! Building trust with the next billion Nandini Das Ghoshal and Trisha Varma Warc Exclusive July 2012 ! ! !!!"#$%&' !!!()$*+,-./' !!!0+),1&' !!!2..)&' Building trust with the next billion Nandini Das Ghoshal and Trisha Varma Warc Exclusive July 2012 ! Building trust with the next billion Nandini Das Ghoshal and Trisha Varma Insights & More, Singapore Low-income and emerging markets are the focus of consumer product companies with big growth ambitions. The next billion consumers will come from these markets. This billion will include not only the lower-income consumers in China, India and Brazil, but also the newly emerging economies in Africa, Latin America, Central Asia and the ASEAN regions. One of the brand-building imperatives in these markets is the establishment of trust between the brand and the consumer. (This article largely refers to foreign brands that want to move into these whitespace economies and the importance of trust to them. Homegrown brands, which have typically been around for many years, do not face this challenge as much, even if they have not run above-the-line campaigns.) When considering how to launch in a market, companies tend to over-debate the importance of income and affordability. Many brand marketers tend to focus their attention on questions of value and affordability; what they really need is to establish relevance and context. Research by Insights & More suggests that building trust and emotional connections is the first and most important task for foreign brands when looking at a 'whitespace' launch. Foreign brands struggle at the start Very often, foreign brands struggle to explain or understand why their state-of-the-art advertising or very powerful rational reasons-to-buy messages just don't cut through in emerging markets. The advertisement copy talks of superior performance, and yet tracking studies show scant or negligible salience for the brand or communication. Sometimes, even with positive product and brand tests, the sales graphs look lacklustre for many quarters. This happens even in well-established categories. The situation can become even more interesting if consumers don't understand the category the way we think they 'ought to', based on experiences in the home markets. This can lead to immense frustration in the team managing the launch. On the other hand, brands that build trust with the consumer experience unexpected growth and acceptance in a relatively short time. Why is trust important? Trust is an important attribute when considering purchase. In various analyses conducted by Insights & More, a distinct Downloaded from warc.com 2! ! ! difference has been noted in the importance assigned to trust-related attributes in emerging versus developed nations. When buying a brand, consumers in developing/low-income countries such as Mexico, Indonesia, Philippines, India and Nigeria are more likely to rank trust-related attributes among their top 10 reasons to purchase, as compared to those in developed markets such as UK or Italy. The unique trust-related attributes that come up as important across emerging countries are 'understands my needs', 'does what it promises', 'acts in my best interests', 'is an honest brand', 'brand I can trust' and 'makes me feel confident', as illustrated in the table below. We also see that for the brands that are trusted, there is a tendency for higher brand loyalty and lower sensitivity to price. Table: The top 7 category drivers for Brand X (a foreign brand from a well-known company) in the following countries in order of ranking. The attributes highlighted are related to 'trust'. For low-income markets (marked with *), more trust-related attributes come in the top 7, as compared to developed markets like the UK. India* Brazil* 1. Is a brand I trust. 1. Is a brand I trust 2. Is a high quality brand. 2. A brand that does what it promises 3. A brand that does what it promises Mexico* 3. Is reliable 4. Works well in all situations 5. Has been a leading brand 6. Is one of the best brands I can buy. 6. Is effective 7. Is the best value for money 7. Makes me feel confident that I am buying the best. UK 1. Makes me feel confident 1. Makes me feel confident. 1. Has been a leading brand 2. Is a brand I can trust 2. Is effective 2. Works well in all situations 3. A brand that does what it promises 3. Longest lasting 3. Is effective 4. Is reliable 4. Performs well in all situations 4. Longest lasting 5. Is effective 5. A brand I can trust. 5. Performs well in all situations 6. Makes me feel confident that I am buying the best. 6. A brand that does what it promises 4. Is a high quality brand 5. Makes me feel I am spending my money wisely Italy 7. Is the best value for money 7. Is the best value for money 6. A brand that does what it promises 7. Is reliable Many low-income markets tend to have strong cultures of their own, and the code that they use to interpret communication is deeply embedded in their own culture. This leads to a feeling of 'this is not for me', when viewing communication posted by foreign brands. There is no history of performance, no one that they know uses the brand and swears by it, and its look and feel is sometimes too foreign to identify with. This is particularly relevant for mass produced consumer products like soap, shampoo and toothpaste, rather than luxury brands. It is important to note that these feelings are almost always unarticulated, and no research instrument captures these sentiments. Hence brand and insights managers are often foxed when they have to link poor brand performance to equity studies run at a high cost to the company. It is also common to find that, even though product and brand tests do well, the sales graphs do not reflect the optimism of the research. Support from other sources Downloaded from warc.com 3! ! ! The fact that trust is important in emerging markets is corroborated by many disparate pieces of academic research. In 2010, Barki & Parente, in their work on low-income consumers in Brazil, found that low-income consumers deeply mistrusted large companies and retail entities. They perceived that those large companies were "distant, and not interested in the reality of the BoP [bottom of the pyramid]. There is a lack of relevance, proximity, relationship and trust between those companies and lowincome consumers." In a Harvard study on financial products for consumers in Africa (Financial Decision Making Process of Low Income Individuals 3 Edna R Sawady & Jennifer Tescher Feb 2008, JCHS, Harvard University), it was argued that to "bank the unbanked", it was important to look at their needs of respect, trust, belonging and achievement to craft an appropriate programme, instead of worrying about reducing the 'join-up' fee or the minimum deposit. Low-income consumers often trusted only their own community and family networks due to a prolonged history of social and economic exclusion. All large public and government institutions were viewed with a sense of mistrust and disbelief. Why is there low trust in low-income markets? 1. A sense of persecution Consumers from lower income strata are constantly living with a sense of persecution, and any institution that builds trust will be valued. The low-income consumer doesn't trust anyone except his own family, community, kin or religious leader. 2. Poor governance histories Many of these countries have a history of deep systemic failures in governance, with widespread corruption and in some cases violence, failed state machinery and deep income inequality. Except for self-help groups and NGOs, consumers in these markets see no one caring about their plight. If they have purchasing power, the brand has to be relevant for them to buy into. Very often, they are ready to pay a premium for a brand they can trust. 3. Literacy Research has shown that lower levels of education lead to lower overall trust ('Measuring Trust', Glaeser, Laibson, Scheinkman & Soutter, Quarterly Journal of Economics, August 2000). When countries have low levels of high-school or college education, there is less trust in any kind of institution and governance. Typically, one finds that countries with the lowest education levels also have a lot of other ills such as bad governance, corruption and underdevelopment in consumer markets. 4. Emotions rule In environments where governance and infrastructure don't support the cause of the common man, decision-making is governed by emotions. Behaviour is strongly affected by emotions. Lack of trust in low-income and emerging countries is very often a part of the culture code. Appreciating this is critical for brands. How can brands build trust? Normally brands that score highest for trust in any country have been around for at least 20 years. The most obvious way of building trust is through consistent performance. Just by being around, brands create trust. Among Indian brands, Eveready Downloaded from warc.com 4! ! ! batteries and torches top 'brand trust' and 'most admired brand' charts consistently, even with very selective marketing campaigns. However, many foreign brands want to know if they can short-cut the process, or overcome the trust barrier more quickly. The most obvious solutions include: being endorsed by an expert who is regarded highly with the person in question (consumer), and making consumers better off in some way, consistently. However, the solution that gains the most traction is based on emotional appeals. Building an emotional connection with the consumer can be a short-cut to trust and help seal the deal. Low-income market consumers trust their emotions more than anything else. The use of the right emotional insight, within the appropriate cultural context, establishes trust between the brand and the consumer. Emerging market consumers are literal and don't like to decode complicated messaging. Examples of brands that have successfully used this approach and reaped tremendous commercial benefits include Always, a sanitary napkin targeted at teens in Nigeria. Marketing that communicated the product's long-lasting nature and reliability was delivered in an entertaining, informative and slice of life way in a context that every Nigerian teenager girl can relate with. Another brand that has sought to build trust through emotional connection is Unilever's Omo, via the 'Dirt is good' platform. No longer was Omo talking about washing powders as it had in the past; instead it was telling consumers how good it is to get dirty. It has been used in emerging markets all over the world. Downloaded from warc.com 5! ! ! Culture and community Insights & More's analysis of cases and best practices points to a few other ways of building trust for foreign brands. First, brand performance must be assessed within the cultural context of the consumer. It's amazing how many marketers try to shortchange this process in a rush to launch. Brands that take the time to localise the execution of a campaign care about ensuring the 'right context'. Second, communications showing local community gain a lot of traction with low-income consumers. There is often a very strong philosophy of kinship and sharing that can be a source of happiness and fulfillment for consumers in these markets. This would apply to consumers in India, parts of Africa, Latin America and Southeast Asia. For example, in some studies Nigeria has been rated as one of the happiest places in the world, even though it has one of the lowest per capita incomes. Involving the community means showing a community benefit, framing the communication such that the community context is obvious, launching community-service programmes if relevant to the brand, and using endorsers from the community to establish the benefits. Some of the unique needs of consumers from these countries are affinity, affiliation, admiration and achievement. These values are not just applicable to the bottom of the pyramid, but define the 'social ethos' of the entire country as such. The point to remember is that values and culture do not change so rapidly, and hence the very rapidly upwardly mobile middle class is still steeped in this thinking. Being mindful of these needs in communication would be beneficial. Case study: Milo in Africa 4&.$%5!$6,7&$.!%+8-income countries in Africa using unconventional but highly successful strategies. There is a disproportionate allocation of funds to community projects, which tremendously boosts brand engagement. Milo, the malt drink brand, runs school programmes across Africa, in markets including Nigeria, South Africa, Ghana, Kenya and Sierra Leone. The brand promotes sports such as basketball and soccer among kids aged eight to 18 3 the brand's core target audience. 29!4#7&,#6:!;#%+!<,+=+$&.!>6.?&$>6%%!#9!.1*++%[email protected]!"*&,&!#.!69!699)6%!&A&9$!16%%&B!4&.$%5!;#%+!0&1+9B6,C!01*++%!D6.?&$>6%%! competition in partnership with the Nigerian School Sports Federation (NSSF). The 10th edition of the programme took place in 2008, when 3,500 schools nationwide participated in the competition from the state preliminary stage to the national finals. More than 600,000 people have benefited from this programme. 29!0+)$*!(E,#16:!;#%+!<,+=+$&.!E++$>6%%!6=+97!?#[email protected]!4&.$%5!1%6#=.!$*6$!$*#.!<,+7,6==&!*6.!*6B!69!#=<61$!+9!=+,&!$*69! 500,000 people in South Africa alone, with more than 4,000 schools participating. A Milo under-13 soccer championship has been instituted among six participating countries, with plans to extend the franchise across Africa. This programme is intended primarily to foster young football talent in Africa, while promoting an enthusiasm for the game and an awareness of the importance of healthy living. In May 2010, more than 6,000 schools participated in the pan-(E,#169!$+),96=&[email protected]!4&.$%5!FGH!I6)%!D)%1?&!#9$,+B)1&B!$*&! programme to the world in April 2009. In Africa, where passion for sports runs high and the resources available to develop sportsmen are scant, this kind of community engagement has built the brand at fundamental levels and is more powerful than a standalone creative campaign could ever be. Downloaded from warc.com 6! ! ! !"Copyright Warc 2012 Warc Ltd. 85 Newman Street, London, United Kingdom, W1T 3EX Tel: +44 (0)20 7467 8100, Fax: +(0)20 7467 8101 www.warc.com All rights reserved including database rights. This electronic file is for the personal use of authorised users based at the subscribing company's office location. It may not be reproduced, posted on intranets, extranets or the internet, e-mailed, archived or shared electronically either within the purchaserJs organisation or externally without express written permission from Warc. Downloaded from warc.com 7! !
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