International Marketing Final Report - PDF 1

Chapter-1 History of Germany
Country Germany Capital Berlin Location Central Europe, bordering the Baltic Sea and the North Sea, between the Netherlands and Poland, south of Denmark Size357,021 sq km Terrain lowlands in north, uplands in centres, Bavarian Alps in south Climate temperate and marine; cool, cloudy, wet winters and summers; occasional warm wind Languages German Nationality noun: German(s) adjective: German Religion Protestant 34%, Roman Catholic 34%, Muslim 3.7%, unaffiliated or other 28.3% Currency euro (EUR) Exports machinery, vehicles, chemicals, metals and manufactures, foodstuffs, textiles After the collapse of the Second German Empire following the defeat of German forces in the First World War, the Weimar Republic was founded. Its first elected president was Field Marshal Paul von Hindenburg. Germanys economic depression resulted in discontent within the masses and Adolf Hitlers nationalistic views and calls for a Greater Germany fanned the flames. Hitler was made chancellor in 1933 by Hindenburg. After Hinesburgs death in 1934 Hitler began rearming the military. His invasion of Poland was the precursor to the Second World War. Germany was split by the Allies and Soviets after their victory in 1945. The split resulted in the occupation of West Germany by Allied Forces and East Germany effectively being controlled by the Soviet Union. The re-unification of Germany was achieved through the collapse of the East German communist government and negotiations between the West German and Soviet Governments. The country was officially re-unified on 3 October 1990.Today, Germany consists of over 82 million inhabitants; more than 7 million are foreign nationals. Its two main religions are protestant and catholic. Religious freedom is enshrined in Germanys basic law (Grund gesetz). The official language is German and many dialects are spoken throughout the country that can be difficult to understand for those who speak standard German. Approximately 80% of the population speak at least one foreign language, the most popular being English. German people generally take great pride in their neighbourhood and the streets are generally clean and free from International Marketing In Germany Page 1
litter. As a workforce, Germans have a reputation for being diligent, accurate, reliable and loyal.The standard of living is generally high, with rental and retail purchase being comparatively cheap. An OECD study for 2008 revealed that low earners pay some of the highest taxes and social security contributions in Europe up to 52% of gross income. Germanic tribes and Frankish Empire
International Marketing In Germany
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Holy Roman Empire
On 25 December 800, the Frankish king Charlemagne was crowned emperor and founded the Carolingian Empire, which was divided in 843.[17] The Holy Roman Empire resulted from the eastern portion of this division. Its territory stretched from the Eider River in the north to the Mediterranean coast in the south.[17] Under the reign of the Ottoman emperors (9191024), several major duchies were consolidated, and the German king was crowned Holy Roman Emperor of these regions in 962. The Holy Roman Empire absorbed northern Italy and Burgundy under the reign of the Salian emperors (10241125), although the emperors lost power through the Investiture Controversy. Under the Hohenstaufen emperors (11381254), the German princes increased their influence further south and east into territories inhabited by Slavs, preceding German settlement in these areas and further east Northern German towns grew prosperous as members of the Hanseatic League. Starting with the Great Famine in 1315, then the Black Death of 134850, the population of Germany plummeted.[19] The edict of the Golden Bull in 1356 provided the basic constitution of the empire and codified the election of the emperor by seven prince-electors who ruled some of the most powerful principalities and archbishoprics.
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Martin Luther publicized The Ninety-Five Theses in 1517, challenging the Roman Catholic Church and initiating the Protestant Reformation. A separate Lutheran church became the official religion in many German states after 1530. Religious conflict led to the Thirty Years' War (16181648), which devastated German lands.[21] The population of the German states was reduced by about 30%.[22] The Peace of Westphalia (1648) ended religious warfare among the German states, but the empire was de facto divided into numerous independent principalities. In the 18th century, the Holy Roman Empire consisted of approximately 1,800 such territories.[23] From 1740 onwards, dualism between the Austrian Habsburg Monarchy and the Kingdom of Prussia dominated German history. In 1806, the Emporium was overrun and dissolved as a result of the Napoleonic Wars.
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Germany History, Population, Language and Culture
Foundation of the German Empire in Versailles, 1871. Bismarck is at the centre in a white uniform. Following the fall of Napoleon, the Congress of Vienna convened in 1814 and founded the German Confederation (Deutscher Bund), a loose league of 39 sovereign states. Disagreement with restoration politics partly led to the rise of liberal movements, followed by new measures of repression by Austrian statesman Metternich. The Zollverein, a tariff union, furthered economic unity in the German states. National and liberal ideals of the French Revolution gained increasing support among many, especially young, Germans. In the light of a series of revolutionary movements in Europe, which established a republic in France, intellectuals and commoners started the Revolutions of 1848 in the German states. King Frederick William IV of Prussia was offered the title of Emperor, but with a loss of power; he rejected the crown and the proposed constitution, leading to a temporary setback for the movement. In 1935, Germany reacquired control of the Saar and in 1936 military control of the Rhineland, both of which had been lost in the Treaty of Versailles. In 1938,Austria was annexed, and in 1939, Czechoslovakia was brought under German control. The invasion of Poland was prepared through the Molotov Ribbentrop pact and Operation Himmler. On 1 September 1939 the German Wehrmacht launched a blitzkrieg on Poland, which was swiftly occupied by Germany and by the Soviet Red Army. The UK and France declared war on Germany, marking the beginning of World War II.[38] As the war progressed, Germany and its allies quickly gained control of most of continental Europe and
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North Africa, though plans to force the United Kingdom to an armistice or surrender failed. On 22 June 1941, Germany broke the MolotovRibbentrop pact and invaded the Soviet Union. Japan's attack on Pearl Harbor led Germany to declare war on the United States. The Battle of Stalingrad forced the German army to retreat on the Eastern front.[38] In September 1943, Germany's ally Italy surrendered, and German troops were forced to defend an additional front in Italy. D-Day opened a Western front, as Allied forces advanced towards German territory. On 8 May 1945, the German armed forces surrendered after the Red Army occupied Berlin.
Berlin in ruins after World War II

Occupation zones in Germany, 1947. The territories east of the Oder-Neisse line, under Polish and Soviet de jureadministration and de facto annexation, are shown as white as is the detached Saar protectorate. After the surrender of Germany, the remaining German territory and Berlin were partitioned by the Allies into four military occupation zones. Together, these zones accepted more than 6.5 million of the ethnic Germans expelled from eastern areas.[50] The western sectors, controlled by France, the United Kingdom, and the United States, were merged on 23 May 1949 to form the Federal Republic of Germany (Bundesrepublik Deutschland); on 7 October 1949, the Soviet Zone became the German Democratic Republic (Deutsche Demokratische Republic, or DDR). They were informally known as "West Germany" and "East Germany". East Germany selected East Berlin as its capital, while West Germany chose Bonn as a provisional capital, to emphasise its stance that the two-state solution was an artificial and temporary status quo. West Germany, established as a federal parliamentary republic with a "social market economy", was allied with the United States, the UK and France. The country enjoyed prolonged economic growth beginning in the early 1950s (Wirtschaftswunder). West Germany joined NATO in 1955 and was a founding member of the European Economic Community in 1957. East Germany was an Eastern bloc state under political and military control by the USSR via the latter's occupation forces and the Warsaw Pact. Though East Germany claimed to be a democracy, political power was exercised solely by leading members (Politburo) of the communist-controlled Socialist Unity Party of Germany, supported by the International Marketing In Germany Page 6
Stasi, an immense secret service, and a variety of sub-organisations controlling every aspect of society. A Soviet-style command economy was set up; the GDR later became a Comecon state. While East German propaganda was based on the benefits of the GDR's social programmes and the alleged constant threat of a West German invasion, many of her citizens looked to the West for freedom and prosperity. The Berlin Wall, built in 1961 to stop East Germans from escaping to West Germany, became a symbol of the Cold War. hence its fall in 1989, following democratic reforms in Poland and Hungary, became a symbol of the Fall of Communism, German Reunification and Die Wende.
The Berlin Wall in front of the Brandenburg Gate shortly before its fall in 1989 Tensions between East and West Germany were reduced in the early 1970s by Chancellor Willy Brandt's Ostpolitic. In summer 1989, Hungary decided to dismantle the Iron Curtain and open the borders, causing the emigration of thousands of East Germans to West Germany via Hungary. This had devastating effects on the GDR, where regular mass demonstrations received increasing support. The East German authorities unexpectedly eased the border restrictions, allowing East German citizens to travel to the West; originally intended to help retain East Germany as a state, the opening of the border actually led to an acceleration of the Wendi reform process. This culminated in the Two Plus Four Treaty a year later on 12 September 1990, under which the four occupying powers renounced their rights under the Instrument of Surrender, and Germany regained full sovereignty. This permitted German reunification on 3 October 1990, with the accession of the five re-established states of the former GDR (new states or "neue Lander"). International Marketing In Germany Page 7
Geography
Topographic map
Germany is in Western and Central Europe, with Denmark bordering to the north, Poland and the Czech Republic to the east, Austria and Switzerland to the south, France and Luxembourg to the southwest, and Belgium and the Netherlands to the northwest. It lies mostly between latitudes 47 and 55 N (the tip of Silt is just north of 55), and longitudes 5 and 16 E. The territory covers 357,021 km2 (137,847 sq mi), consisting of 349,223 km2 (134,836 sq mi) of land and 7,798 km2 (3,011 sq mi) of water. It is the seventh largest country by area in Europe and the 62nd largest in the world. Elevation ranges from the mountains of the Alps (highest point: the Zugspitze at 2,962 metres / 9,718 feet) in the south to the shores of the North Sea in the northwest and the Baltic Sea (in the northeast. The forested uplands of central Germany and the lowlands of northern Germany Lowest point: at 3.54 metres / 11.6 feet below sea level) are traversed by such major rivers as the Rhine, Danube and Elbe. Glaciers are found in the Alpine International Marketing In Germany Page 8
region, but are experiencing deglaciation. Significant natural resources are iron ore, coal, potash, timber, lignite, uranium, copper, natural gas, salt, nickel, arable land and water.
Climate
Most of Germany has a temperate seasonal climate in which humid westerly winds predominate. The climate is moderated by the North Atlantic Drift, the northern extension of the Gulf Stream. This warmer water affects the areas bordering the North Sea; consequently in the northwest and the north the climate is oceanic. Rainfall occurs year-round, especially in the summer. Winters are mild and summers tend to be cool, though temperatures can exceed 30 C(86 F).[59] The east has a more continental climate; winters can be very cold and summers very warm, and long dry periods are frequent. Central and southern Germany are transition regions which vary from moderately oceanic to continental. In addition to the maritime and continental climates that predominate over most of the country, the Alpine regions in the extreme south and, to a lesser degree, some areas of the Central German Uplands have a mountain climate, characterized by lower temperatures and greater precipitation.
The eagle is a protected bird of prey and the national heraldic animal.
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Chapter-2 Economic history of Germany Peasants and rural life

Peasants continued to centre their lives in the village, where they were members of a corporate body and help manage the community resources and monitor the community life. Across Germany and especially in the east, they were serfs who were bound prominently to parcels of land In most of Germany, farming was handled by tenant farmers who paid rents and obligatory services to the landlord, who was typically a nobleman. Peasant leaders supervised the fields and ditches and grazing rights, maintained public order and morals, and supported a village court which handled minor offenses. Inside the family the patriarch made all the decisions, and tried to arrange advantageous marriages for his children. Much of the villages' communal life centered around church services and holy days. In Prussia, the peasants drew lots to choose conscripts required by the army. The noblemen handled external relationships and politics for the villages under their control, and were not typically involved in daily activities or decisions.
The emancipation of the serfs came in 1770-1830, beginning with Schleswig in 1780. Prussia abolished serfdom with the "October Edict" of 1807, which upgraded the personal legal status of the peasantry and gave them the chance to purchase for cash part of the lands they were working. They could also sell the land they already owned. The edict applied to all peasants whose holdings were above a certain size, and included both Crown lands and noble estates. The peasants were freed from the obligation of personal services to the lord and annual dues. A bank was set up so that landowner could borrow government money to buy land from peasants (the peasants were not allowed to use it to borrow money to buy land until 1850). The result was that the large landowners obtained larger estates, and many peasant became landless tenants, or moved to the cities or to America. The other German states imitated Prussia after 1815. In sharp contrast to the violence that characterized land reform in the French
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Revolution, Germany handled it peacefully. In Schleswig the peasants, who had been influenced by the Enlightenment, played an active role; elsewhere they were largely passive. Indeed, for most peasants, customs and traditions continued largely unchanged, including the old habits of deference to the nobles whose legal authority remains quite strong over the villagers? Although the peasants were no longer tied to the same land like serfs had been, the old paternalistic relationship in East Prussia lasted into the 20th century.
Industrial revolution
Before 1850 Germany lagged far behind the leaders in industrial development, Britain, France and Belgium. By midcentury, however, the German states were catching up, and by 1900 Germany was a world leader in industrialization, along with Britain and the United States. In 1800, Germany's social structure was poorly suited to entrepreneurship or economic development. Domination by France during the era of the French Revolution (1790s to 1815), produced important institutional reforms, including the abolition of feudal restrictions on the sale of large landed estates, the reduction of the power of the guilds in the cities, and the the introduction guilds, the of a new, more efficient the commercial and law. the that Nevertheless, traditionalism remained strong in most of Germany. Until midcentury, government landed so aristocracy, many rules churches, bureaucracies had and restrictions
entrepreneurship was held in low esteem, and given little opportunity to develop. From the 1830s and 1840s, Prussia, Saxony, and other states reorganized agriculture, introducing sugar beets, turnips, and potatoes, yielding a higher level of food production that enabled a surplus rural population to move to industrial areas. The beginnings of the industrial revolution in Germany came in the textile industry, and was facilitated by eliminating tariff barriers through the Zollverein, starting in 1834. The takeoff stage of economic development came with the railroad revolution in the 1840s, which opened up new markets for local products, created a pool of middle manager, increased the demand for engineers, architects and skilled machinists and stimulated investments in coal and iron. The political decisions about the economy of Prussia (and after 1871 all Germany) were largely controlled by a coalition of "rye and iron", that is the Junker landowners of the east and the heavy industry of the west. International Marketing In Germany Page 11
Regions
The north German states were for the most part richer in natural resources than the southern states. They had vast agricultural tracts from Schleswig-Holstein in the west through Prussia in the east. They also had coal and iron in the Ruhr Valley. Through the practice of primogeniture, widely followed in northern Germany, large estates and fortunes grew. So did close relations between their owners and local as well as national governments. The south German states were relatively poor in natural resources and those Germans therefore engaged more often in small economic enterprises. They also had no primogeniture rule but subdivided the land among several offspring, leading those offspring to remain in their native towns but not fully able to support themselves from their small parcels of land. The south German states, therefore, fostered cottage industries, crafts, and a more independent and selfreliant spirit less closely linked to the government.
Banks and Cartels

German banks played central roles in financing German industry. Different banks formed cartels in different industries. Cartel contracts were accepted as legal and binding by German courts although they were held to be illegal in Britain and the United States. The process of cartelization began slowly, but the cartel movement took hold after 1873 in the economic depression that followed the post unification speculative bubble. It began in heavy industry and spread throughout other industries. By 1900 there were 275 cartels in operation; by 1908, over 500. By some estimates, different cartel arrangements may have numbered in the thousands at different times, but many German companies stayed outside the cartels because they did not welcome the restrictions that membership imposed. The government played a powerful role in the industrialization of the German Empire founded by Otto von Bismarck in 1871 during a period known as the Second Industrial Revolution. It supported not only heavy industry but also crafts and trades because it wanted to maintain prosperity in all parts of the empire. Even where the national government did not act, the highly autonomous
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regional and local governments supported their own industries. Each state tried to be as self-sufficient as possible. Despite the several ups and downs of prosperity and depression that marked the first decades of the German Empire, the ultimate wealth of the empire proved immense. German aristocrats, landowners, bankers, and producers created what might be termed the first German economic miracle, the turn-of-the-century surge in German industry and commerce during which bankers, industrialists, mercantilists, the military, and the monarchy joined forces.
Class and the welfare state

Germany's middle-class, based in the cities, grew exponentially, although it never gained the political power it had in France, Britain or the United States. The Association of German Women's Organizations (BDF) was established in 1894 to encompass the proliferating women's organizations that had sprung up since the 1860s. From the beginning the BDF was a bourgeois organization, its members working toward equality with men in such areas as education, financial opportunities, and political life. Working-class women were not welcome; they were organized by the Socialists. Bismarck built on a tradition of welfare programs in Prussia and Saxony that began as early as in the 1840s. In the 1880s he introduced old age pensions, accident insurance, medical care and unemployment insurance that formed the basis of the modern European welfare state. His paternalistic programs won the support of German industry because its goals were to win the support of the working classes for the Empire and reduce the outflow of immigrants to America, where wages were higher but welfare did not exist.[19] Bismarck further won the support of both industry and skilled workers by his high tariff policies, which protected profits and wages from American competition, although they alienated the liberal intellectuals who wanted free trade
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Railways
Political disunity of three dozen states and a pervasive conservatism made it difficult to build railways in the 1830s. However, by the 1840s, trunk lines did link the major cities; each German state was responsible for the lines within its own borders. Economist Friedrich List summed up the advantages to be derived from the development of the railway system in 1841: 1) as a means of national defence, it facilitates the concentration, distribution and direction of the army. 2) It is a means to the improvement of the culture of the nation. It brings talent, knowledge and skill of every kind readily to market. 3) It secures the community against dearth and famine, and against excessive fluctuation in the prices of the necessaries of life. 4) It promotes the spirit of the nation, as it has a tendency to destroy the Philistine spirit arising from isolation and provincial prejudice and vanity. It binds nations by ligaments, and promotes an interchange of food and of commodities, thus making it feel to be a unit. The iron rails become a nerve system, which, on the one hand, strengthens public opinion, and, on the other hand, strengthens the power of the state for police and governmental purposes.[21] Lacking a technological base at first, the Germans imported their engineering and hardware from Britain, but quickly learned the skills needed to operate and expand the railways. In many cities, the new railway shops were the centres of technological awareness and training, so that by 1850, Germany was self-sufficient in meeting the demands of railroad construction, and the railways were a major impetus for the growth of the new steel industry. Observers found that even as late as 1890, their engineering was inferior to Britains. However, German unification in 1870 stimulated consolidation, nationalisation into state-owned companies, and further rapid growth. Unlike the situation in France, the goal was support of industrialisation, and so heavy lines crisscrossed the Ruhr and other industrial districts, and provided good connections to the major ports of Hamburg and Bremen. By 1880, Germany had 9,400 locomotives pulling 43,000 passengers and 30,000 tons of freight, and pulled ahead of France. International Marketing In Germany Page 14
Agriculture
Perkins (1981) argues that more important than Bismarck's new tariff on imported grain was the introduction of the sugar beet as a main crop. Famers quickly abandoned traditional, inefficient practices for modern new methods, including use of new fertilizers and new tools. The knowledge and tools gained from the intensive farming of sugar and other root crops made Germany the most efficient agricultural producer in Europe by 1914. Even so farms were small in size, and women did much of the field work. An unintended consequence was the increased dependence on migratory, especially foreign, and labour.
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The social market economy

The Germans proudly label their economy a "soziale Marktwirtschaft," or "social market economy," to show that the system as it has developed after World War II has both a material and a socialor humandimension. They stress the importance of the term "market" because after the Nazi experience they wanted an economy free of state intervention and domination. The only state role in the new West German economy was to protect the competitive environment from monopolistic or oligopolistic tendenciesincluding its own. The term "social" is stressed because West Germans wanted an economy that would not only help the wealthy but also care for the workers and others who might not prove able to cope with the strenuous competitive demands of a market economy. The term "social" was chosen rather than "socialist" to distinguish their system from those in which the state claimed the right to direct the economy or to intervene in it. Beyond these principles of the social market economy, but linked to it, comes a more traditional German concept, that of Ordnung, which can be directly translated to mean order but which really means an economy, society, and policy that are structured but not dictatorial. The founders of the social market economy insisted that Den ken in Ordnanceto think in terms of systems of orderwas essential. They also spoke of Ordo-Liberalismus because the essence of the concept is that this must be a freely chosen order, not a command order. Over time, the term "social" in the social market economy began to take on a life of its own. It moved the West German economy toward an extensive social welfare system that has become one of the most expensive in the world. Moreover, the West German federal government and the states (Lnder ; sing., Land ) began to compensate for irregularities in economic cycles and for shifts in world production by beginning to shelter and support some sectors and industries. In an even greater departure from the Erhard tradition, the government became an instrument for the preservation of existing industries rather than a force for renewal In the 1970s, the state assumed an ever more important role in the economy. During the 1980s, Chancellor Helmut Kohl tried to reduce that state role, and he succeeded in International Marketing In Germany Page 16
part, but German unification again compelled the German government to assume a stronger role in the economy. Thus, the contradiction between the terms "social" and "market" has remained an element for debate in Germany. Given the internal contradiction in its philosophy, the German economy is both conservative and dynamic. It is conservative in the sense that it draws on the part of the German tradition that envisages some state role in the economy and a cautious attitude toward investment and risk-taking. It is dynamic in the sense that it is directed toward growtheven if that growth may be slow and steady rather than spectacular. It tries to combine the virtues of a market system with the virtues of a social welfare system.
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Chapter-3 Business culture of Germany

The social, political, and economic climates in Germany have evolved in such a way as to welcome change, deter intolerance, and promote equality. These changes can be attributed to several significant historical events; however, it does not mean that the country has lost sight of its culture. Most Germans have a strong classical education because of the nation's rich heritage in music, history and art and they expect others to appreciate that heritage. With a reputation for being industrious, thrifty, and orderly, they have a strong sense of regional pride, a fact that the federal system of government recognizes and accommodates. Over the past decade, Germany has proven itself as a prominent member of the European Union by managing adversity, honouring tradition, and globally competing for international recognition and success.
Dimensions of Culture
Culture comprises the shared set of beliefs, expectations, values, norms, and routines that influence how people within a country relate to one another and work together to achieve certain societal expectations. Per Satterlee and Robinson (2008), "[t]he savvy global manager seeks to understand each of these dimensions as they impact decision making, negotiations, and ongoing operations critical to long-term success" (p. 40). Outside of the managerial role, one needs to understand and appreciate culture because day-to-day activities are a product of and influenced by one's national culture. Communication, Ethics, Values and Attitudes, Religion, Manners, Customs, Social Structures and Organizations, and Education all precipitate culture. Intercultural competence is what managers strive to achieve when entering the global market. Rathje (2007) defines this somewhat radical idea with the following analysis: Given that culture is understood as existing within human groups, characterized by cohesion that is due to familiarity with inherent differences between them, then intercultural competence can be defined as a culture-generic skill which is International Marketing In Germany Page 18
required in interactions between individuals from different human groups who are experiencing foreignness as a consequence of their mutual ignorance of the spectra of differences between them with a view to producing culture by creating familiarity and thus cohesion amongst the individuals involved, allowing them to pursue their interactional goals. The key idea within Rathje's definition is the creation of familiarity and cohesion. Managers in the global environment need to know the culture within the foreign market and think of ways to get along. Profit may be the bottom line of the business venture but it is the customers that generate profit and spell out success or failure for the firm.
Communication
Communication is an important aspect of culture; not only gender communication, but interpersonal communication as a whole between economic classes, from elected government officials, policy makers, and across nations. Communication is the tie that binds and if left unattended, it could choke both personal and professional relationships. A significant event in Germany's history was the fall of the Berlin Wall. When the Berlin Wall was demolished, it signaled the end of two German states, East Germany and West Germany, after many years of separation due to the Cold War. German unification, brought about by a multitude of bilateral and multilateral negotiations and arrangements, represents one of the greatest triumphs of leadership and diplomatic professionalism in the postwar period (Kaiser, 1991). While separated into two distinct regions, Germany befell two equally distinct cultures. It became a tug of war between the poorer eastern region versus the astute western sector. Ignited by the freedom of choice movement, German reunification resembled a merger between two international companies whose language differences, economic differences, and social structures presented more of a challenge than anticipated. It is clear that Kaiser's (1991) observation can also be regarded as a triumph of communication.
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Pre-unification
East
Germany,
being
severely
behind
its
West
German
counterpart, relied heavily on global support in order to improve its economic conditions. Firms contemplating expansion into East Germany had the added pressures of working with an under-developed region and had to carefully plan each strategic business measure as to accommodate the needs of the community. Although West Germany was already an apt member of the European Community, opening the border to East Germany also presented an opportunity for more multinational corporations to rethink their strategies for the region. "[B]y extending their operations to less developed economies, MNCs encounter unprecedented social, cultural and institutional gaps" (Sebastian, 2006, p.1573). One of those gaps lies within communication. Communication, as a driver for culture, adds another dimension to the discussion on multinational corporations' attention to human resource management. Research into HRM within MNCs should, therefore take account of the four influences: country of origin, dominance effects, pressures for international integration, and host country effects. These influences do not operate uniformly across the population of MNCs. Moreover, the nature and strength of the influences alters over time, because of wider political, economic, and institutional change (Almond, Edwards, Colling, etal, 2005). In the case of Germany, business practices had to change when the country was unified. Any international firm operating within the western or eastern region separately had to make 180 degree changes to accommodate the new political system in order to maintain its presence within a unified country. Just as post-unification MNCs must account for all of the drivers of culture when prompted to open operations within Germany. To further distinguish German culture, it is important to devote some time to the country's language. Language and dialect are often at the forefront of communication barriers in international business. Minority languages in Germany - as defined in the European Charter for Regional or Minority Languages - are: Low German, Danish, Sorbian, Frisian, and the Romany language of the German Sinti and Roma (Wawra, 2006). With Germany's current federal structure, language policy is not the primary responsibility of its central government. The central government does not have any legislative power as regards language. It
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can only regulate language use in public administration. This meant that privatesector business communication and personal communication is distorted by several minority languages or dialects. Verbal and written communication is dominated by German but the presence of these other languages cannot and should not be dismissed. Just as within the United States, where English dominates, the actual spoken word varies depending on the specific location; Low German can change the meaning of a message in Germany similar to how a southern drawl within the U.S. can change the interpretation. The best summation on communication is that it should be studied, practiced, and continuously evaluated for change and evolution.
Ethics, Values and Attitudes

Ethics is not a set of standard practices of morality across countries. Ethics is perhaps the step-child of culture and although some generalizations can be made, nothing can be considered absolute. An important cultural element is the degree of consumer acceptance of current business practices. Such consumer trust is vital for the efficient functioning of the marketplace. In order to systematically evaluate consumers' sentiments towards business ethical practices, the Business Ethics Index (BEI) was conceptualized, developed and brought to fruition in the USA (Tsalikis & Seaton, 2007). The Business Ethics Index was extended to some of the countries of the European Union to include Germany. The study of the EU was primarily based on its economic importance. It is important to make note of a few of Tsaliskis and Seaton's findings from their 2007 study. At the other extreme German respondents' BEIfuture scores were indicative of a distinctly pessimistic view of future business ethicality. A low score on the BEI indicates that, in Germany, the focus is on ''consensual'' or ''communicative'' ethics where ethical decisions lie not with the individual but with the community as a whole. Apparently the ethical behavior of individual German managers is lost in the shift of focus to the corporation or the community as a whole (Tsalikis & Seaton, 2007). Compared to the United States view of ethics where the role of the individual is emphasized as the most critical source of ethical values, other capitalist nations, like International Marketing In Germany Page 21
Germany, more emphasis is placed on the corporation as the locus of ethical guidance. Germans look to their local businesses to, in essence, guide their socially acceptable behavior. A study involving ethics found some interesting similarities and differences with respect to the attitudes of consumers to social issues. The most striking results were the similarities, not the differences. The results clearly showed that four issues - human rights, the use of child labor, the availability of safe working conditions, and the availability of good working conditions - were rated higher than the average issue by individuals in all the countries studied including Germany (Auger, Devinney, & Louviere, 2007). Another issue, paying minimum wages, was also rated positively by all countries but only marginally so by most. The similarities in preferences across countries imply that some universal norms do exist with respect to important social issues. Similar beliefs with respect to human and certain worker rights are cross-cultural and individuals are less compromising on the subject. Therefore, some universal communication strategies could show relevance to MNCs within Germany but they must be very specific. For instance, the cost of labor may be lower in certain areas of Germany but the people still expect the same safe working conditions that are afforded to Americans thanks to the Occupational Safety and Health Administration (OSHA). Another interesting finding was that German females perceived that, in the past, businesses treated them personally more ethically than males did. This supports the aforementioned fact that Germans perceive businesses as a guiding entity on ethical values. When considering business ethics, it is important to briefly discuss the subject of gender differences in ethics. Knowing that men and women consider a variety of criteria in their analysis of situations is useful to creating more effective communication between male and female managers about issues in business ethics. How a country perceives its gender differences is derived from its culture and any incoming firm needs to spend time studying gender roles. This is a function of multiple dimensions of culture.
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Social Structures and Organizations

For Germany, the creation of the European Union reformed the social structure of the country and acted as a springboard for its economy by lessening the deficit between East Germany and West Germany and giving rise to international business. The European Union is an association of twenty-seven member states that are required to have a democratic and secular government, an independent judiciary and corresponding personal freedoms (Satterlee & Robinson, 2008). In a sense, the European Union resembles several of the policies and practices of the 50 states that comprise the United States. West Germany was one of the founding members of the union and when the country was reunified, East Germany became part of the European Union. With a focus on market-oriented rules paired with a social concept of globalization, Germany is poised for global prosperity. This is evident in some of the more recent economic research for the country. Unfortunately, the united Germany inherited the burden of the run-down region in the east. The eastern region absorbed a lot of the country's resources as it began to rebuild. Political factions did not leave everything to the forces of the market but assisted East Germany in catching up with the West by transferring funds, investing enormous sums in the infrastructure and by offering generous state incentives to investors willing to set up modern, efficient operations and create jobs to run them. "Less than one year after unification, a sense of disillusion, disadvantage and insecurity was being felt by many in the East....They disliked what they saw as arrogant Westerners, and referred to a new wall between East and West in heads and hearts" (Lumley, 1995, p. 30). These feelings were a product of a submersion of two distinct cultures that had formed as a result of the separation. The dominant social structure of the West was revered, welcomed, and feared at the same time. The German family unit is structured similar to that of the United States. Any business with operations in Germany must respect its family structure. Although women are steadily entering the workforce, it remains dominated by men who are the breadwinners in the family. Page 23
The European Union affects the social structure of the country as a whole however, today there is a wide range of community radio stations in Germany that encourage and support the creation of social groups. Whereas talk radio has lost some of its steam in the United States, Germans rely more heavily on "free radio" or "citizens' radio" as they call it. Free radio is celebrated as a piece of German culture and valuable medium for expression. Pinseler (2008) found that free radio has important social roles in German economy. He noted that free radio gives the microphone to the people and allows them to voice their grievances and opinions on various matters directly affecting the people. By doing so on a local level, it allows for the formation of representative groups who fight social injustice and the like. Free radio stations are under pressure to conform to mainstream media norms due, in part, to financial pressure. Such regulations discourage open communication. Therefore, they try to argue that free radio is part of the basic service usually associated with public broadcasting or that they play a vital role in providing training in media literacy. This way, these stations are able to stay on the air and receive additional financial backing.
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Education
All over the world, societies worry about the state of their school systems. Do they work efficiently to advance the cognitive and non-cognitive skills of students? In the endeavours to reform the school systems, three institutional measures have recently taken centre stage: accountability, autonomy, and choice. The rationale of such market-oriented reforms is that school systems based on informed choice between autonomous schools improve student achievement by creating incentives for students, parents, teachers, schools, and administrators to provide the best learning environment for students. The 2005 Human Development Index ranks Germany at 22 with an overall index value at 0.935. Scores of 0.8 or greater indicate that the country is a developed nation. Developed nations, as a whole, have economic stability. Various researchers define economic stability to include long lives, well-educated natives, higher GDP per capita, strong political presence, and the like. These countries are technologically advanced and idolized by less-developed nations. Although Germany ranks lower than the United States (#12), it is still a leader among nations. Its education index value is 0.953. German speech education has already worked out adequate means of teaching. They comprise speech teaching as an educational principle in schools, training students not only to gain better knowledge and use of their native tongue, but to use speech as a means of social interaction which could mean training for democratic principles and activities from childhood. As these modern teaching principles have been adopted in most schools, adult education facilities seek to fill in the gap. The educational system in Germany follows the European model of free public education and a variety of secondary schools for academic and vocational education, rather than the American model of a single comprehensive high school for all students (Flippo, 1996). The country has realized that within the East German employment system, initial vocational training is of paramount importance. Students, depending on their academic achievement capabilities may be placed in a vocational program to learn a trade.
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A prominent theme that has emerged about the dimensions of culture is the fact that international business is more than strategic business practices abroad. A well-informed and prepared manager knows that the people, the state of the economy, and the environment are equal considerations in global operations. Lack of attention in any one these areas could lead to failure in the global market.
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Chapter-3 Company analysis About Real

Real has been the preferred choice of consumers when it comes to packaged fruit juices, which is what makes India's No. 1 Fruit Juice brand. A validation of this success is that Ral has been awarded Indias Most Trusted Brand status for four years in a row. Today, Ral has a range of 14 exciting variants - from the exotic Indian Mango, Mausambi, and Guava & Litchi to international favourites like Pomegranate, Tomato, Cranberry, Peach, Blackcurrant & Grape and the basic Orange, Pineapple, Apple & Mixed Fruit. This large range helps cater different needs and occasions and has helped Ral maintain its dominant market share. A research conducted by Blackstone Market Facts even pointed out that Ral was preferred by over 50% of the respondents. Whats more, Ral was liked for being the better tasting juice - a category where likeability is primarily driven by taste. Made from best quality fruits, Ral does not have artificial flavours and preservatives, and offer your kids not just great taste, but also FRUIT POWER the power of fruits the power to stay ahead. Loaded with the power of Vitamin C, Ral fruit juices have all the necessary nutrients that keep you active all day long
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Ral is endorsed by PFNDAI

The nutritional contents of Ral Fruit Juices & Nectars are endorsed by PFNDAI -Protein Foods & Nutrition development Association of India. Protein Foods Association has been in existence for about forty years. It has gained credibility in health and food professionals such as physicians, nutritionists, dieticians, food scientists and technologists, etc. as an unbiased body, almost of the stature of an NGO. Even government officials have high regards for the association. So when the association lends its logo to any product, the product is accepted by them to deliver the nutritional contents as claimed by the manufacturer.
Accolades for Ral

India's No.1FruitJuice brand. Voted as a Super brand. Voted by consumers as the most trusted fruit juice brand for four years in a row. Ral awarded the Readers Digest Trusted Brand Gold Award 2009 in the food and beverages category.
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Companys Vision and Mission

There is an abundance of information for its investors and prospective information including a daily update on the share price (something that very few Indian brands do). There is a great sense of responsibility for investors funds on view. This is a direct extension of Daburs philosophy of taking care of its constituents and it adds to the sense of trust for the brand overall.
Vision:
"Dedicated to the health and well being of every household"
Mission:
Dabur believes in the mission of being a leader in the Natural Foods & Beverages Industry. Dabur aims in offering quality products and distributing higher returns to stakeholders. "Real" and "Real Activ" are the two fruit juice brands of Dabur, which are packaged in different flavors like Mixed Fruit Cucumber Spinach Juice and Mixed Fruit Beetroot Carrot Juice. Apart from food, Dabur Health Care offers wide range of ayurvedic and Health care products. Dabur Consumer Health is the department that deals with the marketing of Ayurvedic.
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MANAGEMENT DISCUSSION & ANALYSIS

Chairman statement
It gives me immense pleasure to share with you, another year of impressive performance by Dabur. The year has been a landmark year in more ways than one. During the year, Dabur surpassed the Rs. 5,000 crores or the US$ 1 billion mark in revenues and is now one of the few companies in India which have achieved this distinction. Our Foods division achieved a new milestone surpassing the Rs. 500 crore revenue mark. Odonil, one of our Home Care brands has now become a Billion Rupee brand, taking our count of Billion Rupee brands to twelve. These are trying times, with the industry and the world witnessing fair bit of challenges, given the deepening debt crisis in Europe, political upheavals in parts of Middle East and rising tensions between Iran and the West. India too witnessed its share of challenges during the 2011-12 scal, led by a deceleration in Industrial production and GDP growth rates. Steep inaction and the resultant high input costs coupled with adverse currency movements and disruptive competition were some of the other challenges in the Indian market. The external headwinds notwithstanding, the consumer goods industry has performed well. I am pleased to inform you that Dabur has ended the year with strong growth in both revenues and ports. On a consolidated basis, the revenues grew by 29.6% to end the year at Rs. 5,283.2 crores, and the Net Protrose 13.4% to Rs. 644.9 crores. The steady growth achieved by Dabur has been enabled by sustained investments in marketing and brand building, distribution, production, supply chain management, and by driving operational efficiencies across functions. Our new launches such as Dabur Almond Hair Oil, mixed fruit Favoured variant of our Warship health supplement brand Dabur Chyawanprash, premium face masks and scrub under Dabur Uveda and a range of professional facial products and body bleach under the brand Fem during the year have been well accepted in the market. The pace of innovation in the International Business has been fairly robust as evidenced by launch of products such as skin serums, skin creams, skin lotions, wet wipes, new variants in hair oils, shampoos etc. In addition, we Hobi Groups expertise in hair gels and launched the Vatika Hair Gel range in our international markets. Going ahead too, Dabur will accelerate its innovation initiatives and introduce a host of new International Marketing In Germany Page 30
products and variants to consolidate our competitive positioning while remaining focused on current market segments in which we operate today. The growth strategies and your Companys achievements through 2010-11 have been elaborated in detail in the Management Discussion & Analysis section of this report. During the year, we undertook two major distribution related initiatives in our domestic business. The rationale behind our rst initiative was to enhance the quality of our distribution by leveraging scale of a united business, since the earlier distribution structure for the Consumer Health Division comprising OTC and Ethicals was subscale. We integrated the entire portfolio of Dabur and created specialized networks to meet different service needs of categories and channels. The sales structure has now been aligned along three distinct categories Home & Personal Care, Health Care and Foods. The second distribution initiative, which is still work in progress, is focussed on signicantly increasing the reach of our brands in rural India since rural markets offer signicant potential, driven by increasing disposable incomes and rising aspirational levels. We conducted a pilot in UP and Maharashtra which yielded positive results. Consequently, we are rolling out the initiative in other states like Punjab, Rajasthan, Bihar, West Bengal, Assam, Orissa, and Karnataka. These ten states together represent around 70% of the rural FMCG potential. The year gone by witnessed some signicant developments in our International Business which I would like to highlight in this letter. Your Company is in the process of establishing a greeneld manufacturing unit in Sri Lanka, which would become operational by the second half of the current scal. This unit will initially produce our packaged fruit juices under the brand Ral and would later be expanded to cover more products. In addition, we are contemplating local manufacturing in Africa for Namastes range of hair care products which in turn would help us enhance our product offering and presence in Africa. Our business is committed not just towards portable growth, but also towards leaving a deeper imprint on the society as a whole. We, at Dabur, believe that nancialon societal needs, while addressing environmental and climate change issues with increased signicance. Small yet signicant steps are being taken to not only reduce our carbon footprint but also continuously monitoring waste generation and establish efuent waste treatment plants across all our manufacturing units. As we expand our global footprint, we are also matching our business growth while addressing environmental and societal needs wherever we operate.I would International Marketing In Germany Page 31
like to take this opportunity to thank all our consumers, business partners, shareholders and employees for continued commitment and support. I gratefully acknowledge the condense and faith reposed by the shareholders in the Board and the Management team which has, in my view, spurred the Company to take on more challenges. Finally, I must applaud the tireless efforts, dedication and commitment of our employees who have helped us reach where we are now and look forward to their continued support in the journey forward. Yours sincerely, Dr. Anand C. Burman Chairman Dabur India Ltd.
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The Dabur Philosophy

At Dabur India Ltd., sustainability is not merely a buzz word. The concept of sustainability is incorporated into the core of our business and has been expanded to encompass our aspirations and responsibilities to the society and to the environment. It is this concept that inspires us to optimize our business performance to tackle the new and growing challenges of environment, technology and sustainability.
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Management of Dabur group
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Performance in domestic market
Dabur today operates in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care and Foods. Dabur India (Dabur) posted 21.4% yoy growth in its top-line to Rs.1,462cr, driven by a mix of volume and value growth. The companys net profit rose by 16.9% to Rs.149cr on account of robust top-line performance and steady margins on a yoy basis.
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Margins remain flat: During
1QFY2013, Daburs domestic business growth
stood at 16.0% yoy, driven by healthy 11.6% yoy volume growth. Food category posted robust 34.5% yoy growth aided by good performance of real fruit juices. International business (excluding acquisitions) grew by 24.0% yoy due to good performance in Nigeria, Egypt, GCC and Nepal. The company reported flat OPM at 14.1% since cooling off in input costs was offset by higher advertising expenses yoy.
Outlook and valuation: We expect Daburs top line to post a ~15.3% CAGR
over FY201214E, backed by its robust performance in domestic as well as international markets. The bottom line is expected to post an 18.3% CAGR, aided by top-line growth and margin expansion. At the CMP, the stock is trading at 22.8x FY2014E EPS. We recommend Neutral on the stock.
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SWOT analysis of Dabur Company

Dabur has established its name as the most trusted and the most recalling brand because of its heritage being carried out for the last 125 years and the most selling and accepted product of Chyawanprash. It also has robust distribution network even penetrating the rural market as well and also famous for ayurvedic medicine provider. However the company stands at the fourth no. after Unilever, Nestle & ITC. Unilever wins hand down over Dabur because its much larger wide range of products in comparison to its Dabur
Strengths:
1) 2) 3) 4) 5) Its own heritage, it is 125 years old Most recalling and trusted brand in India 17 manufacturing plants all over the world. Online presence of Dabur Dabur is also financially very strong
Weakness:
1) Dabur more emphasis on Ayurvedic medicine, ayurveda being its core competence, which takes time to cure some illness where as the emerging trend is starting inclining itself towards the allopathic medicine which are quick in healing. 2) 3) 4) Dabur has less distribution channels to reach out its customers in comparison to major players like HUL A no. of products of Dabur are not well known among the consumers. It also does not has direct outlets of the company
Opportunities:
1) 2) 3) The growing FMCG sector in India is the biggest opportunity for Dabur. Expansion of the product or service line of its large selling products. More penetration in the rural market.
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Threats:
1) 2) 3) . Gradual demographic change in India can harm Dabur. Changing lifestyle of the people, moving more towards the international brand No. of competitors like HUL, Nestle, ITC, Amul and price wars between them in the market.
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Products of real juices
310 257 - Real x3.Price: $9.00
Juice 1
Litters
1500 1418 - Prices of juices without added sugar range from Rs 65/- to Rs 110.
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Range from Rs 65/- to Rs 95
Range from Rs 65/- to Rs 95
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Chapter-4 Industry Analysis

Industry Trend
The juice industry is being strongly affected by increasing costs, mainly as a result of rising costs for raw materials and semi-finished products. Rising energy costs and direct or indirect regional factors, like road toll, packaging regulation or VAT increase ,are also having an impact, especially since the necessary consumer price increases for juice and nectar have not yet fully been implemented by retailers. This is putt in margins under pressure and causing financial problems for smaller producers. Source: Rabobank, 2006, based on Lebensmittelzeitung 16, 21.04.2006, page 017, 2006/Dr. Kai Kelch, 2006
EU fruit juice and nectars consumption stood at 10.7 billion litresin 2011. If, driven by the strong upwards momentum in juice and nectars consumption in Germany. 100%juice sales represented approximately two-thirds or 7.0 billion litres of total EU sales in 2011, with nectars (25-99% juice content) making up the remainder. On a global level, the overall fruit juice and nectars market recorded a marginal decline in 2011, held back primarily by a sharp fall in demand in North America due to consumer resistance to high price points, and a steep drop in East Europes key consumption market germany as consumers retrenched. The EU fruit juice and nectars market saw a third consecutive year of contraction in 2011, with the rate of decline accelerating to 2.2%. Given the precariousness of the economic situation in the euro zone, with inflation and rising unemployment key areas of consumer concern, it is perhaps surprising that the rate of decline was not higher; a fact that highlights the underlining robust dynamics of the juice and nectars market. Fruit juice continued to fare better than nectars, falling back by 1.9% compared with a fall of 2.9% for nectars.
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Segmentation and flavour profile

The growing cost of from-concentrate raw materials is also serving to shrink the price divide between from-concentrate and not-from-concentrate fruit juice. As a consequence, trends reversed in 2011 with not-from-concentrate recording a healthy increase at the expense of from-concentrate. Chilled fruit juice also made gains over ambient as the narrowing price gap encouraged some consumers to shift to more premium product. Orange continues to top the flavour ranking of the combined fruit juice and nectars market, followed by flavour mixes. Innovation in flavour mixes has increased as producers seek both to manage production costs and respond to consumer preference for the functional benefits fruit combinations can offer. Apple ranks third in terms of importance in markets such as Germany and Austria the use of local/regional apple variants has proved a popular concept with consumers. Peach and pine apple owe their top five ranking primarily to their significance on the Germany market.
Country ranking
Germany heads up the EU juice and nectars market ranking ,with a 26% share of consumption. France, the UK, Spain and Italy follow, together accounting for a further 46%. In terms of litres per capita, the top five positions are taken by northern European markets, with Germany again at the forefront.
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The structure of Germany juice industry

The Germany juice industry is rather fragmenting apart from a few top players the Germany market is dominated by a huge number of smaller regional producers. the top ten juice companies have a market share in value in60% the remaining 40%of Germany industry turnover is sub dived into more than 400 other companies so there is sttel room for consolidation is that half of the top ten companies like Emig, Riha and Stute, are strong private label players (Figure 1). Riha, the number two, for instance, produces under the Weser gold brand for top German discounter Aldi. The companies belonging to Refresco are also settled among the rather low-price producers. In the branded segment EckesGranini,Valensina, Punica,Tucano and Albi are top players. Eckes-Granini is the largest juice company in Germany if the international sales are included.
Competitive pricing across both branded and private label products

Whilst consumers have been forced to manage their budgets, it is notable that in 2011 both private label and brands declined in line with the overall juice and nectars market average. Promotional offers of branded product at highly competitive prices are now commonplace in the supermarkets, narrowing the price differential with private label.
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Demand trends in Germany

Consumer demand is polarised between fulfilling basic needs on one hand and specific needs on the other. Basic needs are mainly covered by private labels, being predominant at the budget end of the market. Brands are forced to create innovative recipes, finding their niche in a highly competitive market, often setting trends. Consumer shows a dualistic behaviour: on the one hand a bargain hunter and on the other a trend follower. Fruit juices have started to lose their identity; they seem to look the same and taste the same multivitamin effect. Simple re-packing does not qualify as an innovation. Too many copycats and me-too products. The consumer expects from a real innovation that the product has an identity, attributed to a unique taste and flavour convenient, easy to handle and quickly available ideally is 100% natural, without any artificial ingredients offers an additional [functional / nutritional] benefit. Germans favour apple juice. More than one third of their total juice consumption is apple juice, followed by orange juice (21%), multivitamin (9.4%) and grape juice (3.2%), see. Recently, a trend has emerged towards mild juices with less acidity, particularly mild orange juice, whose sales volume more than doubled during the first half of 2005 Compared to the same period in 2004. Following a good year for the German juice industry in 2003, when the very hot summer pushed consumption up to 42 litres per capita, figures fell to 40.3 litres per capita in 2004.Preliminary estimates for 2005 suggest it will have fallen to 40 litres or even lower, with consumption also falling in other classic segments of the beverages industry. Yet, the overall consumption of non-alcoholic beverages increased 1.5% up to 289 litres per capita in 2005, mainly due to a slight rise in soft drinks and waters.
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Germany fruit juice industry number of companies
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Germany fruit juice industry turnover
German Fruit Juice Industry

Facts and Figures Fruit juice producers approx. 650 Employees approx. 21.600 Turnover (billion EUR) 8,9 Industrial production (billion litres) 11,7 (fruit juices / fruit nectars / fruit juice drinks without CO2) Fruit processing capacity (tons) approx. 1.400.000
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Consumer price trends

Recent retail price increase for juice It is a tough market in which to compete in terms of price .The current and anticipated cost is still not enough increases cannot be covered by increases in sales prices, even though the discounter Aldi recently increased its prices for orange juice by EUR 0.06/litre, but that was still not enough .Both market experts and juice producers alike have stated in recent months that at least EUR 0.08 to 0.10/litre are necessary. The current dramatic development is even forcing the juice industry to negotiate price increases of EUR 0.16/litre, but price negotiations between suppliers and retailers are turning out to be very difficult. Consumer prices for juice have been low for a long time.
Development of average prices orange and apple juices
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Porters Five force Model
Threat of New Entrants Low:

New product differentiation is very tough because already are available in very wide range indifferent price points, flavours and brand image. Access to distribution channel Big and established players are already having their huge and strong distribution channel. Capital requirement is very high for setting up a manufacturing unit in India as well as Germany. Government Policies Because of huge taxes and restriction in advertisement in TV and other media, the chances of entering in this industry is very less.
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High barriers to entry: Capital Intensive (especially in advertising) Distribution networks Regulations
Economies of scale in marketing, production and distribution
Rivalry (price competition has been decreasing):

o Increasing competition from imported beers (however, national brewers own part of these breweries). o o o o 2,200 wholesalers and 560,000 retail establishments. Creative and enticing advertising by majors. Growing popularity of micro-breweries and other craft-beers. Alternative: expansion to super-premium beers and other segments with lower demand elasticity.
Substitutes:
o Growth in: o Premixed drinks Alternative malt beverage Alternative alcoholic drinks (from juices to beer and other)
However, juice remains the largest drink sector.
Buyers Bargaining Power:

o It changes from segment to segment, but in general: o Low switching costs Brand loyalty Increasing health conscience
However, for juices, which are perceived as having higher quality, these characteristics may not always hold.
Suppliers Bargaining Power:

o Most supplies come from competitive industries which are more fragmented than the juice industry. Farmers Labour (the case of unionized labour) The more consolidated supplier is that one supplying bottles/cans.
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Chapter-5 Competitor analysis

Major Players in the juice industry in Germany & targeting segment of the Market
Rani fruits industry

RANI is one of the leading juice brands in the Middle East and the flagship brand of Aujan Industries. Over the years Rani has established the unique brand property, "Float," the fruit juice with real fruit pieces, which has highly differentiated the brand within the fruit juice category.
30 years ago, Rani Float was launched in Saudi Arabia. Since then, Rani has experienced tremendous sales growth across the Middle East, North Africa, Europe and other export markets. The drink is sold in 56 countries and
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generates sales revenue above US$600 million. Rani is produced at Aujan Industries' own state-of-the-art facilities.
Market
Consumers have an enormous array of choice when it comes to buying a juice drink juice content, fresh versus long life, regular juice versus juice with fruit pieces meaning there is a juice drink on the market to match every consumer preference. The juice category is classified into: Pure juice (100% fruit content), Nectars (25%-99fruit content), and Drinks (less than 25% fruit content). Across the globe, all three categories are experiencing slow but steady growth in consumption per capita and there is enormous potential for the market in the Middle East and North Africa. Instance, the average Egyptian drinks 4.1litres of packaged juice each year, while in Iraq the figure is around 12 litres. This compares to37.9 litres in the Kingdom of Saudi Arabia, giving some indication of the potential for the regions juice manufacturers and distributors. Against this backdrop sits Rani, one of the flagship brands of Aujan Industries and the number one juice drink in the Gulf. Just two years after launching, Rani is among the top three leading juice drinks in Egypt and among the top three juice brands in Iran. Rani has experience tremendous sales growth across the Middle East, North Africa, Europe and other export markets. The drink is sold in 56 countries and generates sales revenue aboveUS$600 million. Rani is produced at Aujan Industries own state-of the-art facilities. The companys flagship manufacturing facility is the Aujan Soft Drink Industries ASDI) plant located in Dammam Saudi Arabia ,which commenced production over 25years ago and has needs of Aujans expanding products portfolio and capacity requirements, ever mindful that quality is sacrosanct .ASDI has the capacity to produce more than 45 million cases annually and plans are well an additional process stream and packaging line installed in 2007. As with the ASDI plant, plans are also at an advanced stage to expand this plant further in the near future. A third state-of-the-art plant to produce Rani was built and commissioned in Iran during2008. In addition, Aujan Industries completed the construction of a two-piece aluminium can plant in Iran in support its operations. Aujan Industries continues to invest in its markets to ensure there are sufficient in-house manufacturing capabilities International Marketing In Germany Page 53 been progressive lyexpanded and upgraded to meet the demands and
and competencies in place to ensure not only continuous supply but also fresh products of the highest quality and within the market place pricing economies.
Product
Rani is the first home-grown brand for Aujan Industries. It comes in two categories: Float and non-Float. Rani Float is a juice with real fruit pieces, while then on-Float category is a regular juice without fruit pieces. Rani is available in four different formats: cans, TetraPak, PET and glassbottles.In 1982, in Saudi Arabia, RaniOrange Float became the first product in the range to reach. This was swiftly followed by a series of other formats, property, Float, the fruit juice with real fruit pieces, which has highly differentiated the brand within the fruit juice category. In addition to the great taste of Rani Float, the juice drink (Rani Non-Float) also offers unique, convenient and fun packaging. Rani non-Float International Marketing In Germany Page 54
comes in many flavours such as Apple, Cocktail, Orange, Red Grapes and Guava. In 2010 Rani was re-launched in a new can, which fuelled even more the growth and development of the brand. The new brand identity packaging of Rani Float provides a more contemporary look with a distinct burst of colour, reflecting the drinks famous fruit chunks and reminding consumers of the rich flavours that Rani Float offers. The Rani Float Ritual is to Shake, Open, Drink and Chew.
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Rani Float Cans - 240ml
Product of Rani
Avaliable in orange,grapes,banana,pineapple ,guava, apple etc. FOB Price: US $4-8 / Carton
Rani Float Cans - 180ml
Available in all flavour.
RANI JUICE PET PLASTIC BOTTLES
Rani Juice Pet Plastic Bottles - 1.5L
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RANI JUICE DRINK GLASS BOTTLES
RANI JUICE DRINK CANS Rani Juice Drink Cans - 330ml
Available in all flavour. RANI JUICE CARTON PACKS Rani Juice Carton Paks - 200ml
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Promotion
From its inception through to today, Aujan Industries has used above the line Communication and brand differentiation to educate consumers about the float concept and explain its functional and emotional benefits.
Brand values
The words most often used to describe Rani are unique, young, innovative, with real fruit pieces, fun, popular, cool. Rani Float will celebrate its 30th anniversary in 2012. Rani Float has natural fruit pieces, carefully picked from the best crops across the world. In Egypt, Rani Float Peach is the favorite flavor, while in KSA, the UAE and Jordan it is Rani Float Orange. More than 4,000 consumers shake Rani every minute. Rani sold more than 2.1 billion units in 2011, almost five times the number of people in the Middle East. Aujan Industries has more than 100 Stock Keeping Units .Aujan Industries produced approximately 2.6 billion liters of juice and other beverages in the past five years.
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granini
only
the
best
of
fruit
With an extraordinarily fruitiness and premium quality in the eye-catching dimpled bottle granini pleases consumers in over 50 countries day after day. This success story began in 1965, when granini Think frucht a product inspired by fruit juices sold in Italy was introduced to the German market. Today, granini is one of the leading premium fruit juices and nectars in Europe and the strongest brand in the portfolio of the Eckes-Granini Group.
Whether for breakfast at home or as a refreshing treat for people on the go or at hotels and restaurants graninis quality, popularity and unrivalled product range make it the preferred brand. Granini covers the full taste spectrum with over two dozen flavour varieties.
The Eckes-Granini Group at a glance HeadquartersNieder-Olm, Germany (Rhineland-Palatinate 888 million EUR Turnover (2011)
Value-based market share (2011) Export Employees (2011)
11.8% to over 70 countries world-wide 1,646
Strategic brands (2011)
granini, hohes C, Joker, Marli, Brmhults, SI, YO, Mehukatti, Elmenhorste
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The Eckes-Granini Group is active with its brands and products in the following key market segments: Fruit juices and -nectars Chilled fruit juices Fruit-based refreshment drinks Fruit syrups
Our core comprises fruit juices and -nectars. It is also the largest segment in the overall fruit beverage market.
The Eckes-Granini Group: Volume and turnover growth, earnings down significantly from 2010
Along with the entire European fruit juice industry, we found ourselves confronted with record-high raw material prices during the past year. At the close of the business year, the net value of cost increases for all raw materials was roughly equivalent to our profits for 2010. Consequently, Eckes-Granini raised its selling prices consistently and substantially, a process that involved agonizing negotiations with some of our partners in the trade. However, we managed despite these influences to maintain our value-based market share at a nearly constant level at 11.8 % (2010: 12.0 %). Total net turnover for the Eckes-Granini Group rose by 4.2 % to 888 million EUR in 2011 (2010: 852 million EUR). Revenue from the core fruit beverage business rose to 869 million EUR (2010: 831 million EUR), a gain of 4.6 %. Volume sales increased slightly by 1.1 % to 1.072 billion litres (2010: 1.061 billion litres). The volume increase in core sales of fruit beverages from 939 million litres (2010) to International Marketing In Germany Page 60
958 million litres amounted to 2.0 %. We suffered slight losses in volume sales of our stra-tegic brands, due largely to a lack of promotional support in connection with our negotiations with trade partners with respect to the consistent implementation of price increases. We achieved further improvements in our market position in Lithuania, Switzerland, Spain and Turkey. Earnings before interest and taxes (EbIT) fell to 52.4 million EUR, well below the previous years figure of 64.8 million EUR a shortfall of 19.2 %. This is attributable to the unusually steep rise in raw material costs. Although we raised our selling prices to the trade and implemented systematic cost-cutting measures, it was not possible to compensate fully for the dramatic rise in raw material prices. Nevertheless, we continued to invest heavily in advertising support for our brands during the past year with the expectation of sustainable positive effects in the years to come.
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Net
sales
share
by
brands
in
2012
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Chapter-6 Marketing plan

Real Juice has been a successful product brand in the India last many of the years. The company's natural, 100% fruit juices has grown in sales by 15% each year and is now available in over 100 store over all Indian states. Real Juice is planning to expand its operation to include distribution to stores within the entire Germany. Owner funding and internally generated cash flow will enable most the expansion plan. The company will also secure a $100,000 short-term loan. Sales projections for the next three years are based on current sales success with the target customer base in Germany. Initial contacts have been completed with retail outlets throughout the state and the potential target markets have been identified.
Situation analysis
Around 82 million consumers helped make Germany the largest food and beverage retail market in Europe. Total food retailing revenue reached the EUR 170 billion mark in 2011. Other important distribution channels include food service sales (EUR 66.4 billion) and exports (EUR 48.4 billion). Germanys food and beverage industry is the fourth largest industry sector in Germany generating production value of EUR 163.3 billion (8 percent increase on 2010) in 2011. The industry is best characterized by its small and medium-sized enterprise (SME) sector of around 6,000 companies employing 550,000. The largest industry segments by production value are meat and sausage products (23 percent), dairy products (16 percent), baked goods (9 percent), and confectionery (8 percent). Leading companies include well-known brand names such as Nestl, Dr. Oetker, Vio Food Group, Tchibo, Coca-Cola, and Kraft Foods. R&D spending in the German food and beverage industry reached EUR 355 million in 2010.
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Tagline
My Real Fruit Power
USP of real juice

Fruit flavoured health drink
STP of real juice

Segment
For all people seeking a healthy fruit based drink for regular occasions, parties
Target Group
All age groups Lower, middle and upper class people
Positioning
A fruit juice made from real fruits
Goal
To achieve at least 20% market share in Germany within a year as other juice companies are holding about 55% of market share.
Objective
100% preservative free fruit juice brand offering consumers the great taste and wholesome nutrition of freshly squeezed juice in a hygienic and attractive pack.
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Entry Strategy
1 Euro equals 71.95 Indian Rupee
The market
Germanys fruit and vegetable market is of particular interest for foreign companies: just one-fifth of consumed fruits and a third of consumed vegetables are locally sourced. More than half of Germanys fruit and vegetable imports come from Spain and Italy, the rest from France and the Netherlands. Sales of processed fruits and vegetables (excluding fruit juices) reached 3.7 billion in 2009. Fruit preparations (38 per cent market share) and jellies and jams (36 per cent) dominated the processed fruits market. Frozen vegetables (71 per cent) and canned vegetables (21 per cent) are the most important subsegments of the vegetable industry. Around 54 per cent of all fresh fruit and vegetables in Germany are sold through discounters. They are the most important distribution channel for fresh fruit and vegetables in Germany.
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Initial Entry Market

After running through our screening criteria, we have selected the germany as our target country. Not only was it an attractive market across all facets of our decision-making process, but it fits our positioning of bringing exciting and exotic juices to a market that has had very little exposure to such a product. The largest market within the Germany by a significant margin is the greater Frankfurt Area, with a population of nearly 5.2 million. It will be our main entry market for the product and the focus of the majority of our in-store and outdoor promotional efforts. Secondary markets are Berlin and other state, the two nextlargest cities with populations of almost 3.5million respectively. While our television and other broad-reach media advertisements will receive exposure throughout the country, the sheer size and density advantage of Berlin makes it the only viable target for the various innovative promotional activities we have envisioned.
Distribution
As an ultra-premium product designed for at-home consumption, we will be solely reliant on sales through grocery retailers opposed to sales for on-premise consumption at restaurants and bars or sales through convenience stores or small vendors. Our offering was specifically designed to exclude single-serving sizes as would be offered at many of the aforementioned venues. Our product will be distributed through an already-established beverage distributor with an aim of reaching most major supermarket chains and an especial emphasis on the more up-market grocers such as Marks & Spencer and Whole Foods. While we would not object to wider distribution of our product, our in-store promotional efforts will be held at those stores that are most compatible with our image. The advantage of this arrangement is that the alreadyestablished distributor has pre-existing relationships with the supermarkets, and we will be able to rely on their expertise and knowledge of market conditions to obtain the best retail placement. Moreover, creating a distribution arm especially in a foreign countryis an incredibly difficult and time-consuming process and not an aspect of business we are ready or willing to involve ourselves in given the myriad other responsibilities that entail a product launch. International Marketing In Germany Page 67
The concentrated fruit powder will be shipped to the Frankfurt plant, where it will be reconstituted using locally-procured 100% pure white grape juice. Because all of our ingredients are made from 100% fruit juices, and not reconstituted using water, we are still able to label our juices as 100% natural fruit juice. After the juice is reconstituted and packaged, we will ship it via sea to the Port of Frankfurt Authority, where it will then be distributed.
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MARKETING MIX
Product
Real Juice is an ultra premium 100% juice product made with only the finest of exotic ingredients. Our product is available in six flavours that are both delicious and healthy, playing to the health conscious nature of our target market. Our juices are not only delicious and healthy but they are made with the finest exotic fruits and because of that we are making no changes to our flavours for the German market. None of the fruits our juices are based around are native to the Germany and so the introduction of these flavours into the market.
Packaging
All Germany Juices are housed in sleek and trendy transparent plastic bottles that are easy to hold and pour. The bottle graphics on each bottle are simple and uniform making for an elegant yet approachable aesthetic. Additionally, there will be no fruit imagery on the bottles allowing the rich and vibrant colours of the juices, visible through the bottle, speak for themselves set off by the plain lettering of the company and juice name. They come in two different sizes: 1 and 1.75 litters because they are designed to be taken home and enjoyed slowly, not as a grab-and-go indulgence. While not ergonomically designed, the circumference of the bottle is designed to make it easy for one to pour out the contents into a glass. We have chosen to use PET plastic specifically because of its excellent performance as a liquid barrier, its varied and long list of recycled uses, as well as its excellent candidacy for thermal disposal. These recyclable qualities of PET are especially important because of the correlation between health conscious and environmentally conscious consumers .
Distribution
The best placement approach for real Juices is to most heavily target higher end grocery stores like Marks & Spencer and Whole Foods. We will participate in direct distribution with these two stores and provide trade discounts. These relationships will allow us to most efficiently solidify our products as high-end premium quality products. Additionally, they will be placed in the juice section adjacent other off-premise-consumption 100% juices, not with grab-and-go
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style juices. It is important that we illustrate to the market that we provide a higher quality product that is worth the higher price.
Price
per cartoon average 9.5 per cartoon .
Promotion
As our first excursion outside of the Germany and as the initiation of our entry into the broader European market, our promotional activities are very important. First, we aim to build awareness for our product aimed at stimulating trial and purchase. More importantly, however, we are also very serious about We face strong establishing our brand personality in this new market. brand is essential to our growth and survival.
competition in our product segment, and we understand that a differentiated
Country Factors Effecting Media Outlets

The Germany is a very developed national market which was key to our entry decision, but also poses complications in it. Our target market is wellrepresented and avenues for mass communication are plentiful. However, we must be conscious of the increasing ineffectiveness of such mass media outlets, including television and newspaper. While our promotion strategy includes such outlets, we are aware of other media options and plan to fully utilize alternative forms of advertising. Keeping this in mind, our promotion strategy will be highly reliant on nontraditional advertising, as we see high potential in social networking, online, and guerrilla marketing. Our website will be full of information on our company and products, as well as lifestyle information. We will also attempt to engage our online audience through mediums, such as YouTube, Face book, Twitter, and related blogs. We will also lend vast resources towards in-store promotions to increase product visibility. And lastly, we will feature some traditional advertising to increase
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product awareness and knowledge levels, such as magazine, newspaper and television promotions.
Message
Our promotional communication will highlight two main features of Real: Natural and Cool. Our products are 100% juice and every blend includes a different We feel that by developing a direct association between exotic fruit offering.
Real and natural we will get consumers to focus on the unique beverage blend variety our product line offers. Furthermore, this direct association has the added quality of automatically garnering Real juices the subconscious associations of healthy and fresh that consumers normally make with natural. Our message also focuses on transmitting the youthful, trendy, and fun brand personality of Real. In essence we aim to create a Cool factor. The individuals in advertising must represent a young and hip consumer, and the presentation of the product must be lively and appealing. Additionally, we remained constantly aware about the immense importance of breaking through the clutter of advertisement for our communication to have any effect. Our advertisements will consist of edgy humour and racy imagery By to deliver our message interestingly and capture the viewers attention.
creatively utilizing edgy and racy characteristics we also hope to create buzz around our brand which we can use in viral promotional efforts to speed the spread of awareness in the market.
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Organization structure
Organization Head
Marketing head
Accountent
Distribution Manager
Sales Department
Money Collector
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Chapter 7 Budget Budget (3 years 2013 14, 2014 15, 2016 17)
expencess warehousing Transportation Shipping Office Rent Staff salary organization head marketing manager distribution manager5 sales man salary accountent2 advertising goods cost taxes26%
budget for the real juice in germany2013-2014 in Germany income particular amount particular amount 10000 Sales 1900000 25000 Capital 25% Equity, 75% 40000 Loan 110000 Equity 25375 Loan 76125 90000 60000 250000 10 100000 72000
572000 60500 800000 494000 Page 73
Total
2001500
Total Net loss
2001500 101500
Budget for the year 2014 15
Budget for the year 2014-2015for Real juice Expencess Particular Warehousing Transportation Shipping office rent staff salary organization head marketing manager distribution manager5 sales man salary accountent2 Advertising Goods cost Taxes 26% Total Net profit International Marketing In Germany 224350 Page 74 90000 60000 250000 100000 72000 572000 60500 850000 568100 2245650 total 2470000 Amount 11500 Sales 28750 capital 44800 25%Equity75%loan 110000 Equity Loan Income Particular Amount 2470000
Budget for the year 2015 16

Budget for the year 2015-2016for real juice Expencess Particular Warehousing Transportation Shipping office rent Staff salary organization head Marketing manager Distribution manager5 Sales man salary Accountent2 Advertising Goods cost Taxes Total Net profit 99000 66000 275000 110000 550000 79200 75625 1020000 802750 2734807 Total 352693 3087500 Amount 12650 Sales 33062 Capital 51520 25%equity75%loan 110000 Equity Loan Income Particular 3087500
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Income / Capital: Capital o 25% Equity o 75% loan from Ahmadabad District Co Operative Bank @ 15% per annum Sales o Number of cartoon distributed * Price (Average Price = Euros) Expenses: Office Rent includes :following things: o Distribution +Head office, Furnished shared office o Unlimited fibre optic internet usage, Cisco Telephony o Fax by E-mail, Mail management o Access to the network in Germany Shipping cost: 20*2000 per containers Distribution cost: 25000 assumptions in euro(0.7 cent per k.m) Warehousing: 10000 per year (capacity 25000 cartoons for year Staff salary: Office head:90000 Marketing manager:60000 Distribution manager:5*50000=250000 sales man salary:10*10000=100000 International Marketing In Germany Page 76
Accountant:2*36000=72000 Advertising cost: 60500 in TV and news paper goods cost manufacturing in india: 800000 800000/4 euro Average cost per cartoon=200000 cartoon Taxes 26%on 1900000 sales=494000
Income
sales 1900000 9.5 euro per cartoon
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Chapter-1 History of Germany

International Marketing In Germany

Holy Roman Empire

International Marketing In Germany

International Marketing In Germany

Germany History, Population, Language and Culture

International Marketing In Germany

Berlin in ruins after World War II

International Marketing In Germany

Chapter-2 Economic history of Germany Peasants and rural life

International Marketing In Germany

Banks and Cartels

International Marketing In Germany

Class and the welfare state

International Marketing In Germany

International Marketing In Germany

The social market economy

International Marketing In Germany

Chapter-3 Business culture of Germany

International Marketing In Germany

International Marketing In Germany

Ethics, Values and Attitudes

International Marketing In Germany

Social Structures and Organizations

International Marketing In Germany

International Marketing In Germany

International Marketing In Germany

International Marketing In Germany

Chapter-3 Company analysis About Real

International Marketing In Germany

Ral is endorsed by PFNDAI

Accolades for Ral

International Marketing In Germany

Companys Vision and Mission

International Marketing In Germany

MANAGEMENT DISCUSSION & ANALYSIS

International Marketing In Germany

The Dabur Philosophy

International Marketing In Germany

Management of Dabur group

International Marketing In Germany

Performance in domestic market

International Marketing In Germany

Margins remain flat: During

1QFY2013, Daburs domestic business growth

International Marketing In Germany

SWOT analysis of Dabur Company

International Marketing In Germany

International Marketing In Germany

Products of real juices

310 257 - Real x3.Price: $9.00

International Marketing In Germany

Range from Rs 65/- to Rs 95

Range from Rs 65/- to Rs 95

International Marketing In Germany

Chapter-4 Industry Analysis

International Marketing In Germany

International Marketing In Germany

Segmentation and flavour profile

International Marketing In Germany

The structure of Germany juice industry

Competitive pricing across both branded and private label products