Interestingly, half of the surveyed Indian middle class consumers (with gross monthly income of Rs. 18,000-42,000) like German brands, pointing to a huge potential for German products and services among the rising urban affluent in India – an often unexploited potential by German companies.
These are some of the key insights of the “BRIC Branding Survey”, the first ever representative survey of German brands in the emerging BRIC countries. The survey was commissioned by the Germany-based brand and marketing communication consultancy globeone. Findings were based on more than 4,000 interviews with consumers in 20 of the most important cities in China, India, Brazil and Russia, conducted by leading independent market research institutes in 2011. In India, a total of 1,000 Indian consumers in Mumbai, New Delhi, Bangalore, Chennai and Pune were interviewed.
Adidas is the most well-known German brand in India
59% of urban Indian consumers could spontaneously name one or more German brands. This stands in comparison to China, where the top-of-mind awareness of German brands is 85%. The brands with the highest awareness rates are German sportswear giant Adidas (79%), consumer goods brand Nivea (73%) and insurer Bajaj Allianz (68%), followed by automotive brands BMW (65%) and Mercedes-Benz (60%). Surprisingly, given the traditional dominance of German automotive, only BMW and Mercedes-Benz made it into the top 5 ranks of German brand awareness in India. In the eyes of Indian consumers, Adidas is not only the most well-known, but also the most popular German brand, with 57% of consumers claiming that they like the brand. In the popularity stakes, Adidas is closely followed by Puma and Nivea (both 52%).
German brands are strong on product excellence, weaker on meeting local customer needs
The findings also suggested that, for many attributes, the perception of German brands is substantially more positive than that of brands from the USA, Japan or France. Indian consumers from the upper middle class and higher income segments rank German brands highest on the attributes of “excellent quality”, “high durability” and “outstanding design”. On top of that, every second consumer agreed that German brands are associated with “high prestige”.
German brands do not enjoy a perfect scorecard in India, however – only 23% of the respondents believe German brands are closely oriented towards “meeting local customer needs”, compared to 53% for Indian brands. Furthermore, local brands perform more strongly on offering “good value for money” and “good after-sales service”. On these attributes German brands have it more difficult in India.
German country-of-origin can be used to drive purchase
It was apparent from the findings that brand association with Germany is more prominent in some industries than others. Typically, these are industries where Germany has long had a global stronghold, such as automotive and engineering. The brands most strongly associated with a German origin include beer brand Becks, industrial group ThyssenKrupp, sanitary fittings manufacturer Hansgrohe and fashion house Hugo Boss. As brand origin is a relevant purchase driver for 69% of respondents, a stronger emphasis on the German brand origin can further increase the overall preference for German brands. Across the board, more can be done by German brands to enhance this attribute.
“Compared to many other global brands, German brands tend to act very conservatively and are often reluctant to invest in building brands in India. In local communication, the strength of the label ‘Made in Germany’ should be used more often or emphatically,” said Tina Marie Monelyon, Country Manager of globeone India.
German brands are perceived as relatively expensive
Despite the good reputation and consumer-identified preference of German brands, they are purchased infrequently in many product categories. The relatively high prices – about 68% of Indian consumers consider German brands to be expensive – and, in many cases, the positioning of German brands in luxury and premium segments are likely causes.
“In India it is important to also address the aspirations and needs of the expanding middle class. A company must be willing to reconsider its brand proposition and even extend its brand universe, in order to appeal to the varied demographics in India – not just the top earners but the consumer who may be earning RS. 42,000 a month,” said Monelyon.
Word-of-mouth remains an important source of brand information for consumers
In China, Brazil and Russia, the Internet plays a major role in enabling consumers to obtain information about foreign brands. Indian consumers, however, are still more likely to rely on traditional channels such as word-of-mouth (recommendations from friends and family) as well as TV for brand information. Overall, digital channels may be of relatively low relevance now but their future potential cannot be overstated. The onus is on brands to carefully integrate such channels into their communication media mix and, more importantly, to continuously listen to and engage their most important audiences.