The Study discusses how to win trust with the next billion coming from the developing and emerging consumer

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Building trust with the next billion
Nandini Das Ghoshal and Trisha Varma
Warc Exclusive
July 2012
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!!!"#$%&' Building trust with the next billion
!!!()$*+,-./' Nandini Das Ghoshal and Trisha Varma
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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
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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* 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. money
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
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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 low-
income 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
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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.
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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.
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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.
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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!$+),96=&9$@!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 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.
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