Many brands and marketing agencies have set up bases in Asia to make the most of opportunities in the region. With the recession lingering in Western markets, Asian countries may offer better short-term returns.
But a survey exploring the relationship between Asian consumers and brands suggests that businesses hoping for success in the region need to stop targeting by demographics and focus on the “brand tribes” to which people belong.
The research from WPP-owned marketing communications company Grey Group, the fourth report in its Eye on Asia series, identifies five brand tribes that it claims can help marketers better understand how to target Asian consumers.
The survey covers 16 countries from the Asia Pacific region, including China, India, Australia and New Zealand.
While each country has a distinct personality of its own, the research indicates many of the nations have similar “tribes” within them, which can help marketers plan appropriate campaigns using the right channels to make an impact.
Steve Yi, chief strategy officer at Grey Korea and part of the group’s Asia Pacific regional strategic planning council, says marketers are missing a trick by running campaigns aimed at particular age groups. Instead, Yi says that marketers can understand how their brand fits into Asian culture by seeing which tribes are “consistently showing up across Asia”.
The “new brand enjoyers” tribe, which accounts for 21% of consumers across Asia and is particularly prominent in China, India and Vietnam, comprises people who like the novelty of new brands and seeking out new products.
This type of consumer is always on the look-out for the “next new thing”; brands that are entering the market for the first time should look at where people are more likely to buy into the latest thing when planning how to execute a launch. It makes sense to begin campaigns in regions with a high number of “new brand enjoyers” where they can pick up buzz.
Yi adds that tracking where this tribe is most prevalent will also help marketers determine how much marketing spend to allocate to a particular country and what channels to use.
“I might launch a full-blown campaign in Vietnam and China because they have larger percentages of new brand enjoyers,” he says. “But then use an intermediate campaign, such as a word-of-mouth initiative, in places where there are fewer brand enjoyers.”
The Philippines has few new brand enjoyers, according to the research, and instead has a greater bias towards the “perceived value seeker” brand tribe, with 41% of the population falling into this category.
This group of people wants value for money and an emotional connection from their brands, so they won’t necessarily buy the cheapest product available. Nor will this tribe automatically buy the top brand in a category simply because it is the market leader. Instead, they might consider a recognisable brand name with a reasonable price tag attached, looking for a balance between reputation and cost. Other countries with a high percentage of “perceived value seekers” include Malaysia and Taiwan.
More developed economies tend to lean towards the “individualistic believers” tribe. These consumers want brands that fit into their fashions or trends. Japan, Hong Kong and Singapore have higher percentages of this brand tribe and Yi suggests the branding and marketing needs to be much more personalised to appeal to this audience. They do not want a one-size-fits-all solution.
Yi also warns that the old preconception that Asian consumers are devoted to luxury brands is also under threat. The “status seeker” tribe still exists in Asia but this group is becoming less common.
“Status seekers” are the consumers with high-end fashion products sporting prominent logos. They are used to demonstrate a certain level of wealth and taste to other people in society. Yi says: “This group is in decline. It used to be that in Asia you could launch a ‘luxury’ brand and everyone would just buy it. But now it’s not such a big deal anymore.”
There is now, apparently, a much more sophisticated market in operation, where Asian consumers are demanding much more from their brands than simply a luxury label. One such brand tribe demanding more is the “function first” tribe, which demands performance above all else. This group is most prominent in New Zealand and Australia, but overall 16% of consumers fit into this tribe throughout Asia.
Yi explains: “It’s more about pragmatism. They need something to work and be functional rather than have a funky design that will break down in two days.”
But that doesn’t mean branding isn’t still important to this tribe. It simply needs to effectively link the brand with the product or service’s actions. “The brand needs to represent performance and durability,” Yi claims.
The five tribes are not merely an Asian phenomenon. While they are specific to this area, some of the trends can also be seen on a global scale. For example, the US and Europe have a high number of “individualistic believers”, which are more prominent than in Asia. There is also a great appetite for customisation in Europe and the US. There are few status seekers in both of these markets.
Yi says that marketers should not treat Asia as an entirely different market from other regions such as America and Europe. There are lots of similarities between Asian countries and other regions but by understanding the variations between markets and within countries, planning a campaign can be easier for brands.
Yi claims: “There are a lot of centralised hub systems opening in Asia to create cost efficiency, creating a single-minded campaign throughout every market.”
This doesn’t mean that every global campaign has to change completely to suit one tribe or another, he argues. “You can plan a single-minded campaign from the hub but change the channels around, depending on the number of psychographic segments in any particular country.”
Despite this reassurance for any brands or marketers more familiar with Hampshire than Hanoi, there are some marketing methods that simply don’t translate from the UK or even within Asian territories. For example, direct mail is an absolute no-no in Japan. Respondents to the survey feel that receiving a letter from a stranger is an invasion of their personal space. Whereas in other countries such as South Korea and Hong Kong, between 30% and 40% of people say they have purchased something via direct mail.
Online shopping is also affected by country. Internet purchasing in Asia does tend to lag behind Western countries; there is still some scepticism, particularly in China, about whether online traders can be trusted. For the moment, brand loyalty is far easier to establish through physical shops, particularly department stores.
Brand preference also differs greatly from country to country when it comes to home-grown versus foreign-owned marques. In China, 72% of consumers prefer foreign brands to their own country brands, whereas only 10% of Japanese consumers prefer foreign brands to local. But this is changing as countries such as China establish more intellectual properties and rely less on purely manufacturing goods for brands in the West and other regions.
The pace of development in Asia means that any conclusions marketers draw will need revisiting fairly quickly to see if they still hold true. Brand tribes and their shopping habits are likely to adapt as countries such as China and India are exposed to more global brands and marketing techniques.
But for now, Asia offers marketers and businesses the chance to ply their trade in less mature markets where it sometimes seems that anything is possible. A little bit of sensitivity in understanding tribes may help marketers develop more effective campaigns so that the financial results live up to the promise.
Trends that other marketers are noticing in Asia
Chief marketing officer of Hewlett-Packard
Being a global company means we need to communicate well to all our audiences, wherever they are. Of course, the methods we use may differ from region to region to empathise with local customs, but the brand message always remains the same and aims to develop the same consumer engagement that we would hope for in any country.
For us, the Asian market is especially important. With most technology vendors having a high marketing presence in countries such as Japan or China, where their headquarters are based, there is increased pressure on us to stand out.
This is where the importance of storytelling comes in. In every region, we have to use a compelling story that hooks a user and makes them think about HP as their source for computing-related products – be that hardware or software. Certainly, that means making the brand seem enjoyable and have value for everyday people.
When I worked at Disney, it was important to reflect the enjoyable lifestyles people have in these regions, which is reflected in so many of the TV ads they have in these areas; that sense of fun still exists now, and simple modifications to ads from other regions can easily enable this.
Managing director of entertainment media company Galleon
There are a number of trends emerging in Asia that anyone producing content needs to be aware of. Treating Asia as a generic term is quite dangerous as you’re dealing with very different cultures and very different histories.
The second trend is very early adoption of new technology. If you look at China, Korea, Hong Kong and Japan, there’s a very high appetite for content being available on multiple platforms.
If you’ve got an inspirational theme to your content there is potential to have something that can travel quite well. But if you’ve got something made that’s very localised to that culture it’s much more difficult to roll it out to a wider audience. Sport, fashion and family-targeted programming works well in Asia.
Hong Kong managing director of brand and digital consultancy Start Creative
When you look at how people shop online in Asia compared with Europe and North America, there’s a broader trend that you need to consider.
Online shopping in Asia is behind by quite a distance compared with the rest of the world. One reason is connectivity; another reason is trust particularly in China, although this is changing. China now has more people online than any other country in the world but only about 20% of internet users in China have bought something online.
People are becoming much more savvy. It rings true that China prefers foreign brands but it is changing as companies are learning more about how to build their own brands. A lot of Chinese brands not only want to establish themselves in their own country but want to compete internationally.
The youth are streets ahead in Asia in their use of technology so marketers should put digital at the heart of their marketing strategy and not as a bolt-on.
You have to differentiate between the different countries – you can’t take Asia en masse. Vietnam and Singapore are relatively close together but they are very different, so you have to be very careful about taking a very broad brush approach to things. The key for any brand in engaging an Asian audience is to put digital at the heart of the strategy.