Rising Demand For International Brands in Pakistan

[RiazHaq]

Consumer spending in Pakistan has increased at a 26 percent average pace the past three years, compared with 7.7 percent for Asia, according to data compiled by Euromonitor International, a consumer research firm. Pakistan's rising middle class consumers in major cities like Karachi, Lahore and Islamabad are driving sales of international brand name products and services. Real estate developers and retailers are responding to it by opening new mega shopping malls such as Dolmen in Karachi and Centaurus in Islamabad.

Dolmen City, Clifton, Karachi


Here's a recent video of a CNN report on "British Brand Invasion" from Dolmen Mall in Clifton district of Karachi:

[video]http://edition.cnn.com/video/#/video/world/2013/04/01/mohsin-bristish-brands-in-pakistan.cnn[/video]


Pakistan has continued to offer much greater upward economic and social mobility to its citizens than neighboring India over the last two decades. Since 1990, Pakistan's middle class had expanded by 36.5% and India's by only 12.8%, according to an ADB report titled "Asia's Emerging Middle Class: Past, Present And Future.

A string of strong earnings announcements by Karachi Stock Exchange listed companies and the Central Bank's 1.5% rate cut have already helped Karachi's KSE-100 index surge nearly 50% (37% in US $ terms) in 2012 to top all Asian market indices. It was followed by Bangkok's SET index which advanced 36%. It also easily beat India's Sensex index which was the top performer among BRICs with 25.19% annual gain.

Haq's Musings: Upwardly Mobile Pakistan's Growing Appetite For International Brands

 

[RiazHaq]

 

[RiazHaq]

Haq's Musings: Pakistan on Goldman's BRIC+ N11 Growth Map

 

[Asian.Century]

Market Research Pakistan

Tapping into the Pakistani consumer market

When it comes to the overall literacy situation in the country, Pakistan ranks amongst the lowest in the world. The major Pakistani cities of Karachi, Lahore and Islamabad, along with the provincial capitals, i.e. Quetta and Peshawar account for the major literate population of the country. If we are to look at the marketing potential in Pakistan, this statistic is of prime importance because the market segment to which a product is being marketed to, is one of the most important aspects of a marketing campaign and is the essence which determines if a certain advertising campaign will be able to achieve its targets of an increased sale.

There are a number of multinational companies currently operating in the county. Multi-National Enterprises or MNCs as they are more commonly referred to are the major signs of how globalisation has in effect created organisations that make products which are then sold the world over and thus their marketing campaigns also target consumers which belong to diverse, multi-ethnic backgrounds. Even though Pakistan is one of the poorer countries of the world, there are currently approximately 170 million people living in Pakistan. This represents a significant market size that these MNCs want to take advantage of. This is what accounts for their presence in Pakistan. These MNCs spend a considerable amount of capital and other resources into developing extensive marketing campaigns that can target people belonging to all social classes of the country. As the economies of the world are currently facing double-dip recessionary periods, what matters most to these MNCs now is to tap into newer, less explored markets in order to increase their profits. If a company operating in a certain market is not profiting from a presence in that market then its entire business model is a failure and the business cannot run properly. In order to earn profits day in and day out, a company’s marketing campaign needs to be absolutely spot-on or it will miss the mark and thus profits will fall.

Peter Drucker once said that, “The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” With this principle in mind MNCs carry out market surveys and other marketing research techniques with the aim of getting to know their customers in a better way so that the marketing campaigns that are thus formulated can actually help towards an increase in sales which in turn leads to profit maximisation. What differentiates MNCs from other local organisations is that MNCs carry out businesses all over the world. What this does is that firstly, it enables them to have huge marketing budgets that run into millions of dollars due to the large quantities of product sales that they make and also due to their access to a larger share of the market. Secondly this enables MNCs to create marketing campaigns that are suited to the individual needs of their customer base. For example a marketing campaign that has been successful for an MNC in Malaysia may not necessarily work in the context of the Pakistani market due to different demographics and social norms and conditions.

A question that arises is that how can we know if the marketing campaign of one company has been successful whereas that of another did not fare so well? The answer to this question has many dimensions to it. First of all when marketing budgets are formulated, certain set objectives are identified. These objectives make up the foundation for the marketing policy. If these objectives are not identified when the marketing policy is being formulated than there can be no clearly defined scale with which we can measure its effectiveness. A point then comes up where we might be able to predict the success of a marketing campaign on the basis of the increase in sales that it led to, but such a scale is not exhaustive in the sense that it will not let the organisation know if for example the success of the marketing campaign was due to promotions on electronic media or print media. Or whether a certain advertisement ‘by-line’ was responsible for triggering massive sales. Therefore defining the objectives that a certain marketing campaign aims to achieve is the best way forward in predicting its success. Secondly, the success of a marketing campaign could also be measured in relation to that of the competitors’ campaigns, if there is an element of direct competition amongst the products of two different companies. For example if we look at the beverage industry we can see that Pepsi and Coke are direct competitors. If Pepsi wants to measure the success of its marketing campaigns it will also need to look at those of Coke in order to have data that can then be compared amongst the two brands. Both Pepsi and Coke spend millions of dollars annually on their marketing/advertising campaigns. Even though the sales of Coke are much more compared to those of Pepsi on an international level, if we look at these two brands in the context of the Pakistani market, we can see that Pepsi outsells Coke in Pakistan. The reasons for this are varied and the following discussion will look at analyzing this Pepsi versus Coke dilemma in the context of the Pakistani consumer market.

Pakistan is a nation of approximately 170 million people.

With the advent of the print and later the electronic media, the world has become much smaller. Today all the people of the world are more closely related to each other at least in the context of being able to stay in touch and interact, than ever before. As science and technology keeps going up a spiral of progress and innovation, we see that our lives have become much more inter-related. An event taking place in one corner of the globe can now be seen by an audience sitting millions of miles away with the delay of only a few seconds. This global coverage of events has brought in the concept of “mega-events” where the audiences have increased to over millions of people. Sporting events in general also attract huge numbers of audiences. The advent of this electronic age has thus ushered in a new era in the context of sporting activities and events as well. Where once celebrities were only local heroes, now celebrities and sportsmen are a global phenomenon and brands in themselves.

What was once a foreign sport is now considered something that almost every Indian and Pakistani has a love for. It is in this regard that Pepsi managed to outsmart Coke and thus became the choice drink for almost every Pakistani. As was discussed earlier in this thesis that product placement is a form of subliminal marketing, the case of Pepsi and Coke in the context of Pakistan clearly highlights and proves a number of theories to be true with regards to subliminal marketing and its effectiveness.

Imran Khan, the Pakistani cricketer turned philanthropist turned politician, made his debut for the Pakistan team on the 3rd of June in 1971 versus England in a test match. Imran signalled the arrival of a rare-breed of cricketers in the history of our country. Before the arrival of Imran Khan, the subcontinent’s major strength in the field of cricket was their solid batsmen and their accurate and talented spinners. Imran ushered in the era of the lightning fast bowling. A true tiger in body and mind Imran became an overnight sensation and his fame and popularity soared higher than that experienced by any other cricketer in the sub-continent before him. Wherever Imran went, huge crowds followed his every step just to have a glance of their idol. His looks, his overall persona and the aura that surrounded him meant that he was the equivalent of a rock star in the eyes of the people of the subcontinent. The love for the sport mixed with the admiration for the genuine fast bowler and batsman extraordinaire gave rise to the first truly global sporting icon from the subcontinent. When Imran started to shine on the field and in the press, somewhere deep within the marketing department at Pepsi there was a moment of inspiration and a sparkle in the eyes of an executive which led to the idea of Pepsi sponsoring Imran and hiring him for the purpose of their advertising campaigns. As it would be later proved; this turned out to be an absolutely genius idea on the part of Pepsi. Firstly because the love for cricket in the subcontinent meant that everyone from an 8 year old to people who were in their 70’s or 80’s would be targeted by such a marketing campaign owing to the popularity of Imran and the image that was associated with him and secondly because their rivals Coke had not capitalized on this opportunity as yet. Placing their product with Imran’s overall persona as a sportsman and a tiger on the field and off of it meant that even on a subliminal level, people would respond to it in a very positive manner and their purchase decision, when it came down to buying a soft-drink would be massively affected by this decision.

What followed was decades of partnership between Pakistani cricket and Pepsi. Pepsi’s advertisements from the late 70’s and early 80’s included Imran as their main protagonist and Pepsi being conveniently placed with his global persona. From the point of view of subliminal marketing this was a rousing success because firstly it showed how the sales of a product could be increased drastically if it was placed correctly with a celebrity of Imran’s stature and how such an association would be beneficial towards destroying all product competition in the long run. When Wasim Akram came to the fore as the next generation of lightening fast bowlers, Pepsi was quick to pounce on this opportunity aswell and hired Wasim for all their marketing campaigns and media promotions. The result was that sales of Pepsi soared to great levels due to this strategic product placement and consumers subconsciously related Pepsi to being a drink that would give them an added dimension of being a ‘tiger’ just like their favourite fast bowlers of the time. This clearly proves the fact that product placement greatly helps towards increasing the sales of a product, greater sales translate into greater profits and that since product placement is a form of subliminal marketing, therefore subliminal marketing leads to the birth of a bias in the minds of the consumers for the respective product which therefore leads to a favourable purchase decision. This case of Pepsi versus Coke in the context of the Pakistani market clearly highlights how subliminal marketing can be an effective tool towards increasing sales and profits. Pepsi were shrewd enough to understand this phenomenon with relation to the Pakistani market and thus reaped the profits and still continue to do so. Thus, even though Coke outsells Pepsi the world over, in Pakistan this is the complete opposite with Pepsi outselling Coke.

With so many multinational’s operating in Pakistan and having the expertise of employing marketing techniques that have been honed to country specific ones, the Pakistani public is vulnerable to subliminal techniques employed in marketing and advertising due to a huge number of Pakistanis being illiterate. The situation is not better when it comes to literate Pakistanis as a whole due to the fact that subliminal marketing affects its subjects by being hidden. Consumers cannot identify these hidden queues due to the fact that such things are only noticeable and get registered in the unconscious part of our memories as has already been discussed earlier in this thesis. The conscious parts of our minds fail to register these queues and thus our purchase decisions may be affected by these marketing techniques. Furthermore, there are not many consumer protection laws in Pakistan. Due to years of mismanagement and lack of respect for the law the legal conditions that are applied on MNCs that are operating in the country; for safeguarding the interests of the general public, are not in place. This leaves consumers at the mercy of these MNCs if and when they choose to employ such marketing practices which can unfairly influence a purchase decision in the minds of the consumers. If a framework were to be set in place for the protection of consumer rights, then the general public would be much safer. Looking at this subject from the point of view of the MNCs with regard to operating in Pakistan we can say that there exists a huge potential in Pakistan for the use of subliminal marketing techniques that can be employed to attract and promote sales. The Pakistani consumers are largely unaware of these marketing techniques and thus can be influenced into making purchase decisions that can help promote greater sales through effective marketing.

As was highlighted by the case of Pepsi versus Coke, in the context of the Pakistani market nothing is for certain. For example it is a certainty that Coke outsells Pepsi the world over. But in Pakistan this is not the case. Therefore a multi-national company that seeks to invest in the Pakistani market needs to come up with unique marketing strategies that utilise subliminal as well as other techniques and can potentially be able to beat its competitors by having greater share of the sales which in turn means a greater share of the market. The awareness that people have regarding a certain brand can be used with regards to placement thus encouraging further brand recognition instead of recall.

The writer has a postgraduate degree in Business Administration and a freelance journalist.

http://www.pakistantoday.com.pk/2011/09/28/business/tapping-into-the-pakistani-consumer-market/

 

[sparten]

We are a middle income country. Not a poor one.

 

[I S I]

Why you guys don't see the date of OP's post before commenting?