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Don't Blame the New Middle Classes in the Developing World. Reinvent Your Offering!

Worldwide, according to forecasts from the United Nations, emerging economies will contribute 98 percent of population growth to 2050. Millions of new consumers will be joining the middle classes in years to come. That makes it an appropriate time to discuss a social and economic phenomenon that is transforming both Brazil and other emerging economies around the world — the rise of a new middle class of consumers, with a major impact on the current global system of production and consumption.

By Pablo Barros | Published 10 years ago | About a 5 minute read

Over the last 10 years, some 30 million Brazilians have joined the middle class, with dramatic social and environmental consequences. These new consumers are swelling the numbers of a market that is already stretching Brazil’s natural resources and energy supply beyond their capacity. Nevertheless, it is ethically and economically impossible to deny to this segment of the population the access to consumption already enjoyed by other Brazilians. In Brazil, socio-economic classes C, D and E now account for 108 million people, or 54 percent of the population.

Brazil is part of this global movement, as vast quantities of people join the market, all eager to consume. Marketing is playing its part in supporting this trend: These new consumers are driven not only by their basic needs, but by the desire to achieve a social status that until recently was out of their reach. No ethical consumerism campaign or educational drive is going to take this away from them. These newly empowered masses want to consume, they want to show off their new status and their achievements, and they want social recognition — in Brazil, many of these new consumers own a smartphone but do not have a bathroom at home.

Whatever we may think about these developments, a reasoned approach that tries to encourage more rational, ‘conscious’ consumption from these classes is doomed to failure; there is nothing ‘conscious’ or reasoned about this new wave of consumption. In certain middle class niches of the market, and in northern Europe generally, where people’s buying patterns are more settled and their aspirations are evolving, it may make sense for companies to try to raise awareness of the consequences of unbridled consumerism. Elsewhere in the world, these new consumers will simply not be able to hear that message.

Fortunately, raising consumers’ awareness about their responsibility is not the only way to respond responsibly to this sharp rise in consumption. In fact, it is not even a particularly effective response. In Brazil over the last 20 years, market research has shown that awareness of environmental concerns has increased significantly, but this has not been accompanied by a similar change in the buying habits of consumers. Price, durability and brand are still by far the most important factors when making a buying decision.

It is clear that the current situation, in Brazil and worldwide — in which on the one hand companies produce unsustainable products and services, while on the other hand NGOs, governments and even companies try to persuade people to change their choices — is never going to have an impact on these millions of new consumers. If companies and organisations are going to help develop new means of production and encourage more sustainable lifestyles, a new approach is needed.

We believe that this new approach needs to be based both on the innovation of a company’s offering and also on the development of strategies that aim to influence the experience and buying habits of today’s new consumers. They need to be encouraged to want products, services and lifestyles that provide them with benefits and meet their aspirations, but which are also more sustainable. Companies must aim to influence those consumer behaviours and habits that are closely associated with their products, or which touch on wider issues that are material to the company and its stakeholders. Only in this way will companies be able to reduce their environmental impact, or increase any positive social impact, in today’s fast evolving market.

Traditional marketing to consumers has always looked to create desires, and to change patterns of behaving and buying in order to increase the sales of a product or service. What is new about the whole area of consumer behaviour change, which we have addressed in our Consumer Behavior Change Framework, is the use of a much more extensive toolbox to deepen the relationship with consumers and encourage new forms of behaviour and new lifestyles. Using this approach, companies are able to make products, services and behaviours that have less of an environmental impact and more of a positive social impact, that can be just as attractive and desirable as more traditional choices.

The behaviour change toolbox has learnt from areas such as neuroscience and behavioural economics. It is highly focused on the irrationality of much human behaviour; some 70 percent of buying decisions are based not on rational thinking but are driven by factors such as the need to belong and the need for recognition, status, sexual success, etc. This new approach can be used to change the behaviour of a wide range of consumer profiles, analysing what influences and motivates a class of consumers to better understand how to reach them.

At the same time, companies need to use disruptive innovation to create new, more sustainable products, services, value propositions and business models. They need to develop offerings that are more efficient, more economical, and that consume fewer resources. These products also need to differentiate by creating value for consumers in the widest possible sense.

Above all, if it is to be successful, any behaviour change approach that aims to encourage the take-up of a product or service will have to provide real advantages for today’s new consumers. These consumers will have to benefit personally from changing their behaviour. Appeals to self-sacrifice and self-denial will fall on deaf ears in this market. The millions of new consumers joining the market in Brazil and around the world are all too used to going without. If a company is going to reach them and influence their buying patterns and their behaviour, it will have to invest in understanding just what makes them tick and then deliver them with very real benefits.