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!

Exploring Switzerland and Munich

The last week has been filled with a plethora of cultural experiences that have been both enlightening and delightful. The journey of our most recent week first took us to Geneva, Switzerland. The most amazing part of the trip was the train ride to Geneva. We travelled through the hilltops above Lake Geneva, enjoying breath-taking views of small towns near the lake with the Alps just beyond. Geneva was really cool, but it was difficult to thoroughly explore the area given the down-pouring rain we had the whole time. The best part of Geneva was taking a trip to the CERN research facility, which was something I have always wanted to do. It was definitely a nerd activity, but was exciting to be at one of the most influential research labs in the world where CERN scientists created the internet, the large hadron collider, and discovered the Higgs Boson. CERN is also featured in the book and movie Angels & Demons.

Passing Lake Geneva
Passing Lake Geneva
View from above in Geneva
View from above in Geneva

After Geneva, We headed to Zurich for the rest of the weekend. I think the team definitely enjoyed Zurich more, if only because it didn’t rain quite as much! It had a wonderful city center and it was very enriching just to walk around aimlessly. Unfortunately, all of the shops are closed on Sundays, so we weren’t able to partake in a shopping excursion. We found an awesome café though, and sipped on delicious coffee and tea while taking in the local culture. The café appeared to be a favorite among the locals, which convinced us it was the real deal. We also had dinner at a fondue joint called Swiss Chuchi, recommended by an Hungarian girl working at our hotel. She said it was traditional Swiss cuisine, so we had to try it. It wasn’t the ideal cuisine with beach season coming up, but was worth it to get a flavor of the culture.

Limmat River in Zurich
Limmat River in Zurich

We headed back to Munich Sunday night ready to dominate the work week. Monday night, we went to a traditional German restaurant where we ate weiner schnitzel and ragout with asparagus and dumplings. It was the best German food we have had so far. Tuesday, we were able to find a gym nearby that wasn’t too expensive. It seems that Germans don’t exercise the same way as Americans. The gyms we’ve found have been small and costly. Working out at this German gym was certainly an interesting cultural experience. After the workout, we needed some carbs so we went back to our favorite Italian restaurant, and it was just as fantastic as the first time. The next day gave us a taste of German culture that we hadn’t sampled yet. We were walking through the city center and stumbled upon a huge market (called Viktualienmarkt) with tents filled with all types of food, drinks, and gifts. It was so interesting to walk around and see all the different things that the local culture offered. We then happened upon the original Hofbrauhaus, and, of course, we had to stop in. After a drink and a pretzel, we checked out the English Garden a bit more and got to see a spot on the river where people surf. On our last full day in Munich, we took a trip out to Dachau Concentration Camp. This trip was sobering. It was surreal to be seeing a large Nazi concentration camp and a key war area of World War II. The site definitely did a good job at communicating what happened and of presenting the information in a way that allowed us to learn a lot. Nonetheless, it was quite an experience to cap off a week full of cultural immersion.

Hofbrauhaus in Munich
Hofbrauhaus in Munich
Surfing in Munich
Surfing in Munich

GAP Germany, Week 2 Business Blog

After a relaxing (but expensive!) weekend in Geneva and Zurich, Switzerland, we returned to Munich late Sunday night. The weekend left us refreshed and prepared for a work week (mostly) dedicated to preparing our slide deck and developing our market entry recommendation “story” for the client.

Monday was a national holiday in Germany, so we decided to redirect our focus from contacting more distributors, department store buyers and industry-specific organization (Chamber of Commerce and Industry, US Consulate, etc.) experts, to honing in on a clear direction for our strategic recommendation.

Side Note: As a team, we would suggest creating a similar “inflection point” for consulting-based projects; pick a time to cease the research phase of the project so that you can focus on delivering a solid recommendation/slide deck to the client. At a certain point, there are definitely diminishing returns gained from more (aka excessive)research and/or outreach. With that said, collectively choose that point carefully and thoughtfully and make sure you cover your bases!

On Tuesday, the import manager from the Chamber of Commerce and Industry unfortunately had to cancel our meeting; however, we were able to chat over the phone later in the week. His recommendations and advice were very similar to those of our previous contacts in Germany: securing a meeting with a distributor or department store buyer without visiting a large trade show, marketing your product prior to said trade show without having contacts in the intended city of entry with proven sales data in hand or a full assortment of product to show in the (unlikely) event of meeting with an interested buyer, is incredibly difficult in Munich, let alone Germany.

However, despite this less-than-encouraging feedback, we have at least received this same consistent market entry message from our in-country meetings and conversations. We believe that our market research, competitive shopping and meetings thus far have nonetheless adequately prepared us to deliver a quality, valuable recommendation to RG Barry.

(Another) Side Note: Make sure you do your homework beforehand! Spending time in Columbus and the first week in Munich researching the market, industry and potential meeting partners put us in a favorable position to deliver value to the client even without executing exactly what we hoped to achieve. Although we still plan on recommending a specific tiered market entry strategy, remember that it is completely okay to give the client an honest “do not enter/do not do it” recommendation. Initially, they may be disappointed, but, in the long run, they will be very happy that they did not waste time and money on an unprofitable or impenetrable market.

We are excited to review our first slide deck “draft” as a team on Friday and will adjust as necessary before our presentation next week. We have a lot left to accomplish, but are looking forward to a fun weekend in Prague until Sunday night!

Danke Schoen,

GAP Germany Team