Author: mxmadmin

By Robin Thomas

The Interpublic  Group (IPG), one of the world’s premier advertising and marketing services companies, has come out with its global ‘New Realities 3.0’ study that provides a unique window into how the Indian consumer is coping with information overload. The study provides insights on the decision-making process of the consumer in today’s era of information explosion. The study also aims to answer the unanswered queries of marketers on whether the information explosion has made consumers smarter or confused, the role of social media in a making consumers more informed, the role of brand advocates and much more.

The study covered five countries namely, India, China, Brazil, America (US) and Germany. The India leg of the interview was conducted by Draftfcb Ulka’s independent consulting agency, Cogito Consulting. Over 600 online interviews were conducted in each of the five countries between October 26 and November 10, 2011. Some of the findings from the ‘New Realities 3.0’ study reveal that most Indian consumers feel they have grown smarter with the available product information, which is higher than the other countries. Further, the study notes that consumers in India rated a reasonable 7.3/10 when asked whether the available product information made them feel smarter compared to China that showed a rating of just 3.9/10, the US at 6.8/10, Brazil at 6.4/10 and Germany reporting 7.0/10.

Interestingly, despite consumers in India claiming to feel smarter and not confused or frustrated with the product information available to them, they do not trust the information they see on brands, especially from the manufacturers end. Further, 32 per cent of Indian consumers say they do not trust most of the information they see on brands, whereas 31 per cent say they do not trust information from manufacturers or providers.

The trust deficit that brands have among Indian consumers is higher than the other four countries, for instance only 11 per cent of Germans say they do not trust any information from brands whereas 22 per cent say they do not trust information from manufacturers or providers. Even Chinese consumers seem to trust information from brands and manufactures as compared to the Indian consumers. 19 per cent of Chinese say they do not trust information from brands whereas 24 per cent Chinese do not trust information from manufacturers or providers. 16 per cent of those interviewed in the US say they do not trust information from brands whereas 15 per cent do not trust information from manufacturers.

Another interesting finding is that with the exception of Germany, the remaining four countries interviewed – India, China, Brazil and United States have said that product learning is a source of joy and fulfillment. 54 per cent of Indians have said that they enjoy researching the information for buying decision whereas 52 per cent of them say they find the information on brands fulfilling.

The findings have also revealed that most Indians learn product information to build an expertise about a certain product and brand as well as because it helps them stand out in their social circle. 53 per cent of Indians said that the reason they stay informed about certain products is because ‘people value me and my knowledge about certain products’, whereas 52 per cent of them said it helps them enhance their self-esteem.

In addition to these, the study also revealed that consumers in India and China are most likely to turn into brand advocates and become a media channel and that in India, Brazil and China, especially, social networking sites are a good source for word of mouth information on brand experience.

As vague and unique as it sounds, MxM India’s Robin Thomas got Mr Terry D. Peigh, Managing Director and Senior Vice President, IPG to relay more outcomes from the study, the role of social networking sites in decision-making capabilities and much more.

New Realities… is an online study across multiple countries, including India. What is the sample size that was chosen for this study? Who are the respondents i.e. the TG for this study?

We interviewed 600 people in each country i.e. in India, China, Brazil, United States and Germany. Out of the 600 people sampled, one-third were Gen X, one-third were Gen Y and one-third were boomers. 50 per cent of those polled were men and 50 per cent women.

What was the key objective of the study? What, according to you, are the learnings for the Indian market, as well as the global market?

The key objective was to better understand how the consumer has changed because of the new media. We came across the idea years ago as we noticed that the number of information sources available to consumers today has grown exponentially. So we found out if people were confused, frustrated, overwhelmed, and how are consumers viewing the overall experience of absorbing product information and using that information.

We learnt that consumers have evolved over the years and hence they are not confused or frustrated with the information explosion. Consumers have not only learnt to easily filter or absorb the information but, they have also learnt how to manoeuvre their way through all the multiple choices of product information available to them.

We have also learnt that surprising number of consumers, especially from India, are now very open, willing and eager to learn about product information as they find a lot of joy and satisfaction in learning about product information. In fact, our research also shows that people in India are most likely to really enjoy research and product information.

One of the reasons why many in India are willing or open to product information is because they find it of social value as it allows them to have an expertise in certain products. We have also learnt that consumers are aggressively willing to become advocates of brand. Our research also shows that they are now interested in continuing to learn about a product even after they have purchased a product as they want to learn more about the product and advance their knowledge about that product.

What this reveals is that communication should not stop at the time of sale and that marketers must continue to talk to their consumers even after they have purchased the product. As a result marketers may convert their consumers to brand advocates.

The study reveals that Information explosion in India has led consumers to become smarter and helped them beat the system – much higher than what the other countries have reported. What are some of the factors that influence the consumer’s decision-making process around a product?

We see a dominant role of family and friends in a consumers’ decision-making process. Although social media is still small, its role as a channel is growing, but too often social networking sites are limited to ‘likes’ or number of friends which is wrong. It’s too easy to get someone to push the like button or accept a friend request, even though they may really not like the brand or want to be their friend. A research from Australia finds that less than one per cent of friends are actively engaged and want to be truly engaged to the brand. So we keep encouraging our clients to go beyond ‘friends’ or ‘likes’ on a social networking page but, instead seek true engagement.

As India becomes more tech-savvy, do you anticipate further information explosion to come about that could lead to further increase or decline in consumers who are confused or frustrated with the information?

We were, in fact, surprised that the confusion or frustration numbers were not higher. My projection, however, is that it (frustration and confusion) will not go up as consumers have learnt the role of technology very quickly. Technology is fast reaching to the lowest common denominator very quickly so, I think people are learning to process information very quickly.

Will there be a Phase II of the ‘New Realities 3.0’ study?

Yes. We will soon be out with the second phase of the study in another 18 or 20 months, which will help us understand more trends. In China, for instance, during Phase I and II we have seen dramatic changes in over 18 months. We found that the Chinese were much more inclined to use the internet for product research. In China, the internet was used primarily for entertainment purposes, now it’s used for product information.

Not surprisingly, consumers in India do not trust brand information especially from the manufacturers. This is not so with other countries, particularly Germany, US and China. How would you explain this? What must brands / marketers in India do to build the trust deficit among their consumers?

I believe it is because of the newness of the consumer culture in India. In the US, for instance, there has been a mass market of consumer culture for 100 years and the same in Western Europe. I think consumers need to develop trust for their products. Brands must not be afraid to enter into the world of social media and hearing negative comments about one’s brand. There is probably no quicker way to gain trust with the consumer than to actually legitimately and honestly respond to criticism and fix the problem. This, I believe, is one way for brands to gain trust of the consumers.

With the exception of Germany all other countries seem to enjoy product learning. What makes the consumers in Germany not really enjoy product learning?

Yes, German people usually do not associate joy from product information. The Germans usually get their joy from music and food

How has social media changed consumers’ decision-making across the globe? What role do you see social networking sites play in the near future in India?

The role of social networking sites as a tool for brand advocates will increase. One thing we have noticed in the western world is that the number of people visiting brand pages on social networking sites is on a decline in Europe. This is not the case in India. In the western world a lot of consumers say that they do not visit Facebook for brands, but for friends therefore, it will be interesting to see if it will be any different in the developing economies. Nevertheless brands like Coca-Cola have leveraged social media well by finding ways to reach out to the consumers by engaging in a good conversation and get them to participate in brand activities. Right now the data shows consumers are willing and eager to visit social media to learn about products or brands.

Even though broadband penetration is still low in India as compared to the US, why are consumers in the US and Germany reluctant in using social media for product research?

This may be because brands that first started using the social media didn’t do a good job in engaging the consumers. The consumers may have clicked ‘like’ or may have become friends but, the brand may not have received anything else. Brands must, therefore, learn to go beyond the ‘likes’ and adding of friends to adding value in a consumer’s life as the consumer is not accessing social networking sites for brands but for something else. Therefore, in order to leverage the social media, brands need to operate in a different way. Increasingly, many brands are beginning to use social media effectively to engage with their consumers.

How do you plan to reach the brands or marketers with the study? What can brands or marketers expect from the study?

This study is important for clients because it is consumer based, is fresh, is in-depth, is broad, it looks at many different segments by product category, by demographic and it is the consumer telling us what he or she is thinking about.