Q&A: Understanding what motivates consumer choice

There is a need to understand consumer mindsets around the world, identify clusters of markets that bunch together due to geographic proximity, and confirm or dismiss stereotypes, says Stefano Niavas.

There is a need to understand consumer mindsets around the world, identify clusters of markets that bunch together due to geographic proximity, and confirm or dismiss stereotypes. Stefano Niavas, managing director and partner at BCG Johannesburg and Lagos consumer research, says that many companies look for commonalities that can simplify a complex and diverse world. Typically, they would organise their efforts by regions, or by market segments or look for nations that share cultural roots, with the assumption that strategies that succeed in one country will do well in seemingly similar consumer markets.

Boston Consulting Group (BCG) conducted research on 40,000 consumers in 18 of the world’s biggest markets, and found few of the country clusters or regional themes that they expected to see. They also learned that two markets with dramatically different cultures can share similar needs.

What was the purpose of this research?

The reason why we did this research is to help our clients understand their markets and find archetypes that will help them deploy their products in a better way. The data proved that there is a world of remarkable diversity, and that companies need to understand what drives consumer choice market by market.

What are consumers telling you?

BCG’s Center for Customer Insight analysed consumers in 18 nations that account for 60% of the world’s population. According to the findings, consumers in emerging markets are optimistic about the future and interested in entrepreneurship. They also agree that technology is a force for good and feel passionate about sports. When we assessed some of the most important attitudes, the immense differences in consumer cultures stood out for us. For example: for South African consumers, work life balance is important; while Australian and UK consumers value a small group of close friends.

What are the implications for marketers? 

What is clear from these findings is that marketers should look at nations in terms of pairs, rather than groups. Companies can use these insights to study foreign markets and identify which countries are most aligned with their home market or with other markets where they have a presence. Proximity analyses can show which pairs of countries are the most similar. For the proximity analyses of consumer markets, BCG plotted the proximity of each of the other 17 markets, of the 18 nations analysed, in a spiral. The distance of each country from the centre indicates the degree of similarity to the home market at the centre. The African country that is most different from the US when it comes to consumer attitudes is Nigeria with 16 positions; while South Africa was only eight positions from the US.

Describe some of the differences in consumer behaviour.

In the US, the most important snacking need expressed by consumers is to boost one’s mood, while in France it is more about social connection. In France, safety is the paramount need when buying a car, while in the US looks and perception are highly important. Even though Chinese mindsets diverge widely from those in other markets, similarities emerge when you look at needs by category. For example, BCG found that snacking needs in China closely align with those in Saudi Arabia, Indonesia, and the United Arab Emirates; even though the cultures of these countries are vastly different. Consumers in these markets snack to feel energised and enjoy social moments.

Explain in more detail why these findings are significant?

This research has significant implications for brands as corporations need to find synergies among markets in order to scale efficiently and profitably. Research shows that marketing themes that try to target regions or country clusters are likely to fail. Businesses need to make sense of a world with so many different markets and regions; and accept consumer diversity from all across the world. For organisations that truly seek global advantage, a global category approach cannot be a viable model. The world’s consumer attitudes are simply too diverse. Consumers’ requirements for a product category are shaped not only by their thoughts, but also by their demographics and the setting in which they buy and use it.

What is the strategy brands need to employ?

Understanding needs and establishing actual commonality requires a bottom-up strategy. Companies will be able to uncover worldwide commonalities among consumers if they have a detailed understanding of their wants. Common attitudes or rules of thumb about perceived market clusters, on the other hand, will not be driving commonalities. Because consumption or usage times differ, consumers in two markets with comparable consumer cultures may have quite different wants for a product. Companies, on the other hand, may discover unexpected commonalities amongst markets that have comparable needs for a given category. Businesses can use this granular approach to correctly activate marketing tactics at scale where there are actual consumer requirements in common – and strategy locally where there are none.


Main image credit: Supplied.


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