«Roberto Lobl, IBOPE Media Geoff Wicken KMR Group, London, UK Polly Carter, BMRB, London, UK Preface The BRICs markets – Brazil, Russia, India and ...»
BUILDING IN THE BRICs
Market understanding and strategic development
for international brands
Roberto Lobl, IBOPE Media
Geoff Wicken KMR Group, London, UK
Polly Carter, BMRB, London, UK
The BRICs markets – Brazil, Russia, India and China – are coming under
increasing focus. As well as being seen as potential future cornerstones of
the world economy, they are significant markets today in their own right.
International brand owners cannot afford to ignore them.
This booklet uses research-based evidence to provide guidance for marketers. It examines the similarities and differences between the BRICs, and suggests strategies for building successful brands in these huge and dynamic markets.
The information used comes from the Target Group Index network of worldwide marketing research studies. These provide valuable insight into behaviour and attitudes in relation to a wide range of consumer sectors. More details are given at the back of this booklet.
Introduction Great size, great potential Brazil, Russia, India and China – the BRICs economies – are united by their size and their potential. Overall their populations represent 43% of the people of the world, and although GDP levels are relatively low (being 8% of the world between them) with growth rates perhaps double those of the western economies, the numbers entering the market for branded consumer goods will increase rapidly.
The BRICs are becoming ever-larger forces in the world economy. Some forecasters believe that by 2025 they could account for over half the size of the G6, and that of the current G6, only the US and Japan may be among the six largest economies in 2050.
For manufacturers and service providers these are the factors that make them exciting markets – or potential markets – but the associated risks are great. The cost of failure could be high… but so could the cost of not investing.
Yet these four markets are very different from each other, and from developed western markets, in their historical, economic and ethnic backgrounds. Brand owners wishing to develop in the BRICs will have to devise product and marketing strategies to cover countries with diverse culture and value sets.
What future for global brands?
To develop further in the BRICs, brand owners need to understand how well accepted are the western values that have underpinned the globalisation trend to date. Are the BRICs likely to come to accommodate global value ‘norms’? Or will they move in different ways, making it difficult for brands that wish to globalise?
Several brand owners have experienced success in the BRICs. We identify some of these, and examine two types of approach that can be fruitful.
Our information sources This booklet draws upon analysis and interpretation of the Target Group Index consumer research studies in the four BRICs markets. These are part of the worldwide network of Target Group Index surveys, which are available to clients in over 50 markets. (See Appendix 2 on page 40). The possibilities for analysis are extensive, because these are largesample surveys, covering a wide range of marketing, attitude and media information. Their specifications in the BRICs markets are shown here.
Our consumer focus Our focus is on the mainstream consumer market. For the comparative examinations in the first half of this booklet, we have defined this as adults aged 20-54 who live in the two or three largest city regions in each BRICs country. This is a key broad target: people of working age who are most likely to be in the market for branded goods and services. The cities in which they live are ‘leading the charge’ towards consumerism. They offer the largest distribution networks and the greatest numbers of potential brand purchasers, and their inhabitants are at the forefront of their countries’ social and economic development.
For Brazil these city regions are Sao Paulo and Rio de Janeiro. For Russia they are Moscow and St. Petersburg. For India they are Mumbai, Delhi and Kolkata. For China they are Beijing, Shanghai and Guangzhou.
For many of these analyses we also make comparisons with developed markets: the US and the four Western European countries of France, Germany, Spain and Britain (summarised together as ‘Europa’). Here we have taken the entire 20-54 year-old group as being the best comparative representation of the developed consumer population.
The later sections of this booklet focus on the entire Target Group Indexmeasured populations of the BRICs markets, as identified on page 6 opposite.
Underlying values and attitudes Across the world, brand owners who want success need to base their activities on a firm understanding of local culture. This is especially true of the biggest markets, since their size means that misunderstandings and mistakes can mean a high price to pay.
And yet while localised strategies and brand images can work well, they have to be balanced with the overall building of a global brand image – which itself can be one of the main success factors when competing with local brands.
So it is not easy to prescribe the extent to which a brand should be positioned as being global or local. In order to shed some light on this complex question, and to understand the dynamics of values and attitudes in BRICs markets in comparison to US and European ones, we analysed attitude statements from Target Group Index in these countries.
We isolated three relevant groups of values:
1 Universal values – where the same pattern is shared by each of the BRICs and also by the western countries.
2 Specific values – where the same pattern is shared by all BRICs countries, but western countries have different attitudes and values.
3 Divergent values – attitudes and values which vary within BRICs countries, indicating that these may be too localized to be compared.
Universal values These values are held similarly not only among the BRICs countries, but in the US and Western Europe as well. The key universal values are skewed towards conservatism rather than adventurousness, and to collectivism rather than individualism.
The importance of the family features strongly.
The two attitudes illustrated show that the majority of people in all markets prefer to avoid debt, and that the family is for most people the centre of life.
The conservative, unadventurous approach evident from the universal values is also evident in the common agreement to the statements shown in the box at the foot of the page. These include having a “practical outlook on life”, time being more important then money, and the Importance of lasting relationships.
For brand owners wishing to tap into local cultures for their communication, any of these values could be drawn upon safely for brand messages.
It is important to note that the fact that a statement is listed in this group does not necessarily mean that most respondents agree with it everywhere – it simply means that similar views are held to a similar extent in all these countries.
Specific values Specific values shared among the BRICs countries but not by Americans or Europeans are mostly concerned with image in the face of the family or of society.
Success seems to be the driving force behind most of these specific statements. The desires to get on, get rich (“money is the best measure of success”), be recognized by the family (“it’s important my family thinks I’m doing well”) and become an affluent consumer (“I really enjoy any kind of shopping”) are all evident.
In another respect however, we see less individualism than we do in the western markets. There is a greater degree of acceptance that the individual has to play a role within the collective framework of society (“it is more important to do your duty than to live for your own enjoyment”). This also reflects strong family structures. For instance, in each of the BRICs, children live at home even after attaining adulthood. Looking after your parents is ‘expected’ behaviour.
Divergent values The divergent values show areas in which the BRICs countries differ from each other. These indicate more localised attitudes or values, and are often controversial issues rooted in local culture.
Faith, a woman’s place, men crying and being attractive are controversial areas. The responses to these statements vary significantly, indicating that each country has its own clear views.
Status is a key personal driver in China and India. This is an outcome of economic opportunity and growing wealth – where you want to announce that you have arrived. At this stage in China’s development it is of huge importance, especially among those in the largest cities. They are concerned to convey status at the individual level, and have become proudly conspicuous consumers. Hence for example their agreement with the statement “I like to stand out in a crowd”.
Looking attractive to the opposite sex is a more important driver for Brazilians than status, clearly contrasting with Chinese and Indians.
Russians are closer to Brazilians in this respect.
In terms of risk-taking and standing out, Brazilians seem overall the most conservative and least individualistic people, in clear opposition to the Chinese, with Russians being closer to Brazilians, and Indians to the Chinese.
In summary We might conclude that, among the BRICs, consumer values in China and India are the most distinctly different from western ones. Of the four BRICs, Brazil can be considered the most westernised. Russia lies somewhere in-between.
For brand owners developing strategies to communicate to audiences in the BRICs, understanding the subtleties of cultures and value sets is vital.
Mistakes made due to miscomprehension could be very costly.
Our exploration suggests the following broad conclusions for the association
of brands with certain values:
• Brand images related to conservative and unadventurous values can be considered risk-free.
• Associations of success can be used positively in marketing in most BRICs countries, as the struggle for social ascension is considered to be a sign of a healthy society.
• Controversial issues may work very well in some countries but can be destructive in others. As an example, the concern of Brazilians to be attractive to the opposite sex was the theme of a very successful campaign for the leading beer brand in the country. It is clear that this same approach would have very little chance of success in China.
Indicator Measures We have compared the BRICs’ basic social and demographic indicators to the US and Western European countries (again the ‘Target Group Index Europa’ markets of Britain, France, Germany and Spain) in order to assess their performance against these benchmarks in developed countries.
As before, these figures for the BRICs markets are based on the analysis of 20-54 year-olds in the biggest cities, and for the US and ‘Europa’ are for all 20-54 year-olds.
Social indicators When comparing basic demographic information, Brazil and especially India contrast most with the US and Western Europe. Their age profiles within this 20-54 bracket are younger, being much more biased towards 20-34s, while Russia and China are similar to the US and Europe.
Household sizes show more variation, but in all of the BRICs over 75% of this target live in households containing three people or more. Again India and Brazil show the biggest differences, with the largest households.
Almost half of Indian households contain five or more people, which has implications for product and brand use. Three to four-person households are most prevalent in China and Russia. The US and Europe have much higher proportions of one to two-person households.
Education is one of the more contrasting factors among the BRICs countries. For the US and western Europe, and among this particular urban target in most of the BRICs, a schooling level of primary or less is almost non-existent, while the majority of the population complete intermediate (secondary/high school) education.
The proportion that sets out on higher education is greatest in the US – however only 28% of the US population are classified as college graduates.