5 Global Trends That Will Impact Your Marketing Strategies in 2012

5 trends to watch

urbanization

Both an economic and cultural trend

URBAN BOOM: Increasing number of urban dwellers around the world

URBAN MIGHT: More and bigger cities than ever, with increasing wealth and power

URBAN CULTURE: Magnets for innovation, wealth, talent, and creativity

Source: McKinsey Global Institute, Trendwatching.com

The top 600 cities will grow bigger and richer

1.5 billionpeople live in these 600 cities – 22% of the global population

$30 trillionof GDP in 2007 – more than half of global GDP

485 millionhouseholds, with average per capita

GDP of $20,000

2.0 billionpeople live in these 600 cities in 2025 - 25% of the global population; 1.6 times as fast as the world as a whole

$64 trillionof GDP in 2025 – nearly 60% of global GDP

735 millionhouseholds, with average per capita

GDP of $32,000

In 2007 In 2025

Source: McKinsey Global Institute, “Urban World: Mapping the Power of Cities” 2011

…but the cities won’t be the same

136 new cities are expected to enter the top 600. All from the developing world, including

8 from Latin America13 from India100 from China

1 of every 3 developed market cities will no longer make the top 600…


Urban economic clout moves east


Rise of the mid-size city• Engine of GDP growth shifts from developed economies and megacities

to middleweight cities in emerging markets


Expanding middle class


Creating a different profile of consumer• Faster pace, ever-

changing nature of life• Spend money

differently • Exposed to a wide

variety of lifestyles and experiences

• Require appropriate shapes, sizes and features of urban goods and services

Consumer trends often start in urban centers before moving mainstream

Impacts of city growth

Urban centers act as magnets,

increasing concentration of population, jobs,

industry, and innovation

Creating vibrant new enterprise markets for businesses to serve

Construction, infrastructure, transportation, financial markets will all be growth industries

Source: McKinsey Global Institute, Trendwatching.com

Considerations for geographic expansion

• Look beyond the household names• Understand cities as the locus of country

growth • Look beyond GDP growth to identify hot

markets• Be prepared to play in new urban centers• Understand customer needs – and follow their

movement

Photo credit: Unaesthetic, Flickr

mobilitymobility

Mobile has hit critical mass

90% of the world now lives in a place with access to a mobile network

China has over 900M mobile phone users

In India, mobile accounts for nearly 90% of all Internet users

In the developing world, two in three people have a mobile phone subscription

48M people have cell phones -- but no electricity

Source: International Telecommunications Union; China Ministry of Industry and Information Technology; OnDevice Research; Cisco

Mobile quickly becoming mainstream

•Mobile will be the most common way the world accesses the Internet

By 2013

•Smartphones will be the primary enablers of consumer shoppingBy 2015

Source: Cisco Visual Forecasting Index, 2011; Nielsen, 2011

Expectations are building

High Quality Mobile Experience

Enjoyable

Real Time

Convenience

• Ability to enhance our real-time experience with digital interaction

• Convenience: technology helps you get things done easier

• Mobile makes life more enjoyable. Expect to be delighted, surprised, rewarded

“And above all, we need an experience

that is efficient and intuitive. If we get

that, then we'll come back for more.”

Source: Gregg Wheeler, Solstice Consulting

M-commerce• $24B global mobile spending this year;

more than $1 Trillion by 2015. Amazon mobile sales in 2011 $2B; eBay in 2011 nearly $4B

• 74% of smartphone shoppers have made a purchase following mobile research (US)

• 26% of Americans will use a mobile coupon this year

• Mobile shopping apps let you check availability, look for deals, reviews and compare prices

Source: Nielsen; Amazon; eBay; Google & IPSOS OTX; eMarketer

Mobile Payments

141M people made an m-payment in 2011

Total spend: $86B

Square (Visa) doing over $4 Billion/year

Walmart & Target are developing a mobile

wallet service

• Mobile payments will account for 15% of all credit card transactions by 2013, and will overtake cards in 10 years

Source: Gartner; Yankee Group; World Payments Report 2011

Enhancing the local experience

40% of mobile searches are local After looking up a local biz, most call or visit

Less need for paper: Movie tickets, train tickets, coupons

50% of all Google map usage is from a mobile device

Location Based Services and Augmented Reality: Local promotions, things to do, background info

Source: Google

Challenges & Opportunities Mobile disrupts the traditional path-to-

purchase

Entering an era dominated by mobile marketing

Mountains of data – who owns it?

Mobile obviates the need for paper, plastic, bricks & mortar

When consumers can quickly search for best price, retailers need to differentiate through factors other than price

Mobile will be the starting point – not an afterthought

proliferation of choice


The average U.S. supermarket now stocks…

19 varieties of milk

340 breakfast cereals

87 varieties of soft drinks

More than 50 varieties of bottled water141 over-the-counter pain relievers

• Digital only opened the floodgates

• Permeating every area of professional and personal lives

Increased choice results largely when consumers are mobile enough to choose among suppliers and options

Choice can be good

For ConsumersOffers a sense

of controlGreater

opportunity for a product to

satisfy specific needs

For MarketersImprove market

sharePerceived as having

greater category expertise or

competence in a category

Respond to competitive offerings

But too many options can lead customers to inertia…

Compared data for nearly 794,000 employees at 647 companies. The number of investment options offered to each employee varied from as few as two to as many as 59.

Source: The Wharton School

…or being overwhelmed• The human brain hasn’t kept

pace with the rate of change• We can only consciously

contemplate about four bits of information at any given moment

• Rationality can be quickly overwhelmed

• Process of selecting can make us feel worse. Adding options increases expectations in light of lack of perfection.

Americans have mixed feelings about this “new” news environment. Over half (55%) say it is easier

to keep up with news and information today than it was five years ago, but 70% feel the amount of news and information available

from different sources is overwhelming.

Source: Pew Internet Research

Consumers start adapting …

• Satisfy vs. Maximize – “good enough”

• Limit factors/set rules

• Seek “expert” opinions

• Stick to familiar brands and environments “Consumers tend to return to

the products they usually buy, not even noticing 75% of the

items competing for their attention and their dollars.”

“I didn’t want to spend time going through all the choices available…we needed a car that was fuel efficient and had room for family. Typed in – Fuel Efficient + Car + Room for Children and up popped a few choice of automobiles. Went with the top three and ended up choosing the 1st one because it met our requirements. In

and out and done and driving home.”

“A small-town resident who visits Manhattan is overwhelmed by all that is going on. A New Yorker, thoroughly

adapted to the city’s hyperstimulation, is oblivious to it.”

Source: The Paradox of Choice, Barry Schwartz

Businesses are responding by helping customers find what they need

Recommendation engines

Filtering

Comparison shopping

If abundant choice is critical to your business, then help customers navigate the variety that exists

Others find advantage in containing choice

Contained choice/preferred environment

“We say no to good ideas every day; we say no to great ideas; to keep the number of things we focus on small in number. [We] can probably put every product we make on one table – and we had revenue last year of $40 billion.” – Tim Cook, Apple COO, Feb 2010

Choice can be a good thing, but it’s not always the best thing

• Research shows that a broad product assortment can increase market share—and the chance that customers will find exactly what they’re looking for

• However, psychologists suggest that too many options can overwhelm some customers—causing them to delay their decision (if possible) rather than making a choice.

• In order to be successful, understand how your customers make choices

• Help your customers make decisions; they have greater reliance on external assistance than ever before

Sharing


sharing

To promote your own personal brand • 68% share online to give people a better sense

of who they are and what they care about.

To belong and feel valued• 69% share information because it allows them

to feel more involved in the world.

• 73% share information because it helps them connect with others who share their interests

“I try to share only information that will

reinforce the image I’d like to present: thoughtful,

reasoned, kind, interested and passionate.”

“I enjoy getting comments that I sent great information and that my friends will forward it to their friends because it’s so helpful. It makes me feel valuable.”

Why people share online: it’s not so new

Source: Latitude US Research

process information 73% process information more deeply,

thoroughly and thoughtfully when they share it.

85% say reading other people’s responses helps them understand & process information and events.

make decisionsUse friends as curators of our own

consumption

Looking for “people like me”

Immediate information

“Without the ability to share our information, what value does it have?”

People use online sharing to …

influence othersSave you from something badPoint you to something goodBring you around to my side of a causeTo vent!

Source: Latitude US Research

The amount of information people share online doubles each year

• 225M active worldwide users

• Nearly 250 million tweets per day

• Adding nearly 500,000 users a day

• 850 M Users; 1 in every 9 people on earth

• 500 M Users age 35+ and 70% outside the US

• Over 50M users 'like' brands every day

Over 1 billion messages posted daily

• 150M users world wide; 60% male

• 40% in US; India is next with 9%

• More than 6.5M students & 9M recent grads

Source: Facebook; Twitter; Pew; Linked In

Sharing is not just social networks

• 4.2 billion active text users; that’s 60% of the humans on earth

E-mail is still the most widely used method of sharing• Facebook is a distant second• But, for 18-24 year olds, Facebook has an edge

Source: Facebook; Gartner; TomiAhonen Almanac

Sharing doesn’t always require words

5B+ photos on flickr

'Tweet Mirror' • 10 different languages• In Netherlands, Belgium, Germany,

Italy, Austria, Switzerland, Norway, Australia, India and China

4B+ videos watched per day on YouTube

917M+ global users of Skype

Source: Flickr, Skype, YouTube

Sharing doesn’t even require “sharing”

Everything we do online is shared with someone – whether we intend or not.

• The devices and apps we use• The sites we visit• The things we buy• The searches we make

“Now that Spotify & Facebook are BFF’s, what you listen to on Spotify gets shared on Facebook … Maybe you don’t want to explain … your two-hour Barry White session last Thursday when you said you were at the office.”

Frictionless Sharing

There’s an argument to be made that Facebook isn't forcing anyone to share; it’s simply adapting to the increasingly social

way that we are living our lives online.”

Source: Washington Post, CNET

Sharing: considerations for the future Sharing generates masses of content and data …

• Who owns it? • How will it be used?• Will people start asking to be compensated for their content/data? • What are we prepared to offer in exchange?

Automatic sharing is on the rise. • As it increases quantity -- will it inevitably decrease quality?

How do we engage with those who want a relationship, when and where they want it -- without being a nuisance when they don’t?

What are the opportunities to develop a true three dimensional relationship with our customers in a two dimensional space?

global/local puzzle

The world is becoming more global• Going out into the world, absorbing influences• News travels fast – we know what’s happening as it is

happening• Frictionless sharing – borderless world

The 2010 FIFA World Cup was the most watched TV event in history, broadcast in

every country (including North Korea) and garnering an average audience of 400

million viewers per match.

Yet consumers still respond to localization

Consumers may experience local brands as • Authentic• Personal• Relevant• Nostalgic

• Growth of local farmers’ markets with growth of global retailers Walmart, Carrefour and Tesco

• Growth of English as international language of business same time as revival of the Welsh language

• Consolidation of global media companies contrasts with explosion of local language bloggers

• A reaction against globalization as distant and homogenous

Local is affiliation and relevance

• What is local can differ by market

• Local does not equal language; Language does not equal local

Being seen as a brand that is "setting the trends“ is a significant driver of purchase intent for both global and local brands

Local and global brands have different advantages

Being part of the national culture is a significant driver of purchase intent for both global and local brands

Source: The Global Brand Survey, Millward Brown

…but may differ by market

Source: The Global Brand Survey, Millward Brown

Solving the global/local puzzle

Adapted from The Global Brand, Milward Brown

• Adapting products and services to meet local needs and tastes

• Solving the local value equation through product and pricing strategies

• Creating a strong presence and a distinctive identity

• Getting as close to the local culture as possible

No standard recipe for global brands

A common global positioning adapted to local tastes and supported by local advertisng

A global Internet platform creating local sites to promote a stronger sense of community

Consistent brand supported by a common need supported by a global campaign

Globally consistent

Locally adapted

Source: The Global Brand, Millward Brown

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Achieving the right global/local balance

• Local brands start with a home field advantage, but global brands can break status quo

• Don’t think of localization just as a market entry or cost efficiency strategy

• Need to understand most advantageous for long term brand building, relevance and image

• Customer focus is key - listen, adapt and learn

• Remember, all global brands started as local brands!