Comprehensive strategies and tips to evaluate your market potential and find the business partners you need to expand to Germany
Stability and a steady increase in growth are economic qualities of Germany that makes it an ideal location to begin branching out into the European market. The country is the 4th largest economy in the world and largest consumer market in the European Union (EU). Market expansion in Germany means a significant presence in the EU market.
The geographical location, right at the center of the EU region, makes it the keystone which foreign businesses look for to establish their foothold and European expansion strategies. Companies can rely on the highly skilled labor force with a high level of productivity, quality engineering and state of the art infrastructures.
Market Overview and Tips in Developing a Product for the German Market
German consumers are highly responsive to innovative, high tech and quality products with modern designs. Examples include computers hardware and software, electronic components, health care and medical devices, synthetic materials and automotive technology. Agricultural products also hold potential in the market. For most products, price is not as important a factor compared to quality. Breaking into the country’s market requires studying the different aspects of the consumers.
Here are key elements to consider in developing a product for the German market:
- The German consumer finds it necessary to be well informed about the product before making a decision. They have a tendency not to take risks, rather they always like to be on the safe side. This characteristic is noticeable in numerous aspects of business including investment, cultural, security and privacy particularly data protection. When developing a product, think of the trust elements such as partner logos, certified approvals (TUV) and testimonials. This gives conservative consumers confidence in unknown products and services. Honest and trustworthy product relations are the strategy to go for to gain trust and confidence.
- Localisation is key to better product endorsement. Generally speaking, non-English speaking natives still like getting their information in their local language. If the target audience is in the older age group, it’s best to translate information about the product or service into German. Although more than 50% of Germans understand and speak English, localizing the product, the information and digital marketing campaign is best. Setting up German language websites, blogs and social media account adds more value to your strategy.
- When you think of the country’s market, think of uncompromised quality. Quality squashes all other aspects of the product or service including price. In a consumer research by Google, per country, Germany has the lowest number of apps installed on smartphones but has the highest average number of paid apps. Germans are not afraid of spending on things that are worth the price. In launching a new product or brand, set up a simple and fast communication service to allow for discussion, questions and complaints. Germans can be very vocal in stating their opinions in public or online.
In the German market, innovation and uncompromised quality is everything. Consumers are smart and know what they want in products and services, and will remain loyal to the brand as long as they meet the key elements of standard, trust, localized and quality.
The Roadmap to Success for New Innovative Products in Germany
In a study conducted by Nielsen and presented at the Consumer 360 Conference in Frankfurt, Germany (2011) deciphering the German consumers’ mythical characteristics of being too conservative and hard sell. Nielsen reveals the key factors to successfully launching a new innovative product into the German market.
- The product must present and deliver true innovation that consumers need/want. Launch a campaign to get the product noticed.
- Create the right connection to land the message. Communication must be short and sweet, focused on delivering a quality and innovative product.
- Make the product or service irresistibly attractive by these measures - relevant, better and credible.
- Point of purchase - the product or service must be accessible in the right places. The price matches the quality, winning the value equation in the eyes of the consumer.
- Make sure the product delivers on promises, and stays strong in the long run for loyalty.
The success in entering the country’s market is to build a strong foundation that meets critical consumer needs. Developing a unique value scheme, creating and transmitting this clearly gains credibility, and delivers the value promised.
The roadmap helps new businesses to navigate the right course of actions to product innovations and improve the chances of success in the German market.
Finding the business partners you need to expand to Germany
The German market values links to industry associations, national and local trade and business trade networks and even political institutions such as the European Commission. Strengthening the foothold in the German market requires a strong partnership or affiliation with an established player. It’s a necessity for new entrants to be able to demonstrate a true contribution to the organization such as attending industry events, issuing relevant content through white papers and other mediums and participating in panel discussions.
It’s also vital for new entrants to partner with an individual or company to better assimilate to the market. Through the links in industry associations, national and local trade and business networks, a new company can look for the right local business partner to expand the network further and help in selling the product. An established individual or company also strengthens the trust element in building the brand, product or service.
Explore the different types of business partnerships under the German law through a legal adviser/consultant. The different types are created to cater to the specific needs of both parties, foreign or local. They have their own legal personalities and obligations.
The German market is extensive, mature and promising with the right product or service. New entrants must learn the rudiments and quirks of the different demographics but generally speaking consumers are focused on relevance, quality over price and trust.
Information link for Nielsen:
http://www.nielsen.com/us/en/insights/news/2011/innovation-in-germany-myths-vs-reality.html
Learn more about expanding your company into the German market and don’t miss out on the opportunity for expansion in the EU through Germany.
