What hope-fuelled markets can teach fear-fuelled markets

Most markets can be identified as either hope- or fear-fuelled. Ann Mack and Mark Truss describe the outlook of the two types and the lessons mature markets can learn from emerging ones

Analysis of ten markets examined in the JWT Anxietylndex research has revealed two general groups of markets: fear-fuelled (mature developed countries) and hope-fuelled (developing countries).

Not surprisingly, the hope-fuelled markets comprise what are considered the emerging economies: Brazil, India and China (BIC). While Russia is normally grouped with these three as a fast-growing market, we found that it falls into the fear-fuelled camp along with the seven established economies we looked at.

What sets hope-fuelled markets apart from fear-fuelled markets is not their anxiety levels and drivers but their predisposition to optimism and how they move past their anxieties.

While people in the fear-fuelled markets expect most things to get worse – from the national infrastructure to the budget deficit to the economy – the BIC markets feel that a preponderance of factors will improve.

Hope just might be the antidote to anxiety. These optimistic and pessimistic mindsets are manifesting themselves in brand behaviour – for better and for worse (Figure 1).

While brands in hope-fuelled markets are playing to win, many in fear-fuelled markets are playing not to lose. The latter are focused on discounting, deals and promotions. The former, on the other hand, are focused on how they want things to be and how they can get there.

As a result, they are innovating, investing and experimenting with the hope of creating new and better futures for their consumers. And while there are instances of hope-fuelled brands in fear-fuelled markets and vice versa, each country's mindset is largely driving brand attitudes and actions.

The key difference between hope- and fear-fuelled markets is their positive outlook. The optimism scores in Figure 2 illustrate the differences in attitudes. To arrive at a country's score, we asked people in each country whether they expected factors – from the national infrastructure to job security – to get better or worse over the next six months; we then averaged the netbetter/ net-worse scores.

To dramatise this in a bit more detail, Figure 3 shows that while people in fear-fuelled markets expect most factors to get worse in the next six months, the BIC markets believe that a preponderance of factors will improve.

 IT'S BIC, NOT BRIC In looking at anxiety coupled with optimism/pessimism, Russia is distanced from the markets with which it tends to be associated. Unlike Brazil, India and China – which are relatively optimistic amid close-to-home anxieties – Russia is not only anxious but it is also extremely pessimistic (see Figure 4).

Memories of the 1998 financial crisis are still top of mind for Russians, and most believe this crisis will be long-lasting. Amid layoffs and salary cuts, Russians are seeing a reduction in household income even as the cost of products and services continues to climb – prices are two to three times higher in Moscow than in other European capitals. So in this case, it's BIC not BRIC.

HOPE- AND FEAR-FUELLED BRANDS

While today's realities help to determine the anxiety drivers and optimism in each market, mindset is proving to be significant as well.

Hope-fuelled markets have demonstrated incredible resilience, and they are resolutely moving forward to progress. Despite (and perhaps because of) their focus on closer-to-home concerns – some of which are legacy – they are driven by everything there is to gain.

Fear-fuelled markets, however, don't appear to be pushing past their present problems. They're going the safe route, rather than adopting a risk-taking, nothing-to-lose approach. While hope-fuelled markets are playing to win – think America at the height of the industrial revolution – fear-fuelled markets are playing not to lose. As a result, they are exposing their softness.

These optimistic and pessimistic mindsets are manifesting themselves in brand behaviour, for better and for worse. Whereas hope-fuelled brands are asking questions suited for leaders, fear-fuelled brands are asking questions more suited for followers.

While there are instances of hope-fuelled brands in fear-fuelled markets and vice versa, each country's mindset is largely driving brand attitudes and actions. With less to lose, brands in the hope-fuelled markets are focused on innovating, investing and experimenting, in an effort to create new and better futures for their consumers.

It's no surprise that we haven't found a plethora of brands in the BIC markets that are overtly referencing the economy. If anything, recession-related efforts have taken a very optimistic tone. One example of this comes from Airtel.

A recent campaign for India's No 1 telecoms service sees the return of screen couple Madhavan and Vidya Balan (both famous Indian actors), with Madhavan repeatedly sending romantic text messages to his wife. She retorts that in these times, one should use money judiciously, to which he says: ‘There should be no cutbacks in love.'

Airtel drove awareness for its customisable mobile plans by playing on the current sentiment of cautious spending, but it did so in an almost playful way.

In fear-fuelled markets, we see brands erring on the side of conservatism, fuelled by a desire not to lose ground. Brands seem to be obsessed with restoring their markets, market share, share price, brand image and stature to what they once were.

Although this is in fact the best time for brands to take risks, when consumers are changing behaviours and trying new things, nothing extraordinary is happening. Nothing famous is going on. Brand behaviour has been predictable. Hence we're seeing a lot of copycat tactics, many related to price, value and promotions that are meant to move product now.

Novel ideas like Hyundai's Assurance Plan – which many other companies are picking up and adapting to their own categories – are few and far between. Most of the time the conservative approach wins out. For example, a range of brands are trying to evoke a sense of comfort by waxing nostalgic: ‘Trying something new for 140 years: Sainsbury's'; ‘Tough but gentle for 100 years: Persil'; ‘Quality worth every penny: M&S celebrating 125 years'; the list goes on.

 While it's perfectly reasonable to ramp up price-led messages during a recession, sometimes brands can go too far and come across as schizophrenic or even alienate their core, as was the case with the marketing of Las Vegas.

Last year, Vegas marketers emphasised affordability describing the city as a place for hard-working people to rest and relax. The campaign showed blue-collar Americans enjoying activities such as indoor skydiving. Yet the marketers’ research showed that even during a downturn (perhaps especially during one), people still liked the idea of Las Vegas as a place to indulge. So the old ‘What happens here stays here’ theme was revived. How can fear-fuelled brands become hope-fuelled brands no matter what countries they market in? What can brands learn from hope-fuelled markets? How can they exert confidence and optimism while acknowledging the tough times? And how can they shift their loss-mitigation mindset to a winning mentality?

SOME SUGGESTIONS

Brands in established, fear-fuelled markets need to develop their more positive, optimistic, aggressive side – they must take a cue from the hope-fuelled brands in BIC. Rather than take a defensive approach in this recession, trying to stem further losses, protect share and attenuate risks, brands should go on the offensive. And as those in emerging markets do, brands should see opportunities where everyone else sees challenges.

For global brands, a fairly easy way to do this is to ensure that talent from these markets – people who bring an innovative style of marketing – represent a significant share of voice within the organisation. How else can brands in fear-fuelled markets embrace their inner BIC?

1 Inspire consumers, don't empathise with them. Rather than mirror the fearful behaviour of consumers, treating them as downtrodden, penny-pinching and anxious, do as the BIC markets do: think of consumers as hope-fuelled and talk to them accordingly.

Don't dwell on the mess that the next generation will inherit; see these consumers as better off than their predecessors. Don't feed resentment; feed ambition. Be more aspirational.

India's The Economic Times has created a platform to encourage entrepreneurship by giving people an opportunity to submit their ideas, as well as receive mentoring and the chance for funding.

Its ‘Power of Ideas’ contest provides both inspiration and advice for business development in a recession. Many headlines reveal sentiments like this one: ‘Just one big idea can lay off the slowdown.'

Also in India, Nokia has successfully positioned the brand as a means to economic and social progress. In one TV spot, Nokia highlights the economic aspirations of its target audience and encourages them to keep on dreaming.

Chinese sports brand Li Ning has launched a website, iRun Club, dedicated to runners across China. Not a new idea, as Nike launched Nike+ a while ago, but what's key is its slogan: ‘Just run, and be happy'. It's a perfect pitch for people looking to destress in this volatile time.

Questions to ask: how do you inspire your consumers? How do you develop and drive new aspirations?

2 Imagine new futures. Emerging markets and brands in these markets have their eyes firmly on the future. Rather than passively watch events unfold, be active in shaping your future.

That may require you to distance yourself from what has been and to imagine what could be; legacy can impede a brand from evolving.

Bharti Enterprises, run by Sunil Mittal, is one of India's biggest conglomerates in the country. But despite Bharti's success in telecoms, Mittal went on to start new businesses in unrelated spheres. He's partnered with Walmart to become an equally big player in retail, has entered into a joint venture with AXA to provide general and life insurance, and has diversified to offer digital TV, broadband and IPTV (internet protocol television).

Questions to ask: if you discard your past, what or where will your future be? How can you get there? While your competitors are inwardly focused, what ground would you most like to capture? Which new markets offer the most opportunity for your business, and which should you actively go after?

3 Return to the core value of hope. Despite their close-to-home anxieties, Brazil, India and China continue to exhibit optimism on a number of fronts, especially relative to developed nations.

This positive outlook is manifesting itself in marketing messages. In the developed world, where brands are devolving into commodities, messages that restore hope could help make brands aspirational again.

In an ad celebrating Chinese New Year, Coca-Cola smartly leveraged one man's loss of hope to encourage the whole nation. The spot featured Chinese track hero Liu Xiang, the 110m hurdle Olympic champion who had to abruptly withdraw from the 2008 summer Beijing Games due to an injury despairing about the bitter memory of the Olympics.

His father comes into his room and passes him a bottle of Coke. ‘Do you know how many hurdles you have leaped over in the past?’ he asks. Silence. ‘100,006 hurdles,’ his father continues. ‘This is just another hurdle in your life.’ The spot ends with a revived Liu knocking at his father's door and handing him a bottle of Coke.

Brazilian flip-flop maker Havaianas also finds hope in adversity. In one commercial, a roda de samba (an informal gathering of people playing samba songs, a popular event all over Brazil) is interrupted by an earnest woman complaining about the crisis.

The stunned crowd falls silent until someone lets out ‘Talk about sadness', which is immediately picked up by someone who breaks into a popular samba song, ‘Sadness, please go away'. The rest of the crowd follows happily along.

Questions to ask: what does hope look like for your brand? How do you develop and drive hope, especially when the situation might feel hopeless for some?

For brands in BIC markets, the advice is simple: keep going. Look at what you can teach the rest of the world.

In fear-fuelled markets, brands can win by standing out as being hope-fuelled. Start thinking and acting like brands in emerging economies – future-forward, optimistic and extremely opportunistic -because this is the best time to take risks. Seeing the world from the BIC markets’ vantage point will go a long way towards reinvigorating your brand.

This is an edited version of a winning 2010 WPP Atticus Awards entry. Ann Mack is director of trendspotting, JWT;

[email protected]

Mark Truss is director of brand intelligence; JWT,

[email protected]

Featured Image: Marketing of Brazilian footwear brand Havaianas has a consistently optimistic, upbeat flavour

Las Vegas: Despite the economic downturn, blue-collar Americans continued to prefer the traditional image of Las Vegas as a place to indulge