Management-Report Karstadt

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.