Recently while on a trip in Montreal I stopped in at a local grocery store to walk the aisles and see if those clever Canadians had anything interesting to offer. While this particular shopping excursion did not result in finding anything quaint or otherwise unusual, I did chuckle at the store’s line of private labeled goods, quite accurately labeled in French as their “sans nom” (in English literally “nameless” or more widely understood “no name”). Products ranged from dog food to cheese slices to trash bags. Private labeling is a well established practice in North American and European FMCG; however, what many SMEs miss is that not having a brand is a luxury their emerging market consumers not only do not have, but one they do not want in the first place. Study after study across BRIC countries shows that as people come into the middle class, their shopping habits change and they begin to look for branded products.
Why is this? Two reasons: aspirational and reputational. The former is perhaps the best understood and best evidenced by the burgeoning sales luxury goods manufacturers like Coach, Tiffany’s and Louis Vuitton are realizing in BRIC countries. For these companies, the products they manufacture send a subtle but unmistakable signal to those around that you have “made it.” They are obvious signs of wealth and success. The latter reason emerging market consumers look for branded products is, however, one of the more poorly understood: both wealthy and middle class consumers in emerging economies want to purchase a branded product because they have increased confidence in the quality, safety and overall integrity of what they are purchasing.
As you read this, you might be thinking this is a lesson limited to retail or FMCG companies. That would be a mistake. Industries from healthcare to any heavy industry where safety is a concern stand to benefit in emerging economies if they can elevate the idea that their brand represents quality, safety and integrity for the end customer. For American companies this can be a subtle but important shift in how you market yourself and position your company’s products and / or services. For most developed economies, customers make assumptions about quality and safety that are no longer worth mentioning in your marketing collateral. In this sense, marketing for an emerging economy consumer requires taking a step backwards and thinking about how to stress many of the things your business does every day without thinking. You may take them for granted, but your emerging market customers certainly do not. For them “sans nom” products are not the result of a mature and stable supply chain that can pursue private labeling, but rather a risk they are eager to leave behind for the safety and security of established brands.