German Professor Encourages Students to Do Better Business in Germany
Cambodian enterprises might find it advantageous to begin peddling products in German marketplaces, according to Dr Lutz Hoffmann and Katrin Schlatermund, who spoke to College of Management students as part of the Dr. Handa Eminent Leaders Lecture Series.
According to Hoffmann, a professor at the University of Applied Sciences in Germany who has traveled extensively through Southeast Asia in the past few years, consumer trends in his home country lend themselves to Cambodian products. Germans, he said, value individuality, environmental protection and sustainability, health and wellness, other cultures, modern designs and home decor.
“You must discover what your country has and the possibilities it has,” he said, reminding the students that Cambodia has unique resources
that people in Germany would be willing to buy.
However, the key to success in Germany, he said, is in how Cambodian business people market their products. He provided the students with five tips:
1. Don’t copy products. “If you sell copied products in German markets, you will get a low price and most likely have problems with the German law and government,” he said. Although this sort of business could benefit in the short term, in the long term its reputation would be destroyed. Instead, he suggested finding a product that Cambodia specializes in, like silk or rattan, and brand it.
2. Figure out a price strategy. Many Asian countries aim to sell inexpensive products, but he said this doesn’t work. He suggests Cambodian businesses aim to sell quality products at a higher price than their “cheap” counterparts, but not as high as the market leaders.
3. Veer from mass advertising. Only 1 percent of advertisements and commercials are perceived by German audiences, he said. Instead, Cambodian businesses should select target markets and contact those people directly.
4. Figure out a distribution system. “Focusing on sales and distribution is the most efficient means of reaching your customers, especially with a limited marketing budget,” he said. “But it’s also risky." He suggested using channels such as trade fairs, importers and the Internet to reach customers. According to Schlatermund, the Director of Mess Frankfurt, one of the largest trade fairs in the world, trade fairs seem to be the most effective means of distribution in Germany, as the customers can touch, see, taste and smell the products as well as build relationships with distributors.
5. Find a niche market. Market research has been made much simpler with the Internet, he said, but business must zone in on who they specifically want to sell their products to.
In addition, Hoffmann and Schlatermund shared German economical statistics that students should keep in mind if they want to do business in Germany one day, such as the country’s over-aging population and its high spending rate. They also raised the point that Cambodian products are not too visible in Germany.
“There are stores (in Germany) selling Cambodian products, like silk, but people aren’t aware they are from Cambodia,” Schlatermund said.
For this reason, they encouraged the students to find ways to brand Cambodian products and make them more well-known abroad.
Hoffmann and Schlatermund took an interest in what the Cambodian markets have to offer after learning about the country's high-quality products and resources and noticing the popularity of products from other ASEAN countries, like Thailand and Vietnam, in Europe.
"We strongly believe that Cambodia has great possibilities of achieving pieces of cake on foreign markets - starting little by little, of course, but becoming stronger over time," Hoffmann said.