Looking At Asia In A Global Economic Downturn Series(2) : Brand Sirens in China

Who Are Brand Sirens?
They are the most coveted group of brand loving young adults. With their unique ability of brand advocacy, they tell people about their choices and influence the brand decisions of others. They are trusted sources for information. Having a Brand Siren on your side can be one of the most powerful ways to market your brand.

Through our Starcom international study into the lives of Brand Sirens in the US, China, India and Russia, we uncovered what defines Brand Sirens:
1. They are passionate about brands.
2. They lead digitalized lives – and nowhere more so than in China.
3. They advocate their brand choices as active and influential opinion leaders.
4. They are receptive to experiential and digital contacts.
5. They gather brand information from multiple sources.
6. They tend to have higher usage in all categories (especially Luxury)
7. They seek out novelty and are interested in trying new products

Our recession focused conversations in China reinforce the importance of Brand Sirens to marketers especially in these tougher economic times. It is during a downturn and subsequent recovery that marketers stand to benefit by focusing their marketing efforts against these super-influencers. Brand Sirens continue to buy and tell others about their favourite brands even in a slowdown. As others in their social networks put some brands in a purchase ‘parking lot’, Brand Sirens draw their
peers back into a brand conversation, keeping their favourite brands top of mind within their social networks. This report will tell you exactly how and where to reach those all-important super-influencer Brand Sirens.

When Economy Gets Tough, Brand Sirens Keep Loving
Brand Sirens love brands! And equally so, they love telling others about them to exercise their influence power. Neither one of these personality traits changes because the economy has slowed down.

B city Brand Sirens appear the most passionate about brands, more so than A city Brand Sirens, as they place even more value on brands as status symbols. They will rely on big/known brands as a success cue (to others) and a quality cue (to themselves). In rapidly growing B cities, no one can afford to make a fashion faux-pas, so there is a tendency to stick to well known/big brands. If the B city Brand Siren can afford it, they will purchase the desired brand that everyone recognizes and wants (it is safe). Exclusivity is not desired; what they want are symbolic statements.

Brand Sirens Get Creative To Maintain Their Lifestyle
With their spending habits and desire for branded products, it is understandable that Brand Sirens have a greater need for money, leading to a greater need not only to buy smarter and cut spend, but also to be proactive in order to earn more income to maintain their purchases. Brand Sirens show their proactive nature by starting their own side business, engaging in more Do-It-Yourself projects, bargaining over prices, andselling items to make money. B city Brand Sirens especially have embraced learning new skills, despite the fact that their behavourial changes are not as great as A and C city Brand Sirens.

Here is how Brand Sirens are managing their finances in a downturn by city tier:

A city Brand Sirens, for example, are seeking free or low cost entertainment. To help them maintain an outgoing lifestyle at low cost, brands can design events for Brand Sirens that have no cost to the participant but will continue to surround them with the brand. Take this example from Li Ning, China’s sportswear giant. Li Ning
organizes a free running club across cities in China, during which they provide tips, new product information and samples, along with music and other fun activities.

Where Can Brand Sirens Be Reached?
Being proactive is a time-consuming undertaking and we see this in Brand Sirens’ media usage. They have turned even more to online (+20pp versus non-Brand Sirens), not only because it is familiar to them, but because they value it as an information resource. Brand Sirens are making the most out of being more home-bound. In fact, over a third of Brand Sirens increased their time online doing social and business networking, participating in online contests from companies and blogging.

C city Brand Sirens lead the way in increased media usage. 75% of C city Brand Sirens say they have spent more time online now, versus before the recession. Despite their heightened online usage, they have not neglected their familiar newspaper, which saw the second highest increase after online. This is likely because newspaper is a cheaper source of information (versus magazines), inside which
they can find deals/promotions easily.

B city Brand Sirens are also hard at work searching for deals – especially online and in-store. Seeing that they don’t have as big of a means as A city Brand Sirens, they resort to their deal seeking expertise to save money and maintain their lifestyle. They are checking brand websites for promos/coupons (57%), looking for deals/sales in-store (62%), and subscribing to mobile phone promotions from companies (45%) or email newsletters from companies(42%).

Increased Expectations Of Brands
Because of the amount of money Brand Sirens spend, they are also expecting a lot from companies. A majority of Brand Sirens agree that companies should offer better
value to consumers during recessionary times and help them save money.

How Marketers Can Make Themselves Relevant

Surround Me With People Who Speak My Language
Over a third of A city Brand Sirens appear to especially enjoy stores which provide knowledgeable in-store consultants. This is because A city Brand Sirens know their brands and a have vast product knowledge. They appreciate having dialogue and a second opinion from others who are also experts in the area (as they absolutely consider themselves to be experts). They also are likely to shop at stores where
informed and professional staff are there to cater to their needs.
Take Action: Ensure your A city Brand Sirens receive the
dialogue they desire – high-level discussions on brands/products, along with the ability for them to express their excitement and glee to someone who understands.
Give them expert second opinions and also insider tips on the newest products.

Give Me Deals Via Digital Platforms
B City Brand Sirens want deals. They report some of the highest numbers in desiring discounts, coupons, and samples. They also reported being on the lookout for coupons in emails, and checking brand websites for promotions. Compared to B city Moms (the digital savvy group from the Parenting Installation), B city Brand Sirens are even more likely to subscribe to messaging from companies, such as SMS messaging from brands (+17pp vs B city Moms), and subscribe to email newsletters from companies (+20pp).
Take Action: B city Brand Sirens are doing all the hard work pulling information from various sources and companies. Simplify their work. Now is the time to plump up your email/SMS distribution list and ensure you have an effective CRM campaign.

Help Me Be Me
C City Brand Sirens have the biggest worries and are feeling the pressure of not having the means to afford brands for themselves or even to support their families. It is therefore not surprising that almost 40% of C city Brand Sirens say they would appreciate companies taking the initiative to sponsor local charities or organizations, in comparison to 16% non-Brand Sirens. C city Brand Sirens, in particular, want to feel that they are not overlooked, but that companies care about them too. They want to live up to the image they have of themselves in their head ( that they are brand sirens, savvy, in-the-know, and worthy of attention) and for others to recognize it in them as well.
Take Action: Become a bigger part of the lives of C city, Brand Sirens by bridging the current disconnect between their aspirations and their reality. How? Offer contests with shopping spree prizes, or beauty/spa packages to pamper and beautify. Allow them to feel special and well-off, despite their financial constraints.

Key Learnings & What They Mean For Us As Marketers:

1.Sirening Still Continues!
Even in the midst of a recession, Brand Sirens cannot resist connecting with other peers and brands, and sirening their brand love.
What this means to us as marketers?
First, focus your marketing efforts on Brand Sirens to keep your brand top of mind and draw others within the social network into the brand conversation. You can still leverage this learning as we begin on the course to economic recovery!
Second, feed them content to siren about! Turn the slowdown & recovery into a conversation. If you have tips for tougher times, tell them! Join in their celebration at the speedy economic recovery. If you have new products, makesure they know. If you are launching a new contest, let them be the first to enter. As long as they are kept in the loop with new (and relevant) information, they will tell others about it.

2.They are Leading Digital Growth.
More home-bound than ever, Brand Sirens have increased their online usage – in productive ways. 38% have increased their online networking and over a third have increased their participation in online contests from companies and increased their blogging activities.
What this means to us as marketers?
Embrace the digital times! Make sure you have a strong online presence and make it known to them. Since they are online (and on their mobile) more now, use this as an opportunity to start, strengthen or grow your CRM database. Develop a targeted list of movers and shakers for targeted CRM initiatives.

3.They Want To Share Their Enthusiasm With People Who Understand And Can Speak Their Language.
Brand Sirens know their products – and well! That’s why they (especially A city Brand Sirens) want to be surrounded by people who are able to talk the same talk.
What this means to us as marketers?
Give them people to connect with who are able to tell them the new news. Connect them with experts and other passionate Brand Sirens alike in a way that is fun, engaging and informative – be it at the store, via a special website with real-time dialogue, or message boards. Let their passion flow and allow them to feed off the energy of other similar-minded people.

4.Brand Sirens Have Been The Most Proactive In Behavioural Change.
Even cutting spend and buying smart may not be enough to allow them to continue spending and living the lifestyle they are passionate about. Thus, their need to find other ways to supplement their income. This leads to an increased proactivity in finding ways to make money, such as starting their own side business (84%) and selling items to make money (42%).
What this means to us as marketers?
Help them out and give them tips, tricks and ideas on how to make money. Perhaps even develop a branded online platform for them, on which they can sell (or trade) items (as they are likely to have a lot to sell/trade) with other Brand Sirens, or with consumers who are interested in the style and ideas of Brand Sirens.

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Looking At Asia In A Global Economic Downturn Series(1) : A-B-C Cities in China

Consumers the world over have been affected by the economic downturn - but how are consumers faring in China, a country that thus far has been the more resilient to the economic impact? Starcom China partnered with Interface-Asia Holden to investigate the impact of the recession on consumer attitudes and behaviours across life stages and city tiers (A-B-C cities). We explored how consumers have changed pre-recession compared to today, and who is affected the most.

This is the first installation in Starcom’s Looking At Asia In A Global Economic Downturn series that will include future spotlights on Parenting, Brand Sirens, Category Highlights, Greater China and Asia.

In this first report, we look at A-B-C cities in China; at how they are faring during a global economic downturn, how they compare and contrast, what they are spending on, where they are saving, and how we can reach them.

Key China Recession Macro Trends:
1. Recession Amplifies China’s Extremes. Inherent disparities in China are made more pronounced by the recession across city tiers – from product category tradeoffs to media interactions. Insulated A cities are feeling positive but cautious, B cities heighten their value focus, while C cities are pushed back to the basics as they are dealing with the brunt of the recessionary impact.

2. Brand Loyal To Affordable Luxuries. In times of uncertainly, consumers stay with the brands that they can rely on. This is particularly true when it comes to categories which consumers consider to be their small luxuries. Branded shampoo, for example, is viewed as an alternative to actual, more costly, luxury items. In personal care, consumers do not want to skimp out on themselves.

3. Uncertainly Brings Out Creativity. To combat the downturn, consumers turn to creative solutions to make ends meet or get ahead. Some are turning entrepreneurial, while others are taking on courses to retrain or get new skill sets like English.

4. No Compromise On Education And Healthcare. Consumers are increasing their spend in education and maintaining their spend in healthcare, even in C cities.

5. Recession Has Impacted Consumer Messaging And Media Choices – But There Are Differences Across City Tiers. C cities remain traditionalist, turning to familiar media for immediate answers – newspapers, local magazines; for B cities, the recession brings out a true Value Consumer mindset and the Internet becomes the destination to satisfy value hunting; A cities turn more to in-home entertainment presenting the opportunity to reach even the discriminating viewers with escapist fair.

The A-B-C’s Of China’s Recession

A Cities
- Most positive group. A cities are more insulated from the recession due to greater mobility, professional development opportunities and purchasing power.
- While 64% feel that“the recession has affected China greatly”, 65% said they feel‘optimistic’.
- A cities have the most agility in category spending and are able to dial spending up or down. Personal luxuries (handbags, jewelry) and entertainment (dining out and in-home) are the first to decrease.
- TV benefits from the downturn as home-bound A city dwellers turn to in-home entertainment.

B Cities
- Less optimistic compared to A cities, but feel stable (49%) and neutral (44%).
- Overall B cities follow the pattern of Acities with regard to category usage, but just like a middle child, they straddle between A and C cities. Their decisions are not as driven by branding (A cities) nor price (C cities), but by value. 65% said “I feel that value is more important.”
- In these tougher times versus pre-downturn, B city consumers turn to the internet brand offers.

C Cities
- Most affected by the downturn and showing the greatest behavioural changes in
purchase and savings habit.
- C cities will not compromise on education or healthcare.
- They turn entrepreneurial to generate additional income and make ends meet.
- They increase their reliance on newspapers and magazines for deals/promotions.

Chinese Consumers Feel Protected
Chinese consumers are amongst the top ten most confident in the world. They acknowledge the downturn, but still feel that they are protected from it and have faith in the Chinese government due to their quick actions, such as the sizeable fiscal stimulus plan implemented at the end of 2008. In fact 73% agree that they “have confidence the government will help us through it all” and 72% say that “I feel like all of China is in this together and it gives me a sense of security.” On the whole, Chinese consumers are optimistic and hopeful, but still cautious.

Disparity In Consumer Outlook And Attitudes Across A-B-C City Tiers
Though the overall China story is optimistic, it is when we look at city tiers that the true story emerges. C city consumers are affected by the recession the most. Not surprising, C city had the highest percent of respondents(78%) agreeing that “I feel that the economic slowdown has affected China greatly”. The realistic, and relatively pessimistic, outlook from the C city respondents is likely driven by unemployment. Great number of migrant workers who have lost their jobs in the bigger industrial centres are returning home empty-handed, while C city workers are facing widespread factory closures, leaving them to struggle for survival.

Consumers Are Changing Their Purchase Behaviours
We asked our consumers what activities they tend to do ‘more of’ now versus pre-recession. The economic downturn has led to definite shopping and saving behavioural changes in all cities. Savings is tops, but many consumers have also become proactive. No longer are they passively sitting back or merely saving money via coupons. They have stepped beyond that to seize control of their finances by using their personal resources and adopting an entrepreneurial spirit.


Cut Spend
When consumers Cut Spend, they tend to reduce oreliminate spend on goods/services they consider nonessential,indulgences (e.g. daily coffee/tea, memberships,driving), they trade down to cheaper / private brands, orsimply stay at home vs. out spending money.

Buy Smart
To Buy Smart, consumers continue to make necessary purchases, but find smarter ways to get what they want. They will stick to their desired brand, but buy cheaper items within that brand portfolio, or save up for one higher end good vs. impulsively buying several cheaper products. They will also turn to affordable indulgences, like chocolate.

Proactive
The Proactive consumer is not content to merely decrease spending. Instead, they will take charge, adopt an entrepreneurial mindset and make things happen by starting
a side business, learning a new skill to better themselves, selling items, or finding free/low cost activities.

Saving
Those Saving will do exactly that, and ensure that they not only manage their spending, but that they also will set aside a part of their income.

C cities lead the way in all behavioural change categories, showing that they are the ones putting the most thought and effort into combating the recession. Interestingly, on top of cutting spending and buying smart, they have also been extremely proactive and have taken the reins in their financial situation. This is especially apparent when looking at C city parents. 85% of C city moms said they have started a side business to bring in more income since the beginning of the recession – the highest percentage out of any group. This area will be discussed in greater detail in Starcom’s Parenting in a Downturn installment.

Similar Category Tradeoffs Across City Tiers
Respondents from all city tiers follow similar trends in their spending patterns. Luxury and other big ticket items such as home décor and automotive, personal luxury items like jewelry, and out-of-home entertainment like dining out were the top categories consumers eschewed. Higher percentage of C city respondents reported ceasing spending on these categories versus their A and B city counterparts.

Consumers Turn To Affordable Luxuries
With cut-backs on high ticket items, consumers are turning to affordable luxuries to maintain a sense of their customary lifestyle while keeping within their means. To this end, items like chocolate, or in-home entertainment all serve to reinforce that they are managing fine and remain in control.

Personal Care Brands Are Non-Negotiable
In all cities, half of the top status quo items (those which respondents say they have not changed their spending on) are personal care items.

How has your spending in the following categories been affected by the recession?


Brand Loyal Despite Cutting Back
In the personal care category, respondents appear extremely brand-loyal, stating they would not compromise but will purchase their desired brand at regular price.
The myth-buster for China is that while consumers, especially those in C cities, are in savings mode, consumers will still not deviate from their desired brand. In this market, consumers are still learning about brands and are looking for cues regarding quality. Consumers will not always look to the cheapest product, but will make choiceful, value driven purchase decisions within their existent brand consideration set.

C Cities Invest In Education
Education was one of the categories that was immune to spending cuts and even experienced an increase in spend. This was especially the case for C cities where 28%
respondents reported increasing spend on education. C cities view education as an investment in giving their child more opportunities in life.

Contact Messaging Preferences Vary By City
Price discounts are the most popular across all city tiers, with 89% saying they feel that this is what companies ought to offer consumers. Females (the primary decisionmakers)in all cities say they would enjoy the benefits of coupons, free samples, and 2-for-1. However when it comes to consumer incentive programs, C cities are not as keen, as they appear driven by immediate gratification in savings and not the slim possibility of future prizes.

How companies can offer better value for consumers during a recession
A-B-C City Females

1. Product benefit explanations are especially powerful for C city consumers as they are still learning about products and desire product cues – especially in recessionary times when they cannot afford to make mistakes.

2. In store consultants on the other hand are not trusted by C city female consumers, as their trusted sources are overwhelmingly their personal network of family and friends.

3. C city consumers are seeking information and any way to make their lives easier is appreciated.

Key Learnings & What They Mean For Us As Marketers:
Recession Further Amplifies China’s Extremes
There is no one China, and the recession further deepens the cross-city tier disparities.
What this means to us as marketers?
Adopting a by-city tier approach starting with consumer/market research through to communications strategies and media choices will ensure consumer understanding that will lead to stronger consumer relevance.

Consumer Keep True To Their Affordable Luxury Brands
Consumers still perceive branding as a powerful quality reassurance, and will make effort to buy brands within their consideration set first, whether by trading-down on the product tier or waiting for a sale. Personal Care products and even affordable food indulgences, like chocolate, are perceived as the Affordable Luxuries. Price is only part of the equation, reinforcing the rightful brand choice is the other.
What this means to us as marketers?
Opportunity to maximize relevance of our products to the consumer in these tougher times. Making the choice easier(functional) and reassuring of the rightful brand choice (emotional) will deliver the total brand offer, and work to cement the consumer-brand bond.

Consumers Finding Creative Solutions To Combat The Recession
Consumers are increasingly relying more on themselves to get them through tough times. What are we as marketers doing to aid their ingenuity and entrepreneurial spirit?
What this means to us as marketers?
Explore opportunities to connect with these self-starting consumers by aiding them in their goals - equip them with necessary resources such as tips and tactics, facilitate access to forums for them to exchange ideas and experiences.

C Cities Uncompromising On Categories That Affect Their Future
C cities will not compromise on education or healthcare, as these are crucial in securing the best possible future for their children and for themselves.
What this means to us as marketers?
There are opportunities for brands to present an altruistic front by showing a desire to help by offering scholarships or education funds to C city children.

Messaging and Media Choices Differ By City Tier
A city consumers are turning more to in-home entertainment presenting opportunities to reach even the discriminating viewers with escapist fair. For B cities, the recession brings out the true Value Consumer mindset and Internet has become the destination to satisfy their value hunting. C cities remain traditionalist, turning to familiar media for immediate answers – newspapers, local magazines.
What this means to us as marketers?
Linking the content, context and contact in a meaningful way has never been more challenging than it is today. Consumers are more sophisticated, have more media choices and higher expectations of brands and advertisers. Understanding consumer media habits across city tiers is only part of the story; we need to better understand the role that each medium plays in consumer’s life and on the decision-making journey. The most powerful consumer connections can be created when we link the consumer with the brand through the right messaging and contact choices. And as we know, both the message and the contact will differ by city tier and consumer group.

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