INTERNATIONAL MARKETING OF GERMANY

INTRODUCTION GERMANY Germany officially the Federal Republic of Germany (German: Bundesrepublik Deutschland, pronounced is a federal parliamentary republic in western-central Europe. The country consists of 16 states and its capital and largest city is Berlin. Germany covers an area of 357,021 square kilometres (137,847 sq mi) and has a largely temperate seasonal climate. With 80.3 million inhabitants, it is the most populous member state in the European Union. Germany is the major economic and political power of the European continent and a historic leader in many theoretical and technical fields. Germany is the world's fourth-largest economy by nominal GDP and the fifthlargest by purchasing power parity. As a global leader in several industrial and technological sectors, it is the second-largest exporter and third-largest importer of goods. The country ranks highly in manyinternational metrics of performance, has developed a very high standard of living, and features a comprehensive social security system, which includes the world's oldest universal health care system. Known for its rich cultural and political history, Germany has been the home of many influential philosophers, music composers, scientists, and inventors.

INTERNATIONAL MARKETING OF GERMANY

ECONOMY
Germany has a social market economy with a highly skilled labour force, a large capital stock, a low level of corruption, and a high level of innovation. It has the largest and most powerful national economy in Europe, the fourth largest by nominal GDP in the world, the fifth largest by PPP, and was the biggest net contributor to the EU budget in 2011. The service sector contributes approximately 71% of the total GDP, industry 28%, and agriculture 1%. The official average national unemployment rate in June 2013 was 6.6%. However, the official average national unemployment rate also includes people with a part-time job that are looking for a full-time job. The unofficial average national unemployment rate in 2011 was 5.7%. Germany is an advocate of closer European economic and political integration. Its commercial policies are increasingly determined by agreements among European Union (EU) members and by EU legislation. Germany introduced the common European currency, the euro, on 1 January 2002. Its monetary policy is set by the European Central Bank, which is headquartered in Frankfurt. Two decades after German reunification,standards of living and per capita incomes remain significantly higher in the states of the former West Germany than in the former East. The modernisation and integration of the eastern German economy is a long-term process scheduled to last until the year 2019, with annual transfers from west to east amounting to roughly $80 billion. In January 2009 the German government approved a 50 billion economic stimulus plan to protect several sectors from a downturn and a subsequent rise in unemployment rates.

INTERNATIONAL MARKETING OF GERMANY

Of the world's 500 largest stock-market-listed companies measured by revenue in 2010, the Fortune Global 500, 37 are headquartered in Germany. 30 Germany-based companies are included in the DAX, the German stock market index. Well-known global brandsare MercedesBenz, BMW, SAP, Siemens, Volkswagen, Adidas, Audi, Allianz, Porsche, Bayer, Bosch, and Nivea. Germany is recognised for its specialised small and medium enterprises. Around 1,000 of these companies are global market leaders in their segment and are labelled hidden champions.

Rank

Name

Headquarters

Revenue (Mil. )

Profit (Mil. )

Employees (World)

1.

Volkswagen AG

Wolfsburg

159.000

15.800

502.000

2.

E.ON SE

Dsseldorf

113.000

1.900

79.000

3.

Daimler AG

Stuttgart

107.000

6.000

271.000

4.

Siemens AG

Berlin, Mnchen

74.000

6.300

360.000

5.

BASF SE

Ludwigshafen Rhein

am

73.000

6.600

111.000

6.

BMW AG

Mnchen

69.000

4.900

100.000

INTERNATIONAL MARKETING OF GERMANY

Rank

Name

Headquarters

Revenue (Mil. )

Profit (Mil. )

Employees (World)

7.

Metro AG

Dsseldorf

67.000

740

288.000

8.

SchwarzGruppe (Lidl/Kaufland)

Neckarsulm

63.000

N/A

315.000

9.

Deutsche Telekom AG Bonn

59.000

670

235.000

10.

Deutsche Post AG

Bonn

53.000

1.300

471.000

Allianz SE

Mnchen

104.000

2.800

141.000

Deutsche Bank AG

Frankfurt am Main

2.160.000

4.300

101.000

INTERNATIONAL MARKETING OF GERMANY

IMPORTS AND EXPORTS

Germany is the third largest exporter and importer in the world, accounting for more than half of the European Unions international trade. Since January 1 1995, Germany has been a part of the World Trade Organisation, existing both as an individual nation and as part of the EU (known officially as the European Communities in the WTO until 30 November 2009). Much of Germanys exports focuses on industrially produced goods and services. In particular German mechanical engineering products, vehicles, and chemicals are highly valued internationally. Around one euro in four is earned from exports and more than every fifth job depends directly or indirectly on foreign trade. Exports of goods and services also made up about 52 percent of its GDP. Significantly, EU integration has greatly intensified intra-European trade, with about 69 percent of German exports shipped to European countries and 58.2 percent delivered to member states of the EU. Within the EU itself, Germany's most important trading partner continues to be France (9.5 percent of total exports). Meanwhile 7.9 percent of German exports went to the US in 2012 and 6.6 percent to the UK. Most of the goods imported to Germany originated from the Netherlands. Germany imported goods worth 86.6 billion euro from the Netherlands (9.5 percent of total German imports), with China and France accounting for the next highest imports.

INTERNATIONAL MARKETING OF GERMANY

Germany's Import and Export Indicators and Statistics at a Glance (2012) Total value of exports: $1.492 trillion Primary exports commodities: motor vehicles, machinery, chemicals, computer and electronic products, electrical equipment, pharmaceuticals, metals, transport equipment, foodstuffs, textiles, rubber and plastic products Primary exports partners: European Union (58.2 percent of total exports), US (7.0 percent), China (6.1 percent), Switzerland (4.5 percent), Russia (3.3 percent) Total value of imports: $1.276 trillion Primary imports - commodities: machinery, data processing equipment, vehicles, chemicals, oil and gas, metals, electric equipment, pharmaceuticals, foodstuffs, agricultural products Primary imports partners: European Union (54.8 percent), China (8.9 percent), US (5.5 percent), Switzerland (4.2 percent), Russia (3.3 percent)

INTERNATIONAL MARKETING OF GERMANY

AREA
Germany is a country in west-central Europe, that stretches from the Alps, across the North European Plain to the North Sea and the Baltic Sea. Germany has the second largest population in Europe (after the European part of Russia) and is seventh largest in area. The territory of Germany 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 waters. Elevation ranges from the mountains of the Alps (highest point:

the Zugspitze at 2,962 metres (9,718 ft) in the south to the shores of the North Sea(Nordsee) in the northwest and the Baltic Sea (Ostsee) in the northeast. Between lie the forested uplands of central Germany and the low-lying lands of northern Germany (lowest point: Neuendorf-Sachsenbande at 3.54 metres (11.6 ft) below sea level), traversed by some of Europe's majorrivers such as the Rhine, Danube and Elbe. Germany shares borders with nine European countries, second only to Russia: Denmark in the north, Poland and the the Czech Republic in the the

east,Austria and Switzerland in

south, France in

southwest

and Belgium, Luxembourg and the Netherlands in the west. Germany is in Western and Central Europe, bordering Denmark in the north Poland and the Czech Republic in the east, Austria and Switzerland in the south, France and Luxembourg in the south-west, and Belgium and

the Netherlands in the north-west. It lies mostly between latitudes 47 and55 N (the tip of Sylt is just north of 55), and longitudes 5 and 16 E.

INTERNATIONAL MARKETING OF GERMANY

CURRENCY
An exchange rate is the current market price for which one currency can be exchanged for another. For instance, if the Euro exchange rate for the United States Dollar stands at 1.3, this means that 1 euro can be exchanged for 1.3 U.S. dollars. Because exchange rates play such an important role in a country's competiveness level, currency exchange rates are among the most analysed and forecasted indicators in the world. The exchange rate is determined by the level of supply and demand on the international markets. However, changes in foreign exchange market rates are often difficult to understand and to predict because the market is very large and volatile. In fact, the currency markets are the most liquid in the world with a daily turnover of close to $2 trillion, which compares to $500 billion for the US government bond market and $70 billion on the New York Stock Exchange.

EURO EXCHANGE RATE | EUR/USD | GERMANY Germany has adopted the euro. The EURUSD spot exchange rate appreciated 0.0089 or 0.66 percent during the last 30 days. From 1957 until 2013, the EURUSD averaged 1.3600 reaching an all time high of 1.8700 in July of 1973 and a record low of 0.7000 in February of 1985. The euro is the official currency of Germany, which is a member of the European Union. The Euro Area refers to a currency union among the European Union member states that have adopted the euro as their sole official currency. In Germany, interest rate decisions are taken by the Governing Council of the European Central Bank. 1 Euro equals 84.45 Indian Rupee

INTERNATIONAL MARKETING OF GERMANY

MARKETING
There are many products marketed by Germany. Germans are top in BMW. BMW was established as a business entity following a restructuring of the Rapp Motorenwerke aircraftmanufacturing firm in 1917. After the end of World War I in 1918, BMW was forced to cease aircraft-engine production by the terms of the Versailles Armistice Treaty. The company consequently shifted to motorcycle production in 1923, once the restrictions of the treaty started to be lifted, followed by automobiles in 192829. The first car which BMW successfully produced and the car which launched BMW on the road to automobile production was the Dixi, it was based on the Austin 7 and licensed from the Austin Motor Company in Birmingham, England. There are also many Toothpaste brands marketed by Germany. Aim, Babool, Aquafresh, Babool, Cibaca etc. Henkel AG and Company is a German Company marketing many home care, personal care, and Adhesives. Home care Henkel's most famous brand is Persil, introduced in 1907, the first commercial "self-activated" laundry detergent, which means a bubbles forming bleach (sodium perborate) with a soap component (silicate). The abbreviation of the names of the two main components perborate und silicate compose the product name. Other home care brands include: Purex washing powder, Vernel/Silan fabric softener, Somat/Glist dishwasher tablets and Pril washing-up liquid. Persil Abaya Shampoo or Persil Black is a liquid detergent that Henkel Company introduced to the Saudi Arabia market in 2007 and later to the rest of
9

INTERNATIONAL MARKETING OF GERMANY

thePersian Gulf Cooperation Council markets. Henkel markets this liquid as a detergent specialized for black abayas. An abaya is the loose robe-like garment worn by women in many Islamic cultures. It is traditionally black. Personal care Schwarzkopf haircare, Schauma shampoo, Fa shower gel and deodorant, Diadermine skin and body care, Dial shower and hand soap. The cosmetics company Hans Schwarzkopf GmbH was acquired by Henkel in 1985. Adhesives Loctite and UniBond adhesives and sealants, Pritt glue sticks, Polyseamseal caulk, and Plastic Padding chemicals.

10

INTERNATIONAL MARKETING OF GERMANY

POPULATION

The demography of the Federal Republic of Germany is monitored by the "Statistisches Bundesamt" (Federal Statistical Office of Germany). According to the first census since the reunification, Germany's population was counted to be 80,219,695 on May 9, 2011, making it the 16th most populous country in the world. Germany's population is characterized by zero or declining growth, with an aging population and smaller cohort of youths. The total fertility rate has been rated around 1.4 in 2010 (the highest value since 1990) and has recently even been estimated at 1.6 after accounting for the fact that older women contribute more to the number of births than in previous statistic models, and total fertility rates increased in younger generations. Fertility was closely linked to educational achievement (with the less educated women having more children than the educated ones). Persons who adhere to no religion have fewer children than Christians, and studies also found that among Christians the more conservative ones had more children than the more liberal ones. In vitro fertilisation is legal in Germany, with an age limit set at 40 The United Nations Population Fund lists Germany as host to the third-highest number of international migrants worldwide. More than 16 million people are of foreign/immigrant descent (first and second generation, including mixed heritage and ethnic German repatriates and their descendants). 96.1% of those reside in western Germany and Berlin. About seven million of them are foreign residents, which is defined as those not having German citizenship. The largest ethnic group of non-German origin are the Turkish. Since the 1960s, West and later reunified Germany has been
11

attracting

migrants

primarily

INTERNATIONAL MARKETING OF GERMANY

from Southern and Eastern Europe as well as Turkey, many of whom (or their children) over time acquired German citizenship. While most of these migrations had an economic background, Germany has also been a prime destination for refugees from many developing countries, in part because its constitution long had a clause giving a 'right' to political asylum, but restrictions over the years have since made it less attractive. Germany has one of the world's highest levels of education, technological development, and economic productivity. Since the end of World War II, the number of students entering universities has more than tripled, and the trade and technical schools are among the world's best. With a per capita income of about $36,850 Purchasing power parity (in 2009), Germany is a broadly middle class society. However there has been a strong increase in the children living in poverty in Germany. While in 1965 one in 75 children was on the welfare rolls in 2007 one in 6 was.Those children live in relative poverty, but not in absolute poverty however.

12

INTERNATIONAL MARKETING OF GERMANY

While most child-births in Germany happen within marriage, a growing number of children is born out-of-wedlock. In 2010 the out-of-wedlock-rate was 33%, more than twice of what it was in 1990. The Mikrozensus done in 2008 revealed that the number of children a German woman aged 40 to 75 had, was closely linked to her educational achievement. In Western Germany the most educated women were the most likely to be childless. 26% of those groups stated they were childless, while only 16% of those having an intermediate education, and 11% of those having compulsory education stated the same. In Eastern Germany however, only 9% of the most educated women of that age group and only 7% of those who had an intermediary education were childless, while 12% of those having only compulsory education were childless. The reason for that east-western difference is the fact that the GDR had an "educated mother scheme" and actively tried to encourage first births among the more educated. In 1986 38% of all women, who were about to graduate from college, were mothers of at least one child and additional 14% were pregnant and 43% of all men, who were about to graduate from college, were fathers of at least one child. There was a sharp decline in the birth rate and especially in the birth rate of the educated after the fall of the Berlin wall. Nowadays only 5% of those about to graduate from college are parents.

13

INTERNATIONAL MARKETING OF GERMANY

HEADQUARTERS IN GERMANY
Companies having headquarters in Germany:

A. Lange & Shne Adidas, apparel & accessories Air Berlin, airlines Allianz, financials Altana, chemicals Arburg Arcor Audi, automotive BASF, chemicals Bauhaus Bayer, pharmaceuticals Bavaria Film Studios Bertelsmann BMG Bosch BMW Hubert Burda Media Celesio Circus Krone
14

INTERNATIONAL MARKETING OF GERMANY

Claas Commerzbank Concert Software and Business Services Continental Daimler AG Mercedes-Benz Dba Degussa Delton Deutsche Bank Deutsche Brse Deutsche Post DHL Deutsche Telekom T-Mobile T-Systems Deutsche Vermgensberatung Deutz AG Diezel Drger Plus Spar E.ON EnBW
15

INTERNATIONAL MARKETING OF GERMANY

Filmstudio Babelsberg Fischerwerke Fissler Fraport Freenet.de Fresenius Fresenius Medical Care Festo Ford of Europe Ford-Werke Gardena AG GEA Group Gebrder Thonet Gerolsteiner Brunnen Getrag etc

16

INTERNATIONAL MARKETING OF GERMANY

EXPORTS FROM INDIA

As of December 2010, Germany is India's fifth largest trading partner worldwide, and the largest trading partner within the European Union, with an impressive share of 21 per cent of the total trade between EU and India. In line with its reputation of being one of the worlds leading exporters, German exports to India grew to 8.2 billion, growing at a rate of over 12 per cent in 2008. In 2009, this figure fell by 1.2 per cent to reach 8.1 billion. However, in 2010 it again increased by 15.7 per cent to reach 9.3 billion. The top three winners of German exports to India were machinery, chemical products and data processing, electronic and optical equipment sectors. With the value of 2.9 billion, machinery took the lion's share of 31 per cent in Germany's total exports to India. Chemical products with 1.2 billion took a share of 13 per cent, and data processing, electronic and optical equipment grew to 894 million. Exports of electric equipment stood at 818 million. Metals and vehicle parts were other important export items, with a value of 614 million and 534 million respectively.

Overview Indian Exports to Germany

Trade relations between the two nations have increased to a remarkable extent and have recorded a positive growth over the last couple of years. Figures as of 2009, show that India is on 28th position on the list of sourcing countries for Germany and is ranked 27th among the main destinations for German exports. Post to the global recession, there has been an increase in the exports from India to Germany with the figures touching to 21.5% and the total exports amounting to Euro 6.2 billion.
17

INTERNATIONAL MARKETING OF GERMANY

Figures of Indo-German Export Market

There is a growing trend in the bilateral trade between the two nations and the export industry has registered an incredible growth. Figures of export for the textile industry (http://business.mapsofindia.com/india-industry/) touched Euro 1.5 billion. Export of chemicals occupied the second position with statistics showing export worth about Euro 585 million. The next spot is taken by data processing, electronic and optical equipment where export reached Euro 579 million. Machinery and leather exports occupied the fourth and fifth positions with export figures worth Euro 418 million and Euro 396 million respectively. -

Products exported to Germany

Indian exports to Germany from textiles, to IT solutions, leather, agricultural produce, glass materials etc

Leather Exports to Germany

Leather accessories occupy an important part of the Leather Industry in India and the Germany is one of the prime destinations for export of leather goods from India. Germany accounts to about 14% of the export market of the items of leather from India.

Textile Exports to Germany

The Indian textile industry has shown a remarkable growth over the years and has more than four million handlooms. The sector is responsible for 14% of the over all industrial output and is on the rise in the global textile sector. It generally consists of suppliers, manufacturers, exporters of textiles of cotton, handloom, woollen goods etc. Germany is one of the front runners when it
18

INTERNATIONAL MARKETING OF GERMANY

comes to import of handmade Indian fibre textile. Germany resulted for the highest share of the Indian textile export market as indicated by the figures which reached to Euro 1.5 billion as of 2010.

Agricultural Exports to Germany

The agro products exported to Germany from India are listed below: Floriculture Walnuts, Dried and Preserved vegetables Poultry products Processed meat, GuarGum, Natural Honey

IT Exports to Germany
Indian companies are prime outsourcing firms and display a huge potential in the IT export market. Germany is a prime destination in the export market for India providing technology solutions. India is a powerful center for research and development and also gives computer software service export, network infrastructure management, IT consulting.

Indian Glass Trade with Germany

Agenda Glass AG, a German based glass manufacturing industry was bought recently by Kolkata based Hindusthan National glass & Industries (HNG), for an undisclosed amount. HNG Global GmbH is the name of the new venture.

19

INTERNATIONAL MARKETING OF GERMANY

IMPORTS FROM GERMANY

Machinery, Electro-technology and Metal products remain the top 3 items of Indian imports With 35%, Machinery takes up the lions share of Indias imports from Germany. In 2010, India imported Machinery worth over 3.2 billion, half a billion euros and 20.4% more than the previous year. Imports of Electro-Technology products, ranking second in the list of imports, was to the tune of nearly 1.1 billion, registering a growth of around 14.1% - and with that taking up nearly 12% share of total imports. India also imported Metal and Metal Products worth over a billion euros, with imports in this category growing 13%. After registering a decline in 2009, these top three categories of goods registered double digit growths in imports in 2010. Chemicals too grew substantially to touch 813 million posting a growth of nearly 31% and increasing its share in the import basket to 8.8% in 2010 from 7.8% in 2009. In the year of reporting, imports of Automobiles and Ancillaries registered the highest growth of nearly 105% after declining 18% in the previous year moving up from the 8th position in 2009 to the 5th in 2010. Textiles & Garments (+54.1%), Plastics(+47.5%), Pharmaceuticals(+45%), Rubber (+61.8%) as well as Glass & Ceramic products (+54%) whose imports posted a very small or negative growth in the year 2009, grew impressively in 2010, adding substantially to the overall import figures from Germany.

Imports of Consumer Goods - albeit at a lower level - grew a phenomenal 101.6%, mainly on account of the growth in imports of furniture (+93%). Imports of Aircraft registered a substantial decline of over 62% and with that, moved to the 8th position last year from the 4 th position in 2009. Other items of
20

INTERNATIONAL MARKETING OF GERMANY

imports that saw a decline during the last year were Optical & Photographic Equipment (-9.3%), Track Vehicles (-73.7%), Boats/Water Transport (-95.8%). Over 73% of total imports were taken up by the top five categories, while the top 3 accounted for nearly 58%. Complete plants tops Machinery imports list Complete plants; Bearings, gears, toothed wheels & drive as well as Machine tools constituted the top three types of machinery with highest imports from Germany in 2010. Imports of complete plants accounted for 12.3% (398 million) of total Indian imports from Germany, while Bearings, gears etc. with 372 million and a share of 11.5% was at the 2nd position in 2010, improving its position by a notch over the previous year. In 2009, Complete Plants had witnessed a surge in imports growing over 154%, in 2010 however, this category grew a modest 20%. While Machine Tools was at position no.2 in 2009, it was at no.3 in 2010 with India importing 2.6% less of Machine Tools to the tune of 302 million (9.3% share) in 2010. While in the year 2009, most (12 out of 16) of the machinery categories experienced a decline (in some cases substantial), or there was no change, in 2010, imports in only 3 categories experienced a drop, significantly only in the case of Casting & rolling mills, which declined by 21.5%. Segments that registered impressive growths were Cranes/ elevators (+56%), Prime movers (+65%), Instruments & fittings (+67%) and Food & tobacco processing machinery (+ 76%).

21

INTERNATIONAL MARKETING OF GERMANY

INDUSTRIES PROVIDING JOB/EMPLOYMENT

Germany has a social market economy characterised by a highly

qualified labour force, a developed infrastructure, a large capital stock, a low level of corruption, and a high level of innovation. It has the largest national economy in Europe, the fourth largest by nominal GDP in the world, and ranked fifth by GDP (PPP) in 2009. The service sector contributes around 70% of the total GDP, industry 29.1%, and agriculture 0.9%.

Primary
In 2010 agriculture, forestry, and mining accounted for only 0.9% of Germanys gross domestic product (GDP) and employed only 2.4% of the population, down from 4% in 1991. Agriculture is extremely productive, and Germany is able to cover 90% of its nutritional needs with domestic production. Germany is the third largest agricultural producer in the European Union after France and Italy. Germanys principal agricultural products are potatoes, wheat, barley, sugar beets, fruit, and cabbages. Despite the countrys high level of industrialization, almost one -third of its territory is covered by forest. The forestry industry provides for about twothirds of domestic consumption of wood and wood products, so Germany is a net importer of these items.

22

INTERNATIONAL MARKETING OF GERMANY

Industry
Industry and construction accounted for 29% of gross domestic product in 2008, and employed 29.7% of the workforce. Germany excels in the production of automobiles, machinery, electrical equipment and chemicals. With the manufacture of 5.2 million vehicles in 2009, Germany was the worlds fourth largest producer and largest exporter of automobiles. German automotive companies enjoy an extremely strong position in the so-called premium segment, with a combined world market share of about 90%. Smallto medium-sized manufacturing firms

(Mittelstand companies) which specialize in technologically advanced niche products and are often family-owned and form major part of the German economy. It is estimated that about 1500 German companies occupy a top three position in their respective market segment worldwide. In about two thirds of all industry sectors German companies belong to the top three competitors.

Services In 2008 services constituted 69% of gross domestic product (GDP), and the sector employed 67.5% of the workforce.[21] The subcomponents of services are financial, renting, and business activities (30.5%); trade, hotels and restaurants, and transport (18%); and other service activities (21.7%).

23

INTERNATIONAL MARKETING OF GERMANY

The largest annual international trade fairs and congresses are held in several German cities such as Hanover, Frankfurt, and Berlin.[80] Germany is the third most visited country in Europe, with a total of 369.6 million overnights during 2010. Despite being a latecomer to Europes Industrial Revolution, the German economy quickly caught up to the likes of Great Britain and France; and by 1910 was one of the worlds leaders in industrial development alongside the U.K. and the U.S. The rapid industrialisation of Germany had been the result of an alliance between industrial business people and the aristocracy who controlled much of the land emphasising the production of coal and steel, machines and machine tools, chemicals, electronic equipment, ships, and, later, motor vehicles, during the late 19th early 20th centuries. Well-organized business, labour, and farm associations also collaborated with the government producing a distinctive organized capitalism, different from the less regulated capitalism of Britain and the United States. The strong industrialise base allowed the economy to survive two world wars; and today it remains a global leader in manufacturing and technological innovation. Unsurprisingly, Germany is Europe's most industrialised nation, boasting major players in industries like automobile manufacturing, machinery, precision equipments, heavy automotive, technology and softwares.

24

INTERNATIONAL MARKETING OF GERMANY

37 of the world's 500 largest stock market listed companies are headquartered in Germany, including Volkswagen, Allianz, E.ON, Daimler, Siemens, Metro, Deutsche Telekom, Munich Re, BASF, and BMW. Other large German companies include: Robert Bosch, ThyssenKrupp, and MAN (diversified industrials); Bayer and Merck (pharmaceuticals); Adidas and Puma (clothing and footwear); Commerzbank and Deutsche Bank (banking and finance); Aldi, Lidl and Edeka (retail); SAP (computer software); Infineon (semiconductors); Henkel (household and personal consumer products); Deutsche Post (logistics); and Hugo Boss (luxury goods). Germany's Industry Sectors Comparative to its industry and services sectors, German agriculture is fairly insignificant, contributing only 0.8 percent of the nation's GDP in 2012. Yet, Germany is still ranked third in agricultural production behind France and Italy in the European Union; and the nation is able to provide 90 percent of the population's nutritional needs with its domestic production. Germanys agricultural products include potatoes, wheat, barley, sugar beets, fruits, cabbages, cattle, pigs and poultry. Since the 1960s, German agricultural policy has not been decided by the German government, but by the European Commission in Brussels.

Industry in Germany accounts for 28.1 percent of the country's total GDP, and employs 24.6 percent of the workforce. Germany is traditionally strong in industrial products, as prove by its export success in mechanical engineering
25

INTERNATIONAL MARKETING OF GERMANY

and automobiles. The country is the world's forth largest producer and the largest exporter of automobiles, which includes world renowned brands like BMW, Mercedes-Benz and Porche. Germany's industry growth is also driven by many small and medium sized enterprises called Mittlestand. These are family-owned companies with less than 500 employees. Mittlestand in Germany currently has more than 3 million companies, and employs more than 70 percent of the country's workforce. Services in Germany makes up a large portion of Germany's economy, contributing 71.1 percent of the country's GDP and employing 73.8 percent of the workforce. Germany is renowned for its highly skilled labour force and this ranks Germany third in the provision of services among exporting nations worldwide. It is also ranked first in skill-intensive services like technical services, IT-sevices and financial services. Although exchange of services contributes to the nation's GDP, many businesses are reluctant to cross borders, mainly due to legal restrictions and working process from the provision of services. As such, the Germany government is working towards removal of these barriers through bilateral agreements in the General Agreement on the Trade in Services (GATS), and through the implementation of the EU services directive. Companies Of the world's 500 largest stock-market-listed companies measured by revenue in 2010, the Fortune Global 500, 37 are headquartered in Germany. 30 Germany-based companies are included in the DAX, the German stock market index. Wellknown global brands are Mercedes-

26

INTERNATIONAL MARKETING OF GERMANY

Benz, BMW, SAP, Siemens, Volkswagen, Adidas, Audi, Allianz, Porsche, Bay er, BASF, Bosch, and Nivea. Germany is recognised for its specialised small and medium enterprises. Around 1,000 of these companies are global market leaders in their segment and are labelled hidden champions. The list includes the largest companies by turnover in 2009. Revenue Million Profit Million Employees (World)

Rank[69]

Name

Headquarters

Volkswagen AG

Wolfsburg

108,897

4,120

329,305

Daimler AG

Stuttgart

99,399

3,985

272,382

Siemens AG

Munich/Berlin 72,488

3,806

398,200

E.ON AG

Dsseldorf

68,731

7,204

87,815

Metro AG

Dsseldorf

64,337

825

242,378

Deutsche Post AG

Bonn

63,512

1,389

475,100

27

INTERNATIONAL MARKETING OF GERMANY

Rank[69]

Name

Headquarters

Revenue Million

Profit Million

Employees (World)

Deutsche Telekom AG

Bonn

62,516

569

241,426

BASF SE

Ludwigshafen

57,951

4,065

95,175

BMW AG

Munich

56,018

3,126

107,539

10

ThyssenKrupp AG

Essen/Duisburg 51,723

2,102

191,350

28

INTERNATIONAL MARKETING OF GERMANY

TOURISM IN GERMANY

Germany is the seventh most visited country in the world, with a total of 369.6 million overnights during 2010. This number includes 56.5 million nights by foreign visitors, the majority of foreign tourists in 2009 coming from the Netherlands, the United States and Switzerland (see table). According to Travel and Tourism Competitiveness Reports, Germany is rated as one of the safest travel destinations worldwide. The official body for tourism in Germany is the German National Tourist Board (GNTB), represented worldwide by National Tourist Offices in 29 countries. Surveys by the GNTB include perceptions and reasons for holidaying in Germany, which are as follows: culture (75%), outdoors/countryside (59%), cities (59%), cleanliness (47%), security (41%), modernity (36%), good hotels (35%), good gastronomy/cuisine (34%), good accessibility (30%),

cosmopolitanism/hospitality (27%), good shopping opportunities (21%), exciting nightlife (17%) and good price/performance ratio (10%) (multiple answers were possible). More than 30% of Germans spend their holiday in their own country. With more than 133 million foreign visitors (2008) Germany is ranked as the 7th most visited travel destination worldwide. A total of 27.2 billion Euros is spent on travel and tourism: this is equivalent to 3.2% of Germany's GNP.

29

INTERNATIONAL MARKETING OF GERMANY

The history of tourism in Germany goes back to cities and landscapes being visited for education and recreation. From the late 18th century onwards, cities like Dresden, Munich, Weimar and Berlin were European Grand tour. Spas and Seaside resorts on the North and Baltic Sea major stops on a

(e.g. Rugia and Usedom islands, Heiligendamm, Norderney and Syltislands) particularly developed during the 19th and early 20th century, when major train routes were built to connect the seaside spas to urban centers. An extense bathing and recreation industry materialized in Germany around 1900. Since the end of World War II tourism has expanded greatly, as many tourists visit Germany to experience a sense of European history and the diverse German landscape. The country features 14 national parks, including the Jasmund National Park, theVorpommern Lagoon Area National Park, the Mritz National Park, the Wadden Sea National Parks, the Harz National Park, theHainich National Park, the Saxon Switzerland National Park, the Bavarian Forest National Park and the Berchtesgaden National Park. In addition, there are 14 Biosphere Reserves, as well as 98 nature parks. The countryside has a pastoral aura, while the bigger cities exhibit both a modern and classical feel. Small and medium-sized cities often preserved their historical appearance and have old towns with remarkable architectural heritage - these are calledAltstadt in German.

30