Goods and services from Germany still have a good reputation - but a label alone isn't enough to guarantee sales and German businesses will have to take steps to improve their own brands, a new study shows.
German politicians and industry lobby groups are adamant: The label "Made in Germany" is key to the country's businesses and should not be done away with. The label, which was actually introduced by Great Britain in 1887, has come to be trusted not only by 70 percent of Germans but by customers around the globe as well. The Germans' comments are directed towards Brussels, where the EU is considering adapting country of origin labels to customs regulations.
The German government's economic development agency, Germany Trade & Invest (GTAI), wanted to find out just how valuable the "Made in Germany" label currently is around the world. International representatives for the organization, which markets Germany as a business and technology location and provides information to foreign companies looking to setup shop in the country, evaluated the "Made in Germany" label's reputation around the world.
First-class to the czars
German products' reputation is well-respected in Russia, where even the czars are reported to have valued German craftsmanship, according to GTAI's Moscow correspondent, Bernd Hones. "One German machine is enough for Russian companies to promise their customers German quality," he wrote. "Accommodation owners court guests with German-sounding names. On the Internet, consumers give rave reviews to German goods. In a nutshell, 'Made in Germany' stands for quality and dependability in Russia."
In Great Britain, which created the "Made in Germany" label as a signal of low-quality, imported goods at the end of the 19th century, the view of products from Germany has decidedly improved. "The reputation of goods and services from Germany remains good in the United Kingdom," reported Steffen Ehninger from London. "For at least 110 years, many Britons have connected mainly quality and dependability with German products." That's a trend that has increased in recent years, he added.
Labels alone are not enough
Views like those out of Russia and the UK, however, have become exceptions when it comes to what "Made in Germany" is worth. Such a tag in Brazil still stands for dependability, durability and quality, wrote Oliver Döhne, but there are some drawbacks. "The readiness to pay is sinking," he said. "German firms need to communicate more and invest in proximity to customers and after-sales service. In the upper-classes, German products are popular while the middle class is hardly aware of German brands."
"In the People's Republic of China, 'Made in Germany' is a solid sales argument, but is not enough to ensure success," wrote Stefanie Schmitt from Beijing. Competition has increased in nearly all sectors and companies manufacturing goods in China often need to explain that their products are only "designed" or "engineered in Germany." That has led Schmitt to advise business not to rely on the label. She said a company's "future will be improving its own brand."
Engineering, not passion
In India, some German products enjoy a good reputation but a "Made in Germany" label doesn't help all goods, wrote Katrin Pasvantis from New Delhi. "German products stand for quality and fascinating technology," she said, but added that high prices often keep customers from doing more than window-shopping. German goods also do not score as well when it comes to design and lifestyle products. "German machines, cars and kitchen goods are especially popular," Pasvantis said.
In the United States, a "Made in Germany" label can help get some goods sold. "When the German origin is known, manufacturers or products are seen to be of high precision and quality," Martin Wiekert wrote from Washington. "But, on the other hand, they are also seen as having a handsome price and being an unwelcome competition to products 'Made in the USA.' Many German companies use such labels cautiously or non-prominently."
A fading reputation
"In Japan, 'Made in Germany' is an important asset, especially when it comes to cars and machines," Detlef Rehn wrote from Tokyo, adding that Germany is also well-regarded when it comes to environmentally friendly and energy-related products. "This reputation has to be proved repeatedly."
In Japan, Rehn wrote, "Made in Germany" is not limited to goods and services. "That's seen in Japan by the very popular Oktoberfests and Christmas markets."