Jacobs Universty Lecture by Jan Patrick Schmitz

On 22nd of September 2016 Mr Schmitz presented a very inspiring talk on ‘Building an International Consumer Brand. Key Learnings and an Outlook into the Future’The Consumer, Culture and Society 2016 participated actively in the discussion and Jonathan Laetsch, Jacobs University student Class of 2017, provided a summary of the talk, which we make publicly available here.

The meeting room is packed. Jan-Patrick Schmitz dresses as one would expect from a successful businessman. Wide, grey suit Pants that slack at the ankles, a slim white button down covered by a comfortable Tweed Jacket. His eyes are calm as he gazes over the students gathered in the room. The Watch on his wrist is a Montblanc. When he speaks it seems as though every neuron in the room is focused on him.

He begins off the talk by addressing his background. He informs us that he completed his high school education in Germany and then moved to the United States to complete his collegiate studies. He then starts the official part of his talk, exposing us to his life mantra and a theme that we will hear throughout the course of the talk:

The Human and Emotional Connection are essential for the success of a product.

To underline this statement, he takes us on a journey of the famous Luxury Pen Manufacturing company Montblanc, more notably, his experience as the CEO of the company’s North American Branch and how through a few key marketing changes, the company developed over a century from a small utensil business to a global luxury Brand.

In order to understand how Montblanc achieved the success it is important to look at its history. The company started in Hamburg in 1906 in a small manufacturing stable. Schmitz compares the product of the time as unglamorous, functional and cheap. The description appears light years away from the chic, luxurious and expensive product of today that so many love and adore. The question is what changed? Schmitz attributes three factors to Montblanc’s success story: Identity, Value Creation, and Human Connection. 

Identity

In order to successfully market Montblanc, Schmitz notes that it was important to look into the past rather than the future. By staying true to its tradition, Montblanc formed an identity around its most famous product: The “Meisterstück”. The pen with a sleek black design soon became the flagship for the company. Slowly, a new identity was taking shape.

Value Creation

As a next step, the company decided to polish its flawed image and increase its value.  At the time, the Pen Maker was selling its products at almost fifty thousand stores world wide. It was sold in cheap convenient stores next to bubble gum and house supplies as well as designer outlets. This abundance of supply meant that the value of the product was heavily decreasing. To change this, the company decided to kill 70% of its small businesses, and go through a process of de-commoditization. This meant a shift in the customer’s shopping experiences. Rather than selling in large quantity to large stores so that shopping quality suffered Montblanc decided to sell in small quantity to small stores as to enable a high quality shopping experience. When everyone lowered the prices, Montblanc raised them. The company’s value sky-rocketed.

Human Connection

Most importantly, Schmitz mentions the shift away from functionality and towards human emotional connection as a deciding factor in the success of Montblanc. Rather than rely on the quality of the Product as a marketing strategy (Schmitz himself actually killed the ‘Made in Germany’), Montblanc wanted to connect with its customer on an emotional level. Rather than sell a company it wanted to sell a feeling. Through heavy investment in the Arts & Culture sector, the company shifted its brand purpose and began to market its product in theaters, opera houses and cultural institutions across the globe, allowing consumers to draw an immediate connection between the two. A sleek, glossy pen is more than just a writing utensil, it is an emotional experience for the smart, chic and intellectual.

Mr. Schmitz finishes off his talk with two hypotheses. The first hypothesis refers to China and its role in the global consumer market. He argues that China has all the factors to take over the consumer market (financial capabilities, workforce, skill) in the near future. Once the Chinese people find a way to market the product to consumers not as a cheap alternative but as a desired good that speaks to the consumer on an emotional level, it will only be a matter of time until Chinese enterprises establish themselves at the top of the Consumer Market food chain. Secondly, Mr. Schmitz argues that in order to create a successful company it is important to have a clear vision, execute the idea in an excellent fashion, be creative, don’t be scared to fail, show endurance and, most importantly, to remember that the human brain is more valuable for businesses than any computer in the world.

pen-keyb1

Prosumer

The new course Consumer, Culture and Society has started in September. The focus in 2016 will be on the still recent buzzword of “prosumer”. Yes, you guessed it, it is the combination out of producer and consumer. Even without knowing we are already part of this phenomenon to co-produce with companies. Not assembling cars yet, although 3-D printing might allow us to do so in future, but strongly in services. We as customers are co-creators of a brand or producing added value for a company which might simply resell our data, the ones we entered for them in some detail and keep updating frequently. More insights and reading suggestions on demand.