Millions of consumers in fast-growing markets have significantly increased their spending power in the past decade. These consumers are encountering a market environment as complex and swiftly evolving as its counterparts in developed countries. Product choices and communication channels are exploding; so too is the potential of digital platforms.
There are two important factors that have influenced the rapid brand surge in fast-growing markets: technology innovations and consumer confidence. Consumers are willing to spend more money on high-ticket items like cars and luxury goods but empowered by rapidly changing technology – particularly mobile – these consumers have changed how they shop. They wait for the best prices and purchase more mindfully. Therefore, a fresh approachis needed to activate brands, to find new ways to engage with consumers and gain a greater share of life and “share of self”.
Fast-growing brands aim to gain share of life
Many forward-thinking brands are now looking to gain greater share of wallet by increasing their share of consumers’ lives, being present in more ways to make a customer’s life better or simpler. The major ecosystems – Apple, Google and Amazon – serve as models for surrounding consumers with product, services and content. But brands in diverse categories are engaged with customers, in useful and relevant ways, across many aspects of their lives. For example, the Chinese internet brand leaders, Tencent, Baidu and Alibaba are building online banking centers and mobile payment systems. Tesco and the Latin American retailer Falabella are MVNOs (Mobile Virtual Network Operators), are renting capacity from telecoms and branding a mobile service to gain a greater share of customer life.
In a separate innovation aimed at reviving the soft drinks category and remaining relevant, Coke has launched ‘Coca-Cola Life’ in Latin America, with cans that look like Coke but are green, to emphasize both sustainability and health to gain a “share of self”.
Now is a critical time for local brands to build their meaningful differentiator
Local enterprises in fast-growing markets are working hard to match competitors’ offerings with similar products, prices, and packaging. Some brand owners say: “Building a meaningful differentiator for a brand is a long-term endeavor, but we face more urgent sales pressure, and moreover, a good meaningful differentiator, however good it is, cannot translate into sales success.” Is this view right? The answer is an emphatic no!
Over 10 years of the BrandZ™ database, the valuations of more than 50,000 brands shows that those with a meaningful differentiator highly connected with consumer needs achieve average sales growth of more than four times those of their competitors. Meaningful differentiator is obviously a very important driver of sales.
The establishment of meaningful differentiator is better sooner than later, ideally in the early stage development of an industry. Brands must have a purpose and be intent on making some difference in people’s lives, and they must provide something consumers want or need. In the early stage of the brand building journey, local brand owners need to ask themselves some tough questions: “Why does my brand exist? How can I set my brand apart from others?” A prominent example of this thought process is COFCO. The largest food and beverage company in China, it is committed to improving the quality of life of the 1.3 billion people of China by building a complete brand chain from the field to the dinner table.
Ensure an effective brand delivery and encourage experience sharing
Good delivery is critical to a brand’s long-term success, because meaning originates from the brand experience. Ensuring that the brand’s meaningful difference is inherent across all touch points is the key to good delivery. Among the BrandZ Global Top 10 Most Valuable beer brands, four are from Latin America – Corona, Skol, Aguila and Brahma, while Europe and the US have three each. In addition to their aggressive marketing tactics, these successful Latin American beer brands offer consumers a completely different and meaningful brand experience. These distinctions are also evident in the contrasting brand personalities. Latin American beer brands are “sexy”, “playful” and “fun”. Those from Europe are more “desirable” and “brave”, while the US brands have less distinctive personalities.
Smart brands not only deliver a distinctive experiencebut also invite consumers to share their experience, rather than share their product. In Latin America, Huggies moved the hearts and minds of parents when, to celebrate Friendship Day, it delivered a special crib for two newborn babies to a maternity ward. Bringing two boys together meant each had their first friend. And Huggies created a moment parents would never forget.
When fast growing-market consumers perceive a brand being meaningful and differentiating across all the major touch points, including in-store and e-commerce experience, they are far more likely to consider adding that brand to their repertoire. This once-in-a-lifetime brand building opportunity is now up for grabs in fast growing markets; let’s go for it.