This is a great example of why market research is so interesting.
To be successful in understanding potential changes in business, we must be able to know when to look at things through binoculars and when to look through a microscope. BRICs (Brazil, Russia, India and China) is a great example of this because I would be here for months typing and researching every minute detail of why we should be thinking about the changing economies and consumer trends that are now shaping Brazil, Russia, India and China. But, I can’t do that. Well, I could – but I won’t. For three reasons: 1) I’m sure someone already has; 2) that will not help me drive strategic decision-making for my organization; and 3) you’re not really that interested. I’ll take you on the path from binoculars (still focused on idea, but not the details of that idea) to the microscope (the important, relevant details).
Binoculars The four countries that make the BRICs currently account for more than a quarter of the world's land area and more than 40% of the world's population They are considered to be at a similar stage of newly advanced economic development that is expected to create a much larger market of middle class consumers.
If you’re not sure what this means for your business, then you have to focus your lenses…
Refocused As the economies in these countries continue to explode in the next 10-20 years, the number of people that shift from poverty into the discretionary-spending middle class will likely grow faster than the overall economy.
So, now I know that BRICs is important for me to understand because there will be more spending power, and more demand for discretionary products and services.
What, specifically, is going to cause these changes and for what industries/products/services?
Consider the following (as provided by Deloitte, 2010):
1. As countries become more developed, the opportunity for women to become educated increases, thus leading to increased female labor participation. The rise in two-income households leads to increased demand for the convenience of modern retailing.
2. As the middle class rises, there is often an increase in the availability of consumer credit that leads to more lending and higher-ticket purchases.
3. Demand for travel and leisure services is expected to grow as the number of automobiles increase as they allow from great emphasis on entertainment and leisure. Automobile ownership allows for greater freedom in choosing where to shop or be entertained. It enables spending larger amounts on each shopping trip, and thus allows for less frequent shopping farther from home.
4. Middle-class consumers, with discretionary spending power, have the ability to set aside some their income for future needs such as retirement, healthcare, or children’s education. An increased ability save leads to increased demand for financial services.
(Did I make that look too easy?)
In closing, the BRICs may be an important focus for many of your organizations that, of course, would require much more investigation than the blanket example I provided. Market research can be very complicated, especially in the four developing nations that are expected to change the face of middle-class around the world. We all know that once you pull out the microscope you find more to investigate the story becomes much more complex. In regards to BRICs, you’ll learn what other companies have discovered by attending this years The Market Research Event in Orlando.
Garrett McGuire (@GJMcGuire) is a Consumer Insights Analyst for a major retailer. His areas of focus are advertising research, brand equity, and providing consumer insights for many marketing initiatives. Prior to his current position, he was a graduate student at Michigan State University where he began his blog, "The Journal of a mAD Man," that explains the theories and methods of advertising.