Florian Haller

Drawing strength from the DNA of the target market: how local myths and fairy tales offer additional impetus for brands

Without a deep understanding of local culture and myths, hardly anything works in the major growth markets, even if the rest of the preparations are perfect. Whether it´s about gods, festivals and colors in India, Chinese legends and Confucianism, or infectious joie de vivre and folk tales in Brazil: those who do not internalize the cultural DNA of the target markets and coordinate their own marketing accordingly will run into a wall. From Chinese philosophy to Hindu mythology, the extremely diverse future markets offer endless analogies to link a brand with the prevailing symbols, beliefs, tastes and myths. Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group) explain the four factors that are especially important for this undertaking. All details can be found in our new Springer publication “Successful brand development in the major emerging markets”, written in German.

1. Referencing local worldviews: Reincarnation is a telling example

Each region has its own beliefs, religious convictions and myths. They express themselves in colorful rituals and festivals, in serious processions, or in traditional narratives. Western companies and brands have imaginatively used local myths and beliefs in many target markets. Volkswagen in India is a great example. For a while, the car manufacturer drove an ad alluding to the topic of reincarnation. Reincarnation is very important in Hinduism. The ad showed an old VW Polo, which was highly appreciated by its owner. Even in old age the man still took care of the vehicle. But he died when his daughter was expecting a child. The daughter and her husband buy a new Polo and discover that their grandson appreciates the car as much as his late grandfather. The analogy here is that the grandfather must have reincarnated himself in his grandson and thereby also transferred the love for the vehicle. The advertising spot culminates in the slogan: “The new Polo – so good that you will come back for it”.

2. Use local festivities: How to make effective connections

Religious and other traditional festivals in some countries initiate massive migration of peoples. Hundreds of millions of Chinese return home to their families to celebrate Chinese New Year. The whole country is on its feet for these emotional celebrations. They are wonderful occasions for brands to establish or expand connections with their target groups. Starbucks used the Chinese calendar in a clever advertising campaign to increase sales. The Seattle-based coffee chain developed a 30-day calendar around the annual Spring Festival, when all of China is on its feet and all Chinese give their loved ones red envelopes with gifts of money. The Spring Festival is often used in China for weddings, travel or other important events. One day in the Starbucks calendar was declared to be good for visiting relatives. Another day was reserved for blind dates. The calendar was distributed on social media platforms and the various days were linked to special offers in the coffee chain stores. Once, customers were asked to hug their parents in a shop to take advantage of an “order three, pay two” offer. On another day the drinks were free and customer cards were offered. With relatively little investment, Starbucks made its “Campaign of Daily Friendliness” a huge success. It is said to have increased sales revenues tenfold compared to other advertising campaigns.

3. Local research: Identifying future global trends at the source

Global trends usually emerge from the largest, most agile and creative markets. The large growth markets are therefore increasingly becoming the source of new standards and trends. For this reason, Western brands have been strengthening their local research and development in the markets of the future for some years now. Mercedes-Benz was one of the trendsetters in China. The car manufacturer opened a center for advanced design in Beijing in the first half of the decade. The reason was the farsighted assumption that the preferences of Chinese consumers will set global trends in the future. In addition to adjustments to infotainment and driver assistance systems, the R&D center is also researching the vehicle design of the future and the specific preferences of local consumers. Parallel to the opening of the R&D center, Mercedes presented its first local concept car, an SUV coupé crossover called “G-Code”. The car features numerous adaptations that serve the special taste of the local target group. In addition to borrowings from traditional national architecture, fashion and calligraphy, the design was also influenced by specific tastes of modern customers. The Chinese prefer an expressive and dominant design to demonstrate their individual social rise. This even includes striking gimmicks such as a radiator grille that can change its color.

4. Well translated is half integrated: When BMW turns into a “precious horse”

A local adaptation can be really tricky when it comes to the language. There are pitfalls lurking here. They can prove expensive if something goes wrong, especially when it comes to translating the brand name. Names are very important, for example, in the Chinese culture. Before the Cultural Revolution, it was a widespread custom to add a pseudonym to the family name and first name when you reached adulthood. From this self-chosen name one could deduce characteristics and activities of the name bearer. The same applies to brand names. From the point of view of Chinese consumers, the brand name is a manifestation of the culture and values of the product advertised. But with about 50,000 characters and hundreds of dialects, negligence in translation can end in disaster. Some German companies have succeeded in making successful transfers with the help of experts. The name for Siemens – “Xi-men-zi” – means “Gateway to the West”. In Chinese, the name BMW is “Bao-ma” – “Precious Horse”. And “Ben-chi” as a transmission from Mercedes-Benz is translated as “galloping fast”.

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Florian Haller

The appeal to emotions: how to address the rising individualism among consumers

As a result of rapid social and economic change all over the world, individualism is on the rise everywhere, especially in large growth markets, which up to now were characterized by a rather collectivist mentality. The drivers of this change are better income and an expanding middle class in large parts of the world. Consumers are enjoying to finally catch up with Europe and North America. They want to make inspiring and fascinating experiences. They want to make up for what was once an impossible dream. Along with disposable income, demand and the strive for independence are growing. This means that emotional factors are increasingly coming into play on top of purely functional aspects as a factor for consumption that is aimed at demonstrating social status, individual taste and being part of the “global village”. The level of individualism, though, still varies from country to country. Successful brand differentiation must therefore address these factors, if international brand development is to succeed. The way this works is described in detail in our new Springer publication “Successful brand development in the major emerging markets”, written in German, by Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group).

No contradiction: emotionality and functionality must go hand in hand

Marketing scientists and managers have known for quite some time that successful brand differentiation can also be achieved by emotionalizing the brand, which addresses the trend towards individualism. The emotional benefits that brand consumption promises must be linked to the brand identity in a way that reflects the self-image of the target group. Like people, brands have an identity consisting of personality traits, values, a vision, competencies and brand origin. It is important to integrate the emotional personality traits into the functional benefits associated with a brand. The ideal watch should not only look beautiful, fit and function reliably, but also emphasize the personality of the owner. The ideal handbag for women should not only be easy to wear, but also underline the fashionable individuality of the woman. Particularly in industries where functional differentiation is more or less exhausted, emotional differentiation can make all the difference compared to the competition.

How Adidas increased its market share in the women´s category

As one of the leading sports brands in China, Adidas was faced with the challenge that Chinese consumers felt less and less addressed by the more masculine-oriented brand communication of sporting goods manufacturers. Market surveys had shown that Chinese consumers rather rely on the factor of fun and bonding power – i.e. the shared experience with friends and acquaintances – during sporting activities. With the “all in for #mygirls” campaign, Adidas therefore developed a campaign aimed at using this high value of friendship in brand communication. The campaign communicated the fun, the bonding power and the “coolness” factor of sport. Messages that brought the sense of togetherness to the fore were at the heart of the campaign. With the well-known Chinese singer Hebe, Adidas was also able to win a high-profile brand ambassador, whose passion for sport and dancing was well received by the target group. In the campaign commercials Hebe was staged with her “sisters”, i.e. with women practicing sports together. The TV commercials all ended with Hebe speaking directly into the camera: “These are my sisters, what about your sisters?” The campaign, which was played out cross-media and accompanied by various events, led to an increase in sales of 40% in the Adidas women’s category and, in addition, actually inspired Chinese consumers to more sporting activities (studies have measured an increase of 3.45%).

Opportunity for prestige brands

In general, foreign brands enjoy an advantage particularly in larger growth markets. Due to their reputation, they are generally more likely to serve the emotional needs of consumers. A pronounced self-confidence or the will for self-expression and self-development promote an emotional expectation among consumers towards these brands. Durability, good quality and functionality are still important criteria, but they are increasingly complemented by factors such as attractive design and other aspects that serve personal enjoyment. This phenomenon varies from consumer segment to consumer segment: This individualization trend and the growing need for an emotional appeal can be observed especially among younger generations who have grown up with social media, as well as in higher income households.

The worldwide trend towards individualization marks a paradigm shift in brand communication. Ideally, the strongly fact-oriented product communication is supplemented by a fascination level that appeals to the emotions of consumers. Against this background, more and more companies are defining a purpose – a higher corporate purpose – for their brand communication that is intended to cover exactly this level of fascination.

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Florian Haller

Culture drives consumption: Why cultural values are important in brand building

Authors: Florian Haller, CEO Serviceplan Group, and Niklas Schaffmeister, Managing Partner Globeone

The rapid changes of our time lead to conflicts between cultural traditions and new ways of life. Career advancers spend more time in the office, they often go on business trips, they have less time for themselves and their families. The lack of time changes everything from eating habits to family orientation, the way of communicating and consumer behavior. And in many international markets, foreign influences, industrialization or massive urbanization are turning even ancient traditions upside down. Individualization is increasing and consumer behavior is spreading, particularly in the middle classes around the globe, which is intended to showcase the newly acquired status.

There can be no question: culture is and remains a decisive factor for consumer behavior and thus also for brand positioning. Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group) therefore explain why an intensive examination of the culture and cultural values in the target markets is indispensable for successful brand development or repositioning. Read more in detail in our new Springer publication “Successful brand development in the major emerging markets”, written in German, by Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group).

Powerful factors: culture and cultural values

The definitions for the term culture have become as diverse as the cultures of this world. Things may become clearer if the term culture is separated from cultural values: Culture then refers to the totality of human behavior in a society, while cultural values refer to a series of beliefs about certain behaviors that are considered particularly desirable in a society. In marketing, the conviction has therefore developed that cultural values are a powerful factor that has a decisive influence on the motives of consumers. This applies to their lifestyle as well as their product selection.

In the jungle of values: What is decisive for brand development

Foreign brands that want to address these different cultural preferences must therefore familiarize themselves well with the cultural environment in the local target market. In view of the diversity of values and moral concepts, however, this is easier said than done – brand managers are often faced with the challenge of identifying the consumer-relevant value dimensions for brand development. In such cases, so-called catalogues of values have proven to be a helpful instrument. Sociologist Shalom Schwartz, for example, has developed a catalogue of values that identifies seven important cultural value dimensions on the basis of data from 73 countries. On the basis of these dimensions, it is not only possible to differentiate between the essence of cultures worldwide, but also to record individual, culturally specific and consumer-relevant value dimensions.

According to Schwartz, the most important dimensions of value include:

  • Harmony (harmony with the environment)
  • Social embedding (social order, obedience, respect for tradition)
  • Hierarchy (authority, social power, orientation towards wealth)
  • Ability (ambition, daring, success)
  • Intellectual autonomy (open-mindedness, curiosity, freedom)
  • Affective autonomy (joy of life, pleasure, tension)
  • Egalitarianism (social justice and responsibility, equality)

Infographic cultural values

It quickly becomes apparent that there are enormous differences along these value dimensions, for example between European countries and the major emerging markets such as China and India. While in China and India hierarchical values are given high priority (e.g. in the form of the caste system), in Europe the focus is on egalitarian values and intellectual autonomy. Put simply: people want to enjoy their freedom, work creatively and realize their full potentials.

Significance for brand communication: cultural values and consumer motives

Besides the family, society, religion and educational institutions, the mass media – not least digital and social media – have developed into important carriers and mediators of cultural values in the post-industrial age. However, it has been shown time and again that advertising also has a great influence on the representation and communication of cultural values. Advertising is based on linguistically powerful images and metaphors. These, in turn, are strongly influenced by cultural values which have an influence on culture, insofar as they are received by a broad circle.

The “similarity acceptance hypothesis” is regarded as a rough compass for successful brand communication in the local target market. Its message: The more similar the values communicated by a certain brand are to the values of a certain social class, the higher the probability that the brand is attractive for this grouping.

Conclusion: culture has a strong influence on consumption. In marketing you have to find the most effective levers to use this influence. This requires a profound knowledge of local cultural values.

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Florian Haller

Market-driven positioning: Only the best value proposition guarantees success

Authors: Florian Haller, CEO Serviceplan Group, and Niklas Schaffmeister, Managing Partner Globeone

Insiders have known it all along: When foreign companies succeed in growth markets, half of the success factors are directly related to the adaptation or localization of key elements of the brand strategy. The key question is how best to adapt a brand to local expectations and requirements. Based on multiple years of consulting experience, we at Globeone have developed the so-called market-driven positioning process. This multi-stage process ensures that all relevant internal and external factors are taken into account in the analysis and development of the positioning strategy. The result is a positioning concept that is actually tailored to the needs of consumers and at the same time protects the brand itself from overstretching. The six steps can be read in detail in our new Springer publication “Successful brand development in the major emerging markets”, written in German, by Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group).

1. Market analysis: Gaining an overview

The problem many companies are facing is not that they miss information, but often the available information is simply not prepared in a way that makes sure it promotes the development of meaningful and realizable strategies. The first step is therefore to collect all relevant data within the organization and – if necessary – to supplement it with additional market and consumer research. From the available company data, competition analyses, market statistics and relevant media reports, an overview of the target market and initial positioning options can then be obtained.

2. Relevance analysis: Understanding what is important to consumers

The prerequisite for a successful positioning is always the local relevance of a brand or product. Therefore, in a second step, the most important decision drivers for the brand are identified. It needs to be analyzed how the brand can best support the development of certain preferences. The evaluation does not only need to take into account the functional brand drivers. It is important to include those that appeal to the customer at the emotional level as well. In our experience, many foreign companies do not begin with this relevance analysis, but instead assume a much narrower starting position from the outset. However, this carries substantial long-term risks.

3. Feasibility: Not every consumer wish fits the brand

Recognizing the needs of consumers is one thing – but serving them successfully is another. If a company has analyzed the local target market and the target group without bias, it must of course decide which consumer needs and wishes it can satisfy best. What can actually be achieved may depend not only on the portfolio but also on the current image of the brand. The image must match the brand offering, otherwise there is no convincing basis for consumers to buy. If the company or brand lacks the relevant image associations for certain products, systematic brand development is necessary.

4. Consistency analysis: Beware of excessive adjustments

Balancing the global brand promise and local positioning is incredibly important in order to avoid brand dilution. Adaptation to the local target market must not conflict with global brand positioning, because otherwise there will most likely be conflicts in brand management. In this fourth step, the consistency of the positioning route with the global brand promise must be checked. If the adjustment to the local target market threatens to be too strong, companies are generally well advised to build up a separate brand.

5. Differentiation: How to draw the best distinction

In a further step, the positioning strategies of local and global competitors must be analyzed because the composition of competitors in individual markets can vary greatly. More importantly, however, competitors themselves sometimes choose different positioning strategies for each country. Therefore, brand managers cannot blindly rely on a competitor’s positioning in one market corresponding to its positioning in another. The communication between competitors must also be scrutinized: How is positioning implemented in print media, advertising campaigns, digital channels and elsewhere? Based on this analysis, a positioning chart can then be created. It can be used to identify the positioning gaps.

6. Positioning: Finding the best value proposition

The remaining options resulting from the previous steps can now be validated for their attractiveness through detailed quantitative and qualitative tests. This last step should not be underestimated, because only the truly optimal market-driven positioning helps the brand to remain relevant in the local target market in the long term. This process can also be used to develop similarly convincing product and service concepts.

Infographic market-driven positioning

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Florian Haller

Global, hybrid or local: 4 decision factors for the right degree of adaptation to the target market

Authors: Florian Haller, CEO Serviceplan Group, and Niklas Schaffmeister, Managing Partner Globeone

The successful positioning of a brand is part of the high art of marketing. Based on complex factors, a concept needs to be developed that supports branding in the minds of consumers in the local target market. In the first part of our blog series we explained the most important strategies for the global expansion of brands. Against this backdrop, brands basically have the possibility to choose between a global, hybrid or local positioning. It is therefore important to determine the right degree of adaptation to the local market on the basis of suitable criteria. Following, we briefly present the four most important strategies. For more detail see the new Springer publication “Successful brand development in the major emerging markets”, written in German, by Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group).

1. Product category: How much culture is in my product?

Every consumer is familiar with that: certain products are more closely linked to cultural ideas and habits than others. This becomes particularly apparent in the case of food or clothing, where local consumer perceptions have evolved over centuries. Contrary to that, products such as vehicles or electronic devices have a weak cultural component. Before deciding on a local positioning, it must therefore be clarified whether the product has a realistic chance of sufficiently reflecting the local culture and thus prevail over local competitors.

2. Status relevance: Does my product serve the right status factors?

In major growth markets, foreign brands are often used to demonstrate a certain status. Newly-rich Chinese, for example, like to display their prosperity with luxury watches. According to research, wealthy Chinese own six luxury watches on average. But be careful: too much adaptation to the local target market can dilute the global brand promise of premium brands. Against this background, they are generally better advised to play to the strengths of their country of origin image that serves the status needs of local consumers. Before entering the target market, they need to ascertain that the brand meets the local status requirements and whether this might be jeopardized by too much adjustment.

3. Consumer patriotism: How big is the political influence on purchasing decisions?

Patriots can still have a soft spot for foreign brands. In times of political tension, however, solidarity with one’s own country can be a serious obstacle against the purchase of foreign brands and thus prove to be a huge risk for a successful positioning in the target market. This risk needs to be thoroughly examined before entering the market: What kinds of conflicts are lurking, which ones can be anticipated? Traditional elites, low-income consumers and the elderly tend to be more patriotic than other social groups. In addition to conflicts that go back a long way in history, current political tensions, such as Donald Trump’s protectionist agenda, can also have a negative impact on foreign brands.

4. Income level: What can consumers afford after all?

The income level is another decisive determinant of a positioning strategy. The rule of thumb for most emerging markets is that with higher prosperity more consumers prefer foreign brands. This reflects the tendency to demonstrate one’s prosperity by buying foreign brands. Before entering a local target market, brands must therefore analyze the income level of their target groups, because the extent to which they need to adapt to local market conditions ultimately depends on that.

All four factors must be carefully weighed against each other. The most important principle is to avoid conflicting positioning goals: Once you have decided on a global or local positioning, you must carefully avoid inconsistencies. The difficulty with a hybrid positioning, on the other hand, is to separate the global brand core from those aspects that are adapted to the culture in the local target market.

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Florian Haller

Serviceplan goes Big Apple: independent, integrative, innovative and international

The House of Communication in New York has been open since the beginning of May and, with 65 colleagues and exciting customers, it is already “fully operational”. It also has a roof terrace with a spectacular view of Midtown Manhattan.

“If you can make it there… ”

The Serviceplan success story feels a bit back-to-front: first the world, then America… Following our achievements in Germany, we had set our sights on a targeted programme of international expansion across the three major economic areas. We would have started helping to shape the American communications scene earlier if we could, but from a business point of view, it made more sense to go to Asia first. In 2018, the moment finally arrived: we made it anywhere, so we will make it there, too.

When it became clear that our next step would take us across the pond, we immediately decided upon New York, and specifically Manhattan, as the location for our office. It hasn’t lost any of its appeal and it’s still “the place to be” for the creative industry (and it isn’t used for the opening titles of all those blockbusters for nothing). “It’s not that everything is better here, but it does make you improve a little each day,” said Stefan Schütte, Head of our New York office, to me recently. For me personally, the roof terrace with its view over Midtown Manhattan is still a dream come true, along with the jogging route in Central Park, an unbeatable part of New York.

The right team makes “ÜberCreativity” happen

The complete range of services for customers and our integrated communication approach are reflected in our new House of Communication’s management team. Serviceplan New York is led by Nick Johnson, along with creative director Jay Benjamin and strategist Nick Chapman. Stefan Schütte is overseeing integration within the House and in relation to Germany, while Suzanne Reeves-Lau is responsible for accounts as Group Director and Sarah Samshidi is responsible for Serviceplan Solutions in her role as Account Director. Ben Gaddis, President of T3, has already moved in with his team, while Ellie Bamford and Erik Dochterman are in the swing of things in their roles as managing partners for Modco/Mediaplus. Together, this management team is already operating successfully in almost every American industry and customer segment. Most of our 65 colleagues are either American or have many years of prior experience in the American market. But there’s always room for transatlantic exchange.

Bringing our independence, integration, innovation and internationalism to the land of opportunity

The mindset of our House of Communication in New York is built on the same values that have ensured success for every other Serviceplan office and division: independence, integration, innovation and internationalism. This creates the ideal environment for ÜberCreativity and minimises the barriers between communicative disciplines, cultures and markets. We can then implement ideas that only become possible when the whole is greater than the sum of its parts. I get goosebumps whenever that happens – even after 30 years in the communications industry – because that’s how Best Brands come about, just as they do at every Serviceplan location.

Serviceplan is heading to the Big Apple and taking with it everything that has already made the agency group a success in Europe and Asia: innovation, integration and internationalism. Our success is built on this combination and on ensuring the measures we adopt work well together. We’re not fixated on being “Number One”, but on being the best for our customers. I don’t know what the global communications market will look like in the future. One thing’s for sure: we’re prepared for anything.

Creative and stable

Serviceplan creates these conditions across the business in order to favour external expansion and ensure internal stability. Externally, this means ensuring we continue to grow steadily and organically in the years to come, including in America too now. While internally, every employee must have the opportunity to express their creativity and develop themselves further, across countries and the individual divisions. In all honesty, that was another reason for our terrace in Manhattan. And by the way, the next New York Marathon is on 4 November. By this time, Serviceplan New York will have been up and running at its location near Central Park for a little while. So who knows? We may find one or two European Serviceplan employees looking forward to a welcome drink at the Tavern on the Green – as they drag themselves round the last couple of miles of the marathon course.

Germany meets America – a recipe for success

Serviceplan is the only independent German agency group to have established a foothold in the USA. For this very reason, we will bring traditional German virtues to New York and mix them with the spirit of America. And the customers love this blend of American zaniness with German tenacity and drive. Even in New York, where “anything goes”, this combination is out of the ordinary.

When we Europeans think of American brands, the names of tech giants and convenience brands, such as Coca-Cola and American Express, spring straight to mind. But there are many archetypically American brands that lots of Europeans have never even heard of. We find these brands especially exciting and are looking forward to seeing what kind of business the Manhattan crew might attract. Our portfolio has already gained one such customer in Brighthouse Financials.

I’m filled with nervous excitement about this new opening and the fact that something we’ve prepared for so carefully is actually finally happening. Our ambition to make it happen right here in the birthplace of advertising, amongst the inventors of PR and the pioneers of digitalisation, continues to drive us all. Shall we, Big Apple?

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Florian Haller

From brand image to purchase activation: 4 stumbling blocks in brand communication

Authors: Florian Haller, CEO Serviceplan Group, and Niklas Schaffmeister, Managing Partner Globeone

Again and again, brand managers underestimate the simple fact that brands are first and foremost created in the minds of local consumers. The results don´t always meet the expectations of the top management at HQ. A Volkswagen may be a mid-size car in Germany, in China it is definitely a premium car for most buyers and perhaps even a luxury car in India. The development of an international positioning strategy therefore requires a thorough analysis of one’s own brand perception in the target market. This is necessary to ensure that the communication of one’s own strengths can be aligned with consumer needs. In recent years, we at Globeone and Serviceplan have advised numerous blue-chip clients and brands in international expansion projects. Based on this experience, we have identified four major stumbling blocks in brand communication that may cause an international positioning to falter. For all the details, see our new Springer publication “Successful brand development in the major emerging markets”, written in German, by Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group).

1. Brand awareness: Wishful thinking should not subdue reality

It is an old truism: awareness is not everything, but without awareness almost everything is nothing. However, brand awareness cannot be achieved with the crowbar – especially not in large emerging markets, which are difficult to understand due to their enormous geographical spread and diversity. In addition, there are often horrendous costs for classic media, frequently forcing brands to switch to cheaper digital advertising channels. This, however, runs the risk of communicating below the critical perception threshold in the fight for the attention of target groups. The development of brand awareness should therefore not be based on intuitive assumptions about consumer needs, but on empirically proven facts and a well thought out communication concept.

2. Brand image: Known but without profile

If a brand enjoys excellent recognition values but is hardly bought, it usually has a veritable image problem. The brand has not been sufficiently focused on the wishes and needs of local consumers or is simply interchangeable because it is not sufficiently differentiated from competitors. In this case it is important to act quickly in order to not jeopardize the success of market entry in the long term. A clear understanding of the brand drivers – i.e. the most important decision factors for a brand – must be developed and translated into a convincing communication concept and storytelling that sufficiently differentiates from local champion brands.

3. Country-of-origin: Communicating the strengths of the country of origin correctly

Notably in the premium segment, brands can often benefit from the image of their country-of-origin. This so-called image transfer from the country-of-origin to the brand (e.g. “Made in Germany”) is an important competitive advantage that is difficult to imitate. Nevertheless, brands frequently fail to properly bring this advantage of a strong and positive country-of-origin image to bear in their communication concepts. Often there is simply no strategic storytelling that systematically establishes the connection between the brand tradition and the history of the country-of-origin. But strong brands live from exciting stories about their origins.

4. Purchase activation and loyalty: If the customer still does not show up

Even with high popularity and image values, sales figures may fall short of industry standards. Usually two things lead to this problem: either a narrow focus on an undersized target group, or an incomprehensive local sales and logistics structure. Brands must regularly ask themselves whether they are attractively priced for a sufficiently large target group and whether they are actually available everywhere. Digital sales channels may help, if a brand can’t build enough local branches.

A comprehensive brand monitor in the corresponding target country will help to identify and avoid these stumbling blocks. However, the conceptual effort should not be underestimated: careful preparation is essential in order to understand the local perception and performance of your own brand correctly.

 

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Karin Maria Schertler

New Work – Panacea or hype?

Clear out the management myths!

The management theorists have discovered a new wonder weapon: New Work. Pretty much everything to do with agility, the meeting of equals and self-organisation in the widest sense is subsumed under this term. The hope is that this will generate greater innovative energy and enhance companies’ ability to create value, or to put it in a nutshell: New Work is supposed to cure all the painful symptoms of a dysfunctional organisation at a stroke. All the time- and energy-sapping meetings, the corporate policy that devours your creative spark, the never-ending decision-making processes, the silo mentality cemented into people’s heads. The deeper the pain an organisation feels, the more hopeful the New Work promise of being the solution for the digitised, disruption-friendly VUCA age sounds. All the employees are highly motivated to work with each other, focusing on the customer and for the benefit of the enterprise, self-organised, collaborative and in blissfully agile coexistence.

Peace and love and harmony? As if!

There could be no greater error as this level of expectation conceals several fallacies. And whenever a fundamentally good approach runs the risk of turning into a hype, and overblown or even false expectations are invested in it, disappointment is sure to follow.

There are numerous examples showing that New Work offers the potential to have a positive effect on a company’s ability to create value and on it’s vitality. Whether it’s Upstalsboom, a North German hotel chain with over 600 employees, or Semco, a Brazilian industrial heavyweight that introduced unconventional management practices as early as 30 years ago. Or Sparda Bank München with its 290,000 members and 700 staff or Morning Star, the world’s largest tomato processor based in California and with sales of 600 million dollars. As different as the New Work philosophies and practices are — these are all highly successful companies and highly attractive employer brands.

And precisely because New Work contains the seed of a wonderful idea, it is so important to take a close look at what it can achieve and how it has to be embraced to unlock its full potential. It’s time to reveal the biggest New Work misconceptions — raise the curtain!

Misconception No. 1: New Work is like a pill you swallow that makes everything better

Firstly: There is no one single New Work. The avenues leading to the world of New Work are as diverse as the people and organisations that populate them. Whether project management approaches such as scrum, innovative organisational systems such as holacracy or a managerial mission statement that puts the focus on keeping employees happy — there is no right or wrong. Every organisation is invited to find the right approach and the right route for itself.

This requires a very precise diagnosis of the problem. What are the perceived dysfunctionalities of the organisation? What attitudes and behaviour patterns are exhibited by managers and employees? What are the unspoken dogmas that pervade the organisation? And also: What role do the perceived dysfunctional behaviour patterns play?

Does that sound like hard work? That’s because it is! At the same time, this analysis is an important factor in the success of New Work. Because in the long run, superficial treatment of the symptoms helps nobody. To enable New Work to be successful, we must not lose sight of the causes of dysfunctional patterns of behaviour, and for this a collective process of reflection is required. This often automatically provides the answer to the question of what the next step on the way should be because the process as such activates the collective intelligence of the organisation.

New Work is therefore no quick “down pill and all better” approach. Rather the process resembles that of a physiotherapist who supports the self-healing process of the organism with patience, precise observation and constant intervention.

Misconception No. 2: New Work is quick and easy to learn

Misconception No. 1: New Work is like a pill you swallow that makes everything betterNew Work is much more than just working from home from time to time, sticking a few multi-coloured post-its on the wall in a meeting, deploying collaboration software or working in colourfully painted offices. New Work is also more than just applying new meeting formats. New Work expresses itself primarily in a new attitude. An attitude marked by the belief that people are responsible and that they have more potential in them than they normally are able (or want) to show in the organisation. And that the act of giving up supervision and conventional displays of authority on the part of managers, coupled with the self-organisation and assumption of responsibility on the part of employees, activates additional potential for creating value. And that organisations gain substantially in resilience and adaptability as a result.

Every paradigm shift requires time. New Work is therefore not something that can be learned on the run. This process is laborious and at times painful. You may lose an employee or two along the way. And those who stay will find themselves being drawn out of their comfort zone on more than one occasion. Honest peer-to-peer feedback — however appreciatively it may be couched — doesn’t always feel so comfortable as some truths don’t really fit with the way we see ourselves. It requires a high degree of reflective capacity to deal with such criticism constructively. At the same time, New Work facilitates major leaps in personal growth in an appreciative environment and genuine person-to-person encounters — if the individual is willing to admit them.

That is why people who jump on the bandwagon (“We’ll adopt New Work too because it’s trendy”) don’t stand a chance. Because New Work practices can only develop their full potential if the underlying world view is internalised and embraced by everybody — including the managers. Anyone not deeply convinced by it and who does not feel a serious need to tread a new path towards a more effective, soulful organisation (and who does not have a genuine interest in their own learning curve), shouldn’t touch it. Otherwise, this will only end in disaster for all concerned for want of authenticity.

Misconception No. 3: New Work can be prescribed

New Work is different from classic change programmes in many respects.

First and foremost, New Work can only be successful if the top manager in the organisation (or department or team) is unconditionally behind it and is also prepared to live out the paradigm shifts and behavioural changes themselves. With all the successes and failures that go with them. New Work cannot be prescribed, therefore, but you can embody it by example — and advocate it through discussion.

But with a certain degree of New Work maturity, the organisation makes significant gains in its skill at initiating change. It then basically finds itself in a permanent change mode. Traditional change programmes are then superfluous.

And there is another difference from traditional change programmes: there is no end date. There may be dates for certain milestones but New Work is by definition a journey which never ends. Anyone familiar with system theory knows that every problem contains its solution and at the same time, every solution contains a new problem. And the world around us also does not stand still. So there will always be grounds and potential for refinements — both on a human and organisational level.

New Work: Panacea or hype?

Now that the most important misconceptions and myths surrounding New Work have been revealed, if you still feel the inner urge to embark on the journey, I must congratulate you. I myself am embroiled in the middle of this process with my team, and as strenuous as it may sometimes be: I have not regretted this decision for even one day. Because ultimately, New Work is nothing more than authentic encounters — with yourself and others, i.e. your fellow employees and customers. New Work is thus neither a panacea nor hype. It is a natural evolutionary step for mankind and a process leading to a better world. No more and no less.

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Florian Haller

Successful internationalization of brands – It’s all about the right start!

Authors: Florian Haller, CEO Serviceplan Group, and Niklas Schaffmeister, Managing Partner Globeone

Despite the protectionist demeanor in Washington D.C., German companies have realized record investments abroad in 2017, according to the German Chambers of Commerce and Industry (DIHK). The degree to which a company is prepared to adapt to local market requirements decides which path for the market entry is chosen. Following, we briefly present the four most important strategies. For more detail see the new Springer publication “Successful brand development in the major emerging markets”, written in German, by Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group).

1. Global strategy – Maximizing global efficiency and centralized decision-making

In industries that are characterized by high integration pressure and short innovation cycles, a globally oriented strategy is recommended. In this case, the corporate headquarter controls the operation. Economies of scale enjoy top priority, the brands are highly standardized. However, adaptation to specific local market needs is limited, which may result in problems with local acceptance.

Example: Apple applies this strategy to its iPhones and iPads. Design, production and marketing are controlled by one single unit worldwide. Market-specific adjustments are usually limited to details such as the power cable, which must satisfy different voltages varying from county to country.

2. Multidomestic strategy – Strong decentralization with significant product adaptations

In this strategy business models and products are strongly adapted to local consumer needs. Country units operate largely independently. Economies of scale are neglected in order to achieve a higher acceptance in local markets. However, the high degree of adaptation can turn out to be a problem when the brand has to hold its own against competitors in a highly globalized environment.

Example: US restaurant giant Yum! Brands, operator of Pizza Hut, Taco Bell and KFC, tailors its menus to local tastes and culinary specialties in every single market.

3. Transnational strategy – Combining the strengths of the first two strategies

The transnational strategy aims to combine the flexibility of the multidomestic strategy with the efficiency gains achieved by global standardization. This difficult undertaking is recommended when companies are equally dependent on economies of scale as well as on adaptation to local consumer needs. Despite these adjustments, brands managed under a transnational strategy can continue to use the reputation of their country of origin for their branding.

Example: The Swedish furniture group Ikea is committed to providing its global customers with a unique shopping experience that defines the global recognition value of the Ikea brand. In addition to the standardized portfolio, there are numerous local adjustments. This is why Ikea sells harder mattresses in China at a lower overall price level compared to other parts of the world.

4. Home replication strategy – Limited standardization and little local customization

The home replication strategy is applied when there is little or no need for flexibility or standardization. This strategy aims to open up additional international markets without major adaptations for products primarily developed for domestic consumers. In the long run, however, this strategy includes the risk of not completely grasping local market conditions and thus losing competitiveness.

Example: Media Markt transferred its concept one-to-one to China and ultimately failed because the chain could not prevail over its local competitors with its classic concept and without major adjustments.

The choice of the right strategy will be rewarded in any case. After a short cooling interval, the emerging markets are currently registering a new dynamic. China will outperform the US as the world’s leading retail market in 2018. India overtook China in GDP growth at the end of 2017.

 

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Serviceplan Group

So, what does an Online Concept Designer do?

Get to know Ursi Jäger and Helen Birke who are giving some exciting insights about her job as Online Concept Designer at Plan.Net Pulse. Learn more about part 4 of our series Jobtitles Bingo now!

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