VALUE CHANGE IN THE WESTERN WORLD: OPPORTUNITIES FOR INNOVATION AND SUCCESS IN BUSINESS
Kongresszentrum CCN Nürnberg
July 14, 2006
The 56th. GfK Conference in Nuremberg on the equilibrium between values and business financial objectives
The change from a traditional to a modern understanding of values is stronger in the Western World than ever before. Among the reasons is that modern societies are more demanding today and they can permit themselves to communicate these increased demands. In order to protect their long-term economic success, companies are following these developments in their brand communications and in the dialog on values. The GfK 2006 Conference took place in Nuremberg on July 14 and was attended by around 600 marketing specialists from Germany and other countries. Its theme was “Changing Values in the Western World: Opportunities for Innovation and Commercial Success“. A key theme was formed by the move from old bonds to emerging values based on self-expression, the positioning of brands and the needs of individual target groups, as well as the equilibrium between values and business commercial objectives.
The present change in values results from demographic developments which have arisen as a result of increased life expectancy. Secondly the change in values results from socio-economic developments, which manifest themselves in a world of work characterized by greater knowledge, the experience of creativity and technological change.
Using hypotheses and the results from surveys, attempts to answer the question were made on how these trends could be confronted for the roughly 600 marketing experts who attended the Conference. They were presented by Professor Dr. Christian Welzel, School of Humanities and Social Sciences, International University of Bremen, Thilo Lohmüller,
Division Manager of GfK Textilmarktforschung (Textile Market Research), and Professor Dr. Dr. Ulrich Hemel, Managing Director of German company Süddekor.
Values dissolve in an emancipation-based society
Professor Dr. Christian Welzel tracked in a world study of values (WWS) how values and orientations are changing at worldwide level in a number of different areas of life. The survey comprises waves of interviews which take place at regular two-year intervals.
Although the increasing desire for emancipation represents a trend in all post-industrial societies, there are important differences between individual countries. Modern values such as tolerance, fantasy, personal independence and permissiveness are strongest in Sweden, followed by neighbouring countries Norway, Finland and Denmark. Countries such as Germany, France, U.K. and the Netherlands are in the middle of the table as far as innovation is concerned. Russia on the other hand seems to be experiencing difficulty in building a firm foundation for democracy, tolerance, creativity and an innovative knowledge-based society.
According to Professor Dr. Welzel, it is mainly young people aged under 35, in Sweden, Poland and Italy who are developing an awareness of the new values and are living them. The Silver Generation too is identifying itself increasingly strongly with values such as tolerance, permissiveness and awareness of personal responsibility. This particularly applies in countries such as France, Italy, Sweden, U.K., USA and the Netherlands. In Mexico and above all in Russia people are waving „back to the roots“ banners.
Professor Dr. Welzel’s conclusion: This trend to emancipation nurtures creativity which innovative knowledge-based societies need in order to successfully control their futures.
Fashion: the expression of values and feelings towards life
Thilo Lohmüller put forward two hypotheses on the positioning of brands and the needs of individual product groups:
Hypothesis 1: Brands are successful if they help to communicate values.
Hypothesis 2: The connection in people’s minds between changing values and behavior in the market provides indicators for future market trends
In Thilo Lohmüller’s view, manufacturers of branded products consciously use their advertising to create associations between their products and clear ideas about values. Companies such as BOSS, Uncle Sam, Troublemaker and Zara express the values of the modern western world with “status and ease with one’s own style”, “belongingness” and „understanding of fashion”. Other fashionable brands communicate values such as „social
responsibility“. Companies operating internationally, for instance Trigema and Puma use slogans such as „Production only in Germany“ or „United for Africa“.
Observing changing values provides clues on future market trends. As an example, Lohmüller cites declining sales in the market for children’s outer clothing which has fallen by nearly a third in the last ten years, while at the same time, the Young Fashion Market has nearly doubled. They can be regarded as an indicator of the shift in values among younger target groups from “family” to “attractiveness”.
Thilo Lohmüller’s conclusion is that meeting the needs of consumers in a focused way will provide the market opportunities of tomorrow.
Value creation also contains ethical added value
Professor Dr. Dr. Ulrich Hemel monitored in five hypotheses ethics and business as complementary aspects of human dealings:
Hypothesis 1: the ethical framework of business dealings cannot be avoided
Hypothesis 2: For success in business, ethics are a necessary but not sufficient condition
Hypothesis 3: Companies must generate not only commercial added value, but also ethical
Hypothesis 4: Ethical dealing in business never invalidates limits to an individual’s areas of responsibility
Hypothesis 5: Ethical dealing in business is subject to the imperatives of creating value
In Professor Dr. Dr. Hemel’s view, the personal integrity of the people involved, the systems and the institutions as well as of the companies forms a central issue in balancing ethical and business objectives. Personal integrity is reflected in the absence of discrepancies between word and deed, credibility and reliability. Systems and institutions achieve trust through incorruptibility, protecting themselves against abuse and exploiting
dynamic forces such as modernisation and self-renewal. Companies impress customers, staff and shareholders above all through their reliability.
Professor Dr. Dr. Hemel believes that profit alone is not sufficient to meet the demands of the market. The competition is also looking at the positive values of a company and a brand which is of importance for customers, profits and the recruitment of staff. Future-oriented company and branddevelopment need to be understood as a dialog of values. Professor Hemel’s conclusion: Ethics and business are not contradictory, but are complementary perspectives on human dealings.