Mr. von Pierer is correct when he says, among other things: “Made in Germany” is globally recognized as a premium brand. Germany, so he says, possesses a top-class educational system, a dense and modern infrastructure, rail and integrated data networks, public utilities and waste management industries, powerful technology clusters distributed throughout the country; for instance medical technology, automotive and mechanical engineering and media. Germany, von Pierer continues, is a cosmopolitan location. He views Germany as a turntable between Western and Eastern Europe. And he mentions the position of Germany in the center of the European Union. The list of his arguments in favor of the industrial location Germany is long and convincing. However, he does concede that Germany does have its weaknesses, without naming them.

We, as strategy consultants, see the strengths which Germans possess, insufficiently utilized. Germany does not contrive to utilize the purchasing power in its own market, resulting from its own strengths. This is the biggest weakness. Specifically the consumer goods industry has enormous deficits. The Japanese celebrate from quarter to quarter new, and at times, two-digit growth rates at the sales of cars. Cell phone business is firmly in the hands of the Finns, Americans and Koreans; computer business does not happen without the Asians and Americans. In fashion it is the Chinese, Vietnamese and Romanians, just to mention a few, who convince the German consumers with their products. While momentarily still with Western brands, the Chinese are already working on offering their own brands. The costs for piecework pay being too high is often the cause mentioned for products made in Germany being too expensive and therefore being forced from the market. Of course, the German performance costs money. Without money, the “strong sides” Mr. von Pierer mentioned, would not be possible.

Germany has to develop a new marketing thinking and to get it going. The German consumer goods industry has to curtail the power of retail, because with these uninspired rebate strategies, retail is destroying, medium and long-term, the high quality standards which are expressed by the term “Made in Germany”; and thus ultimately hurting the consumer. In the long run, bottom-of- the- line prices lower the standards of quality.

Marketing thinking and the consumer goods industry have to free themselves of rebates not consistent with the performance of the product. Of course, mass products of daily needs have to be worth the money, but they also have to contain a fair chance for all market participants to realize profit. In order to market products for the fulfilment of needs successfully, strong brands are required which represent the immaterial value of a product. It is essential to replace brand management through brand leadership.

If the consumer goods industry does not know how to utilize the strengths of the industrial location Germany, the relocation of production to low-wage countries is going to continue; the unemployment of millions will persist. What Mr. von Pierer can still praise as the strengths of Germany today could be lost and the country could be harmed.

Instead of orienting oneself too much on the overall economic situation and the development of branches, we suggest to commit our own forces, the quality and the capabilities of the employees all the way to the strengths of the brands, at the highest possible level in order to produce products to head up the range of products on offer.

It is not enough to only see the strong sides; we must also utilize them.

The essay of Heinrich von Pierer was published in the Sunday paper “Welt am Sonntag” No. 35.