How to Market in Germany
Germany boasts the largest economy in Europe and the fourth largest in the world as measured by nominal GDP. Given its dominant role in world trade, it is vital that companies in the United Kingdom and elsewhere take an informed approach to how to do business in Germany. The Germans take marketing seriously too: two-thirds of the world’s trade fairs take place in the country. Foreign firms intent upon trading successfully within the German economy need to have a clear strategy driving their plans and practice for how to market in Germany.
Doing Business in Germany
Any foreign company planning on conducting business in Germany needs to be aware of the cultural differences between German society and that of the UK and other countries. Obviously there are individual differences wherever one goes in the world, but it is still possible to identify certain key norms of behaviour that one can expect to encounter when one is conducting business in Germany. Overseas companies who wish to be successful in doing business in Germany need to be aware of these norms and work with their German partners and customers with informed cultural sensitivity.
German Business Etiquette
Germans value forward-planning and close attention to detail. This is the norm within German business and it is something they expect from foreign firms conducting business in Germany. As is the case within the German nation’s society as a whole, German business is invariably conducted within a clear framework of rules and protocols and with well-defined lines of responsibility. This is not a culture that values spontaneity and overseas companies doing business in Germany will find that the national business culture allows far less flexibility than they may be used to.
Even if it results in a better outcome, German firms do not like their trading partners to deviate from an agreed plan. Remembering that German businesses do not like surprises is a key lesson for any foreign company looking into how to do business in Germany. Similarly, one needs to bear in mind that in Germany business is a serious matter and German firms will not appreciate the levity that sometimes characterises British office life. However, recent moves towards better work-life balance in many UK and US businesses have long been the norm in Germany. In fact, foreign firms conducting business in Germany should never forget that Germans invariably like to maintain a clear separation of their work, home and other areas of their life.
As we have already noted in our introduction to how to market in Germany, Germans value careful planning and close attention to detail; this is the expected norm within business transactions. A key aspect of German planning is punctuality. When doing business in Germany you should never turn up late for a meeting. In cases where an unavoidable delay occurs you should ring ahead and offer an explanation and apology. In a similar fashion your German hosts will not appreciate you arriving too early: the agreed time is the only acceptable time. This expectation of punctuality holds true for deliveries, transactions and other deadlines too.
Gift giving between business associates is not as common in Germany as it is elsewhere. If you wish to give a gift, however, you should select one that it good quality, but not too expensive or ostentatious. Quality pens, wine or spirits from your own country or small items featuring your company’s logo are all acceptable items to show your appreciation to partners with whom you are doing business in Germany.
Should you visit a German business associate’s home a gift of flowers, wine or chocolates will always be appreciated. German etiquette directs that flowers should always be of an uneven number and unwrapped, unless in cellophane. Never present your host with red roses or any bunch of thirteen flowers.
Business Dress Code
German expectations for what is acceptable dress in business circles are fairly conservative. Compliance with this code is an unspoken protocol of how to do business in Germany. Any deviation from this norm may risk undermining your credibility with your business contact.
Obviously somewhat more relaxed dress codes apply if you are dealing with German associates in the creative industries or the academic world, but in general terms German business men and women wear sober, formal clothing for the office. For men dark suits, white shirts and understated ties are the norm, while for women dark suits and white blouses or fairly conservative dresses are expected. Heavy make-up or showy jewellery for business women is often frowned upon.
German business people will dress formally even in very warm weather and, when attending a meeting with German partners or customers, it is a good idea not to remove your jacket until your host does so.
How to Advertise in Germany
It is important to understand that the marketing environment of Germany is very different to that of the UK, and indeed how to advertise in Germany is different to doing so anywhere else. It is impossible to grow one’s business in this environment without understanding the idiosyncrasies how to market in Germany. One key feature of German marketing is the importance of trade journals: the key decision-makers in German business gain most of their market information from trade publications. Germany has some 3,600 active trade journals within its market.
English is the international language of business and most German professionals are fluent in the language. When first making contact with German firms it is courteous and respectful to conduct that correspondence in German, which is where the services of a good professional translator are essential. Once business relationships are established, however, most German managers will move seamlessly into communicating in English with their British counterparts.
Online Marketing in Germany
Online commerce is an increasingly important factor in how to sell in Germany. In terms of e-commerce within the European market, sales in Germany are second only to those of the UK. Germany accounts for eighteen per cent of European online sales closely trailed by France at fourteen per cent. The UK currently achieves thirty-one per cent of Europe’s total.
To put this in a global context, online marketing and SEO in Germany was most recently measured at thirty-seven billion Euros of online sales per year which puts it at fifth place behind the USA, Japan, China and the UK. One note of concern when it comes to planning how to sell in Germany is that its nationals do not engage with social media to the same extent as people in other countries. Only around fifty-six per cent of Germans engage with social media whereas the figure in the UK and USA is in excess of sixty-seven percent. This is significant given the rapid growth of marketing via social media channels.
Email marketing is currently a hot topic for retailers based in North America and the United Kingdom. In these territories sales from email campaigns are showing significant growth. However, deciding how to sell in Germany by means of an email campaign is rather more problematic. Some twenty per cent of emails in Germany are blocked or marked as spam, which makes it difficult for marketing campaigns to consistently reach the in-box of German consumers.
British or American companies looking at how to sell in Germany need to be aware of the somewhat unique in the way German consumers use the internet. Germans spend less time online than people elsewhere. Furthermore, their searches are much more focussed, which means that impulse purchases are much less likely than is the case in the UK or US.
A Growing Advertising Market
Figures for the year 2013 saw a dip in advertising spend in Germany. However, since 2014 spending figures have enjoyed an upward trend, particularly in the electronic media.
An awareness of the power of television is a key factor when planning how to advertise in Germany. At twenty-seven per cent TV advertising takes the largest slice of Germany’s advertising spend and totalled some 4.13 billion Euros in 2013. Advertising in daily newspapers retains second place in terms of total expenditure but is experiencing a steady decline. The decline of advertising spend in Sunday newspapers is even more rapid.
When one analyses how to advertise in Germany it would appear that one cause of the gradual decline of print media is the increase of spending on online advertising. Internet and mobile advertising is currently ranked fifth in terms of spending in Germany. It increased by 9.3 per cent in 2013 and achieved sales of around 1.15 billion Euros.
Other promising options for how to advertise in Germany include outdoor adverting which increased by 2.7 percent, trade journals which were up by 3.6 per cent and radio which saw a 3.7 per cent increase.
The Practicalities of Conducting Business in Germany
Finally, there are a number of practical considerations for UK and other overseas firms looking at how to sell in Germany.
The use of credit cards has increased in Germany in recent years. However, their usage is still not as widespread as elsewhere, particularly for online sales and mail order. Germans tend to prefer to pay by bank transfer, known as Überweisung locally and the normal payment terms allow payment within fourteen days of delivery.
Choice of Suppliers
Foreign companies intent on conducting business in Germany will be well advised to consider using local suppliers whenever possible. German suppliers will know their own market inside out and can become valuable partners for firms wishing to expand their reach into the German market. German customers are very loyal to their own country’s brands and it will give your company valuable consumer credibility for doing business in Germany to be seen to be working with German partners.
The German Language
One key area to consider for how to do business in Germany is the use of the German language. The Germans are a proud people and rightly see their nation as being at the heart of Europe. Whether you are looking at how to market in Germany, how to advertise in Germany or how to sell in Germany you should always be aware of the importance of the German language. German consumers will expect to do business in their own language, as will many suppliers. Your strategies should reflect this requirement if your aim is how to do business in Germany.
An Expanding Market
Germany is an expanding market, which is why so many companies are asking about how to market in Germany. Germany offers a vast market with over eighty-two million inhabitants and one of the world’s highest GDPs. But Germans are discerning consumers so foreign companies looking into how to do business in Germany need to take the trouble to research the market thoroughly and to devise well-thought out strategies for how to market in Germany.
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