Boston ConsultingConsumer research

What you may not know about the choices of global consumers

The following is the What you may not know about the choices of global consumers recommended by And this article belongs to the classification: Boston Consulting, Consumer research.

Few global consumer markets are as confusing as they are now. This epidemic is undoubtedly a black swan incident, which has fundamentally changed the purchase behavior of many products and services. For marketers around the world, not everyone is fully aware of these changes.

In some markets involving trillions of dollars, enterprises are still using traditional methods to locate products, predict consumers’ consumption habits under the new normal, and develop target consumer prototypes.

The problem is that this approach can oversimplify the changing drivers behind buying behavior.

For example, most consumers around the world say that they pay attention to cost performance and are willing to spend more money on green products. However, when asked about factors influencing their recent buying behavior, from clothing to drinks to dining in restaurants, they usually put sustainability and value behind them.

A detailed understanding of the factors that really drive consumer choice will determine whether you can become the leader of a certain category in the target market, or make decisions that are not considered in terms of product, pricing and positioning, and then lose your advantage.

To this end, the BCG consumer insight think tank (CCI) has an in-depth insight into the six major markets of Australia, China, France, Germany, Japan and the United States, and analyzed the driving factors behind the demand and choice of a series of products / services by more than 15000 consumers.

CCI has been committed to in-depth study of consumer behavior and purchase decisions in specific markets, and uses BCG demand center growth method to understand the key drivers of consumer choice. This is the first time that we try to combine the three key dimensions of consumer demographic data, consumption view and situation to analyze the factors influencing consumer demand and choice in different goods and services categories and different countries (see Figure 1). Finally, we get some insights different from traditional concepts.

01. The same world, different consumption views

Although globalization has lasted for decades, consumer thinking mode is still highly localized

Marketers have long known that consumer confidence and perceptions vary from market to market. However, a more and more popular view is that under the influence of globalization, the global generation Z have similar consumption concepts. Therefore, we decided to study the similarity of consumption views in different countries and market segments more deeply.

In general, we find that the consumption view is more different than convergent among different markets (see Figure 2).

There are obvious differences between eastern and Western consumers in most consumption views. Western consumers are more individualistic and agree with the idea of “individual independence”. However, this idea has not been well received in Japan and has not been able to enter the top ten in China.

In many cases, the attitude of Chinese consumers is quite different from that of other countries. So far, for example, they have shown the strongest optimism about the future and the greatest confidence in the beneficial impact of technology. In addition, 86% of Chinese consumers admit that they care about what others think of their purchases, which is not important in Western markets. On privacy issues, such as whether they are worried about the safety and protection of their own data, Chinese respondents pay very little attention to this issue. In contrast, in our study, respondents from neighboring Japan were the least optimistic of all countries, and their uniqueness was that they attached great importance to their time alone.

Thanks to the Internet and social media, there has been a lot of discussion on the common attitudes and preferences of the younger generation, such as the millennials and the under-30 groups. Therefore, we would like to know whether the consumption views of the new generation of consumers around the world are more consistent than those of the older generation. When we compare the similarities of the consumption views of the respondents under 30 years old in different countries with that of all the respondents, we find that the young consumer groups in different countries have the same obvious differences as the elderly group. Similarly, there are differences among high-income groups in different markets. This may indicate that people exaggerate the global archetype, and it is risky to develop a broad strategy for each generation of giant groups without considering important local differences.

02. The global category guide is usually a myth

Of the 13 categories we studied, a common global strategy would not work

Consumers around the world have different ideas and different needs. The same is true of cars, insurance, personal computers and tablets, and even payment products. In these areas, enterprises invest relatively less time in localizing products and services (see Figure 3).

Only a few categories, such as leisure tourism, luxury retail and content streaming media, have relatively similar global demand. Supply may be the reason: Netflix, Amazon and other streaming providers offer very similar content around the world, often with local translations or subtitles.

In the case of luxury goods, the similarity of global demand may reflect the demand for the iconic nationality of the products and brands purchased, rather than the demand for local customization. Even in these unusual categories, Chinese and Japanese consumers have expressed different local needs.

Our results show that businesses must understand local needs. A one size fits all marketing strategy is unlikely to apply to most B2C categories globally. So, why do some multinational brands succeed in the world? We find that, to a certain extent, this is because some international brands have different audiences in different markets and can meet completely different needs. For example, the appearance and public perception make BMW very advantageous in the Chinese market, while in Germany, BMW’s advantage lies in its quality image; in Japan, some Starbucks coffee shops are similar to traditional teahouses, while in Mexico, they look more like bars; although McDonald’s adopts standard operation mode and supply chain all over the world, it constantly adjusts to local tastes Menus, such as vegetarians in India and farmhouse soup in Portugal.

We can take the category of “snacks” as an example to better understand this trend. Compared with other markets in our study, Chinese consumers pay more attention to health and quality when buying snacks. For example, Japanese consumers pay more attention to “convenience” when choosing snacks. Obviously, in snack products, enterprises should not despise localization (see Figure 4).

03. The situation can complement the consumer portrait

Although concepts and demographic data are very important, they are not convincing in explaining consumer choice unless the impact of product use context is also taken into account

Our research found that in the actual purchase and consumption, the concept and demographic data are usually not directly expressed as the driving factors of demand. Context plays an important role in influencing consumers’ trade-off purchase or consumption behavior.

This becomes clear when we compare the consumer attitudes and confidence that respondents think are important to them with the factors that specifically affect their recent purchase or use of goods. For example, many consumers around the world say that as expected, because of the huge economic uncertainty caused by COVID-19, cost performance is very important to them.

However, with the exception of a few cases, our study found that the pursuit of cost performance as a general mentality has little to do with its impact on actual purchase decisions. Although consumers in six countries agree that price / performance is an important consideration (from 67% in Japan to 81% in Australia), only a small number of people regard price / performance as one of the three main demands that affect their recent dining out and purchase snacks, drinks, cars, computers or video streaming services. For example, while nearly 70% of German consumers think they care about cost performance, less than 9% think it’s one of the top three demands when they buy a car recently, and only 25% think value is one of the top three factors when they buy a PC or tablet recently (see Figure 5).

We analyzed more than 130 variables and found that in the category of high frequency and moderate cost, context is often more important than consumption view and plays a leading role. For example, in all markets we studied, dining out, beverage and snack consumption were highly context driven. Although consumers may find the brand image of a restaurant attractive, which restaurant they actually choose depends largely on the people they are with, the time of the day and the situation (see Figure 6).

In fact, the more frequently consumers buy or consume a certain kind of goods, the more important the situation is. Even in luxury goods, automobiles, insurance and other categories with high customer price and low purchase frequency, we find that two to three of the top ten demand drivers are context related (see Figure 7). Demographic data has little effect on demand differences. Our results show that age is the only demographic factor that significantly affects purchase and consumption decisions. Among the 13 product and service categories, none of the factors strongly influencing demand is related to gender or income.

As for consumers’ attention to price, we find the strong influence of situation again. We asked consumers whether they chose the lowest price snack or a slightly more expensive snack (no more than 5%) when they last bought a snack? We classify the respondents who still choose the lowest price option in the face of small price differences as “price sensitive”. We found that more respondents around the world chose the cheapest snack when they were low energy or ate with their children. Few consumers care about the price when they buy snacks in convenience stores, especially when they only buy snacks and don’t buy other goods.

The impact of situational variables is different in different parts of the world, reflecting the subtle differences between specific markets. For example, when we ask consumers who they are sharing their recently purchased meal with, the most common answer in western countries is “spouse or partner”, which accounts for 36% of consumers in Germany and 40% in the United States. In Japan and China, however, consumers tend to eat alone. Such significant differences mean that businesses need to understand the context and its local impact.

Impact on global brands

Our research results can bring the following inspirations for brands:

Don’t bet on GM’s consumer prototype. Although marketers should continue to invest in understanding demographics and consumer attitudes, it is unwise to build a global marketing campaign based on a generic consumer prototype. For example, even if z-generation consumers in different countries use the same social media channel, they may not have similar ideas when deciding which products to buy. The marketing activities of enterprises must consider the regional differences of consumers. Of course, businesses should still reach consumers through social media, but they should adjust their content and information to their local audience.

Even for the categories that do not need to be localized in the traditional concept, the globalization strategy also needs to be fully adapted to local conditions. Due to the different needs of consumers all over the world, it is not realistic for enterprises to use the “one size fits all” strategy to win in a certain category of products in most category markets. Like Philips, Nestle, Starbucks and McDonald’s, brands that adjust their value proposition to local needs tend to perform well in similar products. This is true even in areas such as insurance or payments, where global strategies are more common.

Don’t pursue complete loyalty by trying to satisfy all the desires of the target consumers. It is natural for enterprises to try to build brand loyalty and attract consumers as much as possible. But there is no such thing as “total customer loyalty.”. Even loyal consumers will make different decisions in different situations. Enterprises must invest in understanding and mastering the specific needs of consumers at a specific time of purchase or consumption, especially the products with high purchase frequency and low customer price. Similarly, the pricing strategy of consumer goods also needs to consider the scene characteristics of when, where and with whom to buy and consume, so as to seize the value opportunities that other brands may miss.

In recent decades, the advanced technology developed by enterprises can more and more accurately locate the global target market, and conduct more in-depth research on the psychology of consumers. As a combination of art and science, consumer marketing has made great progress. Nevertheless, we believe that many enterprises still have many missing values. They can understand the key factors of consumption through a more comprehensive method, and then accurately predict the purchase and consumption of goods or services in a specific market. With the global economy becoming more and more complex, those enterprises that can break through the static state and successfully unlock the mystery of consumers through insight into the market and situation will be in the best position in the differentiated competition, stand out in the increasingly tense competition and win the competitive advantage.

How do global consumers want to find brands or products online in the future? Internet Retailer: global consumers’ online shopping reached $1.74 trillion in 2015 Annual growth rate is about 20%. New development of people car relationship: how do global consumers want cars to adapt to their own life (with download) BCG & China Foreign Trade Trust: China Trust Industry Report 2017 (with download) Boston Consulting: application of brand advocacy index in China’s technology, media and Telecommunications fields Boston Consulting: survey shows that American consumers are not enthusiastic about the same day delivery service BCG: global luxury consumer insight in 2017 (with report) culture: the most important thing for new fashion and luxury consumers BCG: global luxury consumer insight report in 2017 (with download) BCG: research highlights Tencent & BCG: insight report on consumers’ digital behavior in China’s luxury market

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