Is there a universal consumer? Regional, national and local nuances will always exist, with global brands adapting their products and services to meet the desires and choices of local consumers

Café

Global brands and small regional companies are listening to customers and localizing their products to meet differentiated tastes, flavors and even portion sizes.

Walking into a supermarket in Zurich presents a familiar view. At the front of the store is a row of cashiers serving a long queue of shoppers. To the right, a huge selection of fresh fruits and vegetables are clearly visible. Behind are the “frisch und fertig,” or pre-packaged salad leaves. Moving further inside, a large selection of dairy products and freshly baked breads and pastries occupy carefully created spaces. And then there are the neatly wrapped Swiss chocolate bars.

Now change the scene to a supermarket in Bangkok. Are there any differences to what a shopper is presented with? Moving past the large discount cardboard signs with exotic Thai letters reveals rows of fully packed shelves. Apart from the overwhelming variety of in-store promotions and an enthusiastic lady giving away free test samples, the same product categories are available for purchase: snacks, confectionary, beverages and fresh produce.

The increasing internationalization of consumer demand and purchasing behavior is pressing supermarkets to think more globally in their store layouts, and product positioning to consumers. Retail brands are also promoting aspirational product attributes to consumers in all locations, which raises the question: “are we seeing the emergence of a universal consumer?”

Coffee or tea in China?
Unquestionably, the consumer world is transforming. Geographical barriers are being transcended as consumers on all continents gain access to similar selections of brands, products and services. Internet access has raised consumer expectations by providing an unprecedented level of product information and price transparency. Trade channels are consolidating, as seen in the few visible differences noticed when visiting a Swiss and a Thai supermarket. But amidst this consolidation is a question many companies are asking: is there actually a universal consumer, or more accurately are there shared consumer aspirations?

Certainly, retailers and brands would favor the emergence of a homogenized “universal consumer” so they could manufacture, distribute and market similar products regardless of geographic location. To a certain extent, there is an increasing universal awareness and demand for global products – which is why advertisers create evocative taglines that can be used anywhere. But regional, national and local nuances will always exist, and global brands adapt their products and services to meet the desires and choices of local consumers.

Consider China. For many years, international retailers viewed its 1.3 billion population as a guaranteed ticket to revenue growth. But many struggled, and indeed some failed, to engage consumers because they applied a “one size fits all” strategy across a country that is continental in proportions.

When Starbucks entered China in 1999, the American coffee company could have become another cautionary case study. Entering a nation in which tea was the national beverage, any wrong move may have rendered Starbucks irrelevant. Except Starbucks had done its homework on the ground. It spotted a market opportunity. Starbucks capitalized on the tea-drinking culture to introduce beverages using local ingredients, such as green tea latte. These tea beverages were Starbucks’ successful ticket into China, and it capitalized by expanding quickly and securing strong word-of-mouth approval, a key market differentiator in China. Today, Starbucks continues to create new engagements with Chinese consumers, including the popular Chili Mocha, first launched in Chongqing, a city famous for its peppery hotpots.

This localized approach is not specific to China, of course. Asia is a complex region, and each market should be approached carefully on its own merits.

“We look at Asia as a region in terms of company management and understanding where we need to place our people to better serve the individual markets within Asia. But in terms of consumers, it is dangerous to look at Asia as a single region, because it is so big and so diverse. The markets within Asia vary hugely,” says David Kamenetzky, Vice President Corporate Affairs and Strategic Initiatives at Mars Inc.

“Asia Pacific, for instance, includes both Japan and Australia, which are considerably different markets even though both are very developed. Japan is at the cutting edge of premium consumer trends worldwide and has a distinctive consumer culture. Australia has strong purchasing power and is more European influenced in its thought processes,” says David Kamenetzky. “If you look at other markets in the region, China, Thailand, Taiwan, Vietnam, or Indonesia, for example, they are hard to compare because they are at different stages of brand awareness and purchasing power.”

There is, in general terms, a move towards a universal consumer. Local contexts will always be very important, however, and it is critical that brands adapt to the unique factors applicable in each market.

David Kamenetzky, Vice President Corporate Affairs and Strategic Initiatives at Mars Inc.

To understand the process of creating strategies tailored to Asian consumer marketplaces, we spoke to executives from two ambitious fast moving consumer goods (FMCG) companies, Lindt & Sprüngli from Switzerland and Malaysia’s OldTown White Coffee.

Lindt & Sprüngli

Satisfying sweet cravings
Since 1845, Lindt & Sprüngli has been delighting consumers with the ultimate chocolate experience. A truly global brand, the Swiss chocolatier puts a sweet smile on faces both young and old. Chairman & CEO Ernst Tanner says the underlying inspiration to consume chocolate is universal. Consumers buy chocolate to savor a “moment of indulgence.” Increasingly, the preference for high-end indulgence foods observed in Western societies “has spilled over to Asian markets,” says Ernst Tanner.

However, Asia has no tradition of eating chocolate, and lags behind the rest of the world in average chocolate consumption. So how can a Swiss company successfully sell chocolate into new markets where customer appreciation has not developed through history? The answer is simple: local adaptation.

“All over Asia, the gift-giving culture is very strong. This drives premium chocolate sales in China, Korea, Hong Kong and in some countries of South East Asia. Especially during the Spring Festival [Chinese New Year], family members exchange valuable gifts, and the Lindor truffles are much loved as a premium gift to show appreciation,” says Ernst Tanner. “This gift brings happiness and ‘face’ value to both the giver and the receiver. The auspicious red and gold colors are also associated with good fortune and wealth in Asia adding to the popularity of Lindors as a perfect gift choice.”

The close correlation between chocolate and romance also ensures strong Valentine’s Day business in Japan, when ladies give chocolate gifts to men and receive reciprocated chocolate gifts one month later on White Day. In Korea, examination day on November 18 sees students taking their college exams rewarded with chocolate gifts for their stressful times. “On this day, chocolate sales peak as high as Valentine’s Day,” says Ernst Tanner.

OldTown White Coffee

Brewing coffee the Malaysian way
OldTown White Coffee was established in Ipoh, the heartland of Malaysian white coffee. At the end of the 18th century, migrants from China brought the art of coffee making to the Malay Peninsula. As Malaysian coffee culture developed, small “kopitiam” coffee shops opened in towns and cities nationwide, and coffee became embedded into the Malaysian way of life.

Over the last decade, OldTown White Coffee has become Asia Pacific’s leading white coffee brand. Its local credentials assisted this progress. “As a brand founded in Ipoh, the origin of white coffee, this gives us a competitive edge. We can claim to be a true white coffee producer, something that no other brand can claim,” says Lee Siew Heng, Group Managing Director of OldTown White Coffee. “As a Malaysian company, we believe that country of origin is an important proposition when promoting coffee products. Just like the Italian latte.”

Mr. Lee says a universal consumer is discernible for certain products: “Cars or consumer electronics products like cameras and computers can be used in an identical manner anywhere to achieve the desired results. In respect of food and beverages, however, there is a high tendency to tailor the products to meet the needs of customers in different markets.”

OldTown White Coffee has an in-house research and development team that develops products for markets beyond Malaysia. “The Asian region has rich and unique traditions, which in turn creates cultural diversity and common challenges, including obstacles of language and geographical separation,” says Mr. Lee. “Based on the history and development of coffee culture in Malaysia, it is challenging to duplicate this across other countries in South East Asia, let alone Asia. Each country in Asia embraces a different coffee culture.”

To meet differentiated tastes, OldTown White Coffee created a new formula with a higher level of sweetness for consumers in Thailand. “Consumers in Singapore, Hong Kong and Taiwan, however, tend to be more health conscious in the selection of foods and beverages, and are accustomed to between just ten and twenty percent of the sweetness of the standard formula,” says Mr. Lee.