Sunday, November 09, 2008

6 emerging lessons to understand the needs of poorer markets – and putting A2U to work for low literacy consumers.

To win and enhance customer loyalty in developing markets, manufacturers and retailers need to understand the difficulties faced by low-literacy consumers and create shopping environments that make them feel less vulnerable.

In a recent report, Dr. Madhubalan Viswanathan, associate professor of marketing at the University of Illinois, offered these 6 ways that companies can help customers make better purchases and avoid embarrassment:

1. Display prices and price reductions graphically -- a half-circle to indicate a 50% markdown, for example, or a picture of three one-dollar bills to indicate a purchase price of $3. Price products in whole and half numbers to make it easier for low-literacy consumers to calculate the price of, say, two bags of rice. These pricing practices are critically important in marketplaces where general stores and kiosks are being replaced by self-service stores, where there is less interaction between customer and store owner.
2. Clearly post unit prices in common formats across stores, brands and product categories to make it easier for low-literacy consumers to perform price/volume calculations.
3. Include illustrations of product categories on store signs to make it easier for low-literacy consumers to navigate new or refurbished stores. Similarly, use graphical representations of sizes, ingredients, instructions and other information to communicate product information more effectively in shelf and other in-store displays.
4. Put the ingredients required for the preparation of popular local dishes in the same section of the store. This would be helpful to low-literacy consumers who often envision the sequence of activities involved in fixing specific dishes to identify the ingredients and quantities they need to purchase. The same can be done for other domestic tasks.
5. Incorporate familiar visual elements -- such as color schemes or font types -- into new store concepts or redesigned brand logos to minimize confusion and anxiety among low-literacy shoppers and increase the likelihood that they will try new products and stores.
6. Create a friendly store environment by training store personnel to be sensitive to the needs of low-literacy shoppers and by verbally disclosing and consistently applying store policies. In addition, allow employees to form relationships with consumers by learning their names and offering small amounts of individualized assistance. This is particularly important for global brands and companies entering markets where foreigners are mistrusted or have accrued a history of mistreating people.

Overall, Dr. Viswanathan says, businesses must take note: An underserved and poorly understood consumer group is poised to become a driving force in economic and business development, by virtue of sheer numbers and rising globalization.

They are subsistence consumers -- people in developing nations like India who earn just a few dollars a day and lack access to basics such as education, health care and sanitation.

As these consumers gain access to income and information over the next decade, their combined purchasing power, already in the trillions of dollars, likely will grow at higher rates than that of consumers in industrialized nations. The lesson for multinational companies: Understanding and addressing the needs of the world's poorest consumers is likely to become a profitable, as well as a socially responsible, strategy.

You can hear a podcast interview with Dr. Viswanathan in which he talks about how companies can market to poor consumers without being seen as exploiting them. Go to

No comments: