Gems: insights from emerging markets - November 2012


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Gems: insights from emerging markets - November 2012

  1. 1. GemsInsights from emerging markets November 2012
  2. 2. Contents1Introduction 32Technology and the Internet in Latin America 43Social skills in the classroom: digital media use in Sub-Saharan Africa 94A shifting base: the BoP in context 155Bridging the gap 216Dreaming little dreams: brand building at the Base of the Pyramid 27 Share this Gems 2
  3. 3. Introduction As the global financial crisis continues sub-Saharan Africa and LatAm. Whilst lower GDP per capita does tend to mean lower levels of technology ownership, mobile to rumble on and even China’s growth is the one must-have device, enabling and empowering new starts to slow, we all need to identify new generations of consumers and increasing social mobility. As the opportunities to build our businesses. cost of smartphone ownership continues to decrease, mobile becomes an even more significant opportunity for brands in For many clients, this means tackling emerging markets. previously unchartered territory - whether Secondly, we continue to reflect on the lives of those at the this is entering new markets, targeting new base of the pyramid (BoP), whose population numbers 4 billion,Chris Riquier customers, or developing products that with a combined purchasing power of $5 trillion. We’ve beenCEO, Asia Pacific partnering with clients for many years, to help them understand address an unmet need. the aspirations of this new consumer class – building a sense of their priorities and what they need from brands. In this issue you With a presence in over 80 countries, TNS has a well-established can explore some of the work we have done and what we have footprint. However, we continue to extend this as we help our learnt about the implications for research. clients to uncover opportunities in new markets. In 2012 this has meant opening an office in Cambodia, as well as starting I hope you find this edition of GEMs interesting and inspiring to work in Myanmar – we’ll be sharing our insights about this – as ever, if you would like to discuss any of the issues in more newest of consumer markets in a forthcoming edition. detail, please do contact your local TNS consultant, or me. There are two clear themes in this edition of GEMs, both of Kind regards, which explore new territory for many of our clients. Firstly we Chris Riquier, have a look at the impact of digital and mobile technology in CEO, Asia Pacific Share this Gems 3
  4. 4. Connected worldTechnology and the Internet in Latin America - James Fergusson Share this Gems 4
  5. 5. Technology and the Internet in Latin AmericaTechnology use in LatAmEmerging markets including LatAm are significantly outstrippingthe West in terms of technology adoption. Whereas the West isused to high levels of technology ownership, including PCs, fixedline telephones and fixed line Internet, Latin America doesn’t havethe same level of infrastructure. Businesses looking to grow theirpresence in the region are therefore finding innovative ways ofharnessing the technology that does exist there – one of thereasons that Internet-enabled mobile is taking off so quickly. Share this Gems 5
  6. 6. Technology and the Internet in Latin AmericaMobile and social mobility Hot products to watchThe future of digital is mobile, particularly in Latin There is a particularly strong interest in tablets in the Country Mobile Internet available on phoneAmerica, where handheld technology is enabling region – stronger than in the US and very close to 2010 2011 2012and empowering new generations of consumers and European demand levels – and there’s evidence that this Argentina 30.2 55.1 68.2increasing social mobility. Lower GDP per capita tends interest is translating into actual purchases more than into mean lower levels of tech ownership, but mobile other emerging markets. One in five of Latin American Brazil 29.9 43.2 70.6has strong usage levels across the board, with 82% consumers plan to buy a tablet in the next six monthsof consumers in Latin America owning a handset. if they don’t own one already. Massive demand for Chile - 69.4 74.9In this way mobiles are helping to bridge the divide smartphones is opening up a battle between Nokia’sbetween rich and poor, and between people in rural Symbian OS and Google’s Android in the race to bring Colombia 25.2 - 67.1and urban areas. These are many Latin American phones to market that meet consumer demand, secureconsumers’ only link to the online world, with many share of wallet and start to win the platform wars. Costa Rica - 34.4 -‘leapfrogging’ web-based sites to skip straight to theirmobile counterparts. For example, many people’s Guatemala 16.8 17.4 - 82%first experience of online banking will be via theirmobile phone. Mexico 26.7 33.0 79.2 of consumers in Latin America own a handset Source: TNS Mobile Life 2012 Share this Gems 6
  7. 7. Technology and the Internet in Latin AmericaCorrelation between GDP per capita and number of technology devices owned; source: IMF / TNS Mobile Life Latin American consumers have a far stronger affinity to content brands compared to other developing markets. The most accessed brands tend to be global brands such as Google, YouTube and Facebook. Only 12% of LatAm consumers are accessing Orkut via their mobiles, versus 25% who are doing so with Facebook, showing that the latter still has the most potential for companies looking to engage with new consumers via social media. 20% of mobile activity is social networking compare to...Social media Social networking is the second most popularThe social media revolution is taking over the world, service activity on the mobile in LatAm (20%), behind 32%and with 34% of LatAm consumers saying they feel uploading photos/videos to a personal computerthey can express themselves better online, the Internet (32%). In addition, consumers are looking to increaseis likely to play a greater and greater role in all kinds the number of activities they are doing in social media,of social interaction. so there are myriad opportunities for businesses to get in on the action by providing new online products uploading photos/videos to a personal computer and services. Share this Gems 7
  8. 8. Technology and the Internet in Latin America strategy, but an entirely different medium requiring Consumers using mobile banking (Checking bank accounts, making purchases securely its own bespoke approach. Current tablet Intend to purchase a tablet from mobile) Country Country ownership within next 6 months 2010 2011 2012 Also, whilst many companies will be broaching new territory, the basics still apply. Mobile services still Argentina 4.7 14.6 Argentina 4.2 8.9 12.2 need to be relevant to consumers, be easy to use, and – especially given the target market – affordable. Brazil 9.8 20.9 20.4 Whilst mobile banking service mPesa has revolutionised Brazil 6.3 17.7 banking in rural Kenya, the same kind of service has Chile - 11.8 20.2 not flourished in India due to poor service delivery. Chile 8.4 18.4 Costa Rica - 2.1 - Latin America can learn from these successes and Colombia 7.1 23.2 failures, but ultimately solutions need to be closely Guatemala 3.4 1.2 - tailored to the local market: there is no place for a cookie cutter approach. Mexico 8.8 20.3 Mexico 0.6 1.8 18.3 Source: TNS Mobile Life 2012 Kenya 5.6 17.7 23.2Implications for businesses India 1.9 1.3 1.7The most enlightened companies are fast capitalisingon the demand for mobile services, recognising that Source: TNS Mobile Life 2012mobile is not just an extension of a company’s web Share this Gems 8
  9. 9. Connected worldOpinion LeaderSocial skills in the classroom: digital connected consumerSustaining brand relevance with themedia use in Sub-Saharan Africa - Mark Molenaar Share this Gems 9
  10. 10. Social skills in the classroom: digital media use in Sub-Saharan AfricaFor the world’s fastest-growing Internet population the web is a social,educational and largely handheld tool. Brands must adapt their digitalstrategies to the available technology in order to succeed.Sub-Saharan Africa boasts the world’s fastest growing Internetpopulation, increasing by over 2500 percent between 2000 and 2011.However, these consumers’ experience of digital media remains verydifferent to that of audiences in other markets, focused on less playful,more purposeful roles such as social networking, e-learning and banking. Share this Gems 10
  11. 11. Social skills in the classroom: digital media use in Sub-Saharan AfricaDigital life is mobile wielding archetype of more developed markets. He orSub-Saharan consumption of digital media is she is typically younger (43 percent are aged 16-24, 43%predominantly mobile. The spectacular growth in compared to 27 percent of web users worldwide),Internet access for the region has been driven by even with lower spending power, and holds a Nokia ormore impressive rises in mobile penetration. The 695 Samsung feature phone rather than an iPhone ormillion mobile subscriptions in the region today equate Android handset. of Sub-Saharan smart phone or tabletto 65 percent mobile access, and represent a 4000 users aged 16-24percent increase over the last 10 years. The expansion Such differences have shaped a distinct approachof mobile broadband and increasing competition to digital media in the region, with the popularity 26%between networks will further boost the availability and of different services and solutions often dependingaffordability of mobile web access through driving down on their accessibility via mobile technologies such asthe cost of both data plans and handsets. Four out of WAP and SMS. Constraints on Internet access speedsevery five Internet users in Sub-Saharan Africa accesses and affordability mean a reduced appetite for onlinethe Internet via mobile phone, compared to one in three entertainment (only 6 percent of web users watch of worldwide smart phone or tabletglobally. Three quarters of Sub-Saharan Africans say YouTube videos compared to 37 percent worldwide) users aged 16-24they would be happy to do all of their Internet surfing and shopping (10 percent have browsed and 2 percentvia mobile phone (compared to just over a quarter in completed purchases online, compared to global figuresdeveloped countries). of 37 percent and 24 percent respectively). Instead, Sub-Saharan consumers’ use of digital media is focusedThe region’s typical mobile web consumer cuts a distinct on immediate needs, via platforms that can be accessedfigure, very different to the smartphone or tablet- across a range of handsets. Share this Gems 11
  12. 12. Social skills in the classroom: digital media use in Sub-Saharan AfricaSocial networks shape the web experienceCommunication is the foremost of these needs and 58%social networking is the digital channel that Sub-SaharanAfrica’s mobile web users turn to, in order to fulfill it.Social networking is the most important online activityfor 58 percent of Internet users in the region, compared Tanzania case study of Sub-Saharan Internet users think social In Tanzania, the BridgeIT initiative, known locally asto 26 percent globally. Four out of five use Facebook networking is the most important online activity Elimu kwa Teknologia or Education through Technology,compared to two out of five worldwide. Accessed enables teachers to access a catalogue of educationalrelatively easily on a broad range of mobile handsets, video content using Nokia N95 mobile phones, 26% which are then connected to classroom TVs.there are signs that social networks are becoming thecornerstone of the digital media experience, used for The University of Pretoria In South Africa uses mobilesharing information as well as catching up. Significantly technology to support its paper-based distance-learningfor advertisers, 70 percent of Sub-Saharan web users programmes for postgraduate students in rural areas.say that social networks are a good place to learn about believe this globally. Dr Math, launched in 2007 and with 32,000 users inproducts and brands. South Africa, provides a mobile tutoring service hosted via a free application, MXit and available for less thanMajor role for information and education online activity compares to 10 percent worldwide. the price of an SMS. Although many mobile-based educational programmes are in their infancy, there isEducation and learning is the second most important This reflects both the younger average age of the clearly strong demand for suppliers who can matchuse of digital media in Sub-Saharan Africa. The Internet population – and the role that the mobile quality resources to innovative forms of low-cost18 percent of web users nominating knowledge- Internet is playing in extending access to educational mobile delivery.gathering and education as their most important content to rural classrooms. Share this Gems 12
  13. 13. Social skills in the classroom: digital media use in Sub-Saharan AfricaNumerous studies have attested to the value of jobs. MTN has launched its own Mobile Money servicethe mobile web in bringing market knowledge and across 12 African countries with 5.1 million registeredinformation to remote rural communities. Establishing subscribers by June 2011. 14 Millionearly-mover authority in such areas could prove animportant strategy for mobile providers looking to Mobile banking will continue to grow in Sub-Saharanretain market share. Nokia is one example, having Africa, powered by distrust of banks and the demand M-PESA subscribers in Kenyarecently launched its OVI Life Tools app to provide for safe, affordable financial transfers, often in smallAfrican consumers with affordable access to agricultural denominations. As the capabilities of phones increase,information, educational content and market prices. mobile banking may well become more sophisticated. Amongst Sub-Saharan web users, 65 percent say theyStrong growth in mobile bankingOvercoming traditional barriers to opportunity is thedriver of another significant use of digital media: are interested in Internet banking (compared to 27 percent worldwide); 70 percent say they are interested in banking via mobile phone. 32,000 jobs have been created since the launch of M-PESAmobile banking. This area has seen major growthsince the pioneering launch of Safaricom’s M-PESA $ 9.6 Billionin Kenya in 2007. M-PESA is now used by over 14million subscribers in Kenya and a further 2.7 millionin Tanzania. The platform, which allows customers todeposit, withdraw and transfer money via SMS using total transaction value since the launch in 2007 ($)a network of M-PESA agents has conducted transactionsworth USD $12.75 billion and created more than 32,000 Share this Gems 13
  14. 14. Social skills in the classroom: digital media use in Sub-Saharan AfricaImmediate and future opportunities Market forces within the mobile industry will lead to of digital platforms and functions is likely to increase asSub-Saharan Africa’s army of Internet users is still continued strong growth in web access and to a broader phones become a more familiar feature of daily life.a relatively small one at 12 percent of the total range of opportunities for businesses targeting the At the same time, marketers must continue to adaptpopulation, and it remains very focused on immediately online population. Mobile broadband access will rise their activities to the capabilities of mobile handsets inpractical, low-cost, mobile web applications. However, with infrastructure investment (over USD $70 billion different markets, as well as the broader characteristicssignificant opportunities exist for organisations that infrastructure investment by mobile operators in 2012) of different countries and cultures. Exporting businesscan adapt digital communications strategies to fit this and the reduced cost of handsets and data plans as a models from other regions (or even other countriespattern of web use. result of competition. Smartphones will play a greater within Sub-Saharan Africa) is unlikely to prove effective. role as they become more affordable: the Huawei This is an extremely diverse region, and understanding ofThe reaction of mobile owners to the Somalian famine Ideos smartphone launched in Kenya in 2011 sold over cultural nuances, demographics and different stages ofprovides a demonstration of the role that social networks 30,000 units in its first month and mobile manufacturer digital development is crucial to creating engagement.and mobile banking can play when aligned with broader HTC has announced its intention to launch a sub-USDawareness through offline media. Facebook, Twitter and $100 Android smartphone into the region. However, 12%SMS were used to mobilise support across Kenya’s urban the most significant area of increased opportunity isand rural populations after mainstream media initially consumers’ growing familiarity with the digital platformsraised awareness of the plight of Somalian refugees. available through their handsets. Most mobile ownersKenyans responded by donating USD $67 million, in Sub-Saharan Africa have been using their phones for of Sub-Saharan total population use the Internetwith the majority of private donations coming through two years or less – and their appetite for a broader rangeM-PESA Share this Gems 14
  15. 15. Finding LeaderOpinionfaster growth: new customersA shifting base: the BoP in context - Poonam Kumar Share this Gems 15
  16. 16. A shifting base: the BoP in contextThe Base of the Pyramid (BoP) is on themove – and the hope and optimismof those living there is creating anunprecedented opportunity for growthin emerging markets. Share this Gems 16
  17. 17. A shifting base: the BoP in contextA shifting base: the BoP in context and challenges of doing well by doing good. In manyFew people have transformed attitudes to the global cases this requires questioning developed world 4 billionpoor to the extent that the late C.K. Prahalad did in his thinking when it comes to making a profit. Innovativepath-breaking 2004 work, The Fortune at the Bottom thinking on business models can be as essential forof the Pyramid. Only a few years earlier, those living doing business with the BoP as innovative productin poverty were still considered the rich man’s burden, development and branding. The BoP’s population numbers 4 billiontheir economic role restricted to needy recipients 40%of charity. Prahalad helped us to see them as the Size matters – and so does distributionfuture: dynamic individuals who together form a vast, Its sheer scale puts the BoP centre-stage in anyuntapped potential market. discussion of emerging market opportunities. The BoP’s population numbers 4 billion, its combined purchasingIn a sense though, Prahalad’s book is only the beginning power of $5 trillion is more than 2.5 times the GDP of Live in Indiaof the work that needs to be done in understanding the UK, and its geographical distribution is concentrated 75%the Base of the Pyramid (BoP). This work is constant, on those regions promising to drive global growthbecause the BoP itself is ever-changing. Companies over the next decade. Of those inhabiting the BoPthat want to do business in this area must invest in worldwide, 40 percent live in India with a further 23understanding the BoP’s great variety of potential percent in China, 16 percent in Africa and 10 percent in of India’s population are members of the BoPinnovators, entrepreneurs, producers and consumers Latin America. In India, 75 percent of the population are– and they must be prepared to face the setbacks members of the BoP. Share this Gems 17
  18. 18. A shifting base: the BoP in contextSeeing the BoP as individuals TNS segments the BoP into three categories ofIt remains a tragedy that 4 billion of the world’s potential consumer: ‘Strugglers’ surviving on less 1995population survives on less than $8 per day. However, than $1 per day, ‘Fighters’ living on between $1it is important to recognise that this definition of the and $2 per day and ‘Strivers’ with purchasing powerBoP covers a large range of very different scenarios, of between $2 and $8 per day. Encouragingly, 73%aspirations and opportunities. An understanding of ‘Fighters’ and ‘Strivers’ together represent morethe BoP population’s varied situations is essential for than 70 percent of the BoP according to Worldcompanies looking to target its growth opportunities Bank statistics. This is an emerging consumer class,effectively. ready to join the market economy, and its ranks 2007 are swelling. Striver $2 - 8 per day 11% In 1995, consumers earning less Fighter $1 - 2 per day than $2 per day represented 73 percent of the population Struggler Less than $1 per day of rural China; by 2007, they represented only 11 percent. Share this Gems 18
  19. 19. A shifting base: the BoP in contextHustlers or entrepreneurs? must have the dedication to help their consumers disposable income that any brand purchase represents.Those waiting to emerge from the BoP have the overcome the daily challenges and barriers that A successful proposition for the BoP must combinecharacteristics of a middle-class-in-waiting: educated, they face. affordability with robust functionality, delivery againstearning a semi-regular income and starting to own priority needs and credible perceptions of quality.consumer goods. They look forward to the future Reinventing the brand wheel Increasingly, trusted brands are also asked to providewith hope and optimism. They can see their own BoP consumers show a strong preference for buying guidance and emotional affirmation in the midst ofpotential and they are confident in their ability to fulfil brands over commodities – but they demand a great the tensions arising from social and economic And they have great motivation and self-respect. deal from those brands in return. This isn’t surprising The brands that embrace this multi-dimensional roleMany would describe themselves as hustlers – but we when you consider the significant proportion of will be the ones to succeed.recognise their ‘hustling’ for what it is – energetic anddedicated entrepreneurialism.These top tiers of the BoP represent an immenseconcentration of ‘unmet needs’, the type of Brand credibility and strategy cannot be imported fromopportunities that companies in developed marketsinvest significant time and money to uncover. In thisrespect the BoP can appear like a gold mine for global other markets.brands. But prospectors beware.They must be prepared to overcome initial setbacks –and they must be ready to relearn how to do business,and build brands. To meet BoP needs effectively they Share this Gems 19
  20. 20. A shifting base: the BoP in contextInternational brands have far less resonance amongst of joining the market economy have clear aspirations to realising the promise of growth and success inthe BoP than they do amongst the existing middle-class. and great confidence in their ability to achieve them. emerging markets – and the importance that theyDeveloped world notions of rebelliousness, ego and And although meeting their needs is challenging, the attach to brand relationships gives first movers a major,counter-culturalism (the mainstay of many brands across rewards for doing so are immense. The BoP is essential long-term advantage in tapping their potential.different categories) have no place in an environmentwhere a sense of isolation and exclusion is somethingto be feared. And brands accustomed to targetingindividual desires must adapt strategies to collectivedecision-making, in which husbands and fathers oftenwield a veto over their family’s purchases.Crafting a successful proposition may require acompany to reinvent more than its brand identity.Successful BoP strategies often embody a shift inbusiness model as well: from focusing on margin tofocusing on volume. Such changes can play a vitalrole in delivering the affordability that the BoP requireswithout undermining the credibility that it demands.Doing well by doing goodFor those prepared to embrace the challenges ofbuilding brand propositions from the ground up, theBoP today represents a greater opportunity than atany point in history. Although it remains financiallyimpoverished, its population is not emotionally orimaginatively so. Those BoP consumers on the point Share this Gems 20
  21. 21. Finding LeaderOpinionfaster growth: new customersBridging the gap - Anjali Puri Share this Gems 21
  22. 22. Bridging the gapIn researching the Base of the Pyramid(BoP), researchers must learn to operatewithout the shared assumptions onwhich communication typically relies. Share this Gems 22
  23. 23. Bridging the gap“The real voyage of discovery,” Marcel Proust wrote, answers to these questions really mean. They must start success by focusing their proposition on economic“consists not in seeking new landscapes but in having by adapting their approach to the types of decisions advancement, rather than more immediate and obviousnew eyes.” Researchers working at the BoP must that BoP consumers are accustomed to making. consumer benefits.embrace both experiences if they are to be successful:exploring new landscapes in terms of economic From choosing products to choosing needsdisparities, infrastructure and literacy, whilst adapting to In the environment of the BoP, the very notion ofsubtler socio-cultural gaps in order to ‘see’ this world in consumer choice changes. The question is not so much Highthe same terms as BoP consumers. “what product do I choose to fulfil this need?” but “which need should I choose to fulfil first?” With many priorityWhen conversations lack common ground priorities competing for limited disposable income, weThe absence of shared implicit assumptions about the often find situations where choices and trade-offs areway the world works can greatly inhibit our ability made across markedly different categories. The relativeto ‘read’ and communicate with BoP consumers. value of fulfilling a need depends on the priority givenWhen talking to populations that have very different to the area of life that it impacts. Understanding theseexperiences of learning, media, products and services, priorities fully can enable research to make a greaterit is surprising just how many notions and concepts no contribution than focusing questions on brandlonger hold true. or product preference.Culture can be defined as a system of common In the BoP, for example, growth in income or socialassumptions, and this shared starting point is essential capital is frequently prioritised over personal comfortfor communication and interpretation. When it is and convenience, something that does not holdremoved, the resultant breakdown in communication true to the same extent in many developed markets. Lowcan be bewildering. Researchers must respond by Brands in sectors as diverse as mobile phones, fertilisers priorityframing questions in new ways, and learning what the and personal care products have found considerable Share this Gems 23
  24. 24. Bridging the gapA not-so-common visual language As with colours, so with ‘simple, everyday symbols’ that However, ticks and crosses are themselves formallyPoor literacy levels amongst BoP consumers create can turn out to be indecipherable to the audience they learned symbols rather than intuitively understood.another set of challenges when it comes to research were intended for. In one example, ticks and crosses In this case, the tick was decoded as representingand marketing. Visual messaging, using common next to covered and uncovered pots of water were a ladle to scoop out water – and the picture hadsymbols and images, is an obvious alternative to intended to show the importance of keeping drinking no meaning beyond this.written questions and communication. However, water covered.what passes for common visual language in manysituations does not necessarily apply in the BoP.When researching in remote, rural communities, itis often surprising how visual grammar that seemsintuitive to urban populations turns out to be whollyalien to BoP consumers. The idea of traffic lights, withgreen standing for go ahead and red indicating stop,is a wholly urban notion. For consumers who havenever seen a traffic light, the colours red and greendo not have the same meaning. This can have seriousconsequences, not only in research but also insimple messaging. Colour coding bore-wells to marksafe and unsafe drinking water is unlikely to have theintended impact, for example. Share this Gems 24
  25. 25. Bridging the gap Cultural interpreters ? Working in partnership with those with exposure to the BoP can provide ready insight as to where cultural gaps exist – and a means of bridging them. Young people from remote rural communities who have moved to work in the city, or community workers belonging to NGOs can act as cultural interpreters and an important aid to data gathering. Common visual grammarSeeing with new eyes Understanding the shortcomings of supposedly universal symbols is an important first stepThe best solutions to the perception gaps that emerge towards developing a more intuitive visual grammar. TNS is developing a process to identifywhen working with the BoP is prolonged immersion a common visual language that can be used in communication with the researchers to build contextual knowledge andunderstanding of different communities. However, thedemands of commercial market research mean thatsuch an approach is not always practical. TNS applies Mapping prioritiesdiverse approaches to BoP research that can provide Studying patterns of adoption across different categories is enabling us to map how BoPa more timely and applicable solution to bridging the consumers prioritise and trade-off between their many different needs – producing a moregaps produced by different socio-economic experiences meaningful guide to consumer decision-making.and include: Share this Gems 25
  26. 26. Bridging the gapLeading the way to a better understandingResearch is a natural arena for confronting the issuesinvolved in communicating with the BoP. However,the benefits of a shared understanding go beyond thegathering and interpreting of data; they are essential foracting on it as well. The insights gained through seekinga common cultural language have immediate value forbrands, governments, NGOs and all others tasked withengaging BoP consumers – and exploring new forms ofresearch has a crucial role to play in this process. Abc 字母 Share this Gems 26
  27. 27. Finding LeaderOpinionfaster growth: new customersDreaming little dreams: brand building at the Base of the Pyramid - Poonam Kumar Share this Gems 27
  28. 28. Dreaming little dreams: brand building at the Base of the PyramidLogic suggests that brands havea limited role to play at the Baseof the Pyramid. But try tellingthat to the people who live there. Share this Gems 28
  29. 29. Dreaming little dreams: brand building at the Base of the PyramidIt goes without saying that affordability matters a great college in the city. She is a bright girl with potential, educations who land salaried jobs in the city – and sodeal to consumers who live on less than $8 a day. the local schoolteacher said. Her family had watched they have carefully set aside what money they can toHowever, it would be a terrible mistake to assume that stories on the community TV set about girls with college send Priyanka to is the only thing that matters. With products askedto perform a range of functional and emotional tasks,there is a natural and hugely valued role for brands atthe Base of the Pyramid (BoP). However, those brandsmust be prepared to develop original, innovative andrelevant propositions if they are to deliver againstthe needs of BoP consumers and become part of anexciting growth opportunity.Priyanka’s storyTNS uses fictionalised realities, stories compiled from themany different interviews conducted by our researchers,to help bring to life the issues regularly faced by BoPconsumers in different markets. Here is one such story.Priyanka is 19 years old. She lives in a small villagenear Lucknow in India, part of a family of six thatsurvives on the annual income of $4,000 that herfather generates from the small piece of land he owns.Every day Priyanka travels for over two hours to attend Share this Gems 29
  30. 30. Dreaming little dreams: brand building at the Base of the PyramidUnlike the more affluent students at the college,Priyanka does not have pocket money – but herparents give her small amounts for transportationand food. For the last month, though, she hasgone hungry most days. Hidden in her collegebag, a secret from her parents, is the reason:a small tube of moisturiser.Neutrogena is one of the more expensive moisturiserbrands on the market – and when Priyanka boughther first tube from a shopkeeper in the city, she wasshocked at the small size of the product she wasgiven having saved up her lunch money to buy it. Shedecided to try it anyway – and has never willingly usedanother moisturiser brand since. She loves the waythat the cream feels on her face – and she is certainthat the soft look it gives her skin helps her to fit inamongst wealthier students. When the shopkeeperran out of Neutrogena one month, Priyanka Although the moisturiser is the only beauty product money – in order to buy a Ponds face wash. By sharingtried another upmarket brand. She went back to that Priyanka buys, it is not the only product that she the two products, the girls are able to use a fullNeutrogena as soon as it was back in stock. uses. One of her friends has also been saving her lunch skin-care regime. Share this Gems 30
  31. 31. Dreaming little dreams: brand building at the Base of the PyramidWhen she returns home from college, Priyanka spends In particular, she fears being forced to abandon herher evenings helping her mother. Dust from sweeping plans for a career if her parents choose to arrange athe floor clings to her long hair, which her traditional- marriage for her. Until then, though, the secret tube ofminded parents will never allow her to cut. It leaves her Neutrogena helps her to balance the two very differentskin feeling dry and spotty. If she did nothing about her parts of her life.appearance, she knows she will be ridiculed and singledout as a ‘village girl’ when she travels to the city.She fears that such perceptions will stand in the wayof her opportunities.Priyanka’s mother and father both believe that cuttingPriyanka’s hair would damage her prospects for a goodmarriage. When she asked to wash her hair morefrequently, to keep it from getting oily, they worriedthat she was secretly seeing boys. They would worryequally about make-up or beauty products – and that’swhy they can’t know about the tube of Neutrogena.Keeping her family happy is very important to Priyanka.She wants to be accepted in her home village, just asshe wants to be accepted amongst the other studentsat college. She is worried, though, that these twoworlds will one day pull her in different directions. Share this Gems 31
  32. 32. Dreaming little dreams: brand building at the Base of the PyramidWhere brand loyalty means more Brands are valued, even loved, as they offer reassurance will be asked to perform within the BoP; robust,We find Priyanka’s story echoed across the lives of men and certainty in potentially very uncertain lives. Once functional, affordable, addressing priority needs andand women in India, China, Latin America and Africa: won over, BoP consumers reward their brands with yet also providing reassurance and even guidance.the regions where the vast majority of BoP unshakeable loyalty, giving early movers in this market Achieving this often means re-engineering a brandconsumers live. a strong competitive advantage. However, to earn through production innovation, packaging and that loyalty, brands must first craft a proposition that delivery mechanisms. People living on less than $8 per day resonates with the multi-dimensional role that they demonstrate a strong and surprising preference to buy a brand over a commodity, provided the brand proposition is relevant, accessible and affordable.This is particularly true of an upper BoP segment, thosewith purchasing power of between $2 and $8 a day,which TNS identifies as ‘Strivers’.These BoP consumers are educated, hopeful andoptimistic about their future, aspirational, ambitiousand confident in their ability to achieve their ambitions.Like Priyanka they value their social equity and seekways to build it further. But like Priyanka they oftenfind themselves caught in conflict between traditionalworlds and new opportunities. Share this Gems 32
  33. 33. Dreaming little dreams: brand building at the Base of the PyramidFunctional, emotive expertise Successful brand relationships often begin withAny brand proposition for the BoP must be anchored in information and education, reasons to believe andstrong functionality that makes a measurable difference reassurance that money is being spent wisely. However,to the consumer’s life. The brand’s products must propositions are most effective when they build onwithstand stress and hostile physical environments, this functional relevance and credibility to connectand last much longer than would be expected in other emotionally as well.scenarios. And they must address genuine, high-priorityneeds in order to compete successfully for a share ofvery limited incomes. Unilever Unilever’s Lifebuoy brand commands a premium Nokia in rural India by delivering germ protection that has saved and changed lives. Its credibility is built Brands must combine affordability with robust on more than a protection product. Lifebuoy has quality. Nokia’s brand reputation as a lifeline for successfully established itself as a protection brand rural Indians and Africans rests partly on its products’ that champions the cause of health and hygiene, reputation for being kicked, thrown, dropped, ground educating over 70 million Indians on the importance into the dirt – and still working. Perceptions of quality of germ protection and featuring as one of the and expertise are as important in the BoP as in more country’s most trusted brands year after year. developed market sectors, building trust, visibility and Like Priyanka’s tube of Neutrogena, Lifebuoy reassurance that consumers are getting the best that delivers emotional support through the trust it their money can buy. engenders as well as the crucial role it performs. Share this Gems 33
  34. 34. Dreaming little dreams: brand building at the Base of the PyramidEmotional resonance one of the world’s poorest countries, get the micro-Across markets, we find a range of emotional themes nutrients they need. Danone’s scientists worked toresonating with BoP consumers in this way – and create a product that strips away all unessential costsproviding reassurance, support and even guidance: without compromising on nutritional quality and the company partnered with the Grameen Foundation toEmpowerment establish an innovative community distribution model.The sense of a brand enabling and empowering, either Shakti Dohi is marketed door-to-door by Grameenoneself or one’s family, is particularly powerful. Brands ladies, who also help to educate and raise awareness.that have successfully leveraged this emotional valueinclude Nirma, now valued at $500m, which started Pleasurelife with a promise of ‘affordable whiteness’ for low- Despite, or perhaps because of their many pressing lifeincome consumers, distancing them from the brown concerns, BoP consumers welcome brands promisingcolours that symbolise dirt and poverty. Priyanka’s tube special moments of cheer. SAB Miller’s Chibuku beer isof Neutrogena also stands firmly in this category. one such proposition: engineered for those who cannot afford bottled beer (the majority of the population inFortification Botswana, Malawi, Zambia and Zimbabwe where it isFood brands that promise immunity against sickness sold), Chibuku is brewed from sorghum and corn andor an improvement in reproductive health resonate sold in paper cartons and plastic containers. The brandstrongly across the BoP, as do nutrition solutions that proposition: Shake Shake, builds an identity around thecan help to make children stronger and better prepared need to shake the cartons before drinking, to mix thefor the future. Danone’s fortified yoghurt product, separated ingredients.Shakti Dohi helps to ensure that children in Bangladesh, Share this Gems 34
  35. 35. Dreaming little dreams: brand building at the Base of the PyramidAssertivenessThemes of excellence and success can also resonateamongst BoP consumers, provided they focus onrelevant needs. Brands have found success withpromises of mastery over budget, admiration and envyof superior homemaking skills, enhancement of socialstature and parental pride and ambition. Priyagold, abiscuit brand in India, challenged the market normsand the market leader by introducing a range ofindulgence biscuits. Until then, the only biscuits thatwere accessible to lower income consumers werethe cheaper energy range. Priyagold’s ‘demand withentitlement’ proposition instead asked: Why should thegood things in life be denied to you? Share this Gems 35
  36. 36. Inclusion not exclusivity: Although international brands have aspirational appeal with consumers. With $5 trillion of spending powersome potential traps for global brands amongst the emerging middle class, that appeal has far currently residing within the BoP, the rewards forIn developing emotive propositions, brands must take less resonance for BoP consumers. Functionality, quality investing in these relationships are substantial.great care not to apply developed market themes that and the ability to satisfy emotional needs must behave potentially negative connotations amongst established on the ground, within the audience’s ownBoP consumers. experience; they cannot be imported from elsewhere. Local brands are often the ones to thrive within the BoP – and global brands looking for new growth Rebelliousness and opportunities can gain valuable insights by studying their success. exclusivity have no place here; meaning Brand-building the old-fashioned way The key to crafting a winning BoP proposition for and purpose are global brands lies in a willingness to re-engineer product and brand infrastructure to craft an affordable, everything. quality proposition. However, it also requires a will to go further: to develop emotional engagement and to fulfil the role of reassuring, trusted advisor thatIf a brand issues a challenge then that challenge must BoP consumers actively seek from their brands. Forrelate to real needs or changing unfair practices, not marketers, the BoP provides an opportunity for good,self-indulgent, edgy rebelliousness. Superiority must be old-fashioned ‘brand building’ – and an environmentdirected towards a goal, never towards ego satisfaction. ideally suited to building meaningful relationships Share this Gems 36
  37. 37. About the authors A shifting base: the BoP in context – Poonam Kumar contemporary thinking in qualitative research globally,Technology and the Internet in Latin America – Dreaming little dreams: brand building at the Base of the particularly in the area of consumer decision making andJames Fergusson Pyramid – Poonam Kumar social media. She is a frequent presenter at ESOMAR andJames Fergusson is the Global Head, Digital and Poonam Kumar is Regional Director in TNS’s Brand & other industry forums, and the recipient of the ‘Best NewTechnology Practice at TNS, leading a group of global Communication practice bringing more than 20 years Thinking’ award by the UK MRS in 2006.experts focused on helping clients to apply digital to fuel experience in brand development, brand strategytheir growth strategy. planning, ethnography and consumer insight to her About TNS role. Poonam has specific expertise on marketing to TNS advises clients on specific growth strategies aroundAustralian by birth, James has 18 years’ experience in the Base of the Pyramid, and on motivational research new market entry, innovation, brand switching andmarket research, across several agencies. James is a and market segmentation and is a regular presenter on stakeholder management, based on long-establishedspecialist in technology and telecommunications across BoP consumers at ESOMAR and other industry events. expertise and market-leading solutions. With a presenceboth rapid growth and developed markets. He has Poonam holds a degree in Electrical Engineering from a in over 80 countries, TNS has more conversations withworked with most of the world’s major companies in this premier Institute (IIT Chennai) and a post graduate degree the world’s consumers than anyone else and understandssector and is increasingly applying working with clients in in Management from a top management school in India individual human behaviours and attitudes across everya more diverse range of sectors. (IIM Calcutta). cultural, economic and political region of the world.Social skills in the classroom: digital media use in Bridging the gap - Anjali Puri is Regional Director, TNS is part of Kantar, one of the world’s largest insight,Sub-Saharan Africa - Mark Molenaar Qualitative Research, TNS Asia-Pacific. information and consultancy groups.Mark Molenaar is Director, Client Service at TNS, based A seasoned qualitative researcher with close to two Please visit for more Cape Town. Mark has been with TNS for over 18 years decades in the industry, Anjali has held a number ofduring which time he has helped clients to understand regional and global roles. She has extensive experience Get in touchconsumer dynamics across different sectors and the across categories in India and Asia Pacific, particularly If you would like to talk to us about anything you haveopportunities that these present for brands. Mark is food & beverage, healthcare and technology. Anjali read in this report, please get in touch viaheavily involved in interpreting TNS’s Mobile Life and has been active in the development of new qualitative or via Twitter @tns_globalDigital Life studies and the advance of digital and mobile methodologies and has been responsible for shapingacross Africa. Share this Gems 37
  38. 38. www.tnsglobal.esShare this Gems 38