The dynamics in major growth markets can hardly be surpassed. Many things change at the same time. International brands and new local champions battle it out for market share. Entire development leaps in electronics, cars and Fintech turn markets upside down. Moreover, there are consumers who learn quickly, who are not really loyal and feel confident enough to try out lesser-known brands at an early stage. This makes customer loyalty a problem. Traditional brand loyalty campaigns often fail in the major emerging markets. This is also due to the fact that consumers climb up the premium ladder quickly. They are constantly raising their expectations and want to showcase their new status.

Marketing managers have to deal with extremely mobile target groups. Brand loyalty often puzzles them: What motivates customers to remain loyal to their current brand? Does the cultural background play an important role? Many questions, but only one certainty: In an environment such as the major growth markets, product and brand managers must know their customers particularly well. They need to be as close to them as possible, communicate with them through the most effective channels and give them the full range of brand experience. Dr. Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group) provide some useful tips – all details can be found their new Springer publication “Successful brand development in the major emerging markets” (written in German).

1. Pole position first, then flatfoot: How VW pulled out of the loop in China

Volkswagen China is a good example of how important customer loyalty is in large growth countries and what pressure can build against a company. After entering the market in the 1980s, VW initially succeeded in capturing a share of more than 50 percent. But after the WTO accession in 2001, the market share of the Wolfsburg-based company fell below 20 percent. Nevertheless, VW managed to remain number one in China, despite the growing number of buyers who are willing to buy larger cars or experiment with other brands. Brand loyalty reaches about 80 percent in western car markets. In China it is only ten percent. In China, one third of all buyers now buy their second or third car. This makes customer loyalty a huge challenge. VW has responded by significantly expanding its model portfolio so that customers have a wider choice. In addition, a retention strategy was developed. This includes a standardized recording of the most important expectations and the drivers of loyalty. In addition, a strategy for after-sales management (CRM) was developed and consumer motives were analyzed in detail.

2. “Malina” and the card trick: Increasing loyalty through cooperation

There are numerous examples of successful customer loyalty programs in large growth countries. One of these is the “Malina” campaign in Russia for five partners, all of whom were market leaders in their respective product categories. Participants included the Rosinter restaurant chain, the telecom company Vympelcom and the BP-TNK service station chain. Together with Visa Card, they issued a credit card as part of Malina. All family members of the cardholders were able to collect points on a joint account and earn bonuses. In the first year after the start of the program, 2.1 million cards were issued. After two years, Malina was the leading loyalty program in Russia. Rosinter-Restaurants and TGI Friday’s, another partner of the initiative, experienced a double-digit percentage increase in the transaction volume of their cards.

3. Special privileges: How to satisfy the hunger for privileges

According to an EY survey, customer loyalty in India is only about half as high as in Europe and the US. So how can you keep customers who are willing to change? The COLLOQUY Cross-Cultural Loyalty Study, a global “commitment compass” that examined consumer attitudes in Australia, Canada and the US as well as in the emerging countries Brazil, China and India, provides helpful insights. The study confirms that consumers in emerging markets demand “special service” three times as often as discounts and privileges. And now comes the crucial point: almost three times as many buyers in emerging markets declare that loyalty to their preferred brands pays off. This is clear proof of the potential of customer loyalty programs. Preferential treatment and rewards are appreciated by customers all over the world. But nowhere is the desire for VIP treatment more distinct than in the large growth markets.

Most companies are convinced that their brand has fully exploited its potential. But far from it: the brand can only score maximum points in the target group if its tradition, its promise and its unique history are well known. The most general definition of a brand is: “The consumer’s idea of a product or service”. So it’s not just about knowing and recognizing, it’s above all about associative connections. Clearly, this is the big moment of storytelling.

And this often starts from scratch in young markets. After all, international brands are often completely unknown to local consumers and potential customers in the major growth markets. In 2013, 70% of Chinese car buyers were still first-time buyers. Most of them had just obtained their driving licenses. They had no product or purchasing experience. Many of them had never been in a showroom before or had dealt with the technical aspects of an engine. For Western brands, this is a challenge, but also a great opportunity. Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group) therefore explain the cornerstones of an engaging storytelling. Further details on that can be found in our new Springer publication “Successful brand development in the major emerging markets” (written in German).

1. Brand knowledge: Managers like to overestimate consumers

A well thought-out strategy with determined implementation is needed. When formulating the strategy, marketing cannot simply assume that the target group being addressed already has the necessary knowledge of the brand simply because connoisseurs of the company are familiar with many details. Brand managers often overestimate what consumers already know. This often results in communication campaigns that do not go far enough. But it is imperative to explain what the brand in question stands for. If this is done in a committed, interesting and motivating way, a lot can be gained. It is important not to overload the storytelling with messages. Target groups in emerging markets are usually 10 or 20 years younger than those in developed Western markets.

2. Understandable messages: Consumers must be addressed in their language

In the new markets, the 30- to 40-year-olds belong to the richest target group, which is already accustomed to exciting and committed marketing techniques. If a bank argues with traditional terms such as “trust” or “security”, its marketing message will not automatically be well received by these “newly-rich” consumers. Many people in these middle income brackets are also consumers without good foreign language skills. Don’t use too many English and technical terms. Admittedly, design and other concrete arguments of conviction are very important for this. But they must be communicated to consumers who are generally not technical experts in their own language. They must also be made aware of why this brand in particular meets their specific needs. Making new customers familiar with the brand requires patience.

3. Tradition is the trump card: With the brand history to the price premium

Every brand strategy must have enough space to tell the history of the brand. You have to take enough time to explain why your brand is unique and how much time it took to become a leading brand. The traditional aspect and the associated foreign brand image are the only sustainable competitive advantage that cannot easily be imitated. Those who tell their own story thus have the opportunity to achieve a clear price premium for the brand, compared to local competitors. This goal can be achieved with clear language and simple explanations as well as with visual clarity and a creative implementation of the campaign. This is the only way to break the communicative flooding in megacities.

4. Educating the consumer: For each product there are instructive campaigns

Educational campaigns or brand academies are particularly suitable for informing a target group about the brand history and special unique selling points. There are many educational examples of awareness-raising campaigns. For example, the highly creative and very successful “MINI Academy for Rapid Learners”. Its success is due to the fact that it has been excellently integrated into the local cultural framework. In Europe, MINI has the image of a cheeky, flexible and individualistic small car. In 2009, the brand was still not able to develop the hoped-for potential in China so quickly. In China, the MINI was initially considered a cute little car for young women and a fun car for young people as a whole. Men and older customers were underrepresented in this group. The MINI managers wanted to make “the most exciting small car in the world” interesting for a broader group of buyers. To this end, a creative strategy was developed around the themes of “dynamic driving experience”, “cult design” and “tradition”. A MINI Academy was founded to inform Chinese consumers about the rich tradition and history of the MINI brand. The Academy was a platform that made it possible to communicate within the local cultural environment via different media channels and at the same time to establish a strong connection to the Chinese mentality.

There are many success stories proving how well storytelling can attract young target groups in growth markets. The history of the brand and its special features must be clearly highlighted. Educational campaigns with instructive and easy-to-understand content are achieving great success.

Digital is where consumers are watching brands.

Digital India is the big buzzword on everybody’s lips these days but the scale at which digital penetration is about to explode will ring a bell in your mind.

The key to success for any business in India, is to have a strong digital presence these days. Relevant content on mobile which entertains, informs and engages the consumer is definitely a winner for the 4-screen Indian viewer. Indian internet users who are living in metro cities spend about 24 hours on the internet every week. [Daily the Germans spend at least 2:08 hours online. Users who also go online with mobile devices spend 2:43 hours a day (Source: That’s half an hour less than the Indian users.] Women internet users are rising but the average time spend by women is less than men. However, there is a huge demand on content online. Indians are spending 9.9 hours per week watching traditional broadcast TV, parallelly they also browse smartphones, stream video and watch TV on their laptops or smartphones.

Video Content Consumption

Indians are mostly engaging for downloading video. 82% India’s video streaming audience access video content every week. India’s massive smartphone user base an average video streaming time of 7.4 hours per week. This creates a great opportunity for content creators and distributors so there is an enormous potential for content distribution on digital devices.
[Europe is way behind:]

What are Indians watching?

3Music Shows / Music Videos77%
4News/current affairs from local TV networks77%
5News/ current affairs from overseas TV networks70%
6Local drama series69%
8Local sport, available on local TV66%
9Overseas drama series65%
11Overseas sport not easily accessible on TV59%
12Children’s programs32%

Source: Nielsen (2015 VOD)

Research Online – Purchase Offline

Consumers in India are researching for online information on any product they have to purchase. They are reading recommendations, people’s experiences, seeking digital opinions before they make a final purchase on goods/services. Recommendation from social networks or friends is something, which is highly in trend these days; a lot of brands are looking for testimonial based ads with real consumers.

The Smartphone Consumers

The number of smartphone users growing everyday, at a very fast rate. There are 170 million internet enabled smartphones currently in India with about 3 million added month on month for the next one year. There is also a boom in “app” business to woo consumers.


Globally Indian ecommerce market is to grow fastest. Today ecommerce is an indispensable part of every Indian’s life today, with homegrown brands like Flipkart, Snapdeal, Myntra, urbanclap wooing the consumers with different tactics every few weeks while Amazon still going strong to provide the bigger platform amongst all. Today ecommerce is offering all kinds of goods and services at the door step of the consumer. Convenience is the key here across all categories of groceries, beauty salon, taxi, solutions, FMCG etc.
The ecommerce sector has seen unprecedented growth since 2014, almost by 34% compound Annual Growth (CAGR) from US $ 3.8 billion in 2009 to US $ 16.4 billion with a projected growth to hit US $ 100 billion by 2019.
Increase in the online shoppers in India from 20 million in 2013 is to 40 million in 2016.

Factors that foster growth in the current Indian landscape are:

  1. Increasing disposable income across households
  2. Expanding Urban scenario
  3. Small families
  4. Evolving preferences
  5. Ecommerce


We are looking forward to dive deeper into this discussion with the “Serviceplan International Roadshow: INDIA INSIGHTS” on Tuesday, November 22nd 2016 at the House of Communication Munich. Are you interested in participating in the event? Please contact the dedicated event team via email. The number of participants is limited.

Download invitation.