Brands Reach Out To First-Time Buyers

Advertisers with an eye on long-term growth in Asia are reaching out to millions of first-time buyers for a range of goods and services, an emerging middle class that is set to grow by more than a billion over the next two decades.

Establishing brand loyalty today could pay significant dividends in the future, particularly when introducing consumers to a category for the first time, rather than competing for share against rival brands.

However, brand owners must adapt sales and marketing approaches as well as ROI measures to succeed in this new environment, where media options may be familiar but attitudes to products and advertising are quite different.

The first forays to connect with new consumers in smaller towns and rural areas, especially for FMCG brands, are usually carried out by sales teams and distribution agents, inking in-store and small-scale outdoor ad deals at the same time as securing shelf space. Funds come out of trade marketing rather than brand marketing budgets.

Although brand-building offers better returns over the long term, money spent on distribution as well as in-store media space delivers the best short-term ROI – as long as the right deals can be struck.

This is far from easy however, as negotiations tend to be inflexible but are vital in building early awareness. The battle for retail visibility is the first media challenge brands face.

“In-store media planning and buying is tougher than television,” says SK Biswas, chief strategy officer for media agency network Havas Media Asia-Pacific.

“Television has flexibility you can play around with; but for in-store, once you get blocked out, you can get blocked out for two years.”

Enter the brand manager
If these initial steps are successful and local sales start to grow, brand managers tend to step in to sustain this early momentum with more formalized media and marketing strategies.

These usually include TV to build awareness – sometimes using tailored creative or ads that have also been copy-tested in smaller towns – while layering in local relevance with more targeted campaigns through out-of-home, in-store and occasionally radio.

TV will remain a cornerstone medium for the foreseeable future, and become increasingly expensive as it connects more people adverisers want to reach. Broadcasters in many Southeast Asian growth markets are already investing in additional towers and stronger transmitters to match the distribution coverage of brands reaching out across the country.

At the same time, other local media will develop to meet the demand, especially out-of-home. Nonetheless,  the pace of economic growth tends to mean demand is always ahead of supply, breeding media inflation at all stages of economic growth.

“Consumers move fastest, then the business moves, then the media moves, then the research moves,” Biswas says. “When consumers move but the media has not moved in, then your point of differentiation or advantage will be distribution and retail coverage.”

The knowledge gap
Data about these new markets are thin on the ground, though brands are still seeking out information and insight to steer their investment decisions, particularly as margins narrow in pursuit of broader sales.

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To tackle this, immersion trips are becoming popular, particularly for international brands that may have fewer offices on the ground than their domestic rivals.

These visits allow marketers to spend time with people they hope to sell to and better understand their daily lives, at the same time hoping for a possible spark of inspiration for a new product or positioning that could give them an edge in the market.

Such techniques can be more useful than more structured forms of research, which tend to measure reactions to a proposed product or ad campaign, a potentially meaningless exercise for consumers without prior experience of many advertising categories.

“Qualitative will be a better play, but no amount of research will deliver a solution because the consumer doesn’t know any better,” says Ranga Somanathan, CEO of media agency Starcom MediaVest Group Malaysia.

“Their needs are very basic, and mostly they are unstated. The trick has to be that people immerse themselves in the consumer’s world by observing and being conscious of what is happening in the consumer’s life, and then making your own leap of faith.”

This is an edited extract from content published in the Q4 2011 edition of The Asia Media Journal. The latest issue of The Asia Media Journal is available in full here.