The renaissance of the brand

Research

The majority of Germans are more concerned with quality than with price in their purchasing decisions. This is true for the first time since 1995.

The German consumer may be sensitive to price, but the times are over in which he skimped and was constantly on the lookout for special offers. After disappointing consumer experiences with an abundance of no-name products, the German consumer is increasingly discovering his love for brand-name articles. Last year, according to a study published by the consulting firm McKinsey in November 2015, the majority of Germans were more concerned with quality than with price in their purchasing decisions. And this was the first time since 1995!

In view of the flourishing economy, rising income and robust employment figures, the vulgar “cheap is cool” trend seems to finally be over. Furthermore, from the point of view of consumers, the brand serves as an orientation they feel is reliable when they are faced with a flood of products and information. This means that the brand has been able to put an end to the loss in significance that had been observed for many years. For the first time in 20 years, quality beats price.  

The renaissance of the brand has by now also reached the discounters and supermarkets, which need to determine their product ranges in line with this new quality consciousness. Aldi, the internationally known supermarket empire, known for its strategy based on cheap prices, now offers a gourmet line in the higher price segment. Classic supermarkets have also adapted to this trend and upgraded their product range with upscale brands or are attempting to lend an aura of value to their own house brand.  

The altered consumer behaviour on the part of the Germans contributed to the fact that sales by German brand name companies, including exports, crossed the one billion line (1.1 billion euros) for the first time in 2014. As compared with the year 2000, when price was still the decisive factor in purchasing, this amounted to an increase of 22%. The greatest portion of sales fell to the classic brand article industry – the manufacturing sector. Brand sales in the other fields, with the exception of financial services providers, have also increased since 2010, although not to the same extent as in the manufacturing sector. 

To be sure, German consumers have not simply turned into thoughtless spendthrifts of late, throwing fistfuls of money out the window. They will remain sensitive to price, and they will compare and consider various options, but the durability and quality of their acquisitions will increasingly be at the core of their decision to make a purchase. To gather information regarding the characteristics of products, brand-oriented consumers in Germany turn not only to the television and the Internet, but primarily to magazines, which they use intensively and in greater numbers. 

The readerships of the G+J magazines, who primarily belong to the higher and highest social classes, are distinguished by an over-average brand awareness. Based on the universe consisting of the German population, the G+J magazines attain high coverages among persons who highly value brand products. In regard to brand advertising, G+J magazines are recommended as effective advertising media.

Sources: FAZ, McKinsey, Brands Association
Author:  Michael Spielmann / IMS , December 2015