By Aparna Bharadwaj and Patrick Witschi
Marketers who search the world for commonalities among global consumers are naturally inclined to think in terms of geographic neighborhoods. Consumers in Europe should be fairly like-minded, right? We assume that brand strategies that work in one East Asian nation would likely work in others and that consumer attitudes and trends in the US influence those in Mexico.
This was the first myth that was busted after we launched an extensive study of the drivers of consumer choice across 18 of the world’s biggest markets. What we found was surprising and intriguing: The world’s consumers are far more diverse than we expected. While commonalities do exist, geographic proximity turned out to be a remarkably poor way to identify similarities in consumer mindsets around the world. Instead, it is better to search for similarities in mindsets that define a consumer’s personality. We should search for “mindset neighbors,” if you will.
Markets at opposite ends of the globe can exhibit strikingly similar consumer mindsets. Consumers in the US and Australia are highly like-minded, for example, as are those in India and Saudi Arabia. But attitudes among Chinese and Japanese consumers differ dramatically, even though they are geographic neighbors.
The implication for marketers: If you have a brand strategy that works at home and want to replicate it abroad, look for your domestic market’s mindset neighbors. And to do so, analyze country pairs, rather than look for clusters and groupings of countries, which rarely exist.
A world of surprising consumer diversity
Our first surprise was the great diversity in consumer cultures around the world — despite decades of globalization. Indonesians agreed most strongly that “religion is an important part of my life,” for example. We found that Chinese consumers care deeply about how they are perceived by peers, while Russian and French consumers generally do not. Nigerians, Mexicans, and Indians are very keen to start businesses; Japanese consumers express little interest in entrepreneurship.
The second big surprise was finding few of the country or regional clusters that we expected to see. There is wide diversity among East Asian, Latin American, and European consumers. If it’s hard to identify significant clusters of markets with like-minded consumers, we asked, how can brands bring some method to the madness as they foray into unchartered territory?
So we looked at all 18 markets in terms of pairs to see if we could find mindset neighbors. We ran a correlation analysis of 56 attitudes for each pair of countries. We then plotted the proximity of each market to the other 17 in a spiral. The distance of each country from the home country, located at the center, indicated the degree of similarity between the two markets. Ideally, markets falling within the innermost circle, which we shaded dark grey, are mindset neighbors to that home market. Outside of that inner circle, similarities become considerably weaker.
Our proximity analysis did find that the US has several close mindset neighbors. But only one of them — Canada — is also a geographical neighbor. The others are the UK and Australia. Consumer attitudes differ sharply between the US and Mexico, however. The countries with the widest mindset gaps with the US are China, Nigeria, and Saudi Arabia.
On the other hand, consumer mindsets within Europe weren’t as similar as we expected. Some of the mindset similarities we did identify were unexpected. Mindsets in India, for example, correlated most closely with those in Saudi Arabia — a country whose per capita GDP is ten times higher and has a radically different cultural heritage.
Our proximity analyses of China and Japan were the most eye-opening. Not only are consumer mindsets in these markets polar opposites from each other. But also, neither China nor Japan has any mindset neighbors that fall within the innermost circle.
The implications for marketers
These findings have important implications for companies pursuing the global consumer market. They tell us it’s risky to build brand strategies around broad segments, such as “emerging-market” and “mature-market” consumers, or even “European” or “East Asian” consumers. Instead, companies must embrace consumer diversity around the world.
It must be noted that attitudes alone aren’t sufficient to inform a brand strategy. Our research also found that companies need to understand the consumer needs and context that drives consumer decisions in different markets — topics we will explore in subsequent Business Insider articles. We found surprising sources of commonality at the level of category needs. But more on that later. Essentially, companies need a nuanced country-by-country, category-by-category understanding of the many factors that influence consumer choice.
This post was created by BCG with Insider Studios.