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Selling Washing Machines in Germany   Term Paper ID:27792 Click to get this paper

Essay Subject: Analysis of the German / EC market for washing machines. Among others, factors concerning sociocultural acceptance, legal standards, political climate, distribution, & marketing are discussed.... More...

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Paper Abstract: Analysis of the German / EC market for washing machines. Among others, factors concerning sociocultural acceptance, legal standards, political climate, distribution, & marketing are discussed. Paper Introduction: EXECUTIVE SUMMARY Germany increased the size of its consumer population by 12 million with the reunification of the two German entities, East Germany with West Germany. This reunification involved the most economically powerful country in the emerging EC--West Germany--and one of the poorer countries of the former Warsaw Pact--East Germany. It was speculated at the time that this shift would damage Germany's economic strength, and indeed it has placed a strain on it as the people of East Germany have some way to go before catching up with their western counterparts. Still, Germany remains an economic powerhouse and a good market for a number of goods from other regions. The countries of Europe have long dreamed of a Europe without borders, a Europe without trade barriers or barriers to Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Shipments of American goods to Germany in 1989 reached$4 million. European job growth has come mainly fromthe public sector, which provided more than 5 million new jobs over thepast two decades. LEGAL STANDARDS Price is most important in the selling of lower end products, andprice competition remains fierce. machinery 14.6 14.7 Chemicals 7.59.5Chemicals 12.6 13.3 Other Consumer goods 6.9 9.3Other consumer goods 7.7 9.5 Office machinery andOther semi-manufactures 8.3 8.6 telecoms. In the 12 European Community nations, 17.4 million people (1 .3percent of the work force) currently are unemployed compared with 14.6million at the start of this year. German consumers have tried to maintaintheir lifestyle during the recession, even if they had to use some of theirsavings to do so. 3) Germany's young professional class have a taste for elegance andflair that translates into steady sales of sophisticated, well-designedhousewares. This means that for the first time, German manufacturers canchoose from a full panoply of media. The final work permit is issued after aresidence permit has been issued. It iscertainly a new item to those in the former East Germany, and it has notpenetrated the market too deeply in the former West Germany. Department of Commerce,1986, 3-4). The population is also aging, reflected in the 15percent of people over 65 years of age and this also influences thedevelopment of the market. Theimport of this item must be accomplished by working through the largedepartment stores and the major import companies which bring in foreigngoods and distribute them to the various outlets that would be able tocarry this type of product and be successful with it. Thegovernment may impose restrictions on business, but such restrictions arepermissible only for certain purposes, such as meeting obligations underinternational treaties and for protecting the German economy. In Germany,as in many other Northern European countries, a few giant retailers holdmost of the power and capture most of the surplus generated by the system,and this can be seen in the food business quite clearly. German companies have beenmaking great efforts to reduce payrolls, hold down wages, and use labormore effectively through more flexible working arrangements (EconomistIntelligence Unit, 1994, 2 -21). Thiskind of static system is poor preparation for a far more dynamic globalsystem, in which new channels and new formats come into the market all thetime (Ohbora, Parsons, and Riesenbeck, 1992, 54-57). American suppliers, for instance, sella large number of household consumer products, though again, the strongU.S. It was speculated at the timethat this shift would damage Germany's economic strength, and indeed it hasplaced a strain on it as the people of East Germany have some way to gobefore catching up with their western counterparts. Certificates of naturalization may be grantedto aliens of good standing who are likely to integrate into the Germanpeople and who have residence in Germany and are able to support themselvesand their dependents (Martindale-Hubbell Law Digest, 1994, GER-11/12). dollar, until recently, has hit vendors hard, with some vendorsreporting as much as a 75 percent cut in shipments while others have leftthe market entirely. REQUIREMENTS TO BECOME A LEGAL RESIDENT Visitors for business or pleasure may freely land in Germany if theyhave a valid passport, or if they are from an EC- country, anidentification card. New Providence, New Jersey: Martindale-Hubbell, 1994.Ohbora, Tatsuo, Andrew Parsons, and Hajo Riesenbeck. The best bets for U.S. Also, small shipments of price-sensitive items, such as glassware,by numerous individual companies have built to an impressive volume of U.S.-sourced shipments. The pressure overall is for further local agreements forgreater flexibility of work patterns and savings among voluntary paymentsnegotiated at plant level, and this is compressing labor costs further. Still, Germany remainsan economic powerhouse and a good market for a number of goods from otherregions. 2) Many German families take pride in owning high-quality consumergoods ranging from silverware to electric appliances. A more realistic dollar value could produce a higher volumein shipments. Only very few brands, such as Mars, orNivea or Ferrero confectionery, or Coke, have the appeal to overcome thispower. There are also a number of other channels that are responsible forsmall fractions of selected markets, and these include door-to-door sales,open-air markets, street vendors, and flower shops. The defects of this system are certain to become a major problem asGerman companies expand into new markets where they will have to competewith non-German companies. It alsoserves the demographic shifts taking place inside Germany today. Various union's however, have tabled claims for wageincreases. This prospecthas created fears among some, however, and some of the member states, ortheir leadership, have seen the developing EC as a challenge to their senseof sovereignty and autonomous rule. A third method is through department stores and mail-order houses serving all segments of the market. Few economists think that consumers can continueusing up their savings to keep buying, and retailers and marketers inGermany have already found that customers are becoming much more choosy.Customers are tending to stick with basic clothing and are cutting back onpurchases of trendy or high-fashion items. This is a viableproduct so long as the importer understands the nature of the German marketand the various legal and marketing needs of Germany today. The countries of Europe have long dreamed of a Europe without borders,a Europe without trade barriers or barriers to the free flow of goods andpeople from one country to another. The latterprovision does not apply to trainees or apprentices. All of these factors affect thecompetitive environment and the ability of either German or foreign firmsfrom carving a niche in the German market in the near future. Unemployment estimates for 19 Europeancountries point to a jump of almost 2 percent to 23 million people (11.9percent of the work force). Customs duties are imposed on U.S.-built consumer goods, andthese generally range from about 4 percent to 13 percent, though for someitems, such as knives and cutlery, tariffs may be as high as 17 percent(U.S. In the importation of consumer goods, standards applying tohousehold consumer products are set by the German Institute forStandardization (Deutsche Industri-Norm, or DIN). ECONOMIC AND POLITICAL CLIMATE The German market, like many other European markets, is dominated by asmall number of large and powerful retailers. A work permit may be obtained forspecific jobs only, and it is generally subject to time limitations of oneor two years, though it is also renewable. "Alternate Routes to Global Marketing." The McKinsey Quarterly (Summer 1992), 52-74.Templeman, John. The market for home, hand, and power tools increased because of agrowing trend to do-it-yourself products among householders. forthe same goods, and this makes such importation a more viable choice. There are twelve nations in the EC, including Germany, which stands as themost economically powerful of the 12 states. German consumers now place a high value on maintaining theirgardens, and the growing level of environmental awareness developing inGerman society only accentuated the popularity of gardening. 4th Quarter 1994.Lauk, Kurt J. However, asthe following analysis will show, it is a product that fits with the desirefor high-quality items among a large segment of the German public. Self-employed personsare also excluded, though they do have to report to the local supervisoryagency for business and trade before starting their proposed business inGermany. Flexibility in Germany is achieved by consensusbetween employers and employees with the aim of achieving job security.There has been a clear recognition that labor costs have to be held undercontrol, and deregulation of excessive rigidities like costs have to beheld under control. Some, in fact, like pan-European discounter Aldi or like Marks & Spencer and Sainsbury's in theUnited Kingdom, are considered virtual "brands" in themselves. In that sector,the top five German retailers control more than 4 percent of the market,which is twice the level of concentration in the United States and eighttimes that of Japan. Each yearin Germany, large consumer goods trade fairs are held and serve as anexcellent means for exposure of products to potential dealers. Consumer spending, which accounts for 57 percent of Germany's economy,is believed likely to decline through 1994-95, and the reluctance ofconsumers to spend more could put a crimp in the recovery of the Germaneconomy. 4.4 E. The approval of the TUV allows the use of the safety seal"GS," and this is a basic requirement for marketing technical equipment inGermany. Discount outlets, such as do-it-yourself home repair chains, are popular, and consumers are even postponingpurchases of clothing or shoes to replace older items ("What's not so rightwith German outlook for the future," 1993, 9). Image is built trough advertising that creates brandrecognition not only among consumers but among dealers as well. Today, Procter & Gamble actually surpasses manytraditional European companies in its degree of collaboration withretailers. U.S.-sourced imports of housewares were among thehardest hit. Some of the largest of theseinclude Nurnburger Bund, Einkaufsbro Deutscher Eisenhandler, and Kaufring.For most household goods, the gross margin between the landed price ofimported goods and the retail price is 5 percent from the top, but mark-ups can be higher, up to 15 -2 percent on higher quality products (U.S.Department of Commerce, 1986, 5-6). Aliens allowed to enter must register with the AliensAuthority if they are to remain in Germany for three months or longer.Foreigners taking a job, except for temporary work for a foreign employer,must have the following: 1) proof of identity; 2) residence permit, to be obtained from Aliens Authority, through theGerman Consulate (The residence permit is usually valid for one year, butit can be renewed annually. Procter & Gamble learned this lesson the hard way in Europe inthe 197 s when it advertised heavily and created consumer pull, but paidlittle attention to retailers, assuming that they would fall in line behindconsumers. Because thesegiant retailers are the only pathway between manufacturers and consumersand because it is least risky and most profitable for them to sellestablished products with proven commercial appeal, they use their power tosquelch new products. Price is less of aconcern for this market than it is for others or than it is in the U.S. There are 12 separate EC countries, each with its own languageand culture, and the economies of scale available in any given targetedmarket are much lower than in the United States. COMPETITION The expanding demand for household consumer goods is expected to beserved by overseas vendors to a great degree. Land inGermany is very expensive, so the average sizes of lots are much smallerthan they are in the U.S., and this has focused demand on tools andequipment appropriate to small-scale yards. Moreover, laws that bar commercials frommentioning competitive products only strengthen the European system'sstrong resistance to the new, targeted products that drive the segmentationtrend in the United States. There has been a shift, however, in the consumermarket so that larger appliances have a better chance of being adopted bypeople who did not purchase such units in the past but who will nowconsider them seriously as a means of improving life. SIZE OF MARKET The German market at the present time contains some uncertaintybecause of the recent reunification of the two German nations into one,with the former West Germany enjoying a considerable economic advantageover East Germany, a disparity that remains as the new united Germany triesto bring the residents of the former East Germany into the consumer marketof the West. Washington, D.C.: 1986."What's not so right with German outlook for the future." American Metal Market (June 22, 1993), 9. The productmust be imported carefully, for the market is not growing fast enough tosupport a large-scale importation or an attempt to reach a high percentageof all households rather than merely the households in the target market. EXECUTIVE SUMMARY Germany increased the size of its consumer population by 12 millionwith the reunification of the two German entities, East Germany with WestGermany. Only a few years ago, all you couldfind in Germany were the three state-owned television channels, while todaythere are more than 2 channels on cable, 15 of which are privately owned.Cable is now available in more than three-quarters of all households inGermany. A second method isthrough nonspecialized stores such as supermarkets, drugstores, anddiscount chains which often carry relatively inexpensive household goods ortools as a sideline. More recent figures indicate, however, that consumption remainssomewhat sluggish. The largest retailers are responsible for about 25 percent ofthe market, and the balance is distributed among the remaining channels.In order to sell through the specialized retail shops or the smallerdiscount stores, U.S. Among thereasons for this are the high cost of professional help and the need toupdate or repair houses and apartments that are often 3 years old. The domestic economy as a whole has moved into a phase of stronggrowth, and there was a sharp acceleration in economic growth in the firsthalf of 1994. This is the challenge facing Germany today, requiring thatcomparable living conditions and equal opportunities be afforded all whotoday live in Germany. Pan-Europeanadvertising will remain the exception, not the rule, for the foreseeablefuture (Ohbora, Parsons, and Riesenbeck, 1992, 71-73). The sameestimates point to 3 percent of the total output of goods and services inJapan and the United States. American companies desirous of entering the German market will findthat careful targeting of potential buyers and markets can allow them tomaintain their presence in the large German market for household consumerproducts. Germanconsumer demand could therefore make the difference between a weak economicrecovery in Europe and healthy growth. TABLE OF CONTENTSEXECUTIVE SUMMARY 1SIZE OF MARKET 3SOCIOCULTURAL ACCEPTANCE 5LEGAL STANDARDS 8REQUIREMENTS TO BECOME A LEGAL RESIDENT 1 COMPETITION 11ECONOMIC AND POLITICAL CLIMATE 15MARKETING AND DISTRIBUTION 17MANAGERIAL LABOR CLIMATE 21FINANCIAL VIABILITY 21REFERENCES 23APPENDIX 24 APPENDIXComponents of Germany's TradeA) Five major product groups(Per cent and million ECU) Share in merchandise Share in merchandiseProduct exports Product imports 1981 1988 1981 1988Automotive products 14.8 17.5 Food 12.411.5Other non-elec. Nearly 46 percent of unemployed Europeans have been outof work for more than a year compared with 6.3 percent in the UnitedStates. Because of this, importsplay a growing role in the market. Bathroom accessories have become more important in Germany after aperiod where the people were limited to the necessities. They also provide a great deal of productinformation and after-sales service to their customers. At the sametime, labor unions seem to be showing a greater confidence in itsbargaining strength. Germany. This is considered a unique moment in history because ofthe coincidence of these two major challenges, occurring at a time when themarket economy should be showing its superiority precisely in those placeswhere it was not allowed to operate previously, where the bankruptcy ofsocialist planning and organization is now fully revealed. The Germanmarket is shaped by two seemingly incongruous trends, a decliningpopulation and a rising number of households. Both imported and domestically-manufactured products are testedby the TUV, a group of agencies authorized by the government to conductsuch testing. For more expensive items, price is lessimportant than image. Department of Commerce. Economists estimate that the overall burden oftax, social security and medical insurance payments amounts to about 41percent of the total output of goods and services in Europe. Car and truck production in April was 352,7 , 26 percent belowApril 1992 (Templeman, 1994, 54-55). In the absence of objections to the enterprise, for personal,commercial, environmental, or other reasons, they may be granted acertificate of registration. Thepossibilities for growth are enormous if they are correctly perceived(Lauk, 1994, 57). Europe also involves problems of scale. Growth is restrained only by the relatively low proportion ofhousing that is owner-occupied, about 36 percent of the total. Birthrates have fallensharply since the mid-196 s. While it is true that German retailers competeaggressively with each other on price, there is little or no competitiveintensity in any other aspect of their business, and the government tendsto foster this lack of competition by restricting where new hypermarketscan be built and the hours that all stores can be open. dollar. Consumers would findrelief if taxes were reduced, but that would undermine all efforts tocontrol the huge budget deficit. ReferencesEconomist Intelligence Unit. Taken the recent decline in the U.S. trdng area 5.24.6Source: EUROSTAT, External Trade, Statistical Yearbook 1989; UNSO, Coflitrade data base: OECD. Lawn and garden products constituted a $1.24 billion market in1984, rising to $1.46 billion by 1989. MARKETING AND DISTRIBUTION Household consumer products reach the German consumer through avariety of channels. One reason for this has been ashift in German work habits, with the long-term trend being to shorter workweeks creating more leisure time. these fairsattract not only German buyers but wholesalers and retail chains from allover Europe. There are also structural differences working against aU.S.-style trend in Germany and elsewhere in Europe. 4.88.3Other semi-mnufactures 6.9 8.1Memorandum: Memorandum:Total trade in Total trade in millionmillion ECU 157,881 272,95 ECU 146,855211.962B) Regional orientation of trade(Per cent) Share in merchandise Share in merchandiseRegion exports Region imports 1981 1988 1981 1988Developed economies 76.8 85.8 Dvlpd econs 75.6 83.5 EC12 (intra) 49.1 54.1 EC12 (Intra) 49.853.3 Others 27.7 31.7 Others 25.8 3 .2Developing economies 17.7 9.6 Dvlpng econs 19.111.8Eastern trading area 5. The goodsthat are permitted to be imported are listed in the regulation, and itenumerates the goods that may be imported from countries without a license. Taxes are also continuing to escalateso Germany can pay for costs related to unification. That market isthe one-person household and the family household in upper income brackets,those people with disposable income who are also interested in making useof that money to provide themselves with greater ease and to increase theirleisure time. Some arrive in shops specializing in certain types ofgoods, and these shops commonly carry medium- to high-priced items andoffer an extensive choice. Under German law, the importer is fully responsible forthe safety of every foreign-built product they bring in, and this makes itdifficult for overseas firms to sell directly to all but the largerretailers. Due to recession, the European auto industry remains in an ongoingtwo-decade slump, with sales expected to fall as much as 15 percent thisyear. Export demand plays a strong part in aggregate demand, thoughGermany has had the highest labor costs of any major economy in the world.Further, in 1994 Germany's competitive position from a cost standpoint washit again by the rise in the value of the Deutsche-mark against tradingpartners' currencies, notably the dollar. German bathroomstoday often are equipped with luxury touches. However, local production costs areamong the highest in the world, and only products representing the highesttechnical standards can be produced profitably. It is very difficult for new products tocompete against existing ones if they cannot make direct comparisons inads. dollar, profits should be held inmarks until such a time as the exchange rate becomes less erratic. 4) Household equipment designed for small or one-person households issought after by consumers with the means to buy it. In Germany, if a manufacturer has a new product tooffer and does not get a listing with Tengelmann, an entity whicheffectively controls 2 to 3 percent of the market in most foodcategories, or gets a listing under onerous terms and conditions, that newproduct is guaranteed to fail. Many Germans, as ithappens, place a premium on quality or uniqueness, and this allows Americanfirms to continue to do well with selected items in spite of the highercost. Thisreluctance stifles innovation by manufacturers, which in turn limits thechoices available to consumers. These big retailers such asAldi, REWE, and Tengelmann, have far more say in selecting and promotingbrands and far more latitude to push their own brands than even their mostpowerful American or Japanese counterparts. Department of Commerce, 1986, 6). The German economy has been sluggish in recent year. vendors need to contact buying cooperatives that actas importer/wholesalers for their members. Only employees need a workpermit, while directors, managers, legal representatives of foreigncompanies, and assembly and repair technicians following the import ofequipment for short term work do not need a work permit. In fact, for manyadvertising campaigns, it is necessary to use country-specific casting andlanguage, and the few pan-European channels broadcasting communicate onlyin English and reach only a limited group of viewers. Inaddition, growing numbers of unemployed and underemployed workers aremoonlighting in the home repair and improvement field to supplement theirincome. Household Consumer Products: Germany. In other European countries, thesituation is similar, but the mass-marketing approach they are following isquite unlike the kind of media-based segmentation that now dominates in theUnited States. InGermany, the term "flexibility" has a somewhat different meaning than itdoes for U.S. In the EC, only 3 million jobs have beencreated in the private sector since the mid-197 s compared with more than3 million in the United States. Housewares is a market that reached $2.35 billion in sales in 1984,constituting the largest share of the household products market, withconsiderable growth over the next few years. More important are thestandards that require all technical equipment, such as electric andnonelectric appliances, tools, and gardening equipment, to conform tosafety standards. The retailers responded by rejecting many of Procter & Gamble'sproduct lines and continued until Procter & Gamble agreed to work moreactively with them. After five years of residence, permanentpermit status may be granted, though these permits are revocable for causeat any time.); 3) a work permit, though this is not necessary for nationals from ECcountries. After the application is made by the prospective employer tothe labor exchange, a preliminary work permit may be issued to enable theemployee to obtain an entry visa. Dishwashers also have not been imported into Germany in high numbersin the past, and companies bringing in smaller appliances have dominatedthe housewares market. Quality remains high, but variety is low.On average, German supermarkets stock just about one-fifth the variety ofproducts that Japanese supermarkets do. FINANCIAL VIABILITY Based on the analysis of the data cited above, the importation ofdishwashers is viable if the importer does not attempt to saturate themarket or to reach beyond what is the clear target market. It is believed thatprivate consumption growth will show a moderate strengthening from .8percent in 1994 to 1.3 percent in 1995, largely because of a reversal ofthe trend of increasing unemployment. Still,most consumers tend to be well off and spend between two and three percentof their disposable income on household consumer products. Early in 1995 Germany is introducing a 7.5 percentsolidarity surcharge, but this is not expected to reverse the slow growthrate of private consumption which took place throughout 1994. The dream has come closer to a realitywith the creation of the european Community and specifically with theadoption of the Maastricht Treaty as a step in an ongoing process thatmight one day lead to a Europe united in more than trade. A number of specific consumer markets have shown considerable life inrecent years as the German public shifts its priorities in consumerspending. SOCIOCULTURAL ACCEPTANCE The German marketing structure is very different from that of the U.S.in some respects, while at the same time it appears to be developing towardthe sort of consumer culture prevalent in the United States. business. German unification brought almost 12 million new German consumersinto the market, with cars a high priority. This isbecause the surcharge had been long pre-announced and was accompanied bydeclining inflation. The small size of theaverage German apartment limits the potential of the market, but salesreached $615 million by 1989. With a 21-percent unemploymentrate, eastern Germans now are not replacing the cars they purchased in199 . Someare raising families, and others are contributing to the growth of one-person households. firms trying to reach the consumer with aminimum number of middlemen include large department store chains (Hertie,Bilka, Horten, Karstadt, Kepa, Kaufhof, Kaufhalle, and Woolworth), mailorder houses (Quelle Grossversand, Otto-Versand, Neckerman Versand,Schoepflin Grossvanderhaus, and Schwab Versand), and large discount storechains (Plaza, Ratio, and Metro). In the United States, amagazine or cable channel targeted to outdoor sportsmen has a country of25 , million people from which to draw itsaudience. All these types of enterprise operatetheir own purchasing department and can buy directly from foreignsuppliers. Domestic suppliers enjoy ahigh reputation on the German market. The trade unions are thought unlikely to be able tosucceed in winning real wage increases, though they might be able toprevent a third year of declining real gross wages. "Germany at the Crossroads." Daedalus (Winter 1994), 57-83.Martindale-Hubbell International Law Digest. Department of Commerce, 1986,2). Several factors may be contributingto the downturn in German consumer spending, including a 1 percentunemployment rate and higher rents. With no equivalent of the protection offered in the United Statesby the Robinson and Patman Act, which requires manufacturers to sell underequal circumstances to each retailer, innovators suffer and consumers paythe price of having fewer choices. This meansa concentration in power that is not good for consumers. Advertising and marketing in Germany are quite different from theprocess followed in the United States. Monthly Statistics of Foreign trade, April 199 . "Germany's Jittery Consensus." Business Week (May 3 , 1994), 54-55.U.S. Experience in Germany shows thatsuccessful innovations and new products come primarily from large playerswith great financial power, and this means that only giants like PhilipMorris, Unilever, and Procter & Gamble can afford the huge advertising andpromotion budgets necessary to push new products through the system.However, even these huge companies have to bow to the power of the largeretailers. Many households chose to spend this timeoutdoors. So great is the power of these large companies thatthese retailers have grown somewhat complacent, with little drive to becomemore efficient or more innovative or to take chances on new products. MANAGERIAL LABOR CLIMATE The climate between management and labor at the present time issomewhat tense, since German employers are in no mood to grant real wageincreases because of a desire to regain price competitiveness and toprevent any further erosion of Germany's share of world trade. Germany's postwar "baby-boomers" are now 2 -3 years old and have started establishing households of their own. Today, there are more one-person households anda class of consumers with relatively high disposable incomes and fewresponsibilities among this older population, which also has pensions thatare up to 7 percent of previous salary (U.S. This will improve confidence andlead to the continuation of a decline in the savings ratio, a trend since199 . Another relatively newform of retailing is found in the large discount stores located outside thecity, and these offer low prices and self-service. However, there has been no serious move to abandoncompletely the regulation of working conditions (Economist IntelligenceUnit, 1994, 24). A second challenge requires that Germany pay closeattention to its economic productivity, understanding that it is the onlyway for the country to maintain its prosperity and to be able to competeinternationally. Among the most successful vendors of American-builthousewares are the following: --Aladdin (vacuum flasks) --Anchor Hocking (oven- and glassware) --Basic Line (plastic items) --Corning (glassware, ovenware) --Dupol Rubbermaid (plastic housewares) --EKCO (bakeware, kitchen tools) --Faultless Caster (casters) --Fostoria (crystalware) --Gemco (glassware) --Genie (vacuum cleaners) --Hamilton Beach (small electrics) --Kirby (vacuum cleaners, shampooers) --Libbey (glassware) --Nordic Ware (ovenware, cookware) --Oster (small appliances) --Raytheon (small appliances) --Regina (vacuum cleaners, shampooers) --Sunbeam (small appliances) --Tops (coffee makers) --Wallace Silversmiths (cutlery) --Waring Products (small appliances) (U.S. The product to be imported is one more familiar in the United Statesthan in many countries of Europe--the dishwasher, a large appliance for thehome that has not been a staple in most European countries. This prospect is also worrisome to other European nations, sinceGermany imports $165 billion worth of products from its neighbors. This reunification involved the most economically powerfulcountry in the emerging EC--West Germany--and one of the poorer countriesof the former Warsaw Pact--East Germany. At present, the EC as constitutedsince 1992 is an economic common market, spurred to integration by theperception that only in this way would Europe be able to compete in thefuture against the growing Asian market and the continuing American market. This means that most of foreign tradeis liberalized (Martindale-Hubbell Law Digest, 1994, GER-9/1 ). Sophisticated marketresearch and test marketing are as widely used as in the United States, butthe power of retailers and their historic resistance to new products meanthat, even if an advertiser could create demand for niche products, it isnot clear those products would ever find broad enough distribution throughlarge retailers to earn a profit. One of the primary constraints on acceptance of U.S.-produced consumergoods in Germany is the high value of the U.S. Demand has been spurred by anumber of factors: 1) There is a growing number of working couples causing consumers toplace a premium on convenience and ease of maintenance. By contrast,intense competition between retailers in the United States forces retailersthere to rationalize operations, cut costs, redesign processes, andinnovate with new formats, better service, longer hours, and lower prices.Protected and powerful, their German counterparts face few such pressuresto maximize efficiency or increase the value delivered to customers. This market is fortunately also the population whichindulges in cable television and other means of advertising that reachdirectly into the homes desired. The Foreign Trade Laws of 1961 and 1973 liberalized foreign trade andinvestment, especially for merchandising and capital transactions. The savings ratio in western Germany declined from 13.9percent of personal income in 1992 to 12.8 percent in 1993 and will fall to12.5 percent in 1994. The German consumer market isaffluent, but it is an austere kind of affluence (Ohbora, Parsons, andRiesenbeck, 1992, 52). Now, though, regulations of the European Community's institutions takeprecedence over German regulations. Finally, there are the do-it-yourself centers which carry high quality as well as low-cost items andwhich offer the customer a choice of self-service or personalizedinformation and assistance. If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.