- The management consultancy globeone has conducted the first in-depth study of the images of brands from the emerging markets China, Brazil, Russia, India, and South Korea in Germany
- Only one-third of German consumers can spontaneously name a brand from one of the emerging markets studied
- Major weaknesses in traditional values like quality, reliability, and sustainability
- Brand acquisitions, such as those of Volvo, Jaguar, Land Rover, and Lenovo, are so far the most successful way to achieve recognition and a positive image quickly
- South Korean brands are the leaders among those studied; Chinese brands are gaining ground quickly, and have almost caught up in the category “innovation and high tech”
- Korea and China focus on similar industries as Germany, and are therefore seen as main competitors
- Untapped market potential for many BRIC champions – market-driven brand positioning brings opportunities
Cologne, August 14, 2013 – German consumers are still relatively unfamiliar with champion brands from emerging markets. Russia leads the group: 36% of those surveyed were able to name at least one Russian brand without prompting. At least 17% were able to recall a Chinese brand, whereas only 11% could name an Indian brand, and 6% a Brazilian one. All in all, results show that companies from BRIC countries have a lot of work to do in building up the images of their brands in the EU’s strongest economy. South Korean companies demonstrate how this can be done: for example by intentionally remaining silent about their brands’ origins.
Those are the results of a representative study conducted by globeone, an international marketing and strategy consultancy based in Cologne, Germany. For the study, an independent market research institute surveyed 1,000 German consumers.
Most (69%) of those surveyed indicated that they do not have a preference for brands from the emerging markets studied. Brazilian brands in particular are not yet relevant for German consumers due to their very limited availability (86% have no preference). South Korean brands are the only ones that have been able to build up a comparatively positive image: 24% of those surveyed like brands from South Korea. In contrast, Chinese and Russian brands are viewed more negatively: 32% and 24% of those surveyed respectively said they do not like brands from those countries in general. The images of those countries in general affect the images of products and brands negatively.
German consumers are also skeptical of the products’ attributes: they see deficiencies in quality as well as in other traditional values, such as reliability and trustworthiness. In these key criteria, South Korean brands stand out from BRIC country brands: excellent quality is most frequently associated with products from South Korea (25%). But results also clearly show that Chinese brands are catching up: in innovation they trail South Korean brands by only two percentage points, and they already lead in value for money.
Brands from South Korea are the clear leaders in the ranking of the most well-known “emerging brands”. In aided recognition, Samsung (98%) and three other South Korean brands (Kia, Hyundai, and LG) achieve over 90%. Interestingly, these brands generally forego a direct reference to South Korea, their country of origin, and instead choose to communicate as global brands. For that reason, many consumers mistakenly think South Korean brands are Japanese. Only heritage brands, such as Volvo, Jaguar, and Land Rover, which have been taken over by companies from China or India, achieve similarly high recognition (96%-94%) as the South Korean leaders. The next “true” emerging market brand, Lada from Russia, follows with a considerable gap: it comes in eighth place, with 77%.
All five countries are clearly associated with certain key industries: China and South Korea, for example, are most strongly associated with household and electronic devices (19% and 20%, respectively), and India with textiles (23%) and IT (16%). These industries, already associated with certain countries, are where German consumers see the greatest potential. 45% of those surveyed say that Russian brands will become even stronger in the fields of energy and raw materials. Brazilian brands are seen as growth candidates in the food and beverage sector. A comparison between China and South Korea is particularly interesting: German consumers are expecting even stronger brands to emerge from both countries in the automotive, household and electronic devices, and IT sectors. Those surveyed also said they expect Chinese brands to intensify their efforts further in the battle between the two countries for technological leadership. That in turn implies that both countries will also compete more strongly with Germany.
“To be successful in Germany, BRIC brands will need to improve their products significantly in terms of perceived product quality and sustainability. Also, many of the new champions still lack the right approach for penetrating the complex European market with a brand positioning that is relevant. But many of them are addressing precisely this issue,” says Niklas Schaffmeister, PhD, managing partner at globeone in Cologne.
Despite increased investment and acquisition in key euro countries, BRIC companies still face significant barriers in building their brands. “Besides a keen understanding of markets, building a brand also requires considerable time and investment,” says Schaffmeister. “Many BRIC champions balk at that. But South Korea shows us how market shares can be captured in developed markets as well.”
The representative study investigated for the first time the images of brands from Brazil, Russia, India, China, and South Korea in Germany. The data were collected in June 2013 by an independent market research institute contracted by globeone. The results are based on a survey of 1,000 consumers in Germany. The 65 brands studied in the survey were selected by means of a pre-test.
Read more and download the survey here: