The Contrast in Marketing Across CulturesThe Contrast in Marketing Across Cultures

The Contrast in Marketing Across Cultures Transcript:

Announcer: You’re listening to The Kula Ring, a podcast made for manufacturing marketers. Here are Carman Pirie and Jeff White.

Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White. Joining me today is Carman Pirie. Carman, how you doing, sir?

Carman Pirie: All is well. How are you doing?

Jeff White: I’m doing great.

Carman Pirie: Hey, I’m really looking forward to this conversation. I think it appeals to the Canadian sensibility. I think because we’re kind of, you know, we like to think of ourselves as being partway between Europe and the U.S. and somewhere like maybe attitudinally or culture. I don’t know what it is, but we try to wear that badge a little bit. And today’s guest is joining us in the U.S., but via Germany. And so, you know, I guess she’s going to be able to be the ultimate judge as to whether or not our Canadianism is a good bridge between these two markets or not.

Jeff White: I think this just comes down to the fact that you and I would both quite happily move to Berlin for at least part of the year.

Carman Pirie: Yeah, well, I mean, the winters aren’t any worse than they are up here, I don’t think, in Halifax. So, I mean, they’re not great, but can’t be any worse. So. Yeah, I agree with that. I agree with that. But look, we’re not here to be Berlin’s tourism voice.

Jeff White: No, but as good Canadians, we did manage to work the weather into another intro.

Carman Pirie: Yeah, that’s true.

Jeff White: Sorry about that. So. But yeah, very much looking for the.

Carman Pirie: Will, people get the apology joke. I don’t know if they will.

Jeff White: I don’t know. 

Carman Pirie: Look, let’s get on with it. I’m excited for today’s conversation.

Jeff White: Me as well. So joining us today is Sandra Babic. Sandra is the director of marketing Americas for ebm-papst. Welcome to The Kula Ring, Sandra.

Sandra Babic: Thank you so much and so happy to be a part of today’s session.

Jeff White: This international delving into issues of bringing European companies and products to North America.

Carman Pirie: Yeah, yeah. And I must say, Jeff, that you pronounce the name of the company much smoother than I think I would have been able to. But ebm-papst doesn’t. Well, okay. It rolled off the tongue. Okay. Okay.

Jeff White: Enough Pabst Blue Ribbon. And you’re good to go. 

Carman Pirie: Sandra, if you would introduce our listeners to Eben Pabst and to learn more about how you how you ended up there.

Sandra Babic: Of course. So ebm-papst is the world’s leading manufacturer for fans and drives. So we started our history around about 60 years ago. So just last year we had our big 60th anniversary that we celebrated. And within the past years, we just grew much more into an international factor. So currently we have about 14,000 employees worldwide, different subsidiaries all over the world, also manufacturing subsidiaries and sales subsidiaries. So I just have been blessed with great experiences and efforts in the past year and the opportunity to grow. And I guess that ebm-papst is very special for our sustainability efforts. So that has always been a part of our DNA. And we’re happy that we can just kind of make the world better every day. And our also, our tagline speaks for that with engineering a better life. And that’s our everyday goal to improve just the world from whatever angle we can do. And so for myself, I started to work at ebm-papst five years ago as the personal assistant to our SVP marketing and Brand Management, and I gained valuable insights into just a true strategic set up of a company and how to strategically align to marketing. I was also able to be responsible for the international marketing management in Europe, so that was a point when I learned more about outside Germany countries and their challenges and efforts. And finally, I was able to relocate to the U.S. and that’s where I’m at now. And just trying to bring this spirit also to the Americas region.

Carman Pirie: Well, that is a you know, moving to the U.S. yourself shows the commitment to this expansion effort that’s underway.

Sandra Babic: Absolutely.

Carman Pirie: It seems like a real investment in the localization of of the firm trying to really um, it’s interesting to me as some people try to do it from afar, if you will, but that’s not what you’re doing. I’d like to understand more of the strategy at play. How big is the operations here in the U.S. right now?

Sandra Babic: So we have around about 500 employees in the U.S. currently, and we’re looking to double that and that within the upcoming years, because we see so much market potential in the U.S. that we’re not yet taking. However, I think the biggest step and probably the most like the best just recent step, that we did at ebm-papst is to reconsider our structure. So as most German companies, we thought we were an international global company. However, it was our headquarters in Germany pretty much thinking for the whole world, trying to figure out the best product for a different market. However, what we understood is it’s just not possible. It’s better if we enable to regions more, if we give them the necessary knowledge also to develop the products that are needed in their markets. And so that was a great success for us to reconsider that and give the people the opportunity also to relocate in the same way as I did a lot of other people who have specific knowledge relocated to the regions and now just try to help them set up the processes and structures and leave after a certain while and hopefully sell that structure and efforts just remain once they leave. And we definitely see it makes more sense to enable local forces instead of keep thinking from a distance.

Jeff White: Is there I mean, we’ve seen this a number of different ways where there’s often kind of a a mothership of marketing, you know, within the head office region in Europe and then a small kind of outpost. But it sounds to me like you’re not just sort of taking what’s provided from Germany and redeploying it in in the Americas. You’re instead, you know, thinking of a products from the ground up as they are specific to meet the needs of the customer base there as well. How is that approach being leveraged from the marketing and sales perspective?

Sandra Babic: Correct. So as our products are different in that market, we also need to think about how we align our marketing. So we do have the biggest marketing team in our headquarters. We have around about 40 people in our team with different specialties, like digital also show management, content marketing, brand management. So I think that we have been working together on a global scale for years, however, now more than ever. So we do try to share our resources. However, what we also do is to enable the regions and also to look into bigger hubs in the regions. For example, we have a bigger hub now in the U.S. We have a bigger marketing hub in China because it just is different. We do try to create global campaigns, however, do the necessary adaptations according to the cultural differences.

Carman Pirie: I want to understand a bit of what you’re experiencing from a cultural difference perspective as you as you market in the Americas. You mentioned about the sustainability focus of ebm-papst earlier. That’s an area where I, I think it’s largely considered that European manufacturers maybe have a bit of a head start and perhaps the European market is a bit more maybe sustainability messaging resonates with them a little bit more than maybe what you experience in the U.S. Is that what you found?

Sandra Babic: Well, surely no. However, I was told the exact same thing you just said. So it’s interesting. Sustainability plays a big role in Germany and in Europe. I wouldn’t say all over Europe, because there are differences from one country to another. But like for Germany, we’re probably one step ahead from other countries. And it is a very important topic. Definitely, we try to do everything to improve our world and just our efforts so we can just be sustainable. However, I was told that, well, you’ll experience it’s not important in the U.S., so it’s not a big deal. And I’m like, I wonder if that’s true. So what I did is just some investigation. So I talked to two customers. I talked to our distributors, I talked or I went to events and we’re talking just about that topic and also asking other marketers and other companies about, Hey, so which rolled out sustainability play for you, watching TV shows about different states? And what I have learned it is a topic, so it is definitely important here as well. So maybe we’re not on equal level regarding the efforts with Germany, but I do see that it is an important topic in the U.S. as well, and we’re trying to find ways to be more sustainable. How we’re composting trash, for example, or different ways. So there are different things that people and companies do to be more sustainable in their efforts. And yeah, so I guess it’s really not a difference. And so that’s also what we are doing for ebm-papst. So we built another factory in Tennessee that is just building EC motors, just building those more sustainable and efficient motors. And at first I thought, well, who is going to be tricky to market these? And the market is really not interested. However, learning that the market is definitely interested in and even willing to pay more for a product that is more efficient. So that’s just interesting and definitely not so different from what I’ve heard initially.

Carman Pirie: Well, that’s encouraging. Frankly, I’m glad that that perception hasn’t proven to be true. Well, what would you say has been the biggest difference?

Sandra Babic: My biggest difference is the messaging and just the perception of messaging. So comparing to Germany, it’s we’re all about facts and figures. So if we try to to pick a supplier or if we try to pick a product, we do like to dig into the details like initially and I personally do that too. However, what I have learned here in the U.S., it seems to be a little bit different. So there has to be something that’s catching like a certain messaging, that’s catching a story that’s catching. And I guess that what I’m also reconsidering in the marketing for ebm-papst. So I do take our concerns from our campaigns, from their already existing or from before, but I look at them from the perspective of an American person. Like, what is the story we’re telling with it? So it’s not just facts and figures, and people will be like, Well, so what’s in for me? So I rather think about telling the story and answering what’s in for me instead of giving too many details right from the beginning. So I guess that’s a very big difference.

Jeff White: I have to think. I mean, it almost it almost sounds too obvious. You know, we expect, you know, the German, the anticipation of German precision and manufacturing and engineering, you know, the perception that we have of that, you know, and kind of you’re able to go to market in Europe with primarily the features and benefits of the product. But in the U.S., you’re having to weave more of a story into it. It’s like it’s kind of of course, but at the same time, it also must be a bit of a challenge to kind of to adapt that messaging and create something new. But it sounds like you have a good foundation for that at least.

Sandra Babic: Yes, absolutely. And I think it’s just a great learning. And I can definitely say for sure it was a great step or a right step also for me to come here. So initially I thought, well, you know, in our new remote world, I could just do it remotely and just kind of support the team or to lead the team from afar. But I learned very quickly that it’s it would have not been the great step or the right step, but it’s definitely better to live in the country for a while, to get to know the people, to get to know the culture and just how do people take marketing and messaging. So that was a great learning and definitely helpful for me.

Carman Pirie: It’s interesting to consider that, you know, often them marketing to engineers tends to be characterized as that very, as that very literal approach that you kind of mentioned maybe is highlighted more in Germany, where it’s facts, figures, what are the futures of benefit of the product or the specs know. It’s interesting that to hear that, you know, you’re still marketing to engineers, you’re still having to get to that same audience. But doing so in a I guess, in a more creative way potentially. Are you are you finding that you’re does it run counter to the brand image or how you tend to view the brand in Germany when you start to kind of make it resonate with the US or is it pushing you into uncomfortable territory for the brand, I guess?

Sandra Babic: Oh no, I don’t think so. So I think that our branding works just fine in this region as well. And just the original messaging, like engineering, Better Life, or a tagline we can represented here just as fine because at the end of the day it’s always the person we’re trying to target. I know it’s an engineer and maybe it’s the last emotional targeting or messaging. However, it’s just a person we’re trying to target with our messaging and talk about our benefits. Working with ebm-papst not just a product, it’s also about what do you get working with us? So how is a personal relationship? And therefore, that’s that’s not a challenge I think. 

Carman Pirie: As you go to market in the U.S. is do you get a bit of a free pass on quality because you are a German company, Jeff, mentioned it earlier, like kind of those impressions of that of German quality. And I guess, do you find that?

Sandra Babic: Well, I was surprised by that. I know that we have great quality products in Germany and also looking into the automotive industry. However, I didn’t I wasn’t aware of the perception outside Germany about our qualities. So that was super interesting and I think it is helpful initially. But at the end of the day, if you don’t keep your promises, you can, you know, have whatever background. So I think that just keeping our promises, making sure that we walk the talk that we represent a quality that maybe our culture represents or our background represents from having our headquartered company in Germany. And I think that’s what our customers also experience. So even if we see failures because that happens for whatever company, but it’s how are we dealing with it? Which people who we have in our company that support the customer with the failures? What happens afterwards? So like the Aftersales part is very important for us and there was also partly changed with the restructuring. So in the past, again, it was like our biggest quality management team in Germany is operating outside, but growing our quality management team in the U.S. was important as well because again, it’s culture. How do you take failures? How do you help the customer with it? It’s just more personalized. And I think from a bigger angle, it’s the relationship management that’s important in whatever situation you face with the customer.

Jeff White: I really love that because, you know, you can have the quality and the perception of quality with the German-made product. But if the staff and the team on the ground in the U.S. isn’t experiencing that, you know, as a real kind of ethos of the of the firm and kind of developing their own quality mantras in the states, it would probably fail because to arm’s length from the you know from Germany so.

Sandra Babic: Right, absolutely. So however what we also do is and that was a good point you just mentioned, it’s the people who manufacture or who work in different departments like customer relationships. So what we do have even Pabst here. So we do also manufacture products in the U.S. and we do trainings with our people to be more customer-centric because it’s very supplier for just like parts and they just see the fan initially, but giving them an idea of, well, this is the application your fan goes into and if those fans fail, this is what happens. And that was very important for our employees because that was a moment for them to realize I play such an important role into making this world function. So if the data center doesn’t run any more, you know, we cannot do so many things. And I think that was important for them because now they think about their work differently and it’s even more effort than it has been before because they know they have the bigger view of it.

Jeff White: The other thing I’m wondering is you mentioned that part of the strategy of fanning out into the different regions was to develop that on-the-ground expertise and to learn about what was absolutely needed in those areas that might be different from what you were typically building and selling in Germany. Has it gone the other way? Have you been feeding anything up from a marketing and sales process perspective to the headquarters, and have they been adopting anything that you’ve learned that might be unique?

Sandra Babic: Well, definitely. We were starting to do that. And it’s interesting because since we’re now more connected all over the regions and it’s not like still centralized and thinking far too world from a German perspective, it’s interesting how much knowledge we would trickle back and that was also one of the reasons why we’ve been sending out people to relocate to the countries to bring back that knowledge to to train the colleagues also who work in the headquarters to understand the outside subsidiaries more. So I think enforcing more travel like more long term travel is important to learn more about the world. And yeah, so definitely also for marketing, gaining very important insights by just networking events, for example, and giving back that knowledge to the other teams all over the world so that everyone who applies.

Carman Pirie: We always risk bouncing around a little bit here on this podcast, I find, but I guess so. I’ve been curious to ask about. Of course, most manufacturing marketing is about marketing that supports a fairly lengthy sales process and a fairly involved, often sales process. I’m curious how different the sales process is in the US versus Germany.

Sandra Babic: From my perspective, the relationship part is even more important. So not saying that relationship management isn’t important and in Germany or in Europe, so definitely as well. But it feels like for our customers here, it might be even more important to have a good relationship to their suppliers and maybe to know them from a personal level as well, and just to enjoy working together. So it’s not just our work relationships. So it’s even more than that. And building up the trust, trusting is important in Germany as well, but it’s just another level of trust for that. So I think that like that’s very important for us to just keep our promises, keep what we’re saying, so we don’t risk the trust that we build with our customers. So we also do look into opportunities to to meet personally. So this is why we have salespeople all over the U.S., all over Canada, in Mexico, because they speak the language, their customers speak as well. And they can keep up the weight of the relationship because they’re close to a customer. So we definitely want to be close to them. And if we get a call from them like, can you be in and can we have a meeting? We’re like, Well, definitely we’ll do that. So that’s just our relationship management. I think that helps us keeping the work or our sales relationships for a long time.

Carman Pirie: What do you think has been the biggest challenge or the biggest perception that maybe you had coming into the market that you’ve had to change?

Sandra Babic: I think it’s well, it was it was great for the recent years. So we are here in the U.S. for 40 years with our manufacturing and sales team. So I think the biggest change, which is helpful, is the localization. So it was a challenge that we haven’t localized the products that are needed here that it might take maybe a little bit longer regarding the lead times to supply the product for the customer. So being closer to the customer, being able to manufacture more products here to develop the products that the customer needs for their application. So this is helpful. So for almost 40 years we were somewhat of a distributor, mainly just producing or manufacturing a few parts locally. However, just increasing that portfolio, this is driving helpful like long term too.

Jeff White: You’re not the first German manufacturer to kind of make the move into in the North America and other areas. But, you know, it sounds like the approach has been particularly successful. Why do you think other German companies or other European companies trying to make this move might not be as successful?

Sandra Babic: That’s a very interesting question. So before I relocated to the U.S., I was investigating a bit about companies who failed or experts who failed coming to the U.S. and just trying to create the processes or improving their marketing, for example. And what I’ve learned is most of the companies were not open to the culture. They just tried to copy what we did in Germany and also the other way around. Like there are some U.S. companies that try to gain more market share in Europe or in Germany, and they failed. And I think that’s the biggest point. You cannot just say, well, copy and paste and it will work out. You know, it’s just working out fine in Germany. Why shouldn’t it work out fine in the U.S.? Well, it’s a much bigger country. Within the country. We have somewhat different cultural levels. So the states differentiate one from another. And I think that’s too big a step to be open to maybe maybe have a certain foundation or an idea of your company, but give it some more room to apply to the local needs. So you can’t just force what works in other countries and think it’s going to work the same way. So I do see that many companies that are headquartered in Europe and expanded their companies to the U.S., they do keep a certain foundation of their product portfolio, but they also have some things that are just special for the region. I think that’s important to be open and just leave the room for that.

Jeff White: Man you make an interesting point there that I don’t necessarily know that a lot of people outside of North America would understand, but Vermont and Arkansas might as well not be part of the same country. They’re very different places and not across the entire the entire country where, you know, really the states are individually quite unique, whereas I think, you know, if you look at, you know, not to make generalized stereotypes, but if you look at in Europe, you know, most of France is kind of you know, it’s France and Germany, the same thing. The divisions within it aren’t quite as as stark as they might be from state to state.

Carman Pirie: I feel like we’re just opening up a can of worms, like there’s some of these countries that are talking to us about how different Bavaria is from northern Germany or French people calling into the show saying Jeff doesn’t know what he’s talking about. 

Jeff White: That’s true. They might do that. That’s not really where America is. Very, very you know.

Carman Pirie: It’s very different from region to region. I think you’re quite right. We’ve been there’s been some interesting studies done about that and actually mapping societal attitudes in different regions in Canada and which regions in the US most align and kind of fascinating because you look at the most conservative areas of Canada, when you strip away the partizan politics of it and you look at just societal attitudes and cultural attitudes, the actually closest to the most liberal parts of the US, which kind of shows you just how kind of goes to show us how much the more conservative areas of the U.S. are very different than the conservative areas of Canada as an example. So it is it is interesting regional differences and I think your point is taken Sandra the the the differences in a desire for trust building and for that relationship building to power the sales process would be different as well from even within regions in the US I would suppose.

Sandra Babic: Yeah. At one point also I think which is the biggest difference is just the level of convenience that’s demanded here. So I feel it’s so much more about convenience in the US compared to Germany. So we might tend to be a little bit complicated and maybe do a little bit more steps. And I do feel that like here it’s just about making less steps.

Carman Pirie: Is there is there a tradeoff in price sensitivity? Like do you find that the American market maybe is in this price sensitive but demands more convenience or they just want their cake and eat it, too?

Sandra Babic: I want to say yes. So yeah, I think so. That it applies.

Jeff White: This is why the US is such a great market for us Carman.

Carman Pirie: Look at never let it be said that it’s not a wonderful country.

Sandra Babic: Absolutely. Yeah. It’s not much to offer.

It’s a it’s it’s a fantastic place to do business I find as well. So this has been just a terrific conversation. Sandra I really enjoyed having you on the show today. Thank you so much for sharing your expertise with us.

Sandra Babic: Well me to you. Thank you so much. It was great.

Jeff White: Thank you.

Announcer: Thanks for listening to The Kula Ring with Carman Pirie and Jeff White. Don’t miss a single manufacturing marketing insight. Subscribe now at kulapartners.com/thekularing. That’s K-U-L-A Partners dot com slash the kula ring.