Wuppertal...

and the untapped innovation potential of an exciting city

With the renowned marketing researcher Bernd Schmitt, the Faculty of Economics at the University of Wuppertal is hosting the third Dr Jörg Mittelsten Scheid Visiting Professor in Wuppertal

He holds the Robert D. Calkins Professorship for International Business at Columbia Business School at Columbia University in New York. He teaches marketing and conducts research in areas such as brands, consumer behaviour and innovation.

He is recognised as one of the world's leading experts in brand management and has written more than 80 articles in leading international academic journals.

His books have been translated into over 30 languages. We are talking about Bernd Schmitt. The psychologist from Heidelberg earned his doctorate at Cornell University and combines scientific excellence and the transfer of scientific findings into business practice like no other marketing researcher. As a management consultant, Schmitt works with numerous brands such as Audi, IBM, Vogue and Samsung. In an interview, he reveals why he thinks the Germans have an innovation problem.

A wooed customer equals a satisfied customer

One of Bernd Schmitt's books is entitled "Happy costumers everywhere", in which he defines a successful company in terms of its customer focus, among other things. And this is where he sees the first major shortcoming in German companies. "Most companies in Germany are product-orientated, technically adept and the products are excellent, but not customer-orientated," he says, explaining this with the lack of service. You have to approach the customer, be open and flexible, because "customers simply want to be treated as people and not as 'targets', as we sometimes call them in marketing." Courting and special treatment have proven their worth internationally, although Schmitt does recognise cultural differences to other countries. "In America, staff in hotels or restaurants rely on tips and in Asia there are more ritualistic manners that are characterised by politeness." So if a company is globally orientated, it must pay attention to these cultural differences and consciously align itself accordingly.

Irrespective of the feel-good aspect, the product must of course be appealing. A wonderful international example of this is the design of the well-known Coca-Cola brand. The expert explains the unbroken appeal in terms of strategy, identity and image as follows: "The colour red plays a role, it stands almost evolutionarily for passion, fire, for something exciting that, together with the can and the bottle, must be designed in an appealing and aesthetic way. Aesthetics play an important role when it comes to the experience."

Show-biz techniques

There are many ways to market a product. One of the variants described by Schmitt is the so-called show-biz techniques. As the name suggests, these are actually practices that have been used in show business for years. "You have to put on a show," says the cosmopolitan, and that starts with packaging, as Apple has done with its iPad, so that the customer ends up holding the actual jewel in their hand. The packaging attracts the customer, so to speak, and makes the actual product even more interesting.

The Unifoodbox

Using the Bergische Universität's new food box as an example, Schmitt then explains the approach of a marketing manager. He opens and closes the product to check its functionality. Even the sound when opening the box does not escape him, because "you have a certain sound in your ear when it comes to a box like this." The motif, with typical elements from Wuppertal printed on a white box, appeals to him and, in his opinion, "students can also identify with it". For successful marketing, the product needs to be introduced slowly. An event could be planned and some of the boxes could be given away to students.

There is a resistance to innovation in Germany

When Bernd Schmitt told his friends about his upcoming guest professorship, he often heard the question: "What do you want in Wuppertal?" and is now very pleasantly surprised by what this host city has to offer. "Well, Wuppertal is an exciting city. It's a city in a state of upheaval and change. It has history, these old villas and the monuments. On the other hand, it has a new scene, a culinary scene too, it has a hipster scene and start-ups. Of course, it has the suspension railway, so there are many interesting facets. I think there is potential for innovation here, and by that I don't just mean technical innovation, but also lifestyle innovation. But the citizens don't really identify with it. I think that's a shame."

Schmitt feels this aversion to new ideas and technologies nationwide and emphasises: "There is a resistance to innovation in Germany, to doing something new," whether it's new railway lines or new buildings. Everything must always be preserved. "Of course, buildings have historical significance, but everything that was once built should be left standing, so to speak. People in other countries see things very differently," he explains, "I live in the USA. The USA is more open to innovation. And in Asia, too, people are always proud of new innovations, they always look to the future. But in Germany and also here in Wuppertal, you can feel this scepticism towards innovation."

Buying green in Germany

German priorities also diverge in international comparison when it comes to purchasing behaviour. "Everything has to be green," remarks Schmitt, who does not prioritise sustainability and environmental friendliness in other countries. "In America, it is an issue in certain target groups, so my students now come to university with bottled water and no longer with disposable bottles, but in Asia there is much less awareness." And he explains the apparent German contradiction between high-quality, organic products on the one hand and bargain discounters on the other with the right advertising strategy: "Green, but at Lidl! That's how you solve the problem."

Old products with new concepts

In an international comparison, Germany is still in its infancy when it comes to marketing. "The strength of Germany or German companies is not actually marketing. There is a good engineering mentality here that produces quality products "Made in Germany". But it's also about selling these products to the customer," he explains, and this can in turn be realised with experience marketing or through communication. A plausible example for Schmitt is the company 'Starbucks'. "That's not really an innovation, because coffee has always existed. But creating a new coffee concept and then globalising it is the strength of American companies."

Artificial intelligence, but without emotion, please

Research into artificial intelligence is certainly one of the most innovative developments. In this context, Schmitt often talks about the second digital revolution, which will change the lives of every citizen. "I do think that we will see more and more robots in various forms. It could be devices that help around the house, robots that you can interact with and then there are also these humanoid robots, very humanised robots that might be suitable as butlers or therapists, but it's still difficult to say." The task for companies will be to find out what the customer wants from this wide range of robots. "But it's not just about robots in this second digital revolution," emphasises the 62-year-old, "it's also about augmented reality and virtual reality. It's about all the new technologies that not only create companies that operate on the internet, i.e. social media, but also those that have a physical presence. Looking at this from the customer's perspective is one aspect of my current research at the moment."

However, artificial intelligence must not be too human, because then, as Schmitt's studies have also shown, it will meet with rejection. "You don't want a robot that understands you, but one that solves problems," says Schmitt, "Emotionality in robots is not desirable. It scares us. Freud already made statements about unusual feelings associated with machines that are suddenly humanised. Today, we are technically capable of producing robots that are very similar to humans. You could be forgiven for thinking that robots think like us. And in my research I've shown that people don't necessarily like that. They won't accept it!" Schmitt applies psychological concepts to marketing and business. He uses surveys and neurotechniques to try to better understand the customer.

The expert recommends a healthy mix of retrospective and prospective approaches involving the city of Wuppertal for the customer-orientated planning of the 50th anniversary celebrations of the university of Wuppertal.

In order to keep up with international innovation, Schmitt summarises his conclusion as follows: "The pointer should point more in the direction of innovation and less in the direction of preservation. If you only measure everything by what has gone before, then you have a problem in global competition."

Uwe Blass (interview from 10 July 2019)

Bernd Herbert Schmitt is Professor of International Business at Columbia Business School at Columbia University in New York. He is known for his research, books, lectures and consulting on customer experience, customer satisfaction, branding and innovation, as well as for his work in Asia. He holds a PhD in Psychology from Cornell University and joined Columbia in 1988. In 2011, he also became Managing Director of the Asian Consumer Insight (ACI) Institute at Nanyang Technological University (NTU) in Singapore, funded by the Singapore Economic Development Board (EDB) and Nanyang Technological. Schmitt held the first marketing chair in China.