Cultural and Business Aspects – Week 3

Business

Entering the last week, we had so many insights into the German market and how it functioned. Being on a team with students from India and America, we had no clue about how big trade shows are to the European market. During our interactions with various officials and some store managers, we realized that if our client had to enter the German market, they would have to take the trade show route. It was amazing to know that almost all the business in most parts of Europe happens through these shows, which attract almost a billion people every year.

When it came to business and dealing with clients or salesperson/distributors, we learned the hard way that communicating our needs in German was the first and most important thing. German businesspeople do not entertain any other language and are very picky about the way we approached them. We had to schedule prior appointments with them (which were hard to get in the first place), and then there was the expectation of communicating in German with them. In terms of the shopping habits of the German consumer,  it was evident that they gave the quality of the product top most priority. Also, they had a preference for “Made in Germany” brands. Having said that, they were extremely brand conscious and did not warm to or show interest in unknown international brands. With considerable disposable income, they fell into one of two categories with very little very middle ground in between: they would prefer to either purchase very expensive products or very cheap ones. Buying products that were priced in between was not a popular sales proposition.

We also saw one common theme across German cities. In spite of all the big brand presence in the market, small local brands were very prevalent among the average consumer, and they really favored such brands. These local brands were limited to their respective cities; it was hard to find a local Munich brand in Frankfurt or other cities in Germany. The market was very diverse in terms of the goods sold, and, unlike in the US, consumers were more inclined to focus on two or three big specialty stores for their non-food purchasing and mostly Aldi or a local market for their food shopping.

Overall we found the German market to be very different from others and a challenging one to enter,  especially if you are an unknown brand. However, once people see the brand and get a firsthand feel of the products in the trade shows, it is possible to attract the distributors and make a connection to enter the market in a very profitable way. Entering and sustaining the growth in German market is a marathon and not a sprint.

Cultural

Our last free weekend, we spent in Prague.  Prague is probably my favorite city of all those we visited in Europe.  The beauty of the architecture and the old eastern European designs were really impressive.  More so than other cities, Prague had a very religious feel to it.  On the tops of the buildings, there were gold plated crosses or symbols of the Catholic/Christian faith.  The importance of religion when Prague was designed and how this beautiful city was literally built around the peoples’ faith is quite amazing.

Unfortunately, our hotel was a little off the beaten path in Prague.  We were about 45 minutes from city center by transit, which equated to a 25-minute drive.  Fortunately, our hotel was the nicest place we stayed during our whole time in Europe.  The accommodations included a tremendous breakfast buffet for the first time on the trip.  Our first evening in Prague, we went to an amazing Italian restaurant right on the river in the city center.  The weather was perfect for the first time in two weeks, and we had a very enjoyable meal.  After the meal, we went to see what Prague’s famous nightlife was all about.  The city had an energy after dark to it that Munich, Geneva, and Zurich lacked.  We were by no means out to get wild like some in Prague, but it was nice to feel the energy and excitement of the evening. There were many Americans and English speaking people in Prague that night which aided in the excitement.  The next day, we headed to a watch tower with breathtaking views of the city.  We hiked up the hill halfway and then jumped on a tram that took us up the rest of the way.  Prague was an awesome time.

We arrived back in Munich late Sunday evening.  Early Monday morning we departed for Ingolstadt to meet with Professor Matta and tour the Audi facility.  We learned a lot about Bavarian culture while we were in Ingolstadt.  Being a smaller town, there was a real sense of pride about being part of Bavaria.  Bavaria has the best school systems in Germany, as well as the best Universities.  Our cab driver told us that he is not German, he is Bavarian.  We had heard about Bavarian pride, but never really got to feel it because Munich is such a melting pot of a city.  Ingolstadt gave us the feeling that matched what we had been told.  The Audi tour was fascinating.  The Ingolstadt headquarters employs 50,000 people.  That is not a typo!  In a town of 100,000, Audi employs 50,000 people.  There is a huge sense of pride in working for Audi and driving an Audi. The tour of Audi was a first class experience. It was amazing to see all of the technology that is used to build one of those amazing machines.  Dr. Matta took us out for lunch after the tour, and we spent the remainder of the afternoon putting the finishing touches on our presentation.  All in all, it was an action packed last four days in Europe!