After all, it’s not every day that you find yourself walking next to a gigantic, walking, talking smile.
As the new brand ambassador for Unilever’s P/S toothpaste, the category-leader, Mr Smiley’s walkabout was part of a recent Lowe campaign to foster a deeper emotional connection with consumers.
Just in case the city’s latest resident didn’t strike a chord, Lowe also penned a feel-good anthem that was sung by Miss Vietnam and launched a set of testimonial print ads featuring nationals from all walks of life. For Unilever, the campaign marked a distinct shift from P/S’s usual tactical and social education ads, and was quickly picked up by the local media.
Newly acceded into the World Trade Organisation, Vietnam is possibly the only member nation without a McDonald’s or Starbucks in sight — but brand attachments are forming fast, fuelled by Vietnam’s turbo-charged development.
Though the minimum wage in Vietnam is 37 per cent lower than China’s, purchasing power across key cities has more than doubled in the last decade. Poverty has dropped from 51 per cent to eight per cent in 15 years, and GDP has grown by an average of seven per cent in the last five years.
“Vietnamese consumers have become increasingly sophisticated over the past six years, particularly the burgeoning middle class, which now has the spending power to buy into brands that deliver on promise,” says Daniel Gordon Jones, general manager of Bates Vietnam. “It is only recently that a flash of wealth is acceptable without suspicion.”
Perhaps McDonald’s and Starbucks have yet to wet their feet, but pioneers such as Kentucky Fried Chicken, Pizza Hut and Gloria Jeans Coffee already enjoy widespread popularity in Vietnam’s youth-filled urban centres. Meanwhile, premium labels such as Nokia, Dutch Lady and Vietnam’s biggest advertiser Unilever have quietly overtaken longstanding local players in both brand equity and sales performance. “Why are local brands losing out to foreign competition?” asks Gordon Jones. “It’s an example of quick and easy logos versus long-term brand building.”
Part of this may be due to what Ralf Matthaes, MD of TNS Vietnam, dubs ‘colonial marketing practices’ — a reliance on foreign marketers to lead the way in branding. “As when the French dominated Vietnam’s economy from the late 1850s to the early 1950s, marketing and advertising are still very often based on adaptation from other markets,” he says. “A ‘wait and see’ attitude prevails with regards to seeing if foreign ideas and concepts will work.”
But perhaps this is just a consequence of recent history. It was not long ago that the Government lifted a mandate that companies couldn’t spend more than 10 per cent of their revenue on marketing.
In terms of adspend, Unilever dwarfs the rest, investing approximately US$35 million in recorded ratecard spend last year. By comparison, the leading local advertiser, Vietnam Post & Telecom, spent less than a quarter of that figure, US$8 million. The Vietnam Advertising Association estimates that 80 per cent of the advertising market is still split among foreign agencies. The market continues to attract global networks, with Omnicom’s BBDO and TBWA recently announcing their new Vietnamese offerings.
With local brands generally lagging behind their foreign rivals in branding savvy, public relations is even further behind. According to a study conducted by Mya Communications, a recently-launched strategic PR shop, there is little understanding of PR’s strategic benefit in the local marketplace. Over half the executives polled believed that PR simply means publicity.
But Danny Phan, director of Ogilvy PR in HCMC, foresees rapid change in this sector too. “The industry is still in its infancy and there is much room for it to grow and develop,” he says. “As global PR firms enter the market and demands from MNC clients become more sophisticated, the level of understanding among current practitioners will undoubtedly fast-track.”
As a demographic, Vietnam has the sort of profile that municipal planners dream of: a population of 85 million, with half of these under the age of 25, plus the region’s highest level of consumer confidence, according to an annual index compiled by MasterCard. All in all, a fertile environment for the growth of a new consumer class. “Optimism, coupled with key social traits such as respect for elders, education, humility, resourcefulness and hard work, contribute towards the potential for Vietnam becoming a very solid and significant consumer-based nation,” Matthaes says.
Marketers need to take demographic variables into account, however, before they start thinking about a single idea for the entire country. Distinct cultural differences separate the country’s main commercial hub, HCMC in the South and Hanoi, the capital, in the North. “Hanoi and the North are very ‘face’-driven,” says Sabyasachi Mishra, MD of Lowe Vietnam. “Brands are used to measure success in life. On the other hand, the South and HCMC are a bit more realistic.”
For this reason, most foreign brands will launch in the North first before trickling down south. The largely rural and under-developed central area between these two cites also remains far less brand conscious.
“The centre is a bit more traditional and family-oriented,” Mishra observes. However, given that three-quarters of the population reside outside urban centres, marketers would do well to think outside HCMC and Hanoi. Getting the distribution right takes precedence over branding here.
Perhaps the single most impressive fact about this developing country is its 90 per cent literacy rate. When Mishra first entered a local supermarket, he was shocked to see how many shoppers were actually reading package labels — “More than anywhere I’ve been to,” he says. “Vietnamese consumers are genuinely interested in new brands and new categories,” he says. “There’s little of the resistance and cynicism we see in other markets.”
One thing is for sure: marketers cannot afford to wait long, especially given Vietnam’s unusually young, savvy and brand-conscious population. Also known as ‘cadres-kids’, today’s youth is the first generation born in a true market economy.
“These days, the youth are the translators of the consumer world for their parents,” says Mishra. “They are influential for a purchase decision — from shampoos to beverages — and are much faster in decoding the message of advertising.”
Such a large youth category prompted market research company ACNielsen to identify four general personalities: Saigon Cool, Traditional- ists, Hard-Working Bees and Kids With Big Heads. The Saigon Cool group, a trendy crowd mostly found in urban centres, is an ideal target for mobile phone companies.
“They are the most image-conscious and more global and spontaneous in their outlook,” says Chris Morley, MD of ACNielsen Vietnam.
At the other end is an equally large number of Hard-Working Bees, or aspirational youths, who are always planning for their futures. This makes them big consumers of locally-branded dairy products and skin care items.
The third category, Traditionalists, have conservative values and prioritise organisation and personal development. They are more likely to devote pocket money to items like gum, candy and hair conditioner.
Finally, Kids with Big Heads refer to those who have been cosseted by their parents their whole lives. They rarely need to make decisions and are thus more carefree than their peers, making them susceptible to promotions and impulsive buying.
Reaching out to a population whose average age is 26 poses constant creative challenges to advertisers vying for their attention. “They appreciate good acting, humour and intelligent wit,” advises Bates’ Gordon Jones. “Above all, a good idea.”
To launch a roll-on deodorant, Rexona developed a cheeky storyboard shot in ‘hidden camera’ style. One spot featured a young urbanite teasing his friend about his wet underarm spots, comparing its wetness to that of his friend’s ex-girlfriend. Cheekiness shouldn’t be kept in short supply Gordon Jones suggests, as most brands still push straightforward, rational advertising. “I’m not sure how successful this will continue to be, as consumers look for more interesting, emotional and even irreverent communication.”
Another tip? “The Vietnamese are very proud of their heritage, so if you can find an insight into heritage from their point of view, the campaign will get talked about,” he says. Nuti IQ, a milk powder, reaped sales with this tack. Its commercials feature three historical Vietnamese figures as babies, with the running super: ‘Every hero was a child once’.
As far as the local media scene goes, TV and print account for over 95 per cent of adspend, according to TNS. Radio has a low profile, while outdoor advertising is heavily regulated. A survey from Consumer Insights Express found that 86 per cent of people between 15 and 65 learn about new trends from magazines and 70 per cent from TV ads.
But this looks set to change, with urban centres enjoying rapid growth in internet and mobile phone penetration. Internet penetration surged almost 30-fold in the last six years, reaching 6.4 per cent of the population in 2005 according to Internet World Stats. Furthermore, most of these users are young consumers: 84 per cent of urban youth between 15 to 19 surf the internet on a weekly basis. “With the growing thirst for international trends, you’re finding more youth using the latest mobile phones, playing games or in chat rooms,” says Nielsen’s Chris Morley.
“As a medium, digital will become significant sooner than we think, because it’s a predominantly young population here,” Mishra says. “Add to this their natural flair and enthusiasm for consumption of technology and converged experiences such as mobile, internet, on-ground, TV.” However, online adspend has some way to go. ZenithOptimedia estimates that just US$500,000 will be devoted to online this year, compared to around US$500 million above-the-line spend.
Press and TV meanwhile are still restricted to local publishing companies, and shared between a small group of players, but things are changing here too, even though media remains strictly controlled. Ogilvy’s Phan has already begun to notice media becoming more globally oriented than when he first arrived two years ago from New York. “I do notice a very refreshing sense of optimism that’s always reflected in the media, from economic development to profiling Vietnam’s up-and-coming individuals.”
Ultimately, it is this anomalous sense of optimism that sets Vietnam apart from other Tiger nations. Advertisers can enter with a confidence that their efforts — if wisely done — will reap rich rewards.
“Vietnamese consumers are info-hungry,” says Mishra. “They want to know how your brand works, how it’s made, how it’ll help them. This is a fantastic opportunity for brand marketers.”
