BizRadio chats to Dr. Amelia Richards – Ask Afrika- about how consumers engage with brands and how Ask Afrika is able to track and report back to industry on this (The Icon Brand Survey by TGI – Target Group Index)
Consumer engagement trends is a three part podcast series | Click below to listen to Dr Amelia Richard in conversation with BizRadio’s Grant Jansen
Part ONE: The dynamic consumer landscape & The rise of the middle market
Podcast | Click HERE to listen
Part TWO: Brand loyalty developed through expression and experience
Podcast | Click HERE to listen
Part THREE: The everyday heroes & The rise of digital and social media
Podcast | Click HERE to listen
“Today you are not behind your competition. You are not behind the technology. You are behind your consumer”
(Rishad Tobaccowala, Chief Strategy & Innovation Officer , VivaKi)
The Icon Brand Survey by TGI (Target Group Index) is the largest of its kind in South Africa with 19 sectors, hundreds of product categories and thousands of brands included in the measurement. An enumerated area sampling design was employed and the universe includes all communities with more than 8,000 inhabitants, 15 years+. A sample of 15,000 consumers was surveyed representing over 19.8 million adult South African consumers. The data was weighted using the Statistics South Africa’s population estimates.
Icon Brands in a nutshell
Icon brands are brands that are ubiquitous and are quintessentially South African brands. They are used by South Africans of all races, creed or colour, irrespective of background or living standard. These are brands that define a common experience, often on a daily basis to which South Africans are committed to in a real sense: they put their money where their mouths are to demonstrate this commitment. South Africans love them, are loyal to them and will even look for them when abroad.
South Africans vote with their wallets and hearts
South Africans have voted with their wallets and hearts and in the process created thirty Icon brands. City Press, Rapport and TGI SA and have partnered to bring 2013/2014 Icon brands. Brands do more than just satisfy consumer’s wants and needs. Brands become symbols and contribute to the way users define their status and their personalities. Some brands even achieve Iconic status which helps to define nationhood and nations. These brands sometimes become symbols of the nations that created them.
From a South African perspective we have to ask ourselves which brands unite us as a nation, which brands are used and loved by South Africans across the age, income, race and language spectrums. The Icon Brand Survey by TGI answers these questions for us. Our inclusion of 8 000+ brands across 15 000 South African respondents, demonstrates TGI’s credibility and robust brand tracking expertise. These are classified into 163 categories across nine industries. This extensive and multi-inclusive sample ensures relevance of results which limits inflated results and misrepresentation of South African consumers. In addition to identifying Icon brands the survey also ranks brands, using the same methodology, in 163 product categories. Thousands of brands across hundreds of product categories were included in the initial analysis with only 30 brands emerging as Icon brands. A further 29 brands were awarded Platinum status, which means that their total Icon score was at iconic levels but not across all population groups. Not all categories had Icon brands, as can be expected, given the vast differences in socio-economic levels and therefore the means to access certain products. Nonetheless, these category leaders often dominate their space and are often Iconic amongst those consumers that have access to these products.
More than just a benchmark
Not only is TGI Icon Brands unique in that it measures actual consumption along with brand loyalty, it is also a valuable brand trend measurement. Delving into the ever-changing context and mind-spaces of South Africans, it explores brands that appeal to specific consumer product needs. In a sense, this index provides the opportunity to learn from 30 successful, Iconic brands. It provides comprehensive insights into key drivers that influence consumer purchasing behaviours and identifies brands that have earned loyalty from their consumers over time. It allows for brands owners to understand who is the consumer, what is behind the shopping basket and incorporates elements of community-centricity innovation, trust and relevance.
In addition to identifying Icon brands the survey also ranks brands, using the same methodology, in 163 product categories. Thousands of brands across hundreds of product categories were included in the initial analysis with only 30 brands emerging as Icon brands. A further 27 brands were awarded Platinum status, which means that their total Icon score was at iconic levels but not across all population groups. Not all categories had Icon brands, as can be expected, given the vast differences in socio-economic levels and therefore the means to access certain products. Nonetheless, these category leaders often dominate their space and are often Iconic amongst those consumers that have access to these products.
Icon brands are good at contributing to unique lifestyles, being responsible, purchase trends, intra- and personal wellbeing and enrichment. Industries that focus on improving consumer’s lifestyle are currently top ranking Icon brand industries i.e. restaurants, fast foods, drinks, food travel and leisure. The second industry tier is focused on those aspects consumers take care of since it is their responsibility such as financial services and communication. Once the lifestyle activities are in place as well as those aspects we ‘have to’ take care of, consumers will indulge in retail therapy from an array of industries such as retail, clothing, household goods, electronic items, pets, personal care and jeans. The last tier of industries focus on inter- and personal wellbeing such as the health industry, DIY, gardening and household appliances. It is clear that Icon brands are competing not only within an industry but also across industries for share of wallet.
THE 2013/14 ICON BRAND SURVEY INSIGHTS
The dynamic consumer landscape
We live in a world where the only constant is change and life is ever evolving. The same holds true not only for brands and human behaviour, but in particular consumer behaviour. Spurred on by increasing competition, coupled with a volatile economic climate, sees brands – in particular big brands – no longer able to sit back and assume that consumers will continue to purchase their product simply because they always have. Faced with increased choice, what does today’s consumer want and demand that perhaps the brands of yesteryear didn’t need to pay as much attention to?
The rise of the middle market
The rise of the middle market classified as those South Africans between the LSM 4-7 group and has seen a growth from 63.7% in 2010 to 68% in 2012. Within the middle market the average number of people in a household is 3.6 and can be bigger. This ‘crowded house’ trend implies that more people are living in the same house so they’ll be using the same products. This implies that brands have to formulate products that work for multiple generations and gender groups. People who use brands may not be those who choose them. Almost half of this market has children and children influence purchases in three markets – primary market (products for children), influence market (parent purchases) and future markets (products they’ll buy when older). Understanding who makes buying decisions in a family is a key issue for marketers, as is an understanding of the dynamics of how joint family decisions are made. Most large purchase decisions are now joint purchase decisions. This also impacts brands in how they market to various groups. When considering KFC, they play on nostalgia and the importance of family which may influence various individuals in a household. When considering the average personal monthly income, household income and spending on clothes it is seen that this market does hold potential for brands. In addition, year on year this market is more positive about their financial situation.
There is an increase in higher education for this market, however, a decline for secondary school education. In South Africa various barriers to education exist from lack of handbooks and mismanagement of educational funds, this may mean that those that are able to complete their secondary education commits to completing a higher education degree. It will become increasingly important to assist with secondary education where our governments are failing? For example:
- Bostik sponsors the Kids Young Artist Competition which sees winning schools win art supplies of R5000.
- All Gold‘s Free Hot Dog Delightful Fridays selects under privileged schools around Pretoria, Soweto and Stellenbosch. Learners at selected schools had an opportunity to meet Tommy the Tomato whilst enjoying free hot dogs with their favourite All Gold Tomato Sauce. These learners also stood a chance to win instant prizes and a chance to win money for their school supplies or R10,000.00 towards their school; all they had to do was to write in and tell us why they like All Gold tomato sauce.
- The All Gold programme was run in partnership with Enterprise, a potential brand Icon, who provides the viennas for the hotdogs, as well as glass recycling bins so that they can recycle their empty All Gold glass bottles.
- Vodacom Mobiles for Good. They are investing in training and promoting digital access to teachers to empower them with access to Information Communication Technology (ICT) and skills that will make teaching and learning more interesting.
Education goes hand in hand with the social capital, brand sustainability argument. If brands decide not to invest in education, they won’t get wallet sizes that can support brand purchases in the future. This can also build sentiment for longer term connectivity between brands and consumers that ultimately have a positive impact on brand longevity.
Brand loyalty developed through expression and experience
Although here is strong potential for well-known brands in the South African market, caution is needed as brand loyalty is declining. However, once consumers are emotionally invested in a brand they are less likely to switch to a different company. Value for money is going down in terms of driving loyalty, so what is driving loyal consumer behaviour especially in the younger market? The answer may lie in social contracting through financial support for educational initiatives, emotional connectivity, interactivity and experience. Brands should revolve around storytelling, creating experiences and providing avenues of self-expression for consumers. To achieve this conversion, an effective experience strategy has to be grounded in a deep understanding of people’s motives, desires, and value systems, and cannot live in isolation from the business and technology scenarios in which it will be situated. If a company’s experience strategy is correctly positioned as the glue between brand, human, business, and technology insights, then one of its valuable side effects is that it can also give an organization a framework to understand what features and services will be needed to deliver at the aggregated experience level.
Experience is the new reward
The drivers of change here include our desire to explore and push the boundaries. We want new sensations and experiences that challenge the way we think, that embrace all our senses. South Africans are looking for sources of instant pleasure in their everyday lives. They enjoy experimenting and trying new things. The accessibility of instant satisfaction through technology is fuelling greater demand – think about 3D cinema and TV, interactive gaming platforms. And there’s a desire for experiences which use, challenge and awaken our senses in a new and innovative way. Marketers looking to ride this trend should consider a 360 degree sensory experience by organising brand activations or events that bring to life the brand’s positioning. Brands are not just a commodity. They have a personality and their own way of being. And just as humans evolve and change together with consumer behaviour, so do brands. Successful brands ensure that they take their consumers with the brand on the journey, whilst accompanying them on theirs.
Nation celebration – ‘South’ Afrocentricity
While globalisation is forging a homogenous global identity, it has reached its tipping point. People are starting to resist global culture and look for the authenticity of the local and the familiar for inspiration. Although marketers need to be aware of the international trends, one needs to focus on existing traditions. Although we are living in a digital world, we need to keep considering the home truths. It will become more important for brands to become relevant, this implies a local production, being locally relevant, with local content and symbols, lifestyles, traditions, not being downplayed, but celebrated instead. South Africans want to celebrate their heritage are and are increasingly more committed and keen to use locally produced products. Emerging markets will proudly export and even flaunt their national and cultural heritage in the next 12 months. Symbols, lifestyles and traditions that were previously downplayed if not denied will be a source of pride for domestic consumers, and objects of interest to global consumers…
The everyday heroes – leveraging word of mouth
Consumers need good news and want to be part of it. Celebrities are disappointing us. The ‘everyday hero’ making a difference in their everyday lives for the everyday people. Although 50% of local consumers ask people’s advice before buying new things, it isn’t celebrities, only 23% of South Africans feel reassured to use products recommended by and expert. What are the implications for brand owners? Against the back drop of tragic public figures like Oscar Pistorius and Julius Malema, South African consumers are reluctant to be convinced to purchase products recommended by experts. Traditionally, South African brands made use of personalities and sports heroes as ambassadors – but they are disappointing us. Choice of brand ambassadors are moving away from personalities for e.g. KFC, Coca Cola who are Icon Brands, and are replacing ambassadors with ‘everyday heroes’ making a difference in their everyday lives of every people. This explains the excessive support for Nike Run, Rhino Project.
The rise of digital and social media
Although South African figures are lagging behind the rest of the developed world, it is growing although from a small base. The internet and social media have empowered consumers. They now have a voice. They can express anger and frustration if brands treat them badly – if brands undersell them or if brands act unethically. Very few Facebook pages are clear of consumer anger. But this also gives brands an opportunity. Used correctly, content provides brands with a tool to create meaningful, emotional and long term connections with consumers. The internet is the only medium of true engagement, but advertisers have yet to harness this power – instead most are opting to merely ‘digitise’ traditional media.
The World Wide Web is great giving consumers more information than ever before to inform decisions – but the flip-side is information overload. The future of digital marketing is not about product discovery – opening up options, but product selection – narrowing down options, and simplifying choice. Online reviews, particularly those from other customers are the most powerful tool in this new recommendation economy.
“Companies will need to start designing brands form the outside in by creating experiences built around a real relationship and bond with their customers. At the core of the relationship lies profound insight into the heart and mind of the customer (Jacqui Maroun, NATIVE.) Icon brands are successful in:
- Formulation products and services that work for multiple generations and gender groups.
- The winning Icon Brands are great brands that are in touch with consumer sentiment.
- They have evolved their message as one from aspiration to one of inspiration. They are focussed less on what they can give and more on what consumers themselves can achieve, to make a better world for themselves by themselves. It is not about being the solution but to be the motivation or one. The call to action is not merely to buy something but to build something.
- They are able to create unique and authentic South African experiences that resonate with local consumers.
- Icon brands are able to build loyalty with consumers in a time where consumers show less and less commitment towards brands.
- These brands have a connection with the youth markets and;
- Apply their digital capabilities to the unique South African landscape when it comes to mobile access and social network behavioural trends.