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Introduction
Germany is suffering from its worst economic crisis since the Weimar republic, a period of controversial labour welfare (Hartz IV)[1] and health[2] reforms. The negative downturn of the German economy has been triggered by several factors namely, the enlargement of the European Union, the unification of Germany, rise in incidence of unemployment and the introduction of the Euro, which has been cheekily named "Teuro"[3] .
Within a short period, German consumers began to feel uneasy about the future and consumer spending started to dip. Suddenly, consumers started to seek ways of reducing cost in order to save. This reflected in the annual household savings figures, which has increased by 25 per cent since 2000[4] . The situation made product pricing to become a key factor in the purchase decision process and many firms lost significant proportion of their market shares.
Several attempts have been made by firms to redress this problem via the introduction of various marketing communication strategies (i.e. sales promotion, media advertising, public relations, exhibition etc). Yet there has been no significant improvement in sales levels. Only a few German based firms within the retail industry have been able sustain sales given their ability to deploy the Geiz-ist-Geil [5] , a German terminology meaning stinginess is cool.
Against the backdrop of the aforementioned, this paper attempts to examine how a few German firms have been successful at sustaining sales - and this shall be addressed in five sections. The first section examines various literature relating to marketing strategy and the next section attempts to identify a suitable methodology for addressing the issue under investigation in this study. The following section discusses the nature of data, how it is collected and analysed. The final section makes recommendations, identifies future research direction and concludes the study.
Objectives of paper:
to understand how Saturn and MediaMarkt, two electro-goods firms that belong to the Metro Group, have flourished during this period of "Geiz-ist-Geil " consumer behaviour;
to examine why the Karstadt chain of department stores is on the brink of collapse, despite being an icon on German high streets; and
to suggest possible future strategic paths for the firms.
Literature review
Marketing strategy is any approach drawn for the successful achievement of a firm's overall...