The 'Made in Germany' Champion Brands

Nation Branding, Innovation and World Export Leadership

Ugesh A. Joseph

• Publisher: Routledge
• Year: 2016
• Print ISBN: 9781409466468
• eBook ISBN: 9781317025023
• Topic: Business
• Subtopic: Business General
• Index: Business

Germany's economic miracle is a widely-known phenomenon, and the world-leading, innovative products and services associated with German companies are something that others seek to imitate. In The 'Made in Germany'Â' Champion Brands, Ugesh A. Joseph provides an extensively researched, insightful look at over 200 of Germany's best brands to see what they stand for, what has made them what they are today, and what might be transferable. The way Germany is branded as a nation carries across into the branding of its companies and services, particularly the global superstar brands - truly world-class in size, performance and reputation. Just as important are the medium-sized and small enterprises, known as the 'Mittelstand'. These innovative and successful enterprises from a wide range of industries and product / service categories are amongst the World market leaders in their own niche and play a huge part in making Germany what it is today. The book also focuses on German industrial entrepreneurship and a selection of innovative and emergent stars. All these companies are supported and encouraged by a sophisticated infrastructure of facilitators, influencers and enhancers - the research, industry, trade and standards organizations, the fairs and exhibitions and all the social and cultural factors that influence, enhance and add positive value to the country's image. Professionals or academics interested in business; entrepreneurship; branding and marketing; product or service development; international trade and business development policy, will find fascinating insights in this book; while those with an interest in Germany from emerging industrial economies will learn something of the secrets of German success.

CHAPTER 1
Branding and the ‘Made in Germany’ Brand: A Perspective

The image and reputation of countries, like cities and regions of the world, have a process similar to that of companies, products and services. All places have what might be called their brand images. But the process of branding them is still subject to academic and practitioner debate.

Today, with the state of globalisation, the world is one huge, diversified market. What this means to each of those countries/places and regions is that they need to compete for their share of consumers, industrial or other, for their products and services. They must compete to attract tourists, investors, entrepreneurs, skilled labour and students. They must vie for their share of international, sporting and cultural events and, finally, they need to get positive attention and respect from the international media, people of other countries and their governments.

Before we dwell on the specific case of Germany, it would be worthwhile to go through a couple of definitions with relation to a ‘brand’ and a ‘nation brand’. According to P. Doyle in The Marketing Book, ‘… a successful Brand is a name, symbol, design, or some combination, which identifies the ‘product’ of a particular organisation as having a sustainable differential advantage’. (Doyle)

On the other hand, Lynch and Chernatony define brands, ‘... as clusters of functional and emotional values that promise a unique and welcome experience between a buyer and a seller’. (Lynch)

While Keith Dinnie, in his book, ‘Nation Branding: Concepts, Issues, Practice’, states that, ‘The Nation Brand is defined as the unique, multi-dimensional blend of elements that provide the nation with culturally grounded differentiation and relevance for all of its target audiences’. (Dinnie)

According to O’Shaughnessy and Jackson, ‘The image of a nation is so complex and fluid as to deny the clarity implicit in a term such as brand image; different parts of a nation’s identity come into focus on the international stage at different times, affected by current political events and even the latest movie or news bulletin’. (O’Shaughnessy)

Illustrative of this is the case of Germany. After the 2006 Football World Cup celebrations, the internal and external image had markedly changed for the better – in terms of perception by a general audience – to a place that was open to visitors, celebration and enjoyment.

The Football World Cup brought out the best in the German psyche and Germans emerged as a fun-loving, friendly people in contrast to the previous stereotype of being serious and humourless. In fact, the event was a pleasant revelation to the Germans themselves, as they embraced the positive vibe. The degree of enthusiasm, tolerance, warmth and openness during the four-week-long football carnival was a surprise to all. Old clichés and stereotypes were dropped and Germany earned a better, more upbeat and fairer image. Even without these events, Germany needs to maintain this positive energy to help maintain its brand equity in the long run, because it is important to remember that a nation is also perceived from the sum of its individuals.

Germans, generally, tend to be rational and direct in their communication style and punctual and orderly in their home and work life. For the most part, they are meticulous and long-term planners who value reliability in their business relations.

In an annually conducted global survey known as the Nation Brand Index (NBI), Germany scored significantly and was repeatedly ranked higher after the football tournament. Around 20,000 adults in 20 different countries were asked to assess the country’s image and reputation in terms of culture, exports, politics, its people and its attractiveness to tourists, immigrants and investments. Germany was named the world’s ‘Best Overall Brand’ among 50 countries measured in 2008.

The NBI founder, Simon Anholt is reported to have said, ‘The NBI is a report card for countries, measuring the world’s perception of each nation as if it were a public brand. Within the top 10 most positively perceived countries, the ranking reveals a strong correlation between a nation’s overall brand and its economic status’. (www.gfk.com/group/press) This explanation underscores the fact that a nation’s products, services, corporate brands and their cumulative success are an integral part of a nation’s brand.

In a similar tone, Senior Vice-President and Director of the NBI study at Gfk Roper Public Affairs & Media, Xiaoyan Zhao, states, ‘Much as a commercial brand relies on a favourable public opinion to sell products, countries depend on their reputation and image to bring in tourists, business, investment and other facets important to a nation’s financial strength and it’s international standing’. (www.gfk.com/group/press)

The parallels between the process of corporate branding and nation branding lie in the complexity and multifaceted nature of the two entities, given the multiple target audiences that need to be catered to.

According to Ludlow Schmidt, co-founder of Chris-Ludlow Consultancy, ‘Corporate Brands make a nation, but I’m not convinced nations themselves can be brands’.

While Simon Anholt states, ‘… But national branding is difficult because countries are “complex and contradictory”’. (Booth)

Nevertheless, there are an increasing number of countries around the world believing and practising nation-branding in order to differentiate themselves from other nations and improve their economic performance, especially in relation to tourism, exports and investments.

Accordingly, Simon Anholt, while contributing with a practitioner’s insight in Dinnie’s book ‘Nation Branding’, has said, ‘… Yet, what really seems to make a difference to the images of countries is when they become dedicated to developing new ideas, policies, laws, products, services, companies, buildings, art and science. When those innovations prove a few simple truths about the country they come from, reputation starts to move; the, place produces a buzz, people pay attention and prepare to change their minds’. (Anholt)

The German government had initiated just such a campaign in 2004 on innovation with an Internet portal for information and various events, presentations, lectures, etc., with the slogan ‘Partner for Innovation’, the objective being to establish cooperation between all relevant institutions in business, politics, science and culture to initiate innovation processes. This is essentially targeting experts, decision-makers, young scientists, creative people and members of the ‘Mittelstand’ or the small and medium-sized enterprises in Germany.

A similar campaign, started earlier and still in existence, touted Germany as ‘The Land of Ideas’ and helped to strengthen and maintain Germany’s reputation both within the country and abroad. This campaign focuses on its past and present achievements in science and culture, and as a land of poets, thinkers, musicians and scientists with a track record of innovative products to show for it, under the ‘Made in Germany’ label. The effort was also to build and encourage a network of people and institutions so as to support a range of creative, innovative ideas and initiatives, especially in the area of new business ventures. A multimedia campaign was utilised to target people in Germany and abroad, especially decision-makers, creative people and potential investors into the country. The underlying message is that of a country with a world-class quality reputation thanks to its innovativeness and entrepreneurial spirit.

Wally Olins, Saffron Brand Consultant’s Chairman, who led the Wolff-Olins in-depth study of the German ‘brand’ in 2000, had said, ‘… a growing emphasis on national stereotypes is leading to “grotesque distortions” of the reality of countries, which must be addressed’. (Booth)

It is a matter of image and identity in which image would refer to how someone, something or some place is perceived, whereas identity refers to what someone, a thing or a place really or truly is.

The gap between the two leads to stereotypes and distortions of the reality of products, services, people and places. Applying branding strategies to nation brands is subject to error, unless all of the multi-dimensional aspects of a country are taken into consideration to reflect its true reality. Sub-systems or their parts cater to individual target groups, for there are many facets to a nation brand identity. The commercial brands of products and services that a nation offers its customers, both domestic and external, represent a major facet of the nation brand identity. Another aspect that embodies the soul or true essence of a nation is its culture, specifically its people, the language, their literature, music, sports and sporting achievements, architecture and design and food and drink habits and so on. Culture is a multi-dimensional whole that distinguishes a people and a nation, a tangible element that makes a people and a nation unique.

According to Philip Glouchevitch in his book, Juggernaut, ‘The good side of the German character, however, is thoroughness, which Germans more often than not put to good advantage. Take the excellent reputation for quality enjoyed by German products everywhere. As consumers, Germans have been raised to demand the highest quality; as manufacturers, they organise their businesses to satisfy that demand’. (Glouchevitch)

German business is organised to maintain this high quality of manufacturing and precision engineering. Supported by a network of research organisations and with exacting technical standards that are enforced by various technical standards organisations, primarily the TÜV, they regularly inspect for the highest in safety and quality standards.

To most German entrepreneurs, wealth comes from producing quality goods and services and not from speculation, and it is wealth that is shared, in the sense of keeping their workers happy and motivated and engaged in other socially responsible activities.

For centuries, in fact since the Middle Ages, Germany has had a strong history and tradition of stressing quality, as seen in the existence of various craft guilds that trained and mentored a huge reservoir of skilled labour, ingraining the values of quality and hard work. Over the years, these core values of skill, quality, hard work, innovation and efficiency have become a major component of the actual nation brand identity of Germany. This identity has manifested itself in various popular, global brands like the Volkswagen Beetle, Mercedes-Benz luxury coupes, BMW cars, the Porsche sports car, Lufthansa, SAP, Adidas, Puma and so on.

Jaworski and Fosher (2003), in their paper, ‘National Brand Identity & Its Effect on Corporate Brands: The Nation Brand Effect (NBE)’ state, ‘This Nation Brand Identity had a big boost from the Nation Brand Effect (NBE), which in turn, is sustained by the core values that gives rise to the German Brand Identity. In essence, a nation’s people, beliefs and history give rise to a Nation’s Brand Identity (core values) which gives rise to a Nation’s Brand Effect (NBE), which in turn sustains and reinforces both a literal full cycle of Brand building’.

They go on to further state that, ‘There is no doubt that the rise & success of German Companies globally (often setting standards for quality and innovation) was and is assisted by the NBE. The NBE flowing back into Germany and reinforcing the ingredients (people, culture & history) and core values that give rise to it in the first place, makes them stronger, which in turn, further reinforces the German NBE … and so on. This is literally one big reinforcement cycle’. (Jaworski)

So, in the case of Germany, the development of its national brand identity is an integral part of the growth and development of its exports, the ‘Made in Germany’ label that has a world-class reputation.

Among the many elements believed to influence consumer perceptions of products and services, i.e. brands, in an age of globalisation and increased competition is the concept of country of origin (COO) effects. This is generally defined as the country of manufacture or assembly as given by the ‘Made in’ label. The COO effect of a product or service has been found to influence a consumer’s attitude and behaviour towards that product or service. It effects how consumers evaluate those product and services in terms of quality and value to them.

Other elements, like a nation’s culture, are used by consumers to arrive at extrinsic and intrinsic cues about the products and services that are offered to them in the marketplace by the nation. However, research evidence states that this is not always the case, as in certain examples where specific product features were decisive in the choice for the given product/service category. Like price, guarantee period, brand reputation, etc., choice also depends on whether or not there is a match between the country image and the brand’s desired features.

Al Ries, the famous marketing strategist and co-author with his daughter, Laura Ries, of the book, The 22 Immutable Laws of Branding, has this to say, ‘Since value lies in the mind of the consumer, the perception of where the brand came from can add or subtract value. … The perception of a country is important. … To be successful as a worldwide brand, you need to do two things: 1. You need to be first. 2. Your product needs to fit the perceptions of its country of origin’. (Ries) It is a strategy which Germany and its brands have adopted for quite a while with great success.

Some of the other significant academic research that has been conducted in this area over the years, especially with regard to the ‘Made in’ label or the COO, is summarised below.

According to Han (1989), ‘A distinction is proposed between country image as a Halo effect, where the general image of a country’s products is transferred to the specific product category and country image as a summary construct, where the specific product images are the building blocks of the general image’. (Han)

In a research paper written by, Papadopoulos and Heslop (1993), it was proposed that the term product–country image (PCI) be used to account for the multi-dimensional character of products/brands as also the multiple places involved in a global production process. (Papadopoulos)

Furthermore, Askegaard and Ger (1998) argued that the analyses of images attached to a product and its place(s) of origin must use a richer set of connotations than those used in standard approaches. They acknowledged the cultural context in consumer product evaluations by proposing the contextualised product–place image or the CPPI. (Askegaard)

Although some other studies do not give primary importance to country-of-origin effects, most studies have indicated its importance.

O’Shaughnessy and Jackson (2000), in their paper, ‘Treating the Nation as a Brand: Some neglected Issues’, have said that ‘One conclusion is that the reputational capital of a nation with respect to a product category will influence choice more than a nation’s overall attractiveness, though fragments of a nation’s imagery may nonetheless be successfully exploited’. (O’Shaughnessy)

Now, most academics, researchers and practitioners agree that a country’s image results from a broad, multi-dimensional mix of factors that includes its geography, history, various cultural elements, famous citizens, ongoing events and proclamations and its products and services – all of these together make each nation unique and give each nation its unique identity.

My intention here is to showcase the best of German brands, the champion brands that are made in Germany – a diverse and broad range of products, services and corporate brands.

I start with the ‘Superstars’ or the truly world-class brands, the brands that feature in the top 100 brands of the world and several more that deserve to be in this category. Next are the ‘Star brands’ of the German industrial firmament. Following this, we come to one of the main sections of the champion German brands that constitute the ‘Mittelstand’, or the small and medium-sized enterprises, what I would like to call, the ‘less known champions’ who together constitute a major part of the German economy. The last section consists of select, innovative and emergent stars, most of which are fairly new, driven by an entrepreneurial spirit and have made a mark on the German industrial establishment.

The book’s middle section also consists of important elements in this discussion of country image and identity, what I would call the facilitators and influencers of German brands to the ‘Made in Germany’ label. These are comprised of the important institutions, governmental, economic and social; the research and testing institutions; and the trade fairs and exhibitions. And of course a brief description of the political system and political parties is included, as well as social and cultural elements that contribute and influence the whole, such as the arts, music and musicians, architecture and design, the media, sports and sportsmen, food and drink, etc.

As all of these elements facilitate and influence the production of quality goods and services and contribute to the positive image of the ‘Made in Germany’ brands, their reputation is not only one of quality but also of reliability, innovation and cutting-edge technology. These facilitators and influencers have especially helped the ‘less-known’ or ‘hidden champions’ and have helped to create a new line of innovative entrepreneurs and emergent stars.

So, here’s to the champion German brands.

Before we look at the companies themselves, we will first look at a bit of post-war German history, and subsequently how they rose from the rubble to become world export leaders, as well as the major contributing factors for their resurgence and resounding success.

CHAPTER 2
From Rubble to an Economic Miracle to a World Export Leader

To better understand a nation and its brands, it is necessary to know a little about its modern economic history, the factors that led to its development and to its present state. In the case of Germany, it was in the year 1945 after the end of the ruinous Second World War that Germany entered what was called the time of ‘Zero Hour’ or (Null Stunde). During this period, most of Germany lay in ruins and was in a state of utter poverty. German society had to be rebuilt from the aftermath of World War II. From this abject state, the re-birth and recovery of this country began.

To understand the makings of German business today, it is crucial to understand what the Germans went through immediately after the war, in a time of rubble and misery. Despite these conditions, they set themselves to the task of rebuilding a nation from scratch. Everybody was determined, worked hard and with a purpose, helping others who needed help, and in the process moved forward together. This collaboration formed the basis for a strong sense of social responsibility, a strong work ethic and a commitmen...

Table of contents

• Cover Page
• Dedication
• Title Page
• Copyright Page
• Contents
• Foreword
• Chapter 1 Branding and the ‘Made in Germany’ Brand: A Perspective
• Chapter 2 From Rubble to an Economic Miracle to a World Export Leader
• Chapter 3 The Superstars
• Chapter 4 The Star Brands
• Chapter 5 The Facilitators and Influencers
• Chapter 6 The Less-Known Champions
• Chapter 7 Some Innovative and Emergent Stars
• Afterword
• References
• Index