According to the Financial Times, one of Europe’s largest department store and mail-order group KarstadtQuelle AG may have to dismiss about 20,000 to 30,000 of its employees and to sell approximately 77 of its smaller warehouses as well as all retail chains including SinnLeffers, Wehmeyer, Runners Point and Golf HousE.
The over-the counter segment of the KarstadtQuelle AG dropped by 5 percent from 7.3 in 2002 to 6.9 billion Euro in 2003 which is under performing its sector. In the year 2003 the group generated a total sales of 15.3 billion Euro with 100,956 employees and 2,621,4 thousand square meter sales space.
As the current marketing weakness concerns the over-the-counter retail which is one out of KarstadtQuelle AG’s four segments, this management report focuses on the warehouses which are under the legal unit called Karstadt AG:
The report has the aim to identify and describe the customers of the Karstadt AG, to discuss the marketing strategy of that organisation and to analyse a current marketing weakness within the KarstadtQuelle AG’s operations. Finally it provides a plan how that marketing weakness can be resolved. It applies a variety of different marketing concepts and tools such as customer segmentation, Ansoff-matrix, marketing mix, SWOT analysis, and STEP analysis.
Finally, the research and the analysis showed that the customers of Karstadt AG are all citizens of Germany from all classes, all age groups, all social milieus. Its overall marketing strategy is to give the “customers what they want”.
The marketing weakness of KarstadtQuelle AG is the usage of the classical warehousing concept which has reached the declining phase of its life cycle, targeting a disappearing customer segment. One solution would be the transformation of the classical warehouses in Shopping-Centres with a large number of specialised shops.
Table of Contents
1 Company Profile
2 Customer Analysis
3 Analysis of the Organisation’s Marketing Strategy
3.1 Outline: Marketing Mix
3.2 STEP Analysis
3.3 SWOT Analysis
4 Analysis of a Marketing Weakness
5 Alternative Solutions to solve the Marketing Weakness
Objectives and Topics
The report aims to identify the customer base of Karstadt AG, evaluate the company's existing marketing strategy, and address its current marketing weaknesses. It provides a strategic plan for long-term resolution by leveraging modern marketing analysis tools.
- Detailed consumer market segmentation and demographic analysis
- Strategic review using Marketing Mix, STEP, and SWOT frameworks
- Identification of structural weaknesses in the traditional warehousing business model
- Development of a shop-in-shop concept to transition from generalist retailing to integrated specialty services
Excerpt from the Book
Analysis of a Marketing Weakness
The apparel and textiles market in Germany is predicted to have an annual growth rate of 1.5 percent from 64.4 billion dollar in 2002 to 69.5 billion dollar in 2007 (Datamonitor, 2003). Karstadt’s largest competitor, the Metro Group could increase its sales from 43 billion Euro in 1999 to 53 billion Euro in 2003 (Metro Group, 2003). The economic development of its warehouses under the brand Kaufhof was better than the performance of the Karstadt Warenhaus AG. Also specialised retailers such as H&M are still growing – turnover increased by 6 percent in 2003 (H&M, 2003). On the other hand, Karstadt’s sales of the over-the counter segment dropped by 5 percent from 7.3 in 2002 to 6.9 billion Euro in 2003 (KarstadtQuelle AG, 2003). During the first half of the year 2004, OTC sales declined further by 6.8 percent (KarstadtQuelle AG, 2004).
The first parts of the management report showed that KarstadtQuelle AG has several weaknesses (see chapter 3.3) but there is one major marketing problem which is threatening the survival of the group as well as the workplaces of 100.000 employees (Financial Times, 2004).
The marketing weakness of KarstadtQuelle AG is the usage of the classical warehousing concept which has reached the declining phase of its life cycle, targeting a shrinking customer segment. This statement is underlined by retail experts such as Maximow (2004) and Prof. Zentes (2004) as well as consultants of McKinsey (2001).
Summary of Chapters
Company Profile: Overview of the KarstadtQuelle AG business segments and the operational structure of its subsidiary, Karstadt AG.
Customer Analysis: Identification of Karstadt’s consumer base through demographic, geographic, and psychographic segmentation, considering the impact of the evolving German population.
Analysis of the Organisation’s Marketing Strategy: Discussion of Karstadt's current approach using the 4 Ps, STEP factors, and a SWOT analysis to identify core competencies and strategic positioning.
Analysis of a Marketing Weakness: Diagnosis of the decline in the classical warehousing model and the failure to remain competitive against specialized retailers.
Alternative Solutions to solve the Marketing Weakness: Strategic proposal to transform traditional department stores into adventure-oriented shopping centers utilizing a shop-in-shop system.
Keywords
Karstadt AG, Marketing Strategy, Retail Management, Customer Segmentation, SWOT Analysis, STEP Analysis, Classical Warehousing, Shop-in-Shop System, Brand Loyalty, Market Positioning, Multi-Channel Strategy, Consumer Behavior, Department Store, Retail Transformation, Competitive Advantage
Frequently Asked Questions
What is the primary focus of this report?
This report examines the market position and marketing strategy of Karstadt AG, specifically focusing on identifying and solving the structural marketing weaknesses within its traditional department store operations.
What are the main thematic areas covered?
The report covers customer demographics, internal and external market influences (STEP and SWOT), and strategic recommendations for retail transformation in the German market.
What is the central research question?
The research seeks to determine how Karstadt AG can overcome the decline of the classical warehousing concept to restore profitability and relevance in a changing consumer landscape.
Which analytical methods are employed?
The analysis utilizes professional marketing frameworks including the Marketing Mix (4 Ps), STEP analysis (Social, Technological, Economical, Political), SWOT analysis, and consumer segmentation models.
What topics are discussed in the main body?
The main body details the current state of Karstadt's business, its customer demographics, environmental threats, the obsolescence of the generalist retail model, and the potential for a shop-in-shop concept.
Which keywords best describe this work?
Key terms include Retail Transformation, Customer Loyalty, Shop-in-Shop, Marketing Strategy, and Department Store management.
Why is the "classical warehouse" model considered a weakness?
Retail experts and internal assessments indicate the model is in the declining phase of its life cycle, failing to provide the specialized experience modern customers demand, thus leading to market share loss.
What solution does the author propose for Karstadt?
The report recommends transitioning into an "adventure-oriented" shopping center model, where the department store space is subdivided into specialized, branded shops to improve attractiveness and competitiveness.
- Arbeit zitieren
- Volker Schmid (Autor:in), 2005, Management-Report Karstadt, München, GRIN Verlag, https://www.hausarbeiten.de/document/38122
