Made in Germany: The Business Magazine

Christoph Burger, Financial Expert, European School of Management and Technology (ESMT)DW-TV: And I can smell right now the typical scent of glowing studio lights mixed with a whiff of make-up powder. What I don't smell, though, is after shave, and that's somewhat puzzling because our studio guest is Christoph Burger, from the European School of Management and Technology. You're not susceptible to scents? Christoph Burger: No, I'm afraid I have to tell you, the last time I bought some scents that's years ago. DW-TV: That's not really representative, I should think, for men in Germany. Especially as scents have always paid a major part in romance. Perfumes have been developed to make men and women more attractive to each other. What role do scents play these days in marketing strategies? Christoph Burger: In marketing strategies I think they play a growing role. They come up but they are many more ways how companies try to influence customers or consumers to take their products. There is, for example, if you do a positive wording less people react that if you do a negative wording. So if I say to you, you have the opportunity to save ten percent of energy, people react less as if I would say people might lose ten percent of their energy. This is called loss aversion and this comes from Neanderthal times when more or less we had to defend our territory and we had to go any risk to avoid that loss. DW-TV: But if these kinds of tricks come from days long ago, from the Neanderthal days, as you say, shouldn't consumers have learned by now not to fall for them? Christoph Burger: Well, that's difficult because they are habitual, yeah, the bigger the size of the product, you think the more it's worth. If you take, for example, painkillers: the higher the price, the subjective feeling is the better they are. And that is difficult to overcome. So it's inherited in our genes and the only way to fight that is transparency in the product, so you need to know the value of the product and the price for the product and then you can have a rational decision on whether you want to do that or not. DW-TV: But what you just said is that the value of the product may not always be synonymous with the price of a product, so where is the transparency then? Christoph Burger: Well, the transparency is a little bit, you have to judge whether you take, if you take luxury products you know that basically the value of the product or the price is far beyond the material components in that product, but nevertheless they give you a benefit, a personal benefit of the positioning of good well being and so on. And if that is voluntarily and a conscious decision, then it's fine for you because you feel better and you are willing to pay that price. DW-TV: Just briefly, consumer habit must have changed over the years. What is the biggest change, let's say in the last five years? Christoph Burger: I would say the biggest change in the last years, I would say, is that consumers become more and more powerful. With the internet they have a transparency unseen so far, they have even technologies that allow them to become producers, if you look at the energy market, you can produce your own energy instead of buying them. There's small community Younder. They just set up a community and produce their energy for the whole village themselves.