Doing Business In - International Franchise Association

sales. The cadre of agents has expanded rapidly in recent years. U.S. firms will find
agents to be very strong technically; however, many will need help developing marketing
and customer service strategies. Margins for distributors are similar to those prevalent
in Western European countries. Field sales representatives usually earn a base salary
of about 30,000 crowns ($1,230) per month plus commission (anywhere from 5 to 10
percent depending on the product), and travel benefits (company car, travel allowance).
Prague's winding cobblestone streets are lined with tiny shops -- groceries, pharmacies,
music stores, clothing boutiques, and bookstores. These small shops face stiff
competition from American-style supermarkets, European "hypermarkets," and shopping
malls with a broader selection, lower prices and extended weekend and evening hours
(increasingly, 24-hour operation). Swedish IKEA, British TESCO, and German OBI,
Hornbach and Baumax, among others, operate multiple locations throughout Prague
and have expanded throughout the nation. At this time, no large U.S. retailers are
present in the market.
Selling Factors/Techniques Return to top
Having a sales force that speaks the local language (Czech) is essential to success in
the market. In order to also compete in the European market, this same sales force
should have employees that can communicate in English – speaking the local language
(French, German, Spanish, Italian, Russian, etc.) is of course an advantage.
Ideally, product literature should be in Czech, and it is advisable to also have some
copies in English, as there are many international firms located in Prague with non-
Czech speaking decision makers. A dual Czech/English brochure may be the most
efficient way of handling this scenario. Any measurements used within the literature
should be in metric. In addition, product labels must be in Czech. Your local
partner/distributor can assist in this process.
As in most markets, companies doing business in the Czech Republic should have a
website in Czech, English and possibly a third language (German). Having a website
gives legitimacy to a company’s presence in the market and plays an increasingly
important role here in attracting potential customers.
Electronic Commerce Return to top
While some of the Czech consumers still do not regularly shop online, interest in ecommerce
is growing and increasing numbers of Czechs are surfing – and buying - on
the Web. During 2007, e-commerce in the Czech Republic grew by more than 17%,
reaching almost $464.3 million in B2C sales and $351.2 million in B2B. The number of
Internet users with e-shopping experience currently exceeds 305,600240,000 and rose
steadily in 2007. The gap between end-use procurement and process-use e-commerce
narrowed significantly last year, and the former is now only slightly ahead.
A number of factors have supported this growth. Credit card use is on the rise, and
lower telecommunication tariffs have prompted more Czech consumers to get online. In
2004, Ceska Sporitelna, a major Czech bank, began providing secure e-commerce