Build where you sell
BriefLetter - Issue 06/2013
The realization that production and point of sale should be as close together as possible is not new. What has been occasionally depicted as new marketing knowledge is a hundred and more years old. Siemens, just to give an example, already created production sites in America and India in the 19th century, in order to be near the developing markets and to act demand-driven. The European industry acts today like the pacemaker of the past - with one exception - they produce less and less in Europe. Mostly the argument is used that the piece rate in Europe, but especially in Germany, France, Italy, so specifically in Western-Europe, is too high and that in order to be competitive in Europe, one has to produce in low wage countries. Surely, many things can be convincingly proven with figures. However, are these arguments based on the experiences of the past still successfully convincing in the medium term and long term?

In the coming years the consumer goods markets of the First World are going to get fewer impulses from the price of the product and more from what the products offer for the money. These consumer goods markets are less shaped by what the people need, but rather by what people want. Products satisfying needs are hardly going to be driving forces of growth in Europe, products creating wants and fulfilling wishes and dreams will be. And these can be once again produced in Europe, because large national economies live from a strong service industry along with a well-functioning industrial economy living up to the expectations. Build where you sell, this applies with no ifs and buts also to Europe.

Occasionally we hear that the production in low wage countries creates – depending on the industry – new jobs at a proportional basis of 10:1 or 3:1 at the home market of companies with globally structured production models. Even here – it is permissible to doubt – one can observe that the dependencies of successfully outsourced production facilities are becoming independent and autonomous rather quickly. Years ago, in Europe, Korean and Chinese cars were not competitive, they are now developing better in Europe than European products. And this is not just because they are employing European designers and engineers in China and Korea, but rather that they have reached an efficiency of the market that allows them to export independently.

For us the consequence is: The European industry has to re-learn to produce at home for the markets in Europe, in the same way and with equal fervor that they use to produce in America and Asia, always market-driven.

Successful marketing means, build where you sell and since there is no global market, this ancient principle also applies: think global and act local.  
 
SchmidPreissler SchmidPreissler Strategy Consultants


Specialized in consumer goods related industries, trade and investments.

Independent and personal.

Creative and innovative strategies through intellectual approach: For excellent business results.

Brand equity enforcement and performance, corporate and product brand strategies.

Proven Business Tools:

The Waisted Rectangle©,
the new perception of the consumer market for demand and supply

The 7-Elements-Definition©
of a brand

The ”Enlightened” Consumer©
as target community

The BrandEquity + Performance Program©

The Holistic Corporate Communication Concept©

Special consultancy subjects:

Creating strategic alliances
brand diffusion
joint ventures
mergers & acqusitions

The Waisted Rectangle©

more....

Editor: Dipl. Soz. Maximiliana Schürrle

SchmidPreissler International Strategy Consultants GmbH
The Lion's House
Burgstallerstr. 6
D 83703 Gmund am Tegernsee