media-Saturn-Holding GmbH, which is headquartered in Page 2 of 5 Ingolstadt. As part of Kaufhof Holding AG, Media-Saturn-Holding GmbH later also became part of the METRO Group. This cleared the way for increased expansion which, in 1989, also took the company to other European countries. Today, Media Markt stores are attractive shopping venues for millions of customers in Germany, Austria, Italy, Switzerland, Hungary, Poland, Spain, the Netherlands, Belgium, Por- tugal, Greece, Sweden, Russia and Turkey. The number of stores cur- rently totals 800, of which 262 stores are located in Germany. Integrated sales During the course of its expansion, Media Markt is also tapping into new sales channels, especially online retailing. With its multichannel strategy, Media Markt aims to ensure that customers can buy products wherever they want – online and offline. This means that customers can choose for themselves whether they want to purchase products in Media Markt's online shop or at their local Media Markt store. Customers buying products online can pick up their purchases at their local store the very same day, subject to availability. They can also take advantage of the services offered in the store for the products purchased online. Media Markt's multichannel approach com- bines the advantages of fixed-location retailing and those of online retailing under the roof of a trusted brand. The price strategy supports the integration of these sales channels: Instead of spectacular short- term special offers, Media Markt offers its customers long-term clear, fair and reliable prices on all sales channels. Decentralized organizational structure One basic principle behind the success enjoyed by Media Markt is not visible to the customers, although they strongly benefit from it. Even though all the stores maintain a uniform brand identity, they do not form part of a centrally controlled network of stores. The majority of Media Markt stores are independent companies whose local manager Page 3 of 5 holds up to ten percent of the shares. Moreover, he has a great deal of freedom to decide and act as he sees fit, for example, with regard to the product portfolio. The underlying philosophy is "All business is local": The success of each Media Markt store is due to the greatest possible degree of customer proximity. A local manager who is re- sponsible for his own store can adapt the range of products he offers to the needs of his specific customers faster and better than the manager of a retail outlet who has to wait for instructions from the head- quarters. Furthermore, as a businessman and part-owner, he identi- fies to a much greater extent with his store and has a vested interest in its success. Motivated employees Another key factor in Media Markt’s success and an important part of the company’s corporate culture is also the great appreciation it shows to its employees. The company encourages individual respon- sibility and an entrepreneurial mindset. In addition, the company offers attractive career prospects and further training opportunities. This is why Media Markt is highly popular as an employer and training company. The high degree of satisfaction that employees feel and the great extent to which they identify with the company are reflected in a very special kind of team spirit. This also has a positive impact on the way in which they deal with customers: Media Markt stores are exem- plary in terms of friendliness and quality of their customer advice and service. Customer magnet Media Markt has been enjoying growing popularity for over 35 years now. This is particularly apparent when a new store is opened or there is a special sales promotion – events that draw huge crowds of customers. The reason for this is not just the attractive prices but rather the entire marketing mix, which ranges from attention-grabbing adver- Page 4 of 5 tising to the appeal and diversity of the product portfolio. The adver- tisements enjoy cult status and have been key to helping the Media Markt brand achieve a level of name recognition in Germany of 96 percent. The enormous range of extremely attractive products is also very appealing. State-of-the-art consumer electronics and tele- communications equipment offer new and fascinating possibilities and play an increasingly important role in leisure activities. No less attractive are the modern household appliances such as fully-automated coffee machines and refrigerators for storing wine that cater to increasingly sophisticated customer demands. The extremely diverse selection of products at Media Markt almost make the stores feel like electronics trade fairs, where customers can find all of the very latest products, put them to the test, and compare them. Ever since the company was founded, Media Markt stores have always made a point of offering permanently low prices. This has had a real and lasting impact on the customers and provides a firm foundation for their trust. Edition: December 2015 Kontakt: Media Markt Unternehmenskommunikation Eva Simmelbauer Wankelstraße 5 D-85046 Ingolstadt Tel.: +49 (841) 634-1111 Fax: +49 (841) 634-2478 E-Mail: [email protected] Page 5 of 5 .

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