German producers who go to India generally see their “Made in Germany” as a major advantage over goods from Indian competitors. He's right about that, because when it comes to quality and reliability, Indians also like to trust in German engineering. However, it was also new to us that the products could have a “too good reputation”. A true anecdote from Dr. Wamser + Batra GmbH
A German tool manufacturer follows its customer from the European automotive industry to India and sets up a branch there in order to better serve its partners and new Indian customers (vehicle manufacturers) locally. In an exemplary manner, an experienced Indian managing director, who was previously sales manager at the largest Indian competitor, was hired. They wanted to benefit from their market know-how and contacts and serve the market on a larger scale. With his help, a corresponding warehouse with German products was set up in India and business began. After a few months, however, the company was on the verge of collapse. What happened?
German brand as a problem
The largest new Indian customer - the largest Indian automobile manufacturer - placed a one-off order in a considerable quantity and then no longer ordered any further products. The customer's buyers had to admit: “Your tools are ideal for our use. But unfortunately they are too good! Our own staff steals them, on average after just a week, to hang on the wall at home! What good are your quality products if they disappear so quickly? This will be too expensive for us in the long run. Then our employees will have to deal with the 'bad stuff' again."
The expensive German branded goods were simply taken home by the staff as a status symbol. Of course, the Indian customer couldn't and didn't want to afford that and had to do without quality tools “Made in Germany”. The failure of the largest Indian customer would have meant enormous economic damage for the German manufacturer and would have fundamentally called the company's operations in India into question.
Who would have thought that an internationally known German brand name could become an obstacle to business in India - when German quality has such a good reputation, especially in India? In this case obviously too good...
Brilliantly simple solution: small adjustments with a big impact
Now we came into play. Dr. Wamser + Batra was tasked with identifying and implementing “turnaround” solutions to ultimately save the German tool manufacturer’s India business. It sounds paradoxical, but ultimately it was the simplest and most effective solution to “relabel” the high-quality German products with an unknown Indian name in order to make the German status brand disappear.
Since then, the same good tools have been sold to the Indian car manufacturer under a newly created Indian brand name. This means that the Indian automobile manufacturer will once again receive the high-quality German tools it values (at German prices!) without them being stolen by the workforce - the status symbolism is missing.
Having to throw your own brand overboard in India, which has been painstakingly built up over decades and is an “asset” all over the world, is certainly not an easy decision. And you can imagine the political discussions it took in the German headquarters to take this step. But in India it often requires very unconventional decisions to be successful. In this case, we managed to make a product “fit for the Indian market” with an extremely simple adjustment.
WB turnaround management® – quality consulting from Dr. Wamser + Batra GmbH on the economically difficult situations of German medium-sized companies in India. We work with you to analyze any obstacles and unrecognized problems and identify suitable optimization options. [further]
