Ashok Sethi
Published in Research World March/April 2011
Six ways to improve understanding of consumers in emerging markets, and why the usual techniques won’t work.
Market research started by asking people questions. Initially the questions were simple: researchers asked, for instance, how many cigarettes consumers smoked or which brand they normally bought. Not satisfied with just learning about behaviour, researchers started to probe the consumer’s mind to understand the factors determining that behaviour. Questionnaires contained both open-ended and close-ended questions, trying to understand the reasons for consumer choice. In qualitative research this developed into what was called ‘motivational research’, and over time quantitative researchers started relying more on observational research and derived statistical methodologies.
When the cigarette and washing powder companies started researching consumers in emerging markets (earlier known as poverty-stricken countries, underdeveloped nations or developing markets) they brought along the same bag of tools. Sari-clad women in India were goaded to try to imagine Surf as a person and the Chinese started ticking the top five out of the 30-attribute-long list of factors which could have led them to make a given choice.
The question is whether the tools and techniques developed in the Western world work equally well in the emerging markets, or do we need instead to develop new techniques (or at least modify existing ones) to reveal the emerging market consumer’s psyche. Of course some will argue that many of the techniques used for decades in the Western world (particularly the few that I alluded to earlier) never actually worked, so they never had a chance in the emerging markets. Such cynicism aside, I give six reasons why marketing research (though hardly anyone uses this name any more) needs to work differently in Asia and other emerging markets.
1. The very process of asking pointed questions to try to understand why consumers do what they do assumes several preconditions. Firstly, it assumes that they themselves know the answer. In many cases it may not be true as the process may be subconscious (few will deny that consumers in both the developed and the emerging world have a subconscious!). Secondly, it assumes that the consumer is willing to share the underlying reasons for their behaviour, which may not hold water in general, but even more so in emerging markets. Lower income consumers may be reluctant to admit that it was price that played the principal role in their decisions. On the other end of the spectrum (emerging markets seem to be producing more than their fair share of the super rich!), in many Asian cultures sticking out and attracting attention is frowned upon, and decisions are supposed to be rational rather than emotional. Luxury consumers are, therefore, unwilling to admit the extent to which intangible factors such as status and emotions guide their decisions. Therefore in Asian markets reliance on direct questioning is often inappropriate.
2. Value derived from direct questioning hinges on the existence of an adequate level of articulation from the consumers. Of course emerging market consumers in general are not inarticulate, but limited education and a lack of experience in giving one’s opinion, particularly on products and brands, can make consumers feel substantially challenged in articulating the reasons behind a choice (assuming they know them). In general the questioning needs to be less open-ended or hypothetical and more based on choice analysis. The best way to understand the consumer mind in developing markets is to use alternative choice scenarios, and analyse the results with statistical techniques.
3. The shopping context in Asian and other emerging markets often differs from that of developed markets. Emerging market consumers do not necessarily shop in hypermarkets like Wal-mart and Carrefour, the favorite haunts of consumers from the developed economies (at least until the economic crisis made them hold tighter to their wallets). In India, as in small town and rural China, traditional trade still dominates. This results in a unique dynamic between shopper and seller which can strongly influence consumer choices. Researchers in the West have never studied this phenomenenon. The right research tools to investigate it need to be specific to emerging markets.
4. Emerging market consumers, not having the benefit of hefty wallets, show price sensitivity that Western consumers would be entirely indifferent to. Additionally, price sensitivities can vary substantially at various price points. Pricing research techniques in emerging markets, therefore, need to be more sophisticated to catch these higher sensitivities and variations – conjoint analysis and discrete choice modeling should find even wider applicability than in the West.
5. In general the emerging market consumer’s experience of and interaction with brands is relatively limited. 30 years ago, Chinese consumers seldom saw an advertisement. Today they are overwhelmed by them. 30 years ago they had practically no choice. Now they have a bewildering array of product options in front of them. This rapid change has led to the development of choice algorithms which differ from those for Western consumers. Some choice algorithms, for example, include a rapid screening process and then a detailed evaluation to make the task more manageable. Understanding these choice processes will therefore require a two stage questioning and exclusive reliance on detailed attribute image measurement will not be appropriate.
6. Lastly, the consumption context of products is different in Asian and other emerging markets. A refrigerator, for instance, may find pride of place in the living room rather than in the functionally more appropriate kitchen. Food may be consumed on the floor rather than at the dining table. These differences give rise to new attributes of relevance which we do not normally associate with the category. Neglecting these aspects will provide an incomplete picture and fail to fully explain consumer behaviour and choices.
In sum, researching consumers in Asian and other emerging markets requires more sensitivity and sophistication than in developed markets. It is essential that researchers focus their efforts and energies on this part of the world, sharpen their tools and develop new ones to accurately capture the mind of the emerging market consumer.
Ashok Sethi is Head of Consumer Insights – Emerging Markets, TNS.
