return to institutionalism

Return to Institutionalism

Emerging trend from Black Diamonds

Contents

• What’s going on

– Changes in society

• Institutionalism

• Why & how is this happening

– Black diamonds, Government, BEE, Brand preferences, Intra-urban movements, Education, Strikes, Advertising, Statistics

• Comparison – Industrial Revolution

• The future

• Summary

What's going on?

• Black Diamonds – the term of the times

– The are essentially the new middle class

– What’s important?

• Media consumption, demographics, psychographics

– Future predictions

• Growth, movements etc.

– How are they integrating into living as “black diamonds” and where are they likely to go?

Changes

• Political

– system becoming more established

– regulations put into place to facilitate advancement

• Economic

– new credit act

• Marketing

– advertising

– products designed to appeal to new markets

• Black diamonds

– key focus in this area

Institutionalism

• Way we make decisions

– world view

– home vs. work – worldview depends on situations etc

– Group vs. individual

• 5 Worldviews

– affiliative

– egocentric

– autonomous

– humanistic

– institutional

Inner directedPassiveMature

Autonomous: Individual

Humanistic: Group

Consumer Mapping

Affiliation Group orientated

Outer directed Active Young, fun, playful, energy

EgoGoing placesIndividua-listic

Affiliative: Group

Egocentric: Individual

Institutional: Group

Responsibles

Buddies

High resources

Low resources

Innovators

Believers

Achievers

Thinkers

Discerning

Accomplished

Independence

In-crowd

Institutionalism

• More money

– life cycle of black diamonds

– highly educated & motivated

– feel responsible - group

• Money in stages

– brand preferences change as stages change

– high priorities:

• car > house

• People thinking more in the long term

• Rather sacrifice luxury car, and have ability to pay off house

• township > suburb

• Moving

Institutionalism

• what does this money get them?

– material objects

– credibility in society?

– spending their money consciously

- Black Money

…but what are they really getting?

– does this money buy them safety and security

• Social

• Job

Why is this happening

• Government intervention - NCA

• BEE

• Intra-urban movements

• Education

• Strikes

• Brand Preferences

• Advertising

Why is this happening

• Government intervention - NCA

• BEE

• Intra-urban movements

• Education

• Strikes

• Brand Preferences

• Advertising

The New Credit Act

• It lives up to the expectations of consumers who want standardisation and control

• Wide acceptance of these regulations by consumers and organisations

• People don’t want to be taken advantage of and risk their time and money in places where it may not be viable

• This is an example of systems becoming more advance and the development of protection for others who are becoming more wealthy

• More money means more responsibility, the rich must not profit by making others poor but by maintaining a stable economy

• Systems must be held in place and that means applying them to all people in the population to give everyone an equal chance.

Sources: Sunday Independent, Personal Finance

New credit act

• This is an example of institutionalism as it has created specific structures and elements of control

• The system has to be adhered to and there is a central governing body

• It means people have less to worry about when dealing with financial transactions

Why is this happening

• Government intervention - NCA

• BEE

• Intra-urban movements

• Education

• Strikes

• Brand Preferences

• Advertising

BEE

• “How do you undo the wrongs of over 350 years in just 10?”

• Internal politics within the BEE structure is rife

– ‘One black, one deal’ mentality

– There is an thought that once a company or black owned company has received a benefit or BEE status it should give chances to other companies, by not entering into any similar dealings

• Problem of only having holding companies

• There may be policies in place to bring about BEE but there also has to be a willingness to transform by corporates.

Sources: M&G, MoneyWeb, Visions of BEE

BEE

• An implementation of specific rules and regulations in order to help even out the opportunities available to blacks in business

• It is enforced by government and business and therefore falls into the institutional world view because it has strict organisational structures with hierarchies associated with BEE and traditional business practices.

BEE

“A cool concept but it often doesn’t trickle down to the masses”

“It needs to be implemented carefully”

Working

• Becoming time starved

– More need for time management, this an effect of work and becoming more institutional

– Using products and services that facilitate this need which means shopping at specific times, integrating with society

– More value is placed on time and money but what is this getting them

– Old Polychromic, New monochromic

– Because there is such a value on time more structures need to be put into place to make use of time more efficient

– Strikes taking place waste time and therefore create problems, the established and young families with children want the best for their children who only have a limited amount of time at school

Sources: UCT Unilever – Black diamonds

Time

• Monochronic:

– Western culture

– Do one thing at a time

– Time is irreplaceable

• Polychronic:

– African cultures

– Many things at once

– Time can be rescheduled

Time

• Moving into western culture

– Time paradigm shift from poly to mono

– Fit in with society:

• Community meetings (suburban)

• Access control

• Shopping

Why is this happening

• Government intervention - NCA

• BEE

• Intra-urban movements

• Education

• Strikes

• Brand Preferences

• Advertising

Urbanisation

• Moving within the urban environment from townships to suburbs

• Benefits

– lower noise levels

– fences and strict divisions of property

– easier to control the area

• 47% of black diamonds now live in the suburbs

– 50 000 people have moved every month

• They are getting more involved with community activities

– De-centralised power structures

Urbanisation

• The move towards suburbs

– institutional world view

– suburbs are historically known as being more structured and hierarchical

– everything laid out in a specific place and knowing where everything is.

Soweto taxi rank used to be a standard taxi rank – quite confusing and unstructured

Now a structured and organised building with specific lanes, queuing areas and signage

Urbanisation

“The atmosphere in Soweto is different & there is the perception that there are no restrictions”

“Blacks who live in the suburbs come back to Soweto over the weekend”

Why is this happening

• Government intervention - NCA

• BEE

• Intra-urban movements

• Education & Culture

• Strikes

• Brand Preferences

• Advertising

Education

• Black diamonds are are becoming well educated

– University & other tertiary

– these are building blocks of structured society

– promote long term views

• “There is a distinct difference in the way people conduct themselves once they have had tertiary education”

Why is this happening

• Government intervention - NCA

• BEE

• Intra-urban movements

• Education & cluture

• Strikes & views

• Brand Preferences

• Advertising

Public-sector & other strikes

• Wage offer based

• Government and strikers viewed to be at fault

• Schools most affected, and essential-services sectors are not legally permitted to strike.

• Contingency plans put into place to assist learners with exams and to ensure their safety

Sources: Sowetan, IOL, Die Burger

Public-sector & other strikes

“Strikes affect students negatively, there should be another process instead of striking”

More future focused

• Becoming future focused means careful and strategic planning, this can include buying a house, life insurance, investments and other activities to prepare for old age

• Although they want suburban development, they still enjoy much of their social life back in the townships, almost a break-away from stricter reality

– Communicate to them differently in these two different environments

– Two different worldviews, depending on location

• Also driving move to the suburbs – better access to services, jobs, security and an instant sign of success

• Townships will also start becoming more institutionalised

• Young families and established are the primary groups

Brand preferences

• Looking at aspirational and middle class brands

• Moving up, this is what they will look at initially

• Family & traditional conscious choices, all in the same magazine…

The Afropolitan

• Relating old traditions with modern means

• Future oriented

• Creating structure out of what was chaos

Statistics

• 87% of South Africa’s new black middle class regard medical aid as a necessity, yet only 26% belong to a medical aid scheme – expect change in the future

• 47% of people with no education attend religious services weekly or monthly, as opposed to 66% of people with post matric education

– Religion is a indicator of institutionalism

• 19% of black South African’s are interested in finding out how to insure their assets

• Only 2% of blacks have asset insurance compared to 53% white, this is set to increase

Industrial revolution

similarities

Industrial revolution

• As systems were put into place more structure was required and demanded by the people

– Working conditions developed

– Social systems were re-organised

– Architecture & city planning evolved to meet the needs of social and economic changes

• Industrial revolution

– Increased emphasis on education & training

– Journals, encyclopedias

“The Industrial revolution witnessed the triumph of a middle class of industrialists and businessmen over a landed class of nobility and

gentry.”

Summary

Implications

• Bedding down of middle class

– Roles are becoming more defined and identifiable for these people who are returning to institutionalism

• Family to play bigger role

– As they move away from the townships, people who move with them will become closer

• Making a difference in community

– Standing up, protecting and fitting in to society

– Becoming legitimate in society

• Physical manifestation through architecture, design, advertising etc.

Implications

• Communicating to this trend

– Social life in the townships means that’s where they may be relaxing and having fun

– More structure and institutional based advertising in the suburbs and at their clubs, associations and media that is consumed in these areas

– Any communication should be structured and future focused with specific guidance

What does this mean for your business?

• They will & already have less time, and need more security – in terms of institutionalism

– Make it easy to understand your offering and provide and communicate your support

• They will be looking for products that benefit not only themselves but also their community and even history

– Make sure they know where you stand, tell them who you support

– Products like Hola 7 from Cell C

Thank You.