how do you increase brand performance in emerging and mature markets? Recently published research reveals how consumer attitudes respond differently to marketing and convert into sales to different degrees. Prof Pauwels quantifies how advertising, price and promotions increase awareness, consideration and brand love. Brands that got big in emerging markets should refocus on multiple communication touch points and brand love when aiming to gain hearts and minds in mature markets. Brands that got big in mature markets should refocus on advertising reach and communication awareness to gain WOM and consideration in emerging markets. More details in chapter 9 of Pauwels' first book: "It's Not the Size of the Data - It's How You Use It: Smarter Marketing with Analytics and Dashboards"

1. Lovemarks or SafeBets?
Consumer attitudes
in emerging versus mature markets
Prof Koen Pauwels
Ozyegin University, Istanbul
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2. Problem: smarter marketing in emerging markets
Developed Markets
Emerging Markets
Emerging markets needed for growth
But: institutional,
cultural & economic
differences between
countries
Imply ≠ response
• Attention to
advertising?
• Attitude response
to marketing?
• Sales conversion
of attitudes?

3. How do my (e)MBA students decide on electives ?
• USA: Construct individual utility function based on
information search and then each „bid‟ on electives
• Turkey: Get together and decide on which elective
they should all take and then let administration know
If this differs for students with >6 years of business
experience, it may reflect cultural differences
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4. Do consumer behavior & marketing effects differ ?
“Consumers in emerging markets are more likely to talk about any
kind of online advert than their counterparts in mature markets”
(Mindshare 2011)
“In emerging markets, brands are seen as an important mark of
quality and status. People value the reassurance provided by a
well-known brand name, and if they can, they may be willing to
pay more for it. They believe it is important to get the right
brand even if they have to shop around for it. In mature
markets, people are more likely to assume that all brands stocked
by mainstream retailers will deliver the same basic quality”
(Nigel Hollis, MillwardBrown 2010)
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5. Overview
• Differences between emerging and mature markets
• Implications for Customer Attitude Dynamics
• Case study 1: Personal care in Brazil vs the U.K.
• Case study 2: Food & beverage in Spain vs France
• Conclusion and contact information
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6. Emerging Markets
• are countries that are restructuring their economies
along market-oriented lines;
• offer a wealth of opportunities in trade, tech transfers,
and foreign direct investment;
• are regional economic powerhouses with large
populations, resource bases, and markets;
• will also become more significant buyers of goods and
services than industrialized countries.

7. Cultural, Economic & Institutional
Cultural
Differences
Economic &
Institutional
Differences
• Individualist / collectivist
• Power distance/egalitarian
• Uncertainty Avoidance
• Income
• Consumer Protection
• Technology, Competition,…

8. BIC versus Anglo-Saxon market descriptives (st.dev.)
Brazil, India, China
USA, UK, Netherlands
Individualism
35 (14,19)
87 (6,08)
Power Distance
75 (5,69)
38 (2,52)
4.310 (3.636)
43.313 (6.971)
Technology Level
3,89 (0,30)
5,38 (0,75)
Trust in General Advertising
2,7 (0,12)
2,4 (0,03)
Trust in Traditional Advertising
2,8 (0,15)
2,5 (0,06)
Trust in Online Advertising
2,6 (0,10)
2,3 (0,03)
GDP per capita (US$)
8

9. 50
2.75
45
2.7
Brazil
Trust in general advertising
GDP per capita (US$)
40
35
30
25
20
15
10
2.65
India
2.6
China
2.55
US
2.5
UK
2.45
Netherlands
2.4
5
0
2.35
0
50
Individualism
100
0
50
100
Individualism
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10. Customer Attitude Dynamics (Srinivasan et al. 2010)
Marketing
What marketers do
• Advertising
• Price
• Distribution
builds
Attitudes
What customers think & feel
Awareness
Consideration
which convert
to brand sales
What customers do
Brand purchases
Liking

11. Customer Attitude Dynamics Criteria
• Hanssens, Pauwels, Srinivasan and VanHeule (MSI 2010)
• Explain marketing impact by 4 criteria of attitude dynamics
– Potential: room to grow ?
– Stickiness: do changes last ?
– Responsiveness to Marketing
– Conversion to Sales
• We propose that attitude dynamics (and thus marketing
effects) differ for emerging vs. mature markets
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12. 1) Potential: does attitude have room to grow ?
40%
95%
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13. 2) Stickiness: how much carries over ?
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14. 3) Responsiveness: can we move it?
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15. 4) Conversion: does it translate into sales/profits ?
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16. Differences emerging vs mature markets
Emerging
Mature
Potential
+
-
Stickiness
-
+
++
_
-
+
Responsiveness
Conversion
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17. Our Framework
Cultural
Differences
-Individualism
- Uncertainty av
-Power Distance
Economic
Differences
Attitude Dynamics:
Stickiness, Conversion
Marketing Response
of each attitude to:
- Ad Awareness
-Consideration
- Liking
-Advertising
- Distribution
-Price
-Income
-Legal Protection
-Competition
Marketing Effectiveness
-Sales

18. Case study 1: FMCG in Brazil vs U.K.
• Data for 3 brands x 2 personal care FMCGs for 2004-2009
Controls for other potential differences:
1) Brands: same brands in emerging/mature market
2) Distribution System: similar in emerging/mature market
3) Market (share) position: similar positioning, market shares
4) Similar potential: for attitude metrics
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19. Attitude Stickiness in Emerging vs Mature Market
category 1
AD AWARE
Emg < Mature
category 2
TOTAL
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
0.7
0.6
CONSIDER
Emg > Mature
0.5
0.4
0.3
0.2
0.1
0.0
0.7
LIKING
Emg >> Mature
0.6
0.5
0.4
0.3
0.2
0.1
0.0
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20. Sales Conversion in Emerging vs Mature Market
0.05
category 1
category 2
TOTAL
0.04
AD AWARE
Similar
0.03
0.02
0.01
0.00
0.20
CONSIDER
Emg > Mature
0.15
0.10
0.05
0.00
0.25
LIKING
Emg << Mature
0.20
0.15
0.10
0.05
0.00
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21. „Cost More‟ Sales Conversion: + Emg, - Mature Market
category 1
category 2
TOTAL
0.04
0.02
0.00
-0.02
-0.04
-0.06
-0.08
-0.10
-0.12
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22. Advertising Response in Emerging vs Mature Market
category 1
AD AWARE
Emg > Mature
category 2
TOTAL
0.020
0.018
0.016
0.014
0.012
0.010
0.008
0.006
0.004
0.002
0.000
0.008
CONSIDER
Emg << Mature
0.006
0.004
0.002
0.000
0.012
LIKING
Emg << Mature
0.010
0.008
0.006
0.004
0.002
0.000
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23. Data 2: France vs. Spain FMCGs (Kantar Worldpanel)
• Spain is NOT an emerging country, but falls right in
between France and Brazil on „individualism‟ &
uncertainty avoidance dimensions
• Monthly data for EACH brand in 6 categories (bottled
water, bath gel, laundry detergent, dairy, milk, soft
drink) 2001-2010 on same marketing mix actions (price,
promotion and advertising) and consumer attitude
metrics as French analysis of bottled water and
shampoo (Hanssens et al. 2010)
• We compare all Spanish to all French categories, and
matched category (water, shampoo-bath gel)
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24. Consistent results of these comparisons
• Spain is similar to France in terms of advertising
and price responsiveness for all metrics, and for
the sales conversion of awareness
• Compared to France, ad awareness has a lower
stickiness in Spain (as in emerging market)
• Compared to France, sales conversion in Spain is
higher for consideration and lower for liking.
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25. Love Marks or Safe Bets ?
Low sales
conversion
Low response to
marketing , high
staying power
High response to
marketing, low
staying power
High sales
conversion
Liking Emerging
Consideration Emg
Awareness Mature
Cost More Mat (-)
Consideration Mat
Liking Mature
Awareness Emg
Cost More Emerging
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26. As illustrated in US-China debates on what a brand is
• “A recent study reveals that the average Chinese consumer
feels the need to wear at least three branded items to feel
comfortable at work. Yet, when probed further, they were at
a loss, unable to define the features of a brand. However,
they had no difficulty describing the product. It seems that
for them, the product is the brand. The emotional
connection is simply absent” (Lindstrom 2011)
• Advani (2006) : "We are trying everyday to make Lenovo a
global brand. Our goal is, not only people here but also
people around the world know us. They will have an
emotional connection with Lenovo. Becoming a name is
one thing but having a deep emotional connection with the
company is quite another. That is what our aspirations are:
to become a brand that people around the world love.”
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27. Romance & Reliability
• Roberts (2005) identifies 3 key elements of a
Lovemark: mystery, sensuality and intimacy: "We
have passed through the age of information and
knowledge and we now live in the age of ideas.
Successful brands tell stories. They are romantic
and mysterious.“
• Mr Zhou (CEIBS, 2008) “In the end, it‟s really the
basic work, whether you have reliable quality, good
service, that are the fundamental attributes of a
brand.”
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28. CONCLUSIONS
• Different long-term marketing effectiveness in
emerging versus mature markets
• Can be explained by differences in stickiness,
responsiveness and sales conversion of attitudes
• Emerging markets experience a higher stickiness
of consideration & liking (interdependent self)
• But a higher responsiveness of ad awareness to
advertising & distribution (more search)
• Consideration converts more than liking
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29. Want to learn more ?
• It‟s not the Size of the Data, it is How You Use It:
Smarter Marketing with Analytics & Dashboards
• Available at: http://www.amazon.com/Its-NotSize-Data-How/dp/0814433952
• Blog: http://analyticdashboards.wordpress.com
Site: www.notsizedata.com ; www.marketdashboard.com
• Twitter: @koenhpauwels
• https://www.facebook.com/pages/marketdashbo
ardscom/207532115957700?ref=hl
• http://www.linkedin.com/profile/view?id=113444
12&trk=nav_responsive_tab_profile
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