Meaningful connections

Kantar Millward Brown’s Piotr Chodakowski examines what Saudi brands are doing to reach a newly published top 20 ranking

What have local firms including STC, Al Rajhi Bank and Jabal Omar done right to make a new list of the 20 most valuable brands in Saudi Arabia?

In March WPP and Kantar Millward Brown launched the first BrandZ Top 20 Most Valuable Saudi Arabian Brands

study in partnership with Prince Mohammad bin Salman College of Business and Entrepreneurship (MBSC).

Today, Saudi Arabia is embarking on a hugely ambitious and far-reaching programme to transform and diversify its economy through Vision 2030 as it hopes to move away from its reliance on oil by developing a thriving private sector, fostering entrepreneurship, and improving people’s health and quality of life.

“Strong brands don’t arise through good fortune or just one creative advertising campaign; they are built through sustained investment in the external face of the business and through continually proving its ability to deliver on a promise of quality,” says Fahd Al Rasheed, vice-chairman of the board of trustees of MBSC.

In its global and local rankings, BrandZ investigates what sets the strongest brands apart from the competition and shows that awareness is a key ingredient in consumer choice. But it is a brand’s ability to make a meaningful connection with a consumer that matters most. Brands must get noticed, but they must then have something of value to say.

Successful brands in Saudi Arabia are telling stories that resonate with contemporary Saudis to help them navigate the evolving tensions they face between tradition and modernity. Consumers are sophisticated and selective, and expect an increasingly complex but authentic relationship with the brands they make part of their lives.

The most successful brands create a connection with consumers to generate a significantly greater return on their brand investment, which positively affects sales and bottom line.

Here is a list of key takeaways that we would advise marketers to consider when operating in Saudi Arabia: Be aware of regional variation in attitudes. Although Saudi Arabia is the dominant economy in the Middle East, with double the population of the rest of the GCC combined and a GDP double that of its five GCC partners, there is no one-size-fits-all approach. Consumers differ significantly in their tastes and expectations depending on where in Saudi Arabia they live. The population is young, but wealth is with the old. The median age of the Saudi population is 27 and brands are usually drawn to the younger, tech-savvy and generally outward-looking sector of the Saudi consumer audience. But much of the country’s wealth remains with parents and grandparents. This creates a curious dynamic for brands: older consumers have more money to spend, but the big spenders of the future are forming brand loyalties now. Make promises and nurture trust. Trust, reliability and authenticity are essential qualities for a brand to succeed in Saudi Arabia. Trust is earned over a long period of time, and, if lost, is almost impossible to recover. A bad experience is not just remembered but also shared rapidly and, in a society where the views of family and friends matter immensely, this is especially important. Offer value and enable smart

choices. Consumer confidence has dropped five percentage points in the past year as economic growth has dipped to its lowest level in five years. While GDP growth is forecast to rebound in 2017, Saudi consumers have adjusted their spending habits and are rethinking the categories, products and brands they buy. Consumers are still looking for quality but this is tempered by people looking to buy smarter and to get better value for money. Cards matter, but cash still

rules. Most consumers have a bank account and penetration of debit cards is almost universal, but most people use their cards to withdraw cash, rather than using the cards to pay for goods directly. Credit cards are used mainly for bigger-ticket items, when it would be inconvenient to carry around so much cash, though card payment systems are widely available at the point of sale. There is an opportunity for payment-service providers, banks and retailers to encourage wider use of cards. Mind the clutter, watch for

There are key advertising seasons when every brand is active, and while the brand landscape is busy at these times, there’s a sense that if you want to maintain a presence in people’s minds, you have to be there too. Ramadan and the post-Ramadan holiday period of Eid are the busiest, along with the back-to-school season and events of national significance, during which brands take the opportunity to, for instance, publicly congratulate the king on a new achievement, or mark an historic event. Outside of these times, there are clear opportunities for brands to make a bigger impact on consumers, not just because media rates become more affordable, but because they can also experiment with ideas unrelated to festivals or events. Get online and get mobile, but don’t forget TV. Video viewing levels on mobile phones are among the highest in the world, partly due to consumers’ passion for all things digital and partly because mobile phone subscriptions tend to be generous with data allowances by world standards. Between a third and half of all time spent watching video content is spent on a mobile device; everyone is online and has a mobile phone, so digital must be part of any media plan. But traditional television is still a powerful draw, and when combined with catch-up TV, still accounts for more of consumers’ time than mobile video: 41 per cent. Look at the opportunity for cross-screen advertising that takes into account the multi-screening habits of Saudi consumers. Think social – consumers are ahead of the game. Brands are lagging behind consumers when it comes to social media. More than 90 per cent of Saudi adults are online and nearly all of these people are using YouTube and other social media platforms, primarily Facebook and Instagram. Yet few brands have so far made real inroads into social media here, beyond having a branded page and inviting people to like it. The closeness and immediacy that social media promises – and that is being used so effectively as a customer service and e-commerce tool in other highly social markets such as China – is an area for brands to explore in Saudi Arabia. Saudi Arabia has had a reputation for stereotypical conservatism, but today the conversation is changing rapidly. The challenge of brand building in this market is to understand social and cultural norms and achieve a delicate balance: to reflect deeply held cultural values while being sufficiently bold and creative to make a lasting impression and connection. Meaningful connections are based on emotional links, and the most successful brands bring meaning to consumers’ lives through their products and through their communications, with emotion-driven and memorable messages that are clearly relevant to the audience. The key is making a locally relevant connection with consumers.

Marketers need to consider both their product and their communication strategies. Depending on the extent of standardisation or localisation of each, their strategy could ultimately be “truly global”, with both a standard product and standard communication, or it might be “totally local”, with both local product and communication. Perhaps it will be “glocal” – a blend of local and global that many multinational corporations have found works best to connect with consumers in an unfamiliar world. They need to have better understanding of their consumers, be nimble, and be aware of the price-value equation, which gives local players an advantage over multinational companies.

The opportunity is there for local and international brands to align themselves with the new vision that the Saudi government has for its country’s future. As the focus of economic activity shifts, this opportunity will be expanding for brands across different sectors such as healthcare, food, education, technology, business services and infrastructure.

“Strong brands don’t arise through good fortune or just one creative advertising campaign; they are built through sustained investment in the external face of the business and through continually proving its ability to deliver on a promise of quality.”