by Hans Pul
‘Made in Germany’ stands for quality products, for top-notch engineering. For world-class cars, machines, dish washers, etcetara. The reputation of German products as quality products is very valuable for the German economy as a whole. German companies eagerly use the ‘Made in Germany’ label to communicate the quality of their products to consumers around the world. The ‘Made in Germany’ label is such a strong brand, that some companies have adjusted their production processes in order to be able to use the label. They open an assembly plant in Germany and put together their product there, while (sub-)components are produced abroad. This leads to important questions: Does the term ‘Made in Germany’ make sense in times of globalized production processes? What does it mean that a product was produced in a country? When a product is assembled in country A, while the parts of the product were produced in country B, C and D, is the product ‘produced’ in country A? Is ‘Made in Germany’ misleading towards consumers?
These questions have become highly relevant, as the EU commissioner Algirdas Semeta plans to restrict the use of claims like ‘Made in Germany’.
According to German media, the European Commission is planning new rules concerning ‘place-of-production’ claims. EU Commissioner Algirdas Semeta wants to restrict the use of the ‘Made in Germany’ claim for products with a maximum of 45% of ‘foreign parts’. More precisely, 55% of the added value in the production process must be in Germany. The German industry fears an immense damage as a result of the EU plans.
Interestingly, the ‘Made in Germany’ label is not a German invention, nor is place-of-production marketing by any means a new concept. ‘Made in Germany’ was introduced by the British in 1877 (!), in order to protect the British market against foreign products. The label enabled patriotic shopping by British consumers. Ironically, the protectionist campaign wasn’t very effective in the long run. Rather, it backfired on the British econonmy in an unforeseen way: British consumers used the label to identify German products, which they thought were of superior quality compared to domestic products. The ‘Made in Germany’ label was (and is) therefore thankfully adopted by German companies. The label is not controlled by a central regulatory body. This had led to a diverse logo landscape, as the first picture of this post witnisses.
A classic example of a German quality product is Volkswagen. In 2007, the company introduced the tagline “Das Auto” (“the car”) to its logo worldwide. Clearly, Volkswagen uses the German language to emphasise the place of origin of the company and, implicitely, the quality of its cars. Interestingly the effectiveness of this strategy differs between countries, as this blogpost on its reception in Brazil and Russia states.
Let’s have a look at a less known German product that is marketed to American consumers: the bellicon mini-trampoline. I choose this product, because I think the references to the German origin of the product are interesting. Note the central role of the place-of-origin in the quality claims:
“Quality Made in Germany. Like many other premium brands (Porsche, Mercedes, Bosch), the bellicon mini-trampoline is produced in Germany. Many of our customers like to call the bellicon “the Porsche of mini-trampolines.” Precise German engineering has enabled us to create a new worldwide standard for mini-trampoline quality.”
Cleary, the claimed quality of the product is related to its German origin. The German origin brings about positive associations. However, the marketeers seem to have recognised that the German origin can have multiple meanings for American consumers. They seem to have recognised the tension with a trend among American consumers of supporting the domestic economy by buying American products. This becomes clear towards the end of the following quotation:
“Made in Germany – Assembled in the US. Our trampolines are made almost exclusively with parts produced in Germany. Only certain raw materials not available domestically are imported, and the mats are sewn outside Germany. During 2011 we will relocate mat production and sewing operations to Germany. Trampolines are pre-assembled under the highest quality standards in our Cologne facility. From there, trampoline parts are shipped to the U.S. for final assembly in our Chicago warehouse. We are pleased that we can offer a high-quality product and do our part to create jobs in the U.S. “
Coming back to the discussion whether a company should be allowed to use the ‘Made in Germany’ label: I think the place-of-origin of products in increasingly irrelevant. It is not that important whether Volkswagen produces its cars in Germany of in Mexico; it is not that important whether Volkswagen uses third-party components from other countries in its cars. I think the quality monitoring standards are more relevant. I will leave it an open question for now, whether a label should be in place to represent “German quality” and whether and how this should be controlled by an independent body.