November 2012

GemsInsights from emerging markets

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Contents

1 Introduction 3

2 Technology and the Internet in Latin America 4

3 Social skills in the classroom: digital media use in Sub-Saharan Africa 9

5 Bridging the gap 21

6 Dreaming little dreams: brand building at the Base of the Pyramid 27

4 A shifting base: the BoP in context 15

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Chris Riquier CEO, Asia Pacific

Introduction

As the global financial crisis continues to rumble on and even China’s growth starts to slow, we all need to identify new opportunities to build our businesses. For many clients, this means tackling previously unchartered territory - whether this is entering new markets, targeting new customers, or developing products that address an unmet need.

With a presence in over 80 countries, TNS has a well-established footprint. However, we continue to extend this as we help our clients to uncover opportunities in new markets. In 2012 this has meant opening an office in Cambodia, as well as starting to work in Myanmar – we’ll be sharing our insights about this newest of consumer markets in a forthcoming edition.

There are two clear themes in this edition of GEMs, both of which explore new territory for many of our clients. Firstly we have a look at the impact of digital and mobile technology in

sub-Saharan Africa and LatAm. Whilst lower GDP per capita does tend to mean lower levels of technology ownership, mobile is the one must-have device, enabling and empowering new generations of consumers and increasing social mobility. As the cost of smartphone ownership continues to decrease, mobile becomes an even more significant opportunity for brands in emerging markets.

Secondly, we continue to reflect on the lives of those at the base of the pyramid (BoP), whose population numbers 4 billion, with a combined purchasing power of $5 trillion. We’ve been partnering with clients for many years, to help them understand the aspirations of this new consumer class – building a sense of their priorities and what they need from brands. In this issue you can explore some of the work we have done and what we have learnt about the implications for research.

I hope you find this edition of GEMs interesting and inspiring – as ever, if you would like to discuss any of the issues in more detail, please do contact your local TNS consultant, or me.

Kind regards,

Chris Riquier, CEO, Asia Pacific

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Technology and the Internet in Latin America - James Fergusson

Connected world

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Technology use in LatAmEmerging markets including LatAm are significantly outstripping the West in terms of technology adoption. Whereas the West is used to high levels of technology ownership, including PCs, fixed line telephones and fixed line Internet, Latin America doesn’t have the same level of infrastructure. Businesses looking to grow their presence in the region are therefore finding innovative ways of harnessing the technology that does exist there – one of the reasons that Internet-enabled mobile is taking off so quickly.

Technology and the Internet in Latin America

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Mobile and social mobilityThe future of digital is mobile, particularly in Latin America, where handheld technology is enabling and empowering new generations of consumers and increasing social mobility. Lower GDP per capita tends to mean lower levels of tech ownership, but mobile has strong usage levels across the board, with 82% of consumers in Latin America owning a handset.In this way mobiles are helping to bridge the divide between rich and poor, and between people in rural and urban areas. These are many Latin American consumers’ only link to the online world, with many ‘leapfrogging’ web-based sites to skip straight to their mobile counterparts. For example, many people’s first experience of online banking will be via their mobile phone.

Hot products to watchThere is a particularly strong interest in tablets in the region – stronger than in the US and very close to European demand levels – and there’s evidence that this interest is translating into actual purchases more than in other emerging markets. One in five of Latin American consumers plan to buy a tablet in the next six months if they don’t own one already. Massive demand for smartphones is opening up a battle between Nokia’s Symbian OS and Google’s Android in the race to bring phones to market that meet consumer demand, secure share of wallet and start to win the platform wars.

Country Mobile Internet available on phone

2010 2011 2012

Argentina 30.2 55.1 68.2

Brazil 29.9 43.2 70.6

Chile - 69.4 74.9

Colombia 25.2 - 67.1

Costa Rica - 34.4 -

Guatemala 16.8 17.4 -

Mexico 26.7 33.0 79.2

Source: TNS Mobile Life 2012

Technology and the Internet in Latin America

82%of consumers in Latin America own a handset

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Social media The social media revolution is taking over the world, and with 34% of LatAm consumers saying they feel they can express themselves better online, the Internet is likely to play a greater and greater role in all kinds of social interaction.

Social networking is the second most popular service activity on the mobile in LatAm (20%), behind uploading photos/videos to a personal computer (32%). In addition, consumers are looking to increase the number of activities they are doing in social media, so there are myriad opportunities for businesses to get in on the action by providing new online products and services.

Latin American consumers have a far stronger affinity to content brands compared to other developing markets. The most accessed brands tend to be global brands such as Google, YouTube and Facebook. Only 12% of LatAm consumers are accessing Orkut via their mobiles, versus 25% who are doing so with Facebook, showing that the latter still has the most potential for companies looking to engage with new consumers via social media.

20%

32%

of mobile activity is social networking compare to...

uploading photos/videos to a personal computer

Correlation between GDP per capita and number of technology devices owned; source: IMF / TNS Mobile Life

Technology and the Internet in Latin America

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Implications for businessesThe most enlightened companies are fast capitalising on the demand for mobile services, recognising that mobile is not just an extension of a company’s web

Country

Consumers using mobile banking(Checking bank accounts, making purchases securely

from mobile)

2010 2011 2012

Argentina 4.2 8.9 12.2

Brazil 9.8 20.9 20.4

Chile - 11.8 20.2

Costa Rica - 2.1 -

Guatemala 3.4 1.2 -

Mexico 0.6 1.8 18.3

Kenya 5.6 17.7 23.2

India 1.9 1.3 1.7

Source: TNS Mobile Life 2012

Country Current tablet

ownership Intend to purchase a tablet

within next 6 months

Argentina 4.7 14.6

Brazil 6.3 17.7

Chile 8.4 18.4

Colombia 7.1 23.2

Mexico 8.8 20.3

Source: TNS Mobile Life 2012

strategy, but an entirely different medium requiring its own bespoke approach.

Also, whilst many companies will be broaching new territory, the basics still apply. Mobile services still need to be relevant to consumers, be easy to use, and – especially given the target market – affordable. Whilst mobile banking service mPesa has revolutionised banking in rural Kenya, the same kind of service has not flourished in India due to poor service delivery.

Latin America can learn from these successes and failures, but ultimately solutions need to be closely tailored to the local market: there is no place for a cookie cutter approach.

Technology and the Internet in Latin America

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Sustaining brand relevance with the connected consumerSocial skills in the classroom: digital media use in Sub-Saharan Africa - Mark Molenaar

Opinion LeaderConnected world

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For the world’s fastest-growing Internet population the web is a social, educational and largely handheld tool. Brands must adapt their digital strategies to the available technology in order to succeed.

Sub-Saharan Africa boasts the world’s fastest growing Internet population, increasing by over 2500 percent between 2000 and 2011. However, these consumers’ experience of digital media remains very different to that of audiences in other markets, focused on less playful, more purposeful roles such as social networking, e-learning and banking.

Social skills in the classroom: digital media use in Sub-Saharan Africa

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Digital life is mobileSub-Saharan consumption of digital media is predominantly mobile. The spectacular growth in Internet access for the region has been driven by even more impressive rises in mobile penetration. The 695 million mobile subscriptions in the region today equate to 65 percent mobile access, and represent a 4000 percent increase over the last 10 years. The expansion of mobile broadband and increasing competition between networks will further boost the availability and affordability of mobile web access through driving down the cost of both data plans and handsets. Four out of every five Internet users in Sub-Saharan Africa accesses the Internet via mobile phone, compared to one in three globally. Three quarters of Sub-Saharan Africans say they would be happy to do all of their Internet surfing via mobile phone (compared to just over a quarter in developed countries).

The region’s typical mobile web consumer cuts a distinct figure, very different to the smartphone or tablet-

wielding archetype of more developed markets. He or she is typically younger (43 percent are aged 16-24, compared to 27 percent of web users worldwide), with lower spending power, and holds a Nokia or Samsung feature phone rather than an iPhone or Android handset.

Such differences have shaped a distinct approach to digital media in the region, with the popularity of different services and solutions often depending on their accessibility via mobile technologies such as WAP and SMS. Constraints on Internet access speeds and affordability mean a reduced appetite for online entertainment (only 6 percent of web users watch YouTube videos compared to 37 percent worldwide) and shopping (10 percent have browsed and 2 percent completed purchases online, compared to global figures of 37 percent and 24 percent respectively). Instead, Sub-Saharan consumers’ use of digital media is focused on immediate needs, via platforms that can be accessed across a range of handsets.

Social skills in the classroom: digital media use in Sub-Saharan Africa

43%

26%

of Sub-Saharan smart phone or tablet users aged 16-24

of worldwide smart phone or tablet users aged 16-24

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Social networks shape the web experienceCommunication is the foremost of these needs and social networking is the digital channel that Sub-Saharan Africa’s mobile web users turn to, in order to fulfill it. Social networking is the most important online activity for 58 percent of Internet users in the region, compared to 26 percent globally. Four out of five use Facebook compared to two out of five worldwide. Accessed relatively easily on a broad range of mobile handsets, there are signs that social networks are becoming the cornerstone of the digital media experience, used for sharing information as well as catching up. Significantly for advertisers, 70 percent of Sub-Saharan web users say that social networks are a good place to learn about products and brands.

Major role for information and educationEducation and learning is the second most important use of digital media in Sub-Saharan Africa. The 18 percent of web users nominating knowledge-gathering and education as their most important

online activity compares to 10 percent worldwide. This reflects both the younger average age of the Internet population – and the role that the mobile Internet is playing in extending access to educational content to rural classrooms.

Social skills in the classroom: digital media use in Sub-Saharan Africa

58%

26%

of Sub-Saharan Internet users think social networking is the most important online activity

believe this globally.

In Tanzania, the BridgeIT initiative, known locally as Elimu kwa Teknologia or Education through Technology, enables teachers to access a catalogue of educational video content using Nokia N95 mobile phones, which are then connected to classroom TVs.

The University of Pretoria In South Africa uses mobile technology to support its paper-based distance-learning programmes for postgraduate students in rural areas.

Dr Math, launched in 2007 and with 32,000 users in South Africa, provides a mobile tutoring service hosted via a free application, MXit and available for less than the price of an SMS. Although many mobile-based educational programmes are in their infancy, there is clearly strong demand for suppliers who can match quality resources to innovative forms of low-cost mobile delivery.

Tanzania case study

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Numerous studies have attested to the value of the mobile web in bringing market knowledge and information to remote rural communities. Establishing early-mover authority in such areas could prove an important strategy for mobile providers looking to retain market share. Nokia is one example, having recently launched its OVI Life Tools app to provide African consumers with affordable access to agricultural information, educational content and market prices.

Strong growth in mobile bankingOvercoming traditional barriers to opportunity is the driver of another significant use of digital media: mobile banking. This area has seen major growth since the pioneering launch of Safaricom’s M-PESA in Kenya in 2007. M-PESA is now used by over 14 million subscribers in Kenya and a further 2.7 million in Tanzania. The platform, which allows customers to deposit, withdraw and transfer money via SMS using a network of M-PESA agents has conducted transactions worth USD $12.75 billion and created more than 32,000

Social skills in the classroom: digital media use in Sub-Saharan Africa

jobs. MTN has launched its own Mobile Money service across 12 African countries with 5.1 million registered subscribers by June 2011.

Mobile banking will continue to grow in Sub-Saharan Africa, powered by distrust of banks and the demand for safe, affordable financial transfers, often in small denominations. As the capabilities of phones increase, mobile banking may well become more sophisticated. Amongst Sub-Saharan web users, 65 percent say they are interested in Internet banking (compared to 27 percent worldwide); 70 percent say they are interested in banking via mobile phone.

14 Million

32,000

9.6 Billion

M-PESA subscribers in Kenya

jobs have been created since the launch of M-PESA

total transaction value since the launch in 2007 ($)

$

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Immediate and future opportunitiesSub-Saharan Africa’s army of Internet users is still a relatively small one at 12 percent of the total population, and it remains very focused on immediately practical, low-cost, mobile web applications. However, significant opportunities exist for organisations that can adapt digital communications strategies to fit this pattern of web use.

The reaction of mobile owners to the Somalian famine provides a demonstration of the role that social networks and mobile banking can play when aligned with broader awareness through offline media. Facebook, Twitter and SMS were used to mobilise support across Kenya’s urban and rural populations after mainstream media initially raised awareness of the plight of Somalian refugees. Kenyans responded by donating USD $67 million, with the majority of private donations coming through M-PESA

Social skills in the classroom: digital media use in Sub-Saharan Africa

12%of Sub-Saharan total population use the Internet

Market forces within the mobile industry will lead to continued strong growth in web access and to a broader range of opportunities for businesses targeting the online population. Mobile broadband access will rise with infrastructure investment (over USD $70 billion infrastructure investment by mobile operators in 2012) and the reduced cost of handsets and data plans as a result of competition. Smartphones will play a greater role as they become more affordable: the Huawei Ideos smartphone launched in Kenya in 2011 sold over 30,000 units in its first month and mobile manufacturer HTC has announced its intention to launch a sub-USD $100 Android smartphone into the region. However, the most significant area of increased opportunity is consumers’ growing familiarity with the digital platforms available through their handsets. Most mobile owners in Sub-Saharan Africa have been using their phones for two years or less – and their appetite for a broader range

of digital platforms and functions is likely to increase as phones become a more familiar feature of daily life. At the same time, marketers must continue to adapt their activities to the capabilities of mobile handsets in different markets, as well as the broader characteristics of different countries and cultures. Exporting business models from other regions (or even other countries within Sub-Saharan Africa) is unlikely to prove effective. This is an extremely diverse region, and understanding of cultural nuances, demographics and different stages of digital development is crucial to creating engagement.

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A shifting base: the BoP in context - Poonam Kumar

Opinion LeaderFinding faster growth: new customers

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A shifting base: the BoP in context

The Base of the Pyramid (BoP) is on the move – and the hope and optimism of those living there is creating an unprecedented opportunity for growth in emerging markets.

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A shifting base: the BoP in context Few people have transformed attitudes to the global poor to the extent that the late C.K. Prahalad did in his path-breaking 2004 work, The Fortune at the Bottom of the Pyramid. Only a few years earlier, those living in poverty were still considered the rich man’s burden, their economic role restricted to needy recipients of charity. Prahalad helped us to see them as the future: dynamic individuals who together form a vast, untapped potential market.

In a sense though, Prahalad’s book is only the beginning of the work that needs to be done in understanding the Base of the Pyramid (BoP). This work is constant, because the BoP itself is ever-changing. Companies that want to do business in this area must invest in understanding the BoP’s great variety of potential innovators, entrepreneurs, producers and consumers – and they must be prepared to face the setbacks

and challenges of doing well by doing good. In many cases this requires questioning developed world thinking when it comes to making a profit. Innovative thinking on business models can be as essential for doing business with the BoP as innovative product development and branding.

Size matters – and so does distributionIts sheer scale puts the BoP centre-stage in any discussion of emerging market opportunities. The BoP’s population numbers 4 billion, its combined purchasing power of $5 trillion is more than 2.5 times the GDP of the UK, and its geographical distribution is concentrated on those regions promising to drive global growth over the next decade. Of those inhabiting the BoP worldwide, 40 percent live in India with a further 23 percent in China, 16 percent in Africa and 10 percent in Latin America. In India, 75 percent of the population are members of the BoP.

4 billion

75%40%

The BoP’s population numbers 4 billion

of India’s population are members of the BoP

Live in India

A shifting base: the BoP in context

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Seeing the BoP as individualsIt remains a tragedy that 4 billion of the world’s population survives on less than $8 per day. However, it is important to recognise that this definition of the BoP covers a large range of very different scenarios, aspirations and opportunities. An understanding of the BoP population’s varied situations is essential for companies looking to target its growth opportunities effectively.

TNS segments the BoP into three categories of potential consumer: ‘Strugglers’ surviving on less than $1 per day, ‘Fighters’ living on between $1 and $2 per day and ‘Strivers’ with purchasing power of between $2 and $8 per day. Encouragingly, ‘Fighters’ and ‘Strivers’ together represent more than 70 percent of the BoP according to World Bank statistics. This is an emerging consumer class, ready to join the market economy, and its ranks are swelling.

In 1995, consumers earning less than $2 per day represented 73 percent of the population of rural China; by 2007, they represented only 11 percent.

73%

11%

1995

2007

A shifting base: the BoP in context

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Hustlers or entrepreneurs?Those waiting to emerge from the BoP have the characteristics of a middle-class-in-waiting: educated, earning a semi-regular income and starting to own consumer goods. They look forward to the future with hope and optimism. They can see their own potential and they are confident in their ability to fulfil it. And they have great motivation and self-respect. Many would describe themselves as hustlers – but we recognise their ‘hustling’ for what it is – energetic and dedicated entrepreneurialism.

These top tiers of the BoP represent an immense concentration of ‘unmet needs’, the type of opportunities that companies in developed markets invest significant time and money to uncover. In this respect the BoP can appear like a gold mine for global brands. But prospectors beware.

They must be prepared to overcome initial setbacks – and they must be ready to relearn how to do business, and build brands. To meet BoP needs effectively they

must have the dedication to help their consumers overcome the daily challenges and barriers that they face.

Reinventing the brand wheelBoP consumers show a strong preference for buying brands over commodities – but they demand a great deal from those brands in return. This isn’t surprising when you consider the significant proportion of

disposable income that any brand purchase represents. A successful proposition for the BoP must combine affordability with robust functionality, delivery against priority needs and credible perceptions of quality. Increasingly, trusted brands are also asked to provide guidance and emotional affirmation in the midst of the tensions arising from social and economic change. The brands that embrace this multi-dimensional role will be the ones to succeed.

Brand credibility and strategy cannot be imported from other markets.

A shifting base: the BoP in context

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International brands have far less resonance amongst the BoP than they do amongst the existing middle-class. Developed world notions of rebelliousness, ego and counter-culturalism (the mainstay of many brands across different categories) have no place in an environment where a sense of isolation and exclusion is something to be feared. And brands accustomed to targeting individual desires must adapt strategies to collective decision-making, in which husbands and fathers often wield a veto over their family’s purchases.

Crafting a successful proposition may require a company to reinvent more than its brand identity. Successful BoP strategies often embody a shift in business model as well: from focusing on margin to focusing on volume. Such changes can play a vital role in delivering the affordability that the BoP requires without undermining the credibility that it demands.

Doing well by doing goodFor those prepared to embrace the challenges of building brand propositions from the ground up, the BoP today represents a greater opportunity than at any point in history. Although it remains financially impoverished, its population is not emotionally or imaginatively so. Those BoP consumers on the point

of joining the market economy have clear aspirations and great confidence in their ability to achieve them. And although meeting their needs is challenging, the rewards for doing so are immense. The BoP is essential

to realising the promise of growth and success in emerging markets – and the importance that they attach to brand relationships gives first movers a major, long-term advantage in tapping their potential.

A shifting base: the BoP in context

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Bridging the gap - Anjali Puri

Opinion LeaderFinding faster growth: new customers

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In researching the Base of the Pyramid (BoP), researchers must learn to operate without the shared assumptions on which communication typically relies.

Bridging the gap

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“The real voyage of discovery,” Marcel Proust wrote, “consists not in seeking new landscapes but in having new eyes.” Researchers working at the BoP must embrace both experiences if they are to be successful: exploring new landscapes in terms of economic disparities, infrastructure and literacy, whilst adapting to subtler socio-cultural gaps in order to ‘see’ this world in the same terms as BoP consumers.

When conversations lack common groundThe absence of shared implicit assumptions about the way the world works can greatly inhibit our ability to ‘read’ and communicate with BoP consumers. When talking to populations that have very different experiences of learning, media, products and services, it is surprising just how many notions and concepts no longer hold true.

Culture can be defined as a system of common assumptions, and this shared starting point is essential for communication and interpretation. When it is removed, the resultant breakdown in communication can be bewildering. Researchers must respond by framing questions in new ways, and learning what the

answers to these questions really mean. They must start by adapting their approach to the types of decisions that BoP consumers are accustomed to making.

From choosing products to choosing needsIn the environment of the BoP, the very notion of consumer choice changes. The question is not so much “what product do I choose to fulfil this need?” but “which need should I choose to fulfil first?” With many priorities competing for limited disposable income, we often find situations where choices and trade-offs are made across markedly different categories. The relative value of fulfilling a need depends on the priority given to the area of life that it impacts. Understanding these priorities fully can enable research to make a greater contribution than focusing questions on brand or product preference.

In the BoP, for example, growth in income or social capital is frequently prioritised over personal comfort and convenience, something that does not hold true to the same extent in many developed markets. Brands in sectors as diverse as mobile phones, fertilisers and personal care products have found considerable

success by focusing their proposition on economic advancement, rather than more immediate and obvious consumer benefits.

High priority

Low priority

Bridging the gap

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A not-so-common visual languagePoor literacy levels amongst BoP consumers create another set of challenges when it comes to research and marketing. Visual messaging, using common symbols and images, is an obvious alternative to written questions and communication. However, what passes for common visual language in many situations does not necessarily apply in the BoP. When researching in remote, rural communities, it is often surprising how visual grammar that seems intuitive to urban populations turns out to be wholly alien to BoP consumers. The idea of traffic lights, with green standing for go ahead and red indicating stop, is a wholly urban notion. For consumers who have never seen a traffic light, the colours red and green do not have the same meaning. This can have serious consequences, not only in research but also in simple messaging. Colour coding bore-wells to mark safe and unsafe drinking water is unlikely to have the intended impact, for example.

As with colours, so with ‘simple, everyday symbols’ that can turn out to be indecipherable to the audience they were intended for. In one example, ticks and crosses next to covered and uncovered pots of water were intended to show the importance of keeping drinking water covered.

However, ticks and crosses are themselves formally learned symbols rather than intuitively understood. In this case, the tick was decoded as representing a ladle to scoop out water – and the picture had no meaning beyond this.

Bridging the gap

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Seeing with new eyesThe best solutions to the perception gaps that emerge when working with the BoP is prolonged immersion by researchers to build contextual knowledge and understanding of different communities. However, the demands of commercial market research mean that such an approach is not always practical. TNS applies diverse approaches to BoP research that can provide a more timely and applicable solution to bridging the gaps produced by different socio-economic experiences and include:

Cultural interpretersWorking in partnership with those with exposure to the BoP can provide ready insight as to where cultural gaps exist – and a means of bridging them. Young people from remote rural communities who have moved to work in the city, or community workers belonging to NGOs can act as cultural interpreters and an important aid to data gathering.

?

Common visual grammarUnderstanding the shortcomings of supposedly universal symbols is an important first step towards developing a more intuitive visual grammar. TNS is developing a process to identify a common visual language that can be used in communication with the BoP.

Mapping prioritiesStudying patterns of adoption across different categories is enabling us to map how BoP consumers prioritise and trade-off between their many different needs – producing a more meaningful guide to consumer decision-making.

Bridging the gap

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Leading the way to a better understandingResearch is a natural arena for confronting the issues involved in communicating with the BoP. However, the benefits of a shared understanding go beyond the gathering and interpreting of data; they are essential for acting on it as well. The insights gained through seeking a common cultural language have immediate value for brands, governments, NGOs and all others tasked with engaging BoP consumers – and exploring new forms of research has a crucial role to play in this process.

Bridging the gap

Abc字母

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Dreaming little dreams: brand building at the Base of the Pyramid - Poonam Kumar

Opinion LeaderFinding faster growth: new customers

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Logic suggests that brands have a limited role to play at the Base of the Pyramid. But try telling that to the people who live there.

Dreaming little dreams: brand building at the Base of the Pyramid

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It goes without saying that affordability matters a great deal to consumers who live on less than $8 a day. However, it would be a terrible mistake to assume that it is the only thing that matters. With products asked to perform a range of functional and emotional tasks, there is a natural and hugely valued role for brands at the Base of the Pyramid (BoP). However, those brands must be prepared to develop original, innovative and relevant propositions if they are to deliver against the needs of BoP consumers and become part of an exciting growth opportunity.

Priyanka’s storyTNS uses fictionalised realities, stories compiled from the many different interviews conducted by our researchers, to help bring to life the issues regularly faced by BoP consumers in different markets. Here is one such story.

Priyanka is 19 years old. She lives in a small village near Lucknow in India, part of a family of six that survives on the annual income of $4,000 that her father generates from the small piece of land he owns. Every day Priyanka travels for over two hours to attend

college in the city. She is a bright girl with potential, the local schoolteacher said. Her family had watched stories on the community TV set about girls with college

educations who land salaried jobs in the city – and so they have carefully set aside what money they can to send Priyanka to college.

Dreaming little dreams: brand building at the Base of the Pyramid

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Unlike the more affluent students at the college, Priyanka does not have pocket money – but her parents give her small amounts for transportation and food. For the last month, though, she has gone hungry most days. Hidden in her college bag, a secret from her parents, is the reason: a small tube of moisturiser.

Neutrogena is one of the more expensive moisturiser brands on the market – and when Priyanka bought her first tube from a shopkeeper in the city, she was shocked at the small size of the product she was given having saved up her lunch money to buy it. She decided to try it anyway – and has never willingly used another moisturiser brand since. She loves the way that the cream feels on her face – and she is certain that the soft look it gives her skin helps her to fit in amongst wealthier students. When the shopkeeper ran out of Neutrogena one month, Priyanka tried another upmarket brand. She went back to Neutrogena as soon as it was back in stock.

Although the moisturiser is the only beauty product that Priyanka buys, it is not the only product that she uses. One of her friends has also been saving her lunch

money – in order to buy a Ponds face wash. By sharing the two products, the girls are able to use a full skin-care regime.

Dreaming little dreams: brand building at the Base of the Pyramid

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When she returns home from college, Priyanka spends her evenings helping her mother. Dust from sweeping the floor clings to her long hair, which her traditional-minded parents will never allow her to cut. It leaves her skin feeling dry and spotty. If she did nothing about her appearance, she knows she will be ridiculed and singled out as a ‘village girl’ when she travels to the city. She fears that such perceptions will stand in the way of her opportunities.

Priyanka’s mother and father both believe that cutting Priyanka’s hair would damage her prospects for a good marriage. When she asked to wash her hair more frequently, to keep it from getting oily, they worried that she was secretly seeing boys. They would worry equally about make-up or beauty products – and that’s why they can’t know about the tube of Neutrogena. Keeping her family happy is very important to Priyanka. She wants to be accepted in her home village, just as she wants to be accepted amongst the other students at college. She is worried, though, that these two worlds will one day pull her in different directions.

In particular, she fears being forced to abandon her plans for a career if her parents choose to arrange a marriage for her. Until then, though, the secret tube of Neutrogena helps her to balance the two very different parts of her life.

Dreaming little dreams: brand building at the Base of the Pyramid

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Where brand loyalty means moreWe find Priyanka’s story echoed across the lives of men and women in India, China, Latin America and Africa: the regions where the vast majority of BoP consumers live.

This is particularly true of an upper BoP segment, those with purchasing power of between $2 and $8 a day, which TNS identifies as ‘Strivers’.

These BoP consumers are educated, hopeful and optimistic about their future, aspirational, ambitious and confident in their ability to achieve their ambitions. Like Priyanka they value their social equity and seek ways to build it further. But like Priyanka they often find themselves caught in conflict between traditional worlds and new opportunities.

Brands are valued, even loved, as they offer reassurance and certainty in potentially very uncertain lives. Once won over, BoP consumers reward their brands with unshakeable loyalty, giving early movers in this market a strong competitive advantage. However, to earn that loyalty, brands must first craft a proposition that resonates with the multi-dimensional role that they

Dreaming little dreams: brand building at the Base of the Pyramid

will be asked to perform within the BoP; robust, functional, affordable, addressing priority needs and yet also providing reassurance and even guidance. Achieving this often means re-engineering a brand through production innovation, packaging and delivery mechanisms.

People living on less than $8 per day demonstrate a strong and surprising preference to buy a brand over a commodity, provided the brand proposition is relevant, accessible and affordable.

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Dreaming little dreams: brand building at the Base of the Pyramid

Functional, emotive expertiseAny brand proposition for the BoP must be anchored in strong functionality that makes a measurable difference to the consumer’s life. The brand’s products must withstand stress and hostile physical environments, and last much longer than would be expected in other scenarios. And they must address genuine, high-priority needs in order to compete successfully for a share of very limited incomes.

Successful brand relationships often begin with information and education, reasons to believe and reassurance that money is being spent wisely. However, propositions are most effective when they build on this functional relevance and credibility to connect emotionally as well.

Nokia

Unilever

Brands must combine affordability with robust quality. Nokia’s brand reputation as a lifeline for rural Indians and Africans rests partly on its products’ reputation for being kicked, thrown, dropped, ground into the dirt – and still working. Perceptions of quality and expertise are as important in the BoP as in more developed market sectors, building trust, visibility and reassurance that consumers are getting the best that their money can buy.

Unilever’s Lifebuoy brand commands a premium in rural India by delivering germ protection that has saved and changed lives. Its credibility is built on more than a protection product. Lifebuoy has successfully established itself as a protection brand that champions the cause of health and hygiene, educating over 70 million Indians on the importance of germ protection and featuring as one of the country’s most trusted brands year after year. Like Priyanka’s tube of Neutrogena, Lifebuoy delivers emotional support through the trust it engenders as well as the crucial role it performs.

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Dreaming little dreams: brand building at the Base of the Pyramid

Emotional resonanceAcross markets, we find a range of emotional themes resonating with BoP consumers in this way – and providing reassurance, support and even guidance:

EmpowermentThe sense of a brand enabling and empowering, either oneself or one’s family, is particularly powerful. Brands that have successfully leveraged this emotional value include Nirma, now valued at $500m, which started life with a promise of ‘affordable whiteness’ for low-income consumers, distancing them from the brown colours that symbolise dirt and poverty. Priyanka’s tube of Neutrogena also stands firmly in this category.

FortificationFood brands that promise immunity against sickness or an improvement in reproductive health resonate strongly across the BoP, as do nutrition solutions that can help to make children stronger and better prepared for the future. Danone’s fortified yoghurt product, Shakti Dohi helps to ensure that children in Bangladesh,

one of the world’s poorest countries, get the micro-nutrients they need. Danone’s scientists worked to create a product that strips away all unessential costs without compromising on nutritional quality and the company partnered with the Grameen Foundation to establish an innovative community distribution model. Shakti Dohi is marketed door-to-door by Grameen ladies, who also help to educate and raise awareness.

PleasureDespite, or perhaps because of their many pressing life concerns, BoP consumers welcome brands promising special moments of cheer. SAB Miller’s Chibuku beer is one such proposition: engineered for those who cannot afford bottled beer (the majority of the population in Botswana, Malawi, Zambia and Zimbabwe where it is sold), Chibuku is brewed from sorghum and corn and sold in paper cartons and plastic containers. The brand proposition: Shake Shake, builds an identity around the need to shake the cartons before drinking, to mix the separated ingredients.

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Dreaming little dreams: brand building at the Base of the Pyramid

Assertiveness Themes of excellence and success can also resonate amongst BoP consumers, provided they focus on relevant needs. Brands have found success with promises of mastery over budget, admiration and envy of superior homemaking skills, enhancement of social stature and parental pride and ambition. Priyagold, a biscuit brand in India, challenged the market norms and the market leader by introducing a range of indulgence biscuits. Until then, the only biscuits that were accessible to lower income consumers were the cheaper energy range. Priyagold’s ‘demand with entitlement’ proposition instead asked: Why should the good things in life be denied to you?

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Inclusion not exclusivity: some potential traps for global brandsIn developing emotive propositions, brands must take great care not to apply developed market themes that have potentially negative connotations amongst BoP consumers.

Although international brands have aspirational appeal amongst the emerging middle class, that appeal has far less resonance for BoP consumers. Functionality, quality and the ability to satisfy emotional needs must be established on the ground, within the audience’s own experience; they cannot be imported from elsewhere. Local brands are often the ones to thrive within the BoP – and global brands looking for new growth opportunities can gain valuable insights by studying their success.

Brand-building the old-fashioned wayThe key to crafting a winning BoP proposition for global brands lies in a willingness to re-engineer product and brand infrastructure to craft an affordable, quality proposition. However, it also requires a will to go further: to develop emotional engagement and to fulfil the role of reassuring, trusted advisor that BoP consumers actively seek from their brands. For marketers, the BoP provides an opportunity for good, old-fashioned ‘brand building’ – and an environment ideally suited to building meaningful relationships

Rebelliousness and exclusivity have no place here; meaning and purpose are everything.

with consumers. With $5 trillion of spending power currently residing within the BoP, the rewards for investing in these relationships are substantial.

If a brand issues a challenge then that challenge must relate to real needs or changing unfair practices, not self-indulgent, edgy rebelliousness. Superiority must be directed towards a goal, never towards ego satisfaction.

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contemporary thinking in qualitative research globally, particularly in the area of consumer decision making and social media. She is a frequent presenter at ESOMAR and other industry forums, and the recipient of the ‘Best New Thinking’ award by the UK MRS in 2006.

About TNS TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and stakeholder management, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world.

TNS is part of Kantar, one of the world’s largest insight, information and consultancy groups. Please visit www.tnsglobal.com for more information.

Get in touch If you would like to talk to us about anything you have read in this report, please get in touch via enquiries@tnsglobal.com or via Twitter @tns_global

About the authorsTechnology and the Internet in Latin America – James Fergusson James Fergusson is the Global Head, Digital and Technology Practice at TNS, leading a group of global experts focused on helping clients to apply digital to fuel their growth strategy.

Australian by birth, James has 18 years’ experience in market research, across several agencies. James is a specialist in technology and telecommunications across both rapid growth and developed markets. He has worked with most of the world’s major companies in this sector and is increasingly applying working with clients in a more diverse range of sectors.

Social skills in the classroom: digital media use in Sub-Saharan Africa - Mark MolenaarMark Molenaar is Director, Client Service at TNS, based in Cape Town. Mark has been with TNS for over 18 years during which time he has helped clients to understand consumer dynamics across different sectors and the opportunities that these present for brands. Mark is heavily involved in interpreting TNS’s Mobile Life and Digital Life studies and the advance of digital and mobile across Africa.

A shifting base: the BoP in context – Poonam KumarDreaming little dreams: brand building at the Base of the Pyramid – Poonam KumarPoonam Kumar is Regional Director in TNS’s Brand & Communication practice bringing more than 20 years experience in brand development, brand strategy planning, ethnography and consumer insight to her role. Poonam has specific expertise on marketing to the Base of the Pyramid, and on motivational research and market segmentation and is a regular presenter on BoP consumers at ESOMAR and other industry events. Poonam holds a degree in Electrical Engineering from a premier Institute (IIT Chennai) and a post graduate degree in Management from a top management school in India (IIM Calcutta).

Bridging the gap - Anjali Puri is Regional Director, Qualitative Research, TNS Asia-Pacific. A seasoned qualitative researcher with close to two decades in the industry, Anjali has held a number of regional and global roles. She has extensive experience across categories in India and Asia Pacific, particularly food & beverage, healthcare and technology. Anjali has been active in the development of new qualitative methodologies and has been responsible for shaping

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