Way to Shop­pers` Mind, Heart & Wal­let!

Point of Purchase - - CONTENTS -

Un­der­stand­ing and draw­ing in the cus­tomers is the quest of each and ev­ery brand and re­tailer. Here are some ideas and sug­ges­tions ex­tracted from in­ter­na­tional prac­tices, stud­ies and ini­tia­tives to un­der­stand the elu­sive ‘shop­per’ bet­ter and max­imise on his/ her loy­alty

How To Use Shop­per Mar­ket­ing To Tar­get Low­In­come Cus­tomers

5.1 bil­lion peo­ple, or 78% of the world’s pop­u­la­tion, are low-in­come con­sumers¹. They live from less than $10,000 a year. Nev­er­the­less, these shop­pers be­come in­creas­ingly in­ter­est­ing to FMCG and re­tail­ers.

But how can com­pa­nies ef­fec­tively mar­ket to them? And what does this im­ply for shop­per mar­ket­ing?

In Rus­sia, low-in­come shop­pers spend $104 bil­lion an­nu­ally (30% of per­sonal spend­ing)¹. More­over, they are brand con­scious as they need re­li­able qual­ity at a fair price. Ac­cord­ing to AT Kear­ney, 70% pre­fer multi­na­tional brands over do­mes­tic brands¹. How­ever, due to glob­al­iza­tion more and more in­di­vid­u­als move up the in­come pyra­mid. Fos­ter­ing early on brand loy­alty among low-in­come shop­pers al­lows com­pa­nies to up­grade them to more ex­pen­sive prod­ucts at a later stage.

Yet, com­pa­nies can­not just repli­cate shop­per mar­ket­ing cam­paigns de­signed for af­flu­ent shop­pers to at­tract low-in­come cus­tomers.

Low-in­come shop­pers usu­ally fre­quent small stores. They com­prise 50% of the world’s mom-and-pops cus­tomers². Their fam­i­lies are larger in num­ber and they tend to tend to main­tain clas­si­cal role mod­els (i.e. moth­ers do the gro­ceries). Also, they usu­ally are more reli­gious and su­per­sti­tious than af­flu­ent shop­pers.

Con­se­quently, com­pa­nies must first un­der­stand the spe­cific low-in­come shop­per they want to tar­get and gen­er­ate in­sights.

For ex­am­ple, Danone in China en­riches its bis­cuits with cal­cium and iron ac­knowl­edg­ing that half of Chi­nese pop­u­la­tion lacks cal­cium. In In­dia, Citibank in­stalled ATM ma­chines with fin­ger­print authentication and voice recog­ni­tion to al­low il­lit­er­ate cus­tomers to ac­cess their bank ac­count with­out in­ter­fer­ence of an em­ployee.

Once a com­pany un­der­stands the de­mo­graph­ics and life­style of its tar­geted shop­pers, they have to de­velop a con­sis­tent strat­egy for shop­per mar­ket­ing along the en­tire path to pur­chase.

AT HOME

TV, In­ter­net and es­pe­cially word-of-mouth are im­por­tant to low-in­come shop­pers. So­cial re­la­tion­ships and fam­ily ties tend to be stronger than for af­flu­ent cus­tomers. Com­pa­nies who in­cor­po­rate shop­pers and con­vert them into brand ad­vo­cates can cre­ate a strong and pow­er­ful so­cial net­work. Nestlé Brazil for ex­am­ple, re­lies on di­rect sales for its yo­ghurt and bis­cuit prod­ucts. Al­though cus­tomers are given a two-week credit to pay for the prod­uct, de­fault rates are low due to peer pres­sure. Mean­while, “(i)n Rus­sia and Cen­tral Asia, door-to-door sell­ing ac­counts for nearly 19 per­cent of the beauty mar­ket”.

ON-THE-GO

The type of me­dia to use to tar­get low­in­come shop­pers de­pends pri­mar­ily on where your cus­tomers are liv­ing.

In ru­ral ar­eas, vil­lage mar­kets and ope­nair fes­ti­vals pro­vide com­pa­nies with an ef­fec­tive means to tar­get larger au­di­ence. Col­gate-Pal­mo­live for ex­am­ple, sends a video van to ru­ral ar­eas of In­dia. The pro­gram in­cludes lo­cal movies as well as com­mer­cials for the com­pany’s per­sonal care prod­ucts. Unileverin turn, uses ma­gi­cians and dancers to pro­mote their prod­ucts in ru­ral ar­eas.

In ma­jor cities, tra­di­tional on-the-go me­dia is best suited. Bill­boards and street fur­ni­ture are only a few of the ve­hi­cles mar­keters can use to com­mu­ni­cate their brand to shop­pers. Al­though the mes­sage and key vi­su­als might be dif­fer­ent from cam­paigns di­rected at af­flu­ent shop­pers, the ve­hi­cles are the same.

IN-STORE

Al­though price is a key cri­te­rion for low­in­come shop­per, they also tend to be more brand con­scious as they are de­pen­dent on re­li­able qual­ity. They just can­not af­ford to ex­per­i­ment and to spend their sav­ings on im­pulse pur­chases.

With re­spect to pack­ag­ing, smaller pack­ages might be more ap­pro­pri­ate for two rea­sons. First, the unit price de­clines and hence al­lows more low-in­come shop­pers to ac­cess the prod­uct. Sec­ond, small mom-and-pops or vil­lage stores of­ten do not have suf­fi­cient space to stock larger pack­ages.

How­ever, com­pa­nies also have to en­sure an ap­peal­ing com­mu­ni­ca­tion in-store. Proc­ter & Gam­ble Mex­ico for ex­am­ple de­vel­oped the “Golden store” pro­gram. “Golden stores” are smaller mom-and-pops that carry some 40 or more P&G prod­ucts and dis­play them to­gether on the shelf in­stead of next to com­peti­tor’s brands. P&G’s sales force in turn of­fers more fre­quent stores vis­its and ded­i­cates more re­sources on dec­o­rat­ing dis­plays.

CON­CLU­SION

As for any other shop­per mar­ket­ing cam­paign, mar­ket­ing to low-in­come shop­pers must be in­sight-driven. Un­der­stand­ing the tar­geted de­mo­graphic group and their life­style is vi­tal for any cam­paign. Yet, shop­per mar­ket­ing is not ev­ery­thing. De­vel­op­ing suit­able and at­trac­tive prod­ucts adapted to the needs of low-in­come cus­tomers is the very first step.

To bench­mark, com­pa­nies should have a close look at how lo­cal com­pa­nies do busi­ness and eval­u­ate the pos­si­bil­ity of col­lab­o­ra­tion. For ex­am­ple, Unilever In­dia in­tro­duced a low price de­ter­gent us­ing a sim­pli­fied for­mula which is man­u­fac­tured by a lo­cal com­pany. The re­sults are im­pres­sive: “with only one strong com­peti­tor, Wheel quickly won 38 per­cent of the pow­der-de­ter­gent mar­ket in In­dia, thereby match­ing the com­peti­tor’s mar­ket share”.

Shop­per mar­ket­ing is not a costly tool for tar­get­ing only af­flu­ent buy­ers. In­stead, it is in­sight-driven mar­ket­ing along the en­tire path to pur­chase to any group of cus­tomers. More­over, low-in­come con­sumers rep­re­sent a lit­tle pen­e­trated seg­ment and hence, pro­vide a huge busi­ness op­por­tu­nity for any com­pany that un­der­stands their very needs

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