A Study On Brand Communication Strategies Of Gaggenau China

Thesis Title: A Study on Brand Communication Strategies of Gaggenau China: Embarking Upon the Territory of B2CFigure 1: Thesis overviewBackground information: Gaggenau is a kitchen appliances company,which was established in 1683 in Germany and acquired by BSH group in 1994.The company entered the Chinese market in 2008 and established showrooms in Shanghai(2008),Beijing(2013)and Guangzhou(2015).Currently,Gaggenau?s business model is mainly based on B2 B projects.However,the company is considering the possibility of penetrating the retail market in the future.The company provides professional and imported kitchen appliances to high-end consumers,as they perceive themselves as a luxury brand.Gaggenau?s brand profile consists of three values: authentic,extraordinary and uncompromising.Furthermore,the words craftsmanship,quality,innovations and design reflects Gaggenau?s slogan "The difference is Gaggenau".These four elements lead consumers to the ultimate Gaggenau experience.Problem: Brand communication towards consumers is important for companies to gain success,as there are fierce competition and similar products in the market.Therefore,distinguishing oneself from the other brands is essential because consumers possess the power of selective attention,a term used to describe that consumers determine what to pay attention to.A company with an aligned internal and external branding can obtain a powerful brand promise experience.However,in many cases,external branding is more emphasized compared to internal branding.Thus,the brand experience might not fulfill consumers' expectation because the branding is not aligned.With the possibility of Gaggenau investigating the opportunity to penetrate the retail market in China,it might be wise to look into Gaggenau?s internal and external branding and explore B2 C consumers' brand perception and brand equity towards the brand Gaggenau.The main scope is to investigate Gaggenau?s ability to deliver their brand promise to their Chinese consumers and if there were any missing gaps within the company's internal and external brand communication.Purpose: The aim of the thesis paper is to investigate how aligned the brand communication is,internally and externally,throughout Gaggenau?s department in China.Furthermore,to explore how B2 C consumers of Gaggenau perceive the brand equity based on their expectations,communication from the brand and experiences of the brand.Besides,looking into the company's brand communication strategies towards both B2 B and B2 C markets.To study consumers' brand equity,Keller?s(2001)customer-based brand equity model was applied.Keller?s(2001)customer-based brand equity model involves four steps;the first step clarifies the brand identity and brand awareness.The following steps include brand meaning,and what consumers associate with the brand.The brand response indicates consumers understanding of the brand and its attributes.Lastly,brand resonance illustrates consumers' relationship and engagement to the brand.Furthermore,Gaggenau?s internal circumstances were analyzed with the framework provided by the ACE model(Solberg,2009)and VRIO(Gallagher,2004).ACE model was applied to explore Gaggenau?s strengths and weaknesses to create an overview of the potential challenges the company could face in the Chinese consumer market.VRIO was applied to understand Gaggenau?s internal foundation,their performances and to look into the company's internal resources and determine the competitive advantages to clarify improvement areas.Furthermore,PEST analysis was applied to identify opportunities or threats for the company.Methodology: To accomplish the purpose of the thesis a qualitative research was applied,as the purpose is to understand the topic in comparison to making measurements.Qualitative research approach with individual in-depth interviews allows the researcher to conduct in-depth research,as the individual personal experiences,understanding and opinion of the brand are the primary purposes(Gripsrud et al.,2010).Moreover,the respondents have the possibility to give more detailed comments and response without interruption from others.Furthermore,a face-to-face in-depth interview allows the researcher to observe social cues such as body language and expressions(Gripsrud et al.,2010).Five participants from Gaggenau China and five participants representing Chinese consumers of Gaggenau contributed to the research.The data collection was analyzed with Braun and Clarke?s thematic analysis model(2006),as this model is frequently used to analyze qualitative data.The model is divided into six steps,where the purpose is to identify,investigate and record themes within the data collection to provide an answer to the research questions.Thematic analysis model is a systematic and structured method to approach the research questions,as the model requires developments of themes and categories.In the end,the results cannot be generalized to the population.Results: The findings from the study show that Gaggenau?s external communication is highly emphasized on the brand values: authentic,uncompromising and extraordinary.Moreover,Gaggenau has positioned the brand in the luxury segment,which automatically increases the consumer's brand expectations.Besides,Chinese consumers associate German products with high quality.Internally,Gaggenau employees are proud to represent the brand in the Chinese market and speak highly about the brand and the appliances.They also believe that they represent the company's values and philosophies in a decent way.However,the employees agree upon limited focus on internal communication and branding.As a result,there is a mixed opinion about how Gaggenau is represented in the Chinese market,as some respondents believe that the brand is not luxury enough and still lack in some aspects to fulfill consumers' brand promise.While,some respondents have the opposite belief.On the other hand,Gaggenau?s marketing activities can be explained as “run-of-the-mill” and lack the aspect of extraordinary and authenticity in their communication strategies.Furthermore,service is an important aspect of this industry,especially during and after the purchase.Gaggenau?s after service has a lot of potential improvements,especially in B2 C market as consumers have experienced unsatisfactory service.As a result,the brand promise is not fulfilled,and a positive brand image weakened.Gaggenau employees are aware that the brand is not fulfilling every aspect that is expected from them.Overall,they believe that the service they are providing is decent,but have some potential improvement.Furthermore,brand communication in both B2 B and B2 C is explained as different,as both markets require different methodologies.In B2 B,a direct marketing and people-communication are applied,as the customers require practical information and have the tendency to be more rational.On the other hand,B2 C consumers have the tendency to be irrational as they focus on personal achievements and status.Gaggenau?s goal is to be the first choice in kitchen appliances and attempt to communicate in a way consumers can understand their brand identity.Consumers of Gaggenau perceived the performance of Gaggenau appliances as excellent,with elegant design,but with inadequate service.Country of origin has a major role,as Chinese consumers perceive European brands as an indication for luxury.While the competition is fierce,consumers also realize that every kitchen appliances companies can offer the same appliances.However,Gaggenau is a symbol of success,social status,and a luxurious lifestyle.The appliances can be used for professional purposes,or for display and a measurement to exhibit wealth since Gaggenau appliances are one of the most expensive appliances in the world.However,the findings concluded that consumers have a mixed loyalty,attachment,and engagement with the brand.Conclusion: The research provides insight for companies and marketers on how brand communication both internally and externally have a major impact on how consumers perceive their brand.To understand how consumers in the highend segment needs,behave and desire,it is then important to create effective marketing strategies.However,the critical aspect is that companies should communicate effectively,reach their consumers and fulfill their expectations as consumers have the tendency to create a brand image based on the communication they receive from the company.The difference in brand perception of Gaggenau indicates the importance of aligning brand communication and understanding external and internal aspects of the business.This is important for consumers to increase their brand knowledge and understanding,as well as obtaining a united brand perception and image.Furthermore,consumers create expectations towards a brand that speak highly of themselves,especially high-end consumers.With Gaggenau?s intention to embark upon the B2 C market,it is then important to fulfill the brand promise with aligned internal and external brand communication in order to develop a brand image with positive associations.A brand promise can create customer loyalty and increase consumer's brand equity.Therefore,the company has to take ownership of the brand promise in order to minor the gap between customer expectations and the actual customer experience.At the moment the internal and external brand communication within the company is inconsistent,with a result of consumers having a mixed loyalty,attachment and engagement towards the brand.