! 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!!!0+),1& Warc Exclusive!!!2..)& July 2012!Building trust with the next billion Nandini Das Ghoshal and Trisha Varma Insights & More, SingaporeLow-income and emerging markets are the focus of consumer product companies with big growth ambitions. The next billionconsumers will come from these markets. This billion will include not only the lower-income consumers in China, India andBrazil, 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 tothem. Homegrown brands, which have typically been around for many years, do not face this challenge as much, even if theyhave 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. Manybrand marketers tend to focus their attention on questions of value and affordability; what they really need is to establishrelevance and context.Research by Insights & More suggests that building trust and emotional connections is the first and most important task forforeign brands when looking at a whitespace launch.Foreign brands struggle at the startVery often, foreign brands struggle to explain or understand why their state-of-the-art advertising or very powerful rationalreasons-to-buy messages just dont 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 positiveproduct 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 dont 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 relativelyshort 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.com2! !
!difference has been noted in the importance assigned to trust-related attributes in emerging versus developed nations. Whenbuying a brand, consumers in developing/low-income countries such as Mexico, Indonesia, Philippines, India and Nigeria aremore likely to rank trust-related attributes among their top 10 reasons to purchase, as compared to those in developed marketssuch as UK or Italy.The unique trust-related attributes that come up as important across emerging countries are understands my needs, doeswhat it promises, acts in my best interests, is an honest brand, brand I can trust and makes me feel confident, as illustratedin 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 followingcountries 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 marketslike the UK. India* Brazil* Mexico* Italy UK 1. Is a brand I trust. 1. Is a brand I trust 1. Makes me feel 1. Makes me feel 1. Has been a leading confident confident. brand 2. Is a high quality brand. 2. A brand that does what it promises 2. Is a brand I can trust 2. Is effective 2. Works well in all 3. A brand that does situations what it promises 3. Is reliable 3. A brand that does 3. Longest lasting what it promises 3. Is effective 4. Works well in all 4. Is a high quality brand 4. Performs well in all situations 4. Is reliable situations 4. Longest lasting 5. Makes me feel I am 5. Has been a leading spending my money 5. Is effective 5. A brand I can trust. 5. Performs well in all brand wisely situations 6. Makes me feel 6. A brand that does 6. Is one of the best 6. Is effective confident that I am what it promises 6. A brand that does brands I can buy. buying the best. what it promises 7. Makes me feel 7. Is the best value for 7. Is the best value for confident that I am 7. Is the best value for money 7. Is reliable money buying the best. moneyMany low-income markets tend to have strong cultures of their own, and the code that they use to interpret communication isdeeply embedded in their own culture. This leads to a feeling of this is not for me, when viewing communication posted byforeign brands. There is no history of performance, no one that they know uses the brand and swears by it, and its look andfeel 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 thesesentiments. Hence brand and insights managers are often foxed when they have to link poor brand performance to equitystudies run at a high cost to the company. It is also common to find that, even though product and brand tests do well, thesales graphs do not reflect the optimism of the research.Support from other sources Downloaded from warc.com3! !
!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 largecompanies and retail entities. They perceived that those large companies were "distant, and not interested in the reality of theBoP [bottom of the pyramid]. There is a lack of relevance, proximity, relationship and trust between those companies and low-income consumers."In a Harvard study on financial products for consumers in Africa (Financial Decision Making Process of Low Income Individuals3 Edna R Sawady & Jennifer Tescher Feb 2008, JCHS, Harvard University), it was argued that to "bank the unbanked", it wasimportant to look at their needs of respect, trust, belonging and achievement to craft an appropriate programme, instead ofworrying about reducing the join-up fee or the minimum deposit. Low-income consumers often trusted only their owncommunity and family networks due to a prolonged history of social and economic exclusion. All large public and governmentinstitutions were viewed with a sense of mistrust and disbelief.Why is there low trust in low-income markets?1. A sense of persecutionConsumers from lower income strata are constantly living with a sense of persecution, and any institution that builds trust willbe valued. The low-income consumer doesnt trust anyone except his own family, community, kin or religious leader.2. Poor governance historiesMany of these countries have a history of deep systemic failures in governance, with widespread corruption and in somecases violence, failed state machinery and deep income inequality. Except for self-help groups and NGOs, consumers in thesemarkets 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. LiteracyResearch 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 orcollege education, there is less trust in any kind of institution and governance. Typically, one finds that countries with thelowest education levels also have a lot of other ills such as bad governance, corruption and underdevelopment in consumermarkets.4. Emotions ruleIn environments where governance and infrastructure dont support the cause of the common man, decision-making isgoverned by emotions. Behaviour is strongly affected by emotions. Lack of trust in low-income and emerging countries is veryoften 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 ofbuilding trust is through consistent performance. Just by being around, brands create trust. Among Indian brands, Eveready Downloaded from warc.com4! !
!batteries and torches top brand trust and most admired brand charts consistently, even with very selective marketingcampaigns.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 isbased on emotional appeals.Building an emotional connection with the consumer can be a short-cut to trust and help seal the deal. Low-income marketconsumers trust their emotions more than anything else. The use of the right emotional insight, within the appropriate culturalcontext, establishes trust between the brand and the consumer. Emerging market consumers are literal and dont like todecode complicated messaging.Examples of brands that have successfully used this approach and reaped tremendous commercial benefits include Always, asanitary napkin targeted at teens in Nigeria. Marketing that communicated the products long-lasting nature and reliability wasdelivered 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 Unilevers Omo, via the Dirt is good platform. Nolonger was Omo talking about washing powders as it had in the past; instead it was telling consumers how good it is to getdirty. It has been used in emerging markets all over the world. Downloaded from warc.com5! !
!Culture and communityInsights & Mores 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. Its amazing how many marketers try toshortchange this process in a rush to launch. Brands that take the time to localise the execution of a campaign care aboutensuring the right context.Second, communications showing local community gain a lot of traction with low-income consumers. There is often a verystrong 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 studiesNigeria 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 isobvious, launching community-service programmes if relevant to the brand, and using endorsers from the community toestablish the benefits.Some of the unique needs of consumers from these countries are affinity, affiliation, admiration and achievement. Thesevalues are not just applicable to the bottom of the pyramid, but define the social ethos of the entire country as such. The pointto remember is that values and culture do not change so rapidly, and hence the very rapidly upwardly mobile middle class isstill steeped in this thinking. Being mindful of these needs in communication would be beneficial.Case study: Milo in Africa4&.$%5!$6,7&$.!%+8-income countries in Africa using unconventional but highly successful strategies. There is adisproportionate 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, Kenyaand Sierra Leone. The brand promotes sports such as basketball and soccer among kids aged eight to 18 3 the brands coretarget audience.29!4#7&,#6:!;#%+!<,+=+$&.!>6.?&$>6%%!#9!.1*++%.@!"*&,&!#.!69!699)6%!&A&9$!16%%&B!4&.$%5!;#%+!0&1+9B6,C!01*++%!D6.?&$>6%%!competition in partnership with the Nigerian School Sports Federation (NSSF). The 10th edition of the programme took placein 2008, when 3,500 schools nationwide participated in the competition from the state preliminary stage to the national finals.More than 600,000 people have benefited from this programme.29!0+)$*!(E,#16:!;#%+!<,+=+$&.!E++$>6%%!6=+97!?#B.@!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 hasbeen instituted among six participating countries, with plans to extend the franchise across Africa. This programme is intendedprimarily to foster young football talent in Africa, while promoting an enthusiasm for the game and an awareness of theimportance of healthy living.In May 2010, more than 6,000 schools participated in the pan-(E,#169!$+),96=&9$@!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 developsportsmen are scant, this kind of community engagement has built the brand at fundamental levels and is more powerful thana standalone creative campaign could ever be. Downloaded from warc.com6! !
!!"Copyright Warc 2012Warc Ltd.85 Newman Street, London, United Kingdom, W1T 3EXTel: +44 (0)20 7467 8100, Fax: +(0)20 7467 8101www.warc.comAll rights reserved including database rights. This electronic file is for the personal use of authorised users based at the subscribing companys office location. It may not be reproduced, posted on intranets, extranetsor the internet, e-mailed, archived or shared electronically either within the purchaserJs organisation or externally without express written permission from Warc. Downloaded from warc.com7! !