New Microsoft Office Word doc on CRM

7/28/2019 New Microsoft Office Word doc on CRM

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Incite 2012Continued...GLOBAL CONSUMER CHALLENGE NEWSLETTER SUMMER 2012WWW.INCITE.WSWhilst the world watched in awe as theOlympics opened in London earlier this summer,the same week saw headlines of a 0.7% declinein the UK economy as the developed marketscontinue to recede. Meanwhile the BRIC1markets keep on showing stronger growth thanmost of the world, even through the recentdownturn, with the Next 112 also doing well. AsJim ONeill, Goldman Sachs Asset ManagementChairman who first coined the BRIC acronymand the term Next-11, predicted over a decadeago, these markets are taking the world bystorm with their growing populations and

increasing productivity.In order to survive and drive future successin this new world economy and unlock thegrowth potential in these markets, brandsmust engage with the local consumer ratherthan assume there is such a thing as a singleglobal consumer. Coke and McDonalds are twobrands that realised this early on and are nowreaping the rewards.Never underestimate the local consumerMany companies struggle to unlock this greatpotential as they take their brand and productsoverseas, and fail to make a substantial or

long term impact on the market. For example,while Best Buy appreciated the importance ofChina and pushed hard to enter the market, ithas since had to close its stores and refocus itsstrategy on maximising the profitability gainedfrom its stake in the local Five Star brand.The core of the issue lies in underestimating thelocal consumer and failing to figure out how todevelop a fruitful, long standing relationship withthem.Emerging markets is no longer a fitting termto use for many of the biggest economies in theworld. One need only review the latest GDP

figures or the Olympic results to realise thatthe likes of China and Russia have alreadyemerged, while Brazil has overtaken the UKas the worlds 6th largest economy. Yet theterm is still used. Not only does it misrepresentthe economies it is supposed to encapsulate,it also fails to capture the essence of the localconsumer and leads many global companiesto underestimate people in these markets.BECOMING A LOCAL BRAND


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John Tearle explains how to unlock the potential of growth markets.Brands must engage with thelocal consumer rather thanassume there is such a thing asa single global consumer Incite 2012Continued...GLOBAL CONSUMER CHALLENGE NEWSLETTER SUMMER 2012PAGE 2They are seen as emerging individuals -poor, lacking education and striving to getby, fundamentally basic and therefore easyto engage. The assumption that they areaspiring to be just like consumers in developedeconomies is particularly corrosive.In addition, its easy toknowthe size of thesemarkets, but tough for some companies toappreciatethe diversity within them. Brazilis geographically larger than the EuropeanUnion whilst China has nearly three times thepopulation, yet it is easy to underestimate the

enormous differences within these markets.Going from Xinjiang in western China to Fujianin the east can prove as stark a contrast asgoing from Paris to Prague.This fundamental underestimation leads manybrands to assume, mistakenly, that usingwestern imagery and celebrity endorsementto drive appeal through aspiration, combinedwith reducing pack sizes or product featuresto decrease the price of a product, will ensuresuccess. No wonder so many brands struggle tobecome successful in a new market and haveto retreat quickly, as locally developed brands

shrug their shoulders and sell another millionunits. A great example from the tech worldare the global mobile phone brands failing tosucceed in China as the local brands such asHuawei and ZTE dominate the booming low endsmartphone market.The reality is that these markets have alreadyvery much emerged. Yes, they continue togrow at an incredible pace as their populationand productivity increases; however they arealready established as key players in the globaleconomy. We should similarly consider theconsumers in these markets as well-established

- there is a clear need to recognise that theyare intelligent, passionate people with their ownculture and aspirations built on generations ofhistory that are fundamentally different fromour own.Adapting your core DNA and becoming atruly local brandSo what can brands do in order to realisethe potential that the growth markets of theworld offer? In our view, it is vital to adapt the


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core DNA that runs through a brand and itsproducts to make it personally and culturallyrelevant at a local level. Anyone who has beeninto a McDonalds in India, only to find thatthey do not sell hamburgers, will understandjust how profound this adaptation needs tobe. Furthermore flying to Beijing to find thatthe McSpicy Paneer Wrap you just enjoyed inDelhi is off the list illustrates the importance ofrecognising and embracing diversity. And evengoing as far as tailoring the marketing mix at aprovincial level may be needed in order for abrand to succeed.However it is important to go beyond simplylocalising a product through its recipe orfeatures, with a local cultural referenceplastered on top, and actually adapt what liesat the heart of the brand - all that it does and allthat it stands for. The strongest relationships,for example those between best friends ormarried partners, are developed over a longtime and built on a number of fundamentalpillars. Some of these pillars are as simpleas common cultural interests, but the most

Its easy to spot the size ofthese markets, but tough forsome companies to appreciatethe diversity within themIt is vital to adapt the coreDNA that runs through a brandand its products to makeit personally and culturallyrelevant at a local levelIncite, 6th Floor, The Place, 175 High Holborn, London, WC1V 7AA, UKT: +44(0)20 7438 4950 | F: +44(0)20 7240 9616Copyright Incite Marketing Planning Ltd. All rights reserved Incite 2012

GLOBAL CONSUMER CHALLENGE NEWSLETTER SUMMER 2012PAGE 3important is a deep emotional understandingand bond between each other. Thinking of brandrelationships in this way and appreciating whatdrives a great relationship is fundamental toensuring the success of a brand. The likes ofCoke and McDonalds have spent years buildingrelationships with consumers in India, China andBrazil, just as they did in the US and Europe.The first steps to developing a great brandrelationship are to become fully immersed in thelocal culture, understand the psychology of the

consumers, identify the established behaviouraleconomics at play and then challenge whatis found in order to understand how localrelationships work. Brands then need to use thisinsight to challenge themselves; to look in themirror and recognise that they are not the sameas the local consumer, but that only by adaptingthemselves their personality and the other 4Ps can they can develop a great relationship.In addition to ensuring high availability and


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historically benefiting from weak competition,Nokia has been a success story in the Asianmobile phone market for years due to taking thisapproach. It has spent time getting to know itslocal consumers and grow local relationships.In 2007 then-Nokia researcher Jan Chipchasegave a great talk at TED in California, reflectingon their research into the anthropology of themobile phone and how it can help consumersacross the world manage their lives, for examplethrough using phones as an ATM in regionswithout an established banking structure. Nokiacontinues to take this seriously today as it risesto the challenge of the local manufacturers;investing time in understanding what makes thelocal consumer tick, how Nokia can be a partnerto them and help them through their lives.Time will tell if Nokia and others will prosper butone thing is clear; only by appreciating the localconsumer and becoming a local brand can thegiants of the developed world meet the globalconsumer [email protected]

The BRIC marketsare Brazil, Russia, Indiaand China. They were identified by Jim ONeillas four key markets with particularly highpotential future growth due to their boomingpopulations and/or increasing productivity.Jim predicts that as well as being a sourceof growth, these markets will come to join,and in some cases surpass members of theG7, creating a new world order in the comingdecades. Each of the 4 markets identified hassince gone on to grow considerably in economicand political terms over the past decade.

2The Next-11, also identified by Jim ONeill, area further group of markets where he predictedsignificant economic and / or political futurepotential. These markets are Bangladesh,Egypt, Indonesia, Iran, Mexico, Nigeria,Pakistan, Philippines, Turkey, South Korea, andVietnam.

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