German engineering drives global brand success

Issue 10 - February 2009 (with special thanks to Barry Silverstein)

Of Interbrand’s Top 100 Global Brands in 2008, ten were German brands - five automobile brands as well as brands in technology (SAP and Siemens), clothing (Adidas), financial services (Allianz) and cosmetics (Nivea). Together, this group of German brands is valued at over US$ 98 billion. Germany was second only to the United States in the number of brands making the Top 100 list.

It should come as no surprise, then, that Germany itself was ranked the best overall “country brand” in the 2008 Anholt-GfK Roper Nation Brands Index (view PDF here), which measures the world’s perception of each nation as if it were a public brand. Fifty nations were measured in the study. The United States, the world’s leading branding powerhouse, ranked seventh. According to Simon Anholt, founder of the Nation Brands Index, “Within the top 10 most positively perceived countries, the ranking reveals a strong correlation between a nation’s overall brand and its economic status.

So what is it about German brands, and the country that produces them, that is so special? Two words might be all the explanation that’s required: discipline and quality.

German companies are highly disciplined in their approach to creating, introducing and selling brands. They have the ability to consistently produce exceptional-quality products that are of lasting value. “German engineering” is a term closely associated with the country’s automobile industry, which has seen a level of global success second only to the Japanese automakers. In fact, between 1990 and 2000, Mercedes-Benz and BMW more than doubled their sales in the United States alone, according to The Detroit News.

An overview of German management from ExecutivePlanet.com offers some insight into why Germany is a leader in brand quality: “The German manager concentrates intensely on two objectives: product quality and product service. … The watchwords for most German managers and companies are quality, responsiveness, dedication, and follow-up… A German manager believes deeply that a good-quality production line and a good-quality product will do more for the bottom line than anything else.”

While German companies engage in competition, they seem to have the greater good in mind. Makers of German brands are less interested in competing on price and more focused on making products of superior quality. German companies tend to strictly adhere to government standards and cooperate rather than conflict with government.

On the downside, large German companies can be, at times, lumbering. They “do not move as quickly today as many American firms,” admits Harvard Business School (HBS) professor Jeffrey Fear, author of Organizing Control, a book about German corporate management. But Fear, interviewed in 2005 by HBS, says that these larger companies are countered by “thousands of owner-entrepreneur controlled Mittelstand (small and medium-sized firms) that remain very entrepreneurial, though in a quiet fashion. Germany remains an export leader today because of those secretive firms.”

Germany’s brand exports have a long, celebrated history of excellence, regardless of industry segment. The country’s automobile brands, of course, are the ones consumers most closely associate with the country’s branding acumen.

BMW, a maker of premium automobiles, is one such revered brand. Founded in 1917 in Munich, Germany as “Bavarian Motor Works,” BMW produced aircraft engines during World War I, then built motorcycles in 1923 and went on to make cars in 1928.

In the past decade, BMW has been recognized as much for its innovative, quality marketing as for its high-performance cars. In the early 2000s, BMW started its own film division, creating high-production-value, short entertaining movies used to promote the company’s cars. More recently, BMW launched a somewhat controversial viral marketing campaign centered around a fictional Bavarian town that supposedly wanted to introduce a new BMW series. The company went so far as to fake a website for the town, refusing for a time to acknowledge that BMW was behind the prank.

BMW’s compatriot Porsche, long known for building luxury sports cars, took a calculated risk in the late 1990s by introducing Cayenne, an SUV model largely designed for the American market. Equally unusual, Porsche decided to build the Cayenne at a plant located within Germany, despite the fact that other auto manufacturers were making deliberate efforts to build within or closer to the United States.

In discussing Cayenne as a business case in 2006, Professor Fear says it is worthwhile for students to ponder “…if by moving into the SUV market did Porsche remain ‘true to brand,’ and what does that mean anyway? How much is the Porsche brand dependent on its roots?” Whatever observers may think, the risk paid off for Porsche: the Cayenne became the German car manufacturer’s best-selling automobile in 2006.


There is ample evidence that Germany’s branding power extends beyond automobiles. NIVEA, whose name comes from the Latin for “snow white,” was created in late 1911. From its origins as a simple cream, NIVEA has now grown into a global manufacturer of a broad range of cosmetic and personal care products. NIVEA was voted the most trusted skin care brand in 15 countries in the Readers Digest survey of European Trusted Brands 2007.

Adidas, named after its founder Adolf (Adi) Dassler (Das), is an 80-year-old company that today is a global leader in sports footwear, apparel and accessories. In 1996, Adidas equipped 6,000 Olympic athletes from 33 countries with its athletic gear. “Adidas athletes” won 220 medals, including 70 gold - and apparel sales increased 50 percent.

SAP, founded in 1972, is the world’s largest business software company and the third-largest software supplier overall. The company employs almost 52,000 people and serves more than 76,000 customers in over 120 countries.

Other well-known global brands, from Bayer (pharmaceuticals) to Becks (beer) to Boss (clothing) to Braun (consumer products) are a testament to the fact that Germany is, and will continue to be, a prolific producer of some of the world’s finest products. It’s Germany’s disciplined approach to quality that inspires consumer loyalty to German brands.

To finish, we have four 30 sec TV ads that aired during the US Superbowl last week. At a (media) cost of approx US$100,000 per second and an audience estimated just short of 100 million, you’d certainly want your agency to get it right. Have a gander, see what you think.

Superbowl 2009 'Crystal Ball' Click here to play	Superbowl 2009 'I'm Good' Click here to play

Superbowl 2009 'Call Me' Click here to play	Superbowl 2009 'Pets' Click here to play

e-Sight is our collection of 'wisdom'. We hope you find these e-Sights informative, thought provoking, or at the very least entertaining. If you would like to subscribe to e-Sight please click here.

Archives
Issue 1 - 'Discover the DNA of your brand' click here.
Issue 2 - 'Santa's troubles' click here.
Issue 3 - 'Best practice marketing advice from our customers' click here.
Issue 4 - 'Viral Marketing... a developing media channel' click here.
Issue 5 - 'Acknowledging a wart' - profiting from honest advertising click here.
Issue 6 - 'Military Strategy in Advertising' click here.
Issue 7 - 'Acceleration of Communication' click here.
Issue 8 - 'Recency Planning' click here.
Issue 9 - 'Another Christmas Fairytale' click here.
Issue 11 - 'The Body as Billboard - Your Ad Here' click here.
Issue 12 - 'Re-calibrating brand values and winning back trust' click here.
Issue 13 - 'Creative plagiarism and the YouTube dilemma' click here.
Issue 14 - 'Marketing during a recession' click here.
Issue 15 - 'The Vegemite Effect' click here.
Issue 16 - 'The Evolution of Brands' click here.
Issue 17 - 'Keep your hat on... it's Christmas!' click here.
Issue 18 - 'Consumer Trends 2010 - Part 1!' click here.
Issue 19 - 'Consumer Trends 2010 - Part 2!' click here.
Issue 20 - 'Mass Mingling - Another Online Revolution' click here.
Issue 21 - 'Does sex sell in advertising?' click here.
Issue 22 - 'Maturialism - time to loosen up a little!' click here.
Issue 23 - 'Understanding the New Consumer' click here.
Issue 24 - 'Let's hear some Christmas cheer' click here.
Issue 25 - '5 Lessons from NABs Marketing Campaign' click here.
Issue 26 - '10 Marketing Lessons from the Royal Family' click here.
Issue 27 - 'Honest Logos' click here.
Issue 28 - 'Sponsorship: All fun and games?' click here.
Issue 29 - 'Retail Renaissance' click here.

Back to the current issue - click here.

If you have trouble viewing our TVC, click here to download Quicktime for free.