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Day 4 - IFA International

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keynote review keeP CALM

keynote review keeP CALM AnD CArry on ZinkAnn urges inDustry to give ConsuMers whAt they Don't know they neeD Keynote speaker Dr Reinhard Zinkann, Managing Director and co-proprietor of Miele and Chairman of the home-appliance division of the German industry association ZVEI, talks exclusively to IFA International. As you mentioned in your keynote speech, the economic crisis has triggered a rethinking process, not only across the industry, but also among consumers. Could you elaborate? The industry has to deliver innovations that not only meet the growing needs of consumers, but also give consumers good reasons to buy a product right now. The objective is to stay calm in time of crisis. The challenge is not to compete on price, but to compete on product. And the relevant aspects are energy efficiency, sustainability and social responsibility. In a nutshell, we need to deliver products with lower energy consumption and greater user convenience. How is Miele responding to the crisis? We are in a fortunate position, because we are at the top end of the market, and durability and sustainability have always been our core values. They have been our main focus since the company was founded 110 years ago. Secondly, we have always been technology leaders in our field. A good example was way back in 1929, when the first global economic crisis hit. At that time, Miele introduced the first dishwasher in Europe — and it cost the equivalent of a domestic maid's salary for three years. Everybody in the marketplace said, "The people at Miele are crazy! Nobody has asked for a dishwasher, nobody needs a dishwasher and nobody can afford a dishwasher — so why are they launching a dishwasher?" Nevertheless, our founding fathers decided to go ahead with the product, which was way ahead of its time. So our philosophy has always been to think ahead and to try to imagine products that the consumer is not asking for today, but that they will want to use in the future. So you will continue to introduce products that, in a sense, people didn't know that they actually need? Exactly and on the other hand, to optimise the products we have, to offer the consumer even more convenience. The slogan of our company is 'Always Better'. And Always Better means being always different and always asking yourself what you can do to improve your product. In this respect, has the crisis helped to develop new ideas? No, the crisis has nothing to do with developing new ideas, because our development pipeline is 10 years and longer. Of course, as a result of the crisis, some people are trying to cut costs here and there, but we decided to stick to all the goals we had already set for development and new product launches. And we also decided to stick to our marketing budgets. You were talking about introducing products that people didn't actually know they needed, like the dishwasher in 1929. Do you have any current examples of this approach? All I can say is that, for the next two years, we have a lot of innovations in the pipeline. I'd like to give you a recent example. When we introduced the builtin steam oven, which was an idea inspired by Asian cooking, nobody was interested. Everybody said: "We cook in a different way in Europe, so we don't need that." But now, we are market leaders in steam ovens, which are now in their fourth generation. In the beginning, we only had one competitor, but now nearly all our rivals have their own steam-oven range. Another example is the built-in coffee machine. We launched this at the time that the espresso, cappuccino and café latte craze had just started. But we decided to go in a different direction from our competitors and design a built-in coffee- Dr Reinhard Zinkann, Managing Partner Miele & Cie.KG maker rather than a freestanding model. And it was a huge success. How are design trends evolving at the moment? There are a couple of design trends coming up. Probably the most relevant one is that more and more products, even in the lower price range, now have electronic intelligence. Another trend is making products easier to use and understand. The principle we follow is that, if we want our products to last for 20 years, then we need designs that the consumer will still like in 20 years time. That means, if we are too modern – if we 8 www.ifa-international.org IFA International • Monday, 7 th September 2009

keynote review slavishly follow every passing trend in terms of colour and materials – people are likely to start thinking they look old-fashioned after a certain length of time. It might take five years, maybe 10 years, maybe 15 years, but people change their ideas about design and their tastes change to. As our goal is 20 years of sustainability, we believe it's better that the consumer loves their Miele product from first to last. We want our consumers to love our products because of their value proposition as well as because of their design. As a result, although I wouldn't call our approach to design minimalistic, it's definitely on the subdued side. Could it be described as 'classic' design? I'd call it classic, but modern. Materials and colours may change, but we like our products to fit perfectly with the design of the kitchen, so we are looking into integrated solutions. In addition, there is a clear trend towards open design, with kitchens becoming more and more part of the living area. Dining spaces are also increasingly being integrated into the kitchen. This means that kitchen appliances and kitchen cabinets are much more on display today than they were in the past, which makes good design even more important. If your kitchen is situated somewhere at the back of the house and you just use it for cooking, you will have completely different design demands than if your kitchen is part of your living space. What is Miele doing in the area of sustainable development? We believe that our responsibility to the environment is becoming more and more important. Miele products are designed to last for 20 years. And when they reach the end of their lifecycle, we want them to be very easy to recycle. That means we look for materials that can be easily recycled and that will do no harm to our environment. A good example is our washing machines, which have castiron counterweights. All our competitors use concrete, but iron is very easy to recycle. What are the major trends in the homeappliance sector as we head towards the end of 2009? As I mentioned earlier, two major trends are lower energy consumption and greater user convenience. And it's quite clear that energy efficiency, sustainability and social responsibility will be hot topics in the future. I've been looking forward to IFA – and one of the reasons is that IFA brought a lot to tHe APPeAL iS in tHe DetAiL ZinkAnn emPHASiSeS tHAt tHe Home iS tHe Hub of An emotionAL SociAL network the market last year. As a spokesman for the German home-appliance association ZVEI, I can say that IFA's decision to include home appliances was a major step forward for all of us. IFA is the only truly international show covering all aspects of consumer electronics and, as a result, the entire trade comes here to Berlin. The channels for brown goods, white goods and many grey goods are essentially the same and now the trade can find all the information it needs in one place. That's not only very convenient for the trade, but it's also very convenient for us, in that in enables us to meet all our important accounts during IFA. Sustainability as an allencompassing policy continues to gather importance in the domestic appliances market, according to Dr Reinhard Zinkann in his keynote speech on Sunday. “The level of confidence people place in a brand hinges on how sustainable they believe it to be, while products need to give customers a feeling of responsibility,“ he said. “Energy saving is an incredible pull factor. The question is ‘Will consumers be willing to spend more on using less?’ Yes they will. Customers will pay a few hundred extra Euros for something more energy efficient. But the product needs to be right and it needs to be capable of meeting customers’ expectations for sustainability” Domestic appliance companies must be kept abreast of long-term social trends, he observed, and he referred to the burgeoning trend for cooking as a prime example of a steadily ascending market. Healthy eating and the use of premium ingredients was key to this trend among the affluent, he said, and domestic appliance manufacturers should offer premium products such as the lava stone grill to meet the high-end needs of this market. “People are using excellent ingredients in their kitchens and they want to invest in quality equipment,” he said. He also highlighted the importance of appliances such as builtin coffee machines and, in particular, the premium combi steamer. “No other appliance offers such diversity and convenience,” he said. Zinkann focussed on the issue of ‘cocooning’, the current buzz word of peoples’ increasing tendency to withdraw into private life. “The home is the hub of an emotional social network and will have paramount importance,” he continued, “and people have more exacting requirements of appliances. We need to be producing design that will be timeless and not look out of place in the home in 20 years time.” IFA International • Monday, 7 th September 2009 www.ifa-international.org 9

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