Ethno-Marketing: Looking for New Chances | Business| Economy and finance news from a German perspective | DW | 05.07.2002
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Ethno-Marketing: Looking for New Chances

The current economic downturn in Germany has hit the banking business. While some banks are laying off staff to compensate for the losses, others are discovering ethnic minorities as a lucrative target.


The days are long over when immigrants in Germany were confined to providing cheap food outlets in German cities. Today German businesses are starting to take ethnic minorities more seriously as consumers, discovering them as a profitable target groups in a time of financial crisis.

Are you are a foreigner, working in Berlin and looking for a tax consultant? Or a kindergarten for your kids? If so, you probably wouldn't think of turning to your local bank to get, would you? But maybe you should consider doing just that.

Germany’s Commerzbank AG offers a special service in its Berlin headquarters on Potsdamer Strasse. At its "International Counter" a crew of seven multilingual staff members help foreigners who have just arrived in the city cope with everything from finding a dentist to getting through the maze of German bureaucracy.

"We have 10 to 20 enquiries each week," says Maike Plaehn, one of the managers of the Commerzbank’s Berlin branch. "It’s mostly expatriates and diplomats that come here to look for help."

Some of their clients work at Berlin’s Sony or DaimlerChrysler headquarters. Most of them are American or European but they also have customers from other corners of the globe, Plaehn told DW-WORLD. "Among the seven of us, we speak Arabic, Italian, Spanish, French, English, and of course German," she said.

And most importantly, hardly anyone leaves without opening an account at the bank with the friendly staff.

Capitalizing on foreigner relations

The Commerzbank has been offering this special customer service since 1995, when the embassies moved from the former capital Bonn to Berlin. Since then, the embassies as well as Berlin’s international companies refer new staff directly to the bank's "International Counter", thereby advertising by word of mouth.

The service is part of the bank’s strategy to tap into the growing pool of foreigners living in Germany. Although "Ethno Marketing" or "Intercultural Marketing" has long been the talk of the town in other countries, especially the United States with its large Hispanic population, in this time of economic downturn, Germany is only just beginning to discover the economic potential of its cultural minorities.

While the Commerzbank’s International Counter service so far is only available in Germany’s capital and is targeted towards a small group of high-level employees, the bank also offers a special investment plan for the 3.5 million Muslims living in Germany. The Al Sukoor European Equity Fund enables Muslims to invest their money in accordance with Islamic law.

Banking according to Islamic law

"We started the fund more than two years ago, because we were approached by investors from the Middle East who were inquiring about ways to invest their money in Germany without coming into conflict with Islamic law," explains Marco Heimken, one of the Al Sukoor-fund managers, "so we started the fund as part of our product-line of so-called ethical funds."

Ethical in this case means that the stocks included in the funds are regularly monitored by a five-member "Sharia Council" which is part of Commerzbank’s cooperation partner in Saudi Arabia. They make sure that certain lines of businesses such as nightclubs, companies that produce alcohol, or even airlines which sell alcoholic beverages are not included in the investment package. Financial service companies are also taboo, since Islamic law forbids reaping benefits from interest. Quite ironically, even the Commerzbank bonds cannot be part of the Al Sukoor-fund.

600 investors had paid some € 22 million ($21.6 million) into the fund by the end of June this year. And with a performance rate of 13 to 14 percent according to the Morgan Stanley Capital Index (MSCI) for Europe, the Al Sukoor fund it’s doing much better than the overall German market in this time of financial crisis.

Targeting the Turkish community

Apart from banks, other German businesses are also discovering the country’s ethnic groups, not least of all the Turkish. Roughly 2.5 million Turks have made Germany their second home in the last 40 years. While the first Turks came as so-called "Gastarbeiter" (guest workers) to Germany in the early 1960s, which was then experiencing a severe labor shortage, many of them decided to stay.

With an estimated purchasing power of € 25 billion ($24.5 billion) each year, the Turkish could be an interesting target group for many German businesses.

Yet German companies are still too reluctant to tap into this market, believes Folker Kraus-Weysser, author of a recently published book on Ethno-Marketing in Germany. "Talking to managers at big marketing events, I got the impression that German managers are simply not up to dealing with a different culture," Kraus-Weysser told DW-WORLD.

One of the companies which tries just that, however, is Yellow-Strom (Yellow Electricity). Germany’s electricity market was liberalized more than three years ago, and almost immediately after entering the market in August 1999, Yellow-Strom incorporated the 2.4 million Turkish people living in Germany into its marketing strategy.

Intercultural marketing

"Intercultural marketing does not simply mean that you translate flyers," Yellow-Strom spokesperson Andreas Müller told DW-WORLD. "It means that you develop special strategies geared towards this target group." For the bilingual staff of the company’s intercultural marketing department this means carefully adapting the content of advertising to the reality of Turkish people living in Germany.

"For instance, we showed a piggy bank on a poster to demonstrate to Germans how much they can save by switching to our electricity rate, but our posters for Turkish clients showed a more neutral box for savings since Muslims consider pigs unclean," says Müller.

But it’s not only content that counts. Customizing television advertising, for instance, means that in order for commercials to be successful on Turkish channels, they have to appear softer in color and more sentimental than spots run on German television.

Despite these isolated attempts of companies such as Yellow-Strom, says Ethno-Marketing specialist Kraus-Weysser, it's surprising how many German companies are still missing out on this opportunity.

"Today, when everyone is complaining about target groups getting ever more diversified, it’s a miracle that companies choose to ignore such a large group with comparatively well-defined features," says Kraus-Weysser, "it’s almost silly and certainly unproductive for German businesses."

"These companies haven’t realized that the days are long gone when Turkish workers would work in Germany and then send most of their money to their families back home. Today, they spend around 90 percent of their income in Germany," he adds.

From an economic point of view, Kraus-Weysser would recommend focusing on the Turkish immigrant group for yet another reason. Much like the Hispanics in the United States, the Turkish have long occupied the lower rungs on the socio-economic ladder in Germany. Thus, explains Kraus-Weysser, they are more likely than the average German to turn to costly products and well-known brand names, like a Mercedes-Benz, "thereby showing that they are worth being respected."

Taking Germany’s minorities serious as customers is therefore another step towards granting them social acceptance. And for some businesses in Germany it might provide a way out of the current economic crisis.

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