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By SMG Research Team, December 22, 2011 1:20 pm

How do we capture the interest of our lower tier consumers?  How do we make them sit up and take notice of us and our brands?  And even more, how can we ensure that they will go out and talk to others about us?

This is what we will be exploring this week – week 9 – the very last week in our Yangtze Study discussion on China lower tier consumers:  Entertain me!

In this 9 part series, we had started off with a macro perspective on China’s lower tier consumers and then dug deep into their hearts, minds and motivations, unraveling their thoughts and their viewpoints on areas such as life, luxury and the brands they buy.

With this post, we wrap up our year at StarcomChinaBlog.com.  We at Starcom China wish you happy holidays and thank you for tuning into our site and taking the time to read about our research and studies.  It has been a fast-paced (and fascinating!) year and we look forward to what 2012 will bring.
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While virtual communications and entertainment have become a part of everyone’s lives in some way, there is still a lot to be said for the tangible communications we see, those we can feel and those that can teach us more than we even realize in the moment.

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OWNED MEDIA IS THEIR OOH MEDIA

When we look at lower tiers, owned versus paid media takes on a whole new meaning.  Branded equipment, displays, promotions and give-aways are very welcome here.  There are Coca-Cola emblazoned umbrellas on top of Coca-Cola tables…  Coca-Cola and many other brands names are seen on useful objects such as tables, benches, chairs, and umbrellas.  This is what we mean by owned media as out of home media; these useful objects are “channels” that the brand owns and controls, yet they can also be seen by lower tier consumers are OOH media.

This is seen frequently in lower tiers mainly because there simply aren’t as many (and as sophisticated) OOH spots (compared to higher tier cities) available for brands to purchase.  Also, brands that can make themselves useful to the lower tier consumer’s every-day life can make an impact – especially since lower tier consumers are not typically going out of their way for specific brands, so that last minute reminder holds a lot of weight.

To shop owners, it becomes part of how brands add value and how they build their loyalty, by providing them ways to stand out, drive sales, and help their consumers (by providing them shade and seating, for example).

As brands, we need to understand what both shop-owners and consumers need and want versus what assets make sense for a brand.  For example, picnic umbrellas and tables may make sense for Coca-Cola, but would that still work for, say, washing detergent?

For shoppers, particularly in lower tiers where formalized OOH is few and far in between, it becomes that chance to show “bigness” and distinctiveness, feeding a part of their brand consideration mindset that helps them see and understand which brands they should be paying attention to.

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COLOUR THEIR WORLD

In a community where people generally have more time on their hands and life may just feel a little bit repetitive at times, new and noteworthy events add something different and exciting to their day.  There’s a power to OOH events in lower tier cities that transcend the ‘reach potential’, as they are able to create strong buzz and word-of-mouth amongst these close-knit communities. Think of the mom who is out all the time and looking for ways to entertain both her and her child. As one mom told us: “Outdoor events liven my day. When my little daughter and I go for our daily walks, every once in awhile there are events in the town square and that is delightful to us.”

Take a look at this example from China Mobile.  When they launched their 3G service, they wowed the local consumers with a pole dancing display in Qingyuan, Guangdong – drawing huge crowds and making it the focal point of the city’s People Square.

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Says Lisa Richert, Strategy Director, North Asia

“Whether one-off events like this or sustainable events, such as creating playgroups or youth study sessions at QSR outlets or creating movie nights in the public square for people to meet, be entertained and learn, large brands can feel more approachable through simple executions brought to life.”

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STOPPING POWER OF CELEBRITY

In lower tier cities, celebrities are seen almost as a well-known ‘friend’ – due to their familiarity and constant presence.   Thus, they are sought out and referenced – and definitely not ignored.

Chatting with our lower tier consumers, some spoke of how they like supporting celebrities they feel they know.  Some say that celebrity-supported brands are more trustworthy, while still 0thers said that they don’t think celebrities have purchase influence.  But the one thing everyone agrees on is that when they see a celebrity, they pay attention.  In their eyes, the celebrity is a bond between them and the brand.   Few lower tier consumers have desires to be a celebrity… but they pay attention to what celebrities have to say.

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Says Jeffrey Tan, National Research & Insights Director:

“Celebrities can become part of those simple visual cues for the brand, giving greater value to the message and medium.  Think about how many further assets your celebrity endorsers can be leveraged across.  But also be aware and understand of their power – do not give them more credit than they deserve.”

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“Julia Roberts” in Guangdong

Speaking of celebrities, we had an “unknowing” celebrity in our Guangdong exploration. It turns out that a lot of people in lower tiers have never seen a Caucasian before (especially one as tall as Lisa).  The school kids in Qingxin county were extremely excited when they saw Lisa because they thought that she was Julia Roberts. They even shouted across the school fields “Hello! Welcome to China!”

Could western celebrity endorsement in lower tiers be more impactful than local, or potentially more differentiating?

APPEAL OF BRANDED ENTERTAINMENT

Product placements strike a chord with consumers.  It has a way of creeping into their subconscious and making them think differently about brands. It gives brands a platform to creatively showcase their brand essence through entertainment.

This is an example of what Starcom’s LiquidThread (our branded entertainment unit) did with M&Ms in China.  This TV host interviewed an M&M, delighting the audience and viewers.

As we increase the video platforms we look at and more TV regulations are imposed for TVCs, brands have a growing need to think differently about the content they create across these platforms.  We have talked about education and entertainment today – how will we bring that to life in video?

As we can see here, across tiers, the value of seeing a product or a brand in context, being used or discussed in the right environment carries a lot of value – even if that environment is fictional…

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We have come to the end of our 9-week discussion on China’s lower tiers… and we could keep going on and on about it! We have many more learnings, across categories, target groups and regions.

We love this quote “Be not afraid of growing slowly, be afraid only of standing still”.

We have taken these words to heart as we embarked on this Study.  We know that there is so much left to learn but we appreciate all that we have learned so far.

We look forward to continuing our journey into the next chapter for China.

We would also like to thank our Sponsors, the Coca-Cola Company and the Wrigley Confectionary Company, for without whom this beginning would not have been possible.

Thanks and Happy Holidays!

All our best, from everyone at Starcom

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Starcom MediaVest Yangtze Study – Insights Links:

Week 0: Kick-off and study details.  Click here.
Week 1: It’s a Matter of Perspective – Click here.
Week 2: The Secrets of the Heart – Click here.
Week 3: Celebrating the Power of Family – Click here.
Week 4: Unveiling Community Dynamics – Click here.
Week 5: The World Outside My Door – Click here.
Week 6:  Purchases and Product Consumption – Click here.
Week 7: Who Do I Turn To? – Click here. 
Week 8: Digital New World – Click here.  

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By SMG Research Team, December 12, 2011 5:22 pm

Happy December!  Thanks for tuning into our Starcom MediaVest Yangtze Study on lower tier China consumers.  We have 2 more posts to go and we’ll be concluding our discussion.

This week, we take a good hard look at media usage amongst lower tier consumers; specifically their digital and mobile usage.

If you have just started reading, please scroll to the bottom to find links to previous week’s insights.

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If talking is in our nature, digital has become the great enabler.  As we start to look at media consumption and media habits in lower tiers, we find that despite a more simple and rural living; digital has become a crucial and integrated part in their lives.

UNITED DIGITAL REPUBLIC

The digital wave has hit China… and what’s more, it has hit China’s lower tiers with force.  Digitals overall reach is ranked 3^rd – right behind TV and OOH.  But more than this, all you need to do is look around the homes of people in lower tiers.  TV may still occupy the center of the home, but the computer and mobile is the place the younger generations are choosing to spend their time.  In fact, online alone has the potential to replace CCTV as the most widely reached media for Tiers 1-4.

TV and OOH still have the greatest opportunity to reach people but as you can see Digital is fast catching up:

And across tiers, China is speaking with one voice – the medium they are looking to spend the most time with is their computers

It makes sense when you take a look at the Chinese family structure – especially in lower tiers.  Several generations are still living under the same roof.  There is only one TV in the one living room, and this is where parents and grandparents gather to watch their shows.  Where does this leave the younger generation?  Retreated to their room to spend hours on the PC (or on their mobile, for those who do not have a PC/laptop at home) to stream or download their favourite shows to watch.

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Lower tier netizens are also looking more for ways to stay connected versus to explore.  They prefer to stay with the tried-tested-and-true sites that they know and will not stray far from sites they are familiar with.  Thus, their online use tends to be limited to a few sites only.  Many even say that they have set icons of their favourite one or two sites on their desktops so they can click and go quickly and easily without even opening their browser.

Time and again, video streaming and QQ are the most (or only) visited sites.  Their mantra seems to be: “Keep me connected and keep me entertained”.

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Says Lisa Richert, Strategy Director, North Asia:

“With this growth, we need to “nationalize” our digital strategies.  Now, this does not mean one size fits all.  But it does mean that we need to stop thinking that digital engagement is something only for the upper tiers.  The opportunity lies in understanding what our communications objectives are, what the pull points are in lower tiers within digital and seeing where they match.”

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MY COMPUTER IS MY TV

Speaking of entertainment, online entertainment – especially video – is a favourite way to pass time. Many younger consumers may not even own a TV anymore.   We visited flats of young lower tier singles in their late 20s and early 30s and a TV was nowhere in sight.  Instead, they made a bee-line to their computer as soon as they got home and turned it on and immediately logged onto QQ.

Despite this, their other online interactions are quite limited.  They don’t think of using the internet for other things, such as meeting new people or exploring passions or even just surfing the web to see what’s available.  They know what they want to do – and that is usually to watch online shows or chat with friends they know offline on QQ.

Granted when we add all of the TV hours up, they are significant.  The point is that Online Video is not just starting to grow… it IS a vital channel where people are looking for Content.  It has now become a media which we need to consider alongside TV.

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As online video penetration grows, this helps answer to another lower tier struggle – literacy.  One respondent from Qingyuan said that she only has middle school education, so she can’t read many words.  That’s why she prefers online video over searching for information online.

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Says Jeffrey Tan, National Research & Insights Director:

“We are highlighting a huge opportunity across tiers – video neutral or screens planning – leveraging not just different kinds of TV but all the different forms of video contacts when planning your media campaigns.  The people that consume our products are changing how they consume our Content – we need to expand with them and bring our messages to the different places where they are.”

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MY MOBILE, MY CONSTANT COMPANION

No matter where across China, mobile is the medium that has the greatest impact on people’s daily lives.  Even for lower tier consumers who cannot afford a computer, or even a TV, they are sure to have a mobile.  And with the penetration of 3G throughout China, mobile internet is taking off in a big way.

Students without computers download videos from their friend’s computer or through school to watch on their mobile at night.  Mobile QQ keeps them company as they use their mobiles to stay connected with friends and family living in other cities.

This young lady is Ms Wu and she is 17 years old.  Her daily routine is to chat on QQ using her mobile while lying down in bed until she falls asleep.  She doesn’t have a PC and uses her mobile as her lifeline to others.

We need to make sure our content and our interactions are compatible for people like Ms Wu. Particularly in lower tier markets, we may need to change our thinking so that we put mobile as our primary consideration and tailor messaging to the way accessibility and navigation is designed for mobile.  Leveraging the growth of LBS (Location Based Services) in China to tailor information to be more region-specific may be very powerful in lower tiers.  Offer opportunities at the shelf, on packaging, on OOH boards to draw people in.

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The desire to talk and connect has come up time and again in our study.  From wanting new things to talk about to how the online space is keeping lower tier consumers connected as well as entertained.  All of this fits with mobile, as we look at the spikes for mobile instant messaging (IM).

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Starcom MediaVest Yangtze Study – Insights Links:

Week 0: Kick-off and study details.  Click here.
Week 1: It’s a Matter of Perspective – Click here.
Week 2: The Secrets of the Heart – Click here.
Week 3: Celebrating the Power of Family – Click here.
Week 4: Unveiling Community Dynamics – Click here.
Week 5: The World Outside My Door – Click here.
Week 6:  Purchases and Product Consumption – Click here.
Week 7:  Who Do I Turn To? – Click here.

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By SMG Research Team, December 2, 2011 3:50 pm

We are starting to wind down our deep dive on lower tier consumers via the Starcom MediaVest Yangtze Study.  This is week 7 and after this, there are only 2 more weeks to go.  So stay tuned as we conclude our discussion of the study…. And as we count down to the end of the year!

This week, we are looking at trust and relationships in lower tier cities.  How lower tier consumers communicate and who/where they place their trust: Who Do I Turn To?

If you have just started reading, please scroll to the bottom of this page to get caught up.  I have listed all the links to previous insights in this series.

As humans, it’s in our nature to talk, listen and share… to build relationships with others.  As we look to people in lower tiers, conversation takes on a new meaning – especially when much of your life revolves around the same people day in and day out.

When you’re surrounded by familiar faces all the time and living a relatively slower pace of life, it’s enjoyable to sit and ‘shoot the breeze’ with those around you.  But what does one talk about in their small town, with arguably fewer happenings?  That’s why we need to…

GIVE THEM SOMETHING TO TALK ABOUT

In these small towns, today’s routine is likely to be the same as the day before, so anything new is worth mentioning.  Gossip is rampant – for everyone knows one another, and life is simple.  That’s why when you are the person with interesting news of events, experiences or local happenings, you have social currency worth its weight in gold.

Gossip becomes mixed with stories of sales, promotions and new products.  Window shopping becomes fuel for conversation.  Advertisements, branded content, samples, events – anything that can entertain or educate has the opportunity to endear a brand to a future consumer.

As brands, we should think about ways to help local shops create excitement around a new launch.  Think about what type of owned media you can use to brighten shelves and aisles.  Give them large “talkable” points in the form of interesting facts, or new technology, which consumers can take and share with their friends.  Be big and bold, yet informative and accessible.   Above all make sure the “talk” you create has legs to stand on and a hook to draw these newly-informed consumers back to the store to make a purchase.

Lower tier youth, especially, view themselves as having a wide network of friends and family that they keep in touch with.  This is extremely important to them, as these relationships are their source of entertainment, companionship and support.

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While we now know that they love talking and sharing/hearing new news, this doesn’t mean that they are thought leaders.  In fact, they are …

MORE OFTEN A FOLLOWER, NOT A THOUGHT LEADER

Lisa Richert, Strategy Director, North Asia explains it well:

“We all know that intelligence is not based on solely on where you are from or how much education you have.

But too often we forget, especially when we think of our own stereotypes of people in more rural areas.

The people in lower tiers though are not stupid or simple-minded – they are just not exposed to as much information or news as their upper tier counterparts.  They know they exist in a world where they are often the last to receive any news.

So they look to Brands to educate them on the category, provide them with a perspective, and help them build their knowledge and have “safe” avenues for questions.  Information gives them the confidence and conviction to act.  The brand that helps guide their knowledge without talking down to them will be seen as being that much stronger and more appealing.”

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Saving or keeping face is a universal truth across tiers.  If the confidence is not there, the best answer is keeping silent.  Our opportunity as brands is to see how we can help enable people to be more confident in the choices they are making for themselves.

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And ultimately, people trust people.  It’s just that simple.

TRUST IS A PERSON, NOT A THING

As we move into lower tiers, we see that people have less trust for pure advertising.

Friend’s experiences and referrals hold infinitely more sway than advertisements.  However, trust is not only reserved to friends and family, but also to others who our consumer views to be ‘experts’.  These include sales associates and shop owners.  Often, sales associates may not have that much more knowledge about the brand, or their information may come from the same sources as the consumer (e.g. TVC and other types of ads), but due to their position, they are viewed as authority figures.  This shows the importance of educating sales associates who have a direct influence upon the sales of your brand in lower tiers. Trial is also an important push for lower tier consumers.

It is also common for lower tier parents to defer the purchase decisions to their children, viewing them as being more educated and knowledgeable about products.

Says Jeffrey Tan, National Research & Insights Director:

“As we think about youth, this power they have with their parents as well as their peers is worth exploring.  Learn how they influence as well as how they make household purchases.  Ease their trial through sampling; through smaller and more affordable sizes for trial purchase.   See whether it’s possible to build school locations into sampling or distribution plans.”

It is evident how much power their peers have upon lower tier consumers.  This works in two ways:  First, it is about people who they know personally, but secondly it is also due to the value of people like them.  The next best thing to me is someone I see as being like me.

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Previous insights for you to get caught up on if you’ve missed any:

Week 0: Kick-off and study details.  Click here.
Week 1: It’s a Matter of Perspective – Click here.
Week 2: The Secrets of the Heart – Click here.
Week 3: Celebrating the Power of Family – Click here.
Week 4: Unveiling Community Dynamics – Click here.
Week 5: The World Outside My Door – Click here.
Week 6:  Purchases and Product Consumption – Click here.

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By SMG Research Team, November 25, 2011 5:57 pm

Thanks for stopping by to join our discussion on lower tier cities.

If you have just started reading, please click the following links to get caught up with our study and to read about previous insights.

Week 0: Kick-off and study details.  Click here.
Week 1: It’s a Matter of Perspective – Click here.
Week 2: The Secrets of the Heart – Click here.
Week 3: Celebrating the Power of Family – Click here.
Week 4: Unveiling Community Dynamics – Click here.
Week 5: The World Outside My Door – Click here.

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This week we take our learnings from previous weeks – about the hearts, minds and motivations of lower tier consumers – and we apply these to the commercial world and how they view products and purchases.

When it comes to purchases and consumption, lower tier consumers differ quite significantly from their top tier counterparts.  However one thing that they do not differ in is their desire for good, safe products.

LET THE BUYER BEWARE

Lower tier consumers are aware of the scandals plaguing China’s food industry.  While their knowledge of food scandals may not be as in-depth as top tier consumers, they are still savvy and suspicious of what they serve to themselves and to their loved ones.  Thus, when they are unfamiliar with the category or brands, they will turn to external cues to lead them to making the right decision.  These cues may be big brand names that they saw on TV, or which they have heard their friends talking about.

In lower tiers, advertising is important as a means of establishing credibility.  Their thinking:  the more money you’re able to spend on advertising, the more legitimate you must be.

Says Lisa Richert, Strategy Director, North Asia

“As the saying goes, “Trust is so hard to earn, but it is also lost so easily”.  As brands, we need to lead with simplicity, not over-complicating.  People want cues to help them know the quality – reminders on where ingredients are from, where it is manufactured, who endorses it and frankly why it should be trusted.  With this, we need to leverage their known trusted sources – from media like TV to word of mouth like organizations, the government, and even to the shop keepers themselves.”

Not surprisingly, this concern is a universal truth across China.  However, the more we understand lower tier people, we see that the tactics we use to address that concern may need to vary.

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POWER OF THE VALUE EXCHANGE

With pressures like this, it is not surprising that lower tier consumers are more price sensitive.

But this goes further than you would expect – this price consciousness translates to many consumers purchasing brands that they may be completely unknowledgeable about.  Instead, they are swayed by a low price, a vaguely familiar-sounding name, or more likely, a promotion or free-gift.

One new mom we spoke to confessed that she had never tried the particular brand of baby milk powder she had just purchased before, or had even heard much about it.  She walked into the store with the intent to purchase her usual formula, but changed her mind.  What made her decide to purchase the new brand?  A free photo album with purchase.

To her, the free photo album – inside which she could store precious photos of her little girl – was worth the switch to a new, unfamiliar brand.

Without strong brand knowledge, products that have give-aways can easily sway the brand choice or convince the consumer to purchase something they normally would not want to spend extra money to buy.

Packaging cues or explicitly stated benefits also have great power to guide brand choice.

Ultimately Brands need to create their own meaning if they are going to have value. This value can be functional – clean, smooth, tasty – or emotional – caring, family-oriented, etc.  Then, they must find ways to bring that to life.  This can take the form of promotions, gifts with purchase, visual cues, content development or association, etc.

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PRACTICAL LUXURY?

The concept of luxury takes on a different meaning in lower tiers – But it does exist.  Luxury here is seen through a very practical lens.  One lady we spoke to said that she defines luxury as buying clothes that costs above 200RMB (as she usually spends only a fraction of that).

In lower tiers, luxury is not about the brand of car – it’s about owning a car… because owning a car means you can afford the petrol to fill it.

Across China, luxury is still very much tied to price and has little emphasis on brand heritage and/or product quality.

The woman pictured in the photo above is Mrs Wang.  She is 33 years old and lives in Huaiyuan county in Anhui province.  She did not know that the Louis Vuitton bag given by her husband is considered a luxury item.  Before she knew that it was an expensive luxury brand, she was using it as a grocery bag when she shopped for groceries.

Says Jeffrey Tan, National Research & Insights Director:

“We need to make our Brand Stories meaningful beyond price and just image.  We want these consumers to be more conscious of the brands they choose versus just purchasing products.  They need to understand how the brand fits into their lives and the value placed behind each brand – be it to satisfy emotion or practical needs.”

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By SMG Research Team, November 18, 2011 3:40 pm

This week we continue our discussion of the Starcom MediaVest Yangtze Study and lower tier consumers by taking a step back and adopting a wider perspective of how they view the world around them: The world outside my door.

If you have just started reading, please click the following links to get caught up with our study and to read about previous week’s insights.

Week 0: Kick-off and study details.  Click here.
Week 1: It’s a Matter of Perspective – Click here.
Week 2: The Secrets of the Heart – Click here.
Week 3: Celebrating the Power of Family – Click here.
Week 4: Unveiling Community Dynamics – Click here.

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The power of community is evident as well in not just how individuals see themselves in it but also in the expectations they hold for their community.

… But this is not limited to only their community, but they hold high expectations of China as a whole.

This post is dedicated to giving our Chinese consumers a voice.  Most don’t feel like they are able to freely speak their feelings.  And while the words in this post are not edgy or controversial, it is a start to learning the concerns Chinese consumers have today.

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DO NOT FORGET THE BACKS OF THE NATION

This is Mr Li, 23 years from Heyun Town in Guangdong province.

He showed great courage in writing what he did here, lamenting at how the state government has forgotten about the basic needs of people in the lower tiers, especially in his small town.

This sums up the feelings of many in lower tiers who often feel that the remote distance from the central government also means that they are often the last to enjoy the prosperity of the nation.

Immediately after writing this, he was reprimanded by his mother severely for being so brazen with his words.  We were lucky to have captured this one photo of his thoughts.

It seems that the younger generation is becoming increasingly bolder in sharing their opinions. Take blogger Han Han for example (read about him here).  He embodies the thoughts of today’s Chinese youth and is seen as a strong, positive role model for them.  He is not shy about sharing his thoughts, which are often very controversial.

How can we, as brands, empower youth who wish to share what’s on their mind, but are unsure how to?  This is a fine line to tread and the trick is in balancing an authentic image and appealing to China’s youth, but also not alienating the older generation. For a youth-centered brand, perhaps stirring up some controversy is the way to get noticed by them? – especially amongst lower tier youth who often feel even more overlooked than their top tier neighbours.

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环保: STOP THE POLLUTION!

During our lower tier journey, one of the key topics we often heard people talk about was the environment.

No different from more developed cities, the environment affects everyone.  This concern is pressing especially to lower tier consumers, and they see this as part of the price they pay for China’s rapid development.

The changes occurring in China feels like everything is on speed-dial.  Farming towns yesterday have been turned into dust and rubble and new buildings today, skyscrapers tomorrow.

Many lower tier consumers are concerned because it does not just affect them directly but also future generations.

Here their expectations are on brands as much as the government.  Brands have the opportunity to be a part of communities through the good they can do. “Selfless” acts of helping not just with disasters but on improving the everyday – recycling waste to create something new for their communities, clean water efforts, etc. – is something that will resonate very strongly with them and something brands can help with that will make a significant impact on the lives of lower tier consumers.

All consumers, regardless of tiers, are concerned about environmental issues.

Here we start to see where upper and lower tier consumers agree – on the need to have the environment around them improved.  While probably for different reasons, their savviness on this issue is equal – they want to see something done now.

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