|By Marketwired .||
|October 3, 2013 12:01 AM EDT||
BOSTON, MA -- (Marketwired) -- 10/03/13 -- Consumers in developed economies are prepared to spend more of their budgets on branded products, according to a new report released today by The Boston Consulting Group (BCG). This is good news for a collection of 30 branded companies whose appeal spans generations -- from baby boomers to Millennials.
The report, titled "The Resilient Consumer: Where to Find Growth amid the Gloom in Developed Economies," also found that around two-thirds of consumers in richer economies plan to trade up to higher-priced goods and services in categories that are important to them, such as travel, large home appliances, and housing.
The report is based on the 2013 Global Consumer Sentiment Survey conducted in 20 countries by BCG, which first identified the trading-up trend more than ten years ago. The report focuses on responses from around 23,000 consumers in the developed economies of Australia, Canada, France, Germany, Italy, Japan, Spain, the U.K., and the U.S. It points to significant growth opportunities even as the pessimism about the global economy continues to worsen, provided that companies are able to position their brands in line with recent shifts in consumer values and priorities.
The report also identifies the brands that appeal to different generations of consumers. Fifteen brands rank in the top 30 for both boomers and Millennials. But 29 brands appeal to only one or the other of the two generations. The top-30 list for Millennials includes newer companies, such as Google and Asus, as well as several older brands that have managed to position themselves well for younger consumers, such as H&M, LG, Puma, Nokia, Converse, Gucci, and Dior.
One of the requirements for corporate success, identified by BCG as part of its Game-Changing Program to mark the firm's 50th anniversary, is the "growth imperative." After five years of economic gloom, companies must find ways to generate profitable growth. The new opportunities in markets for branded products identified in this report could provide those avenues for growth.
The report found that 40 percent of consumers in developed economies regard brand name and reputation as reasons for trading up to higher-priced products within the same categories -- a 16 percentage-point increase from the 2012 BCG Global Consumer Sentiment Survey. In general, more consumers in 2013 said that they plan to trade up to higher-end products in the categories they care about most -- and that fewer plan to trade down. Two-thirds of consumers in developed economies also report concentrating their spending on the few categories that matter to them most. There was a 14 percentage-point increase from 2012 in respondents who said they are willing to pay more for products because the "categories are more important to me." The only exceptions were the hardest-hit European economies: Spain and Italy.
The survey also found that consumers in developed economies have a high affinity toward brands -- especially among members of the Millennial generation. There was a 16 percentage-point increase from the 2012 survey in respondents who said that they are willing to pay more for products because of the brand. What's more, 55 to 65 percent of consumers surveyed in each developed economy said they believe that consumerism is good for the economy and society -- and 56 percent across all nine nations said that buying makes them happy.
"Consumers in developed economies have proven to be remarkably resilient," says Christine Barton, a BCG partner and lead author of the report. "Our research indicates that the current low consumer sentiment is a symptom of present economic conditions -- not some fundamental shift in people's desire to buy or a wholesale rejection of consumerism."
What has apparently changed in developed countries since the onset of the global recession of 2008-2009 is that there is a new "status currency" -- that is, the priorities and values of average consumers. Consumers now pay more attention to traits such as quality, value for money, and healthfulness. Sixty-three percent of respondents said they plan to spend more on products that "give better results" -- a 10 percentage-point increase since 2012. There was a 16-point increase in respondents who said they are willing to pay more for products that are healthier.
Consumers in richer nations also indicated that they attach greater importance to personal enrichment and social responsibility. Forty-five percent of consumers across the nine developed economies said that if they pay luxury prices, they prefer to do so on "enriching, expanding experiences over things." Fifty-seven percent said that they want to know more about how products are made and where they come from.
"The survey's findings suggest that companies should make sure that their brand strategies and messages are in tune with the shifts in consumer sentiment," says Emmanuel Huet, a BCG principal and coauthor. "They should also tailor their brand strategies to specific markets around the world and different generations."
The BCG 2013 Consumer Sentiment Survey is one of the most comprehensive studies of global consumer attitudes undertaken by the firm. In addition to consumer optimism and spending and savings plans, consumers in both developed and developing economies were surveyed, among other things, on product categories in which they plan to trade up or trade down, their perceptions of financial and job security, their emotional well-being and coping mechanisms, and their brand engagement and preferences. Responses were segmented by country, generational cohort, gender, and income. A subsequent report will explore BCG's findings from the rapidly developing economies of Brazil, China, and India, as well as eight African countries.
A copy of the report can be downloaded at www.bcgperspectives.com.
To arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or email@example.com.
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The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 78 offices in 43 countries. For more information, please visit www.bcg.com.
About BCG's Center for Consumer and Customer Insight
The Boston Consulting Group's Center for Consumer and Customer Insight (CCCI) applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG's various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The CCCI is sponsored by BCG's Marketing & Sales and Global Advantage practices. For more information, please visit http://www.bcg.com/expertise_impact/capabilities/center_consumer_customer_insight/.
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