Posts

Florian Haller

Good storytelling wins half the battle for young target groups

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.

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Florian Haller

Foreign sells: Why the country-of-origin effect is an important brand lever

Colorful advertisements, television ads and tourism: foreign influences in the major growth markets are getting ever stronger – and they are leaving a clear mark on the perception of local consumers. In addition, the economic opening up of these markets through their WTO entry and bilateral trade agreements are flushing more and more Western brands onto local shelves. The more respected the country of origin, the greater the propensity to buy. Sometimes the foreign brand origin proves to be an important factor in the international brand development. Niklas Schaffmeister (Managing Partner Globeone) and Florian Haller (CEO Serviceplan Group) explain why this is the case and they elaborate on additional advantages of this positioning concept. Read more about this in our new Springer publication “Successful brand development in the major emerging markets” (written in German).

Since the 1970s, research has consistently shown that consumers intuitively attribute positive or negative characteristics to a company or brand when they know the country of origin. This results in a so-called image transfer: associations with the country of origin are transferred to the company or the brand. This country of origin effect contributes significantly to a kind of “subconscious brand DNA” and therefore continues to play an important role in today’s marketing.

Two facets of the country of origin: production and design

For consumers, the non-domestic origin of trademarks is usually indicated by a reference to the country of origin. Sometimes the country of origin is further differentiated into the country of manufacture and the country in which the product was developed (country of design). In principle, the country of origin is the country in which the group headquarter that markets the product or brand is located. However, the product does not necessarily have to be manufactured there.

A country of origin perceived as positive has a positive effect on brands, for example by perceiving the quality of a brand as significantly higher. Much evidence suggests that certain countries of origin increase the prestige factor of brands. The following three factors show why the country of origin plays such an important role in international brand development – especially in the major growth markets.

1. The country of origin as a distinctive feature of brands

As a rule, consumers associate specific ideas with different countries. For example, the USA is considered to be very innovative and technology-oriented. For brands, it can be much more effective to use this existing knowledge of the country of origin effect than to communicate the same qualities and characteristics individually and without reference to the country of origin – for example through expensive advertising.

2. Growing claims are tied to foreign brands

In many growth markets, foreign brands are used to demonstrate social advancement: they are more expensive, not yet very widespread and are associated with high prestige. The preference for foreign brands is usually pronounced in product categories where the country of origin is supposed to have a higher level of competence. The preference for foreign brands is increasing in step with income. Against this background, the emphasis on brand origin offers a cost-saving and effective opportunity to attribute to a foreign brand such characteristics as quality, flawless functionality and excellent design.

3. Limited availability increases demand

Many emerging markets are opening up slowly, which in turn means that foreign brands are only available to a limited extent. Brands from Western countries in particular therefore enjoy a high reputation in these growth markets due to their relative novelty and scarcity. In addition, many local products cannot yet keep up with the products developed in the West.

“Made in Germany”: Germany as a favorite

Among the countries currently benefiting most from a positive country of origin image are Germany, the USA, Japan and Switzerland, due to their tradition, excellent quality and state-of-the-art technology or engineering. “Made in Germany”, for example, has been regarded for decades as a quality feature that communicates prestige and reputation in a great measure. The advantage: the country of origin image cannot really be imitated by competitors and is therefore a sustainable differentiation factor. For global marketers, this clearly means that the better the COO image, the more clearly the origin should be communicated.

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