Edelman - Innovation China

Innovation and the Earned Brand China

The Earned Brand | Edelman 2015 | pg 2

Four insights:

People believe in the promise of innovation.

Consumer acceptance of brand innovation cannot be bought. It must be earned.

While the promise of innovation inspires, people first need to be reassured.

“I rely on my peers to reassure me. Because their experience is my evidence.”

1 2 3 4


What is innovation? A re-imagination of categories, products, services, operations, models, design, etc. that create more value, for the brand and for consumers.

And yet the Chinese consumers feel the pace of business innovation is too fast

Q349-351. Below are a number of statements. For each, please think about the pace of development and change in business and industry today and select the response that most accurately represents your opinion. (Not Enough, Too Much) Informed Publics, China. (2015 Edelman Trust Barometer)

19%

TOO FAST


JUST RIGHT

21% 59% TOO SLOW

28% 19% 51%


And what can the rest of us learn from this?

How do consumers see innovation?

What are the factors that stop consumers accepting and embracing innovations?

What are consumers’ real feelings about innovation?

The Earned Brand Methodology

Timing April – May 2015 Quantitative Online Survey 10 countries: U.S., Mexico, Brazil, France, Germany, U.K., China, Japan, India and Australia 10,000 respondents, nationally representative of age, gender, and region based on most recent country status data Mobile Diaries 25 millennials, with them on their mobiles, for 2 weeks, in Brazil, U.K., India, China and the U.S.



People believe in the promise of innovation.

Insight 1

Q5P1: Please select the statement from each group that best represents how you feel. (Innovation is just an overused term, it’s not leading to anything) vs. (Innovation is essential for us today and it’s helping us to progress). Q5P4: Please select the statement from each group that best represents how you feel. (Innovation is making us more and more like robots) vs. (Innovation is opening the human spirit) 10-country global total and in China.

The Earned Brand | Edelman 2015 8

Innovation inspires people

“When you look at anything innovative, it will inspire you and make you feel more energetic.” Zhu X, 22, China

92% innovation opens the human spirit

innovation is essential and it’s helping us to progress

77%

94%

90%

In China, consumers believe that business has the biggest role in finding the next big thing

Q15. Where do you think the next big thing will come from? In China. The Earned Brand | Edelman 2015 | pg 9

BUSINESS INDIVIDUALS/ PEOPLE LIKE ME

ACADEMICS/ UNIVERSITIES

15% 87% 45% 30% 79% 36%

They believe that brand innovation should have big goals with societal impact

Q14. What do you think the role of innovation is for brands today and in the future? (in the future)10-country global total and in China.

to improve society

to push our thinking as a society

69% 66% 63%


agree that brand innovation needs to impact society in 9 10

73% 65% 71% to let us be one step ahead of other countries

57% 54%

37%

24%

14% 14%

47% 40%

47% 43%

20%

35%

Technology Mobile Energy Healthcare Food and beverage Education

They want more innovation to come from traditional industries

Q65: Thinking more specifically about the innovation in the products and services you use throughout your life, what industries do you see the most innovation in TODAY? Q66: … what industries do you want to see innovation in TOMORROW? In China.

Percentage of China’s consumers who say they see innovation coming from each industry sector today, and who want to see it from each sector tomorrow:

INNOVATION GAP

10 19


21 6

INNOVATION TODAY INNOVATION TOMORROW

WANT LESS TOMORROW WANT MORE TOMORROW

And they question your motives

66% 70%

65% 69% 67%

61% 65% 65% 67%

62% 65%

Global Australia U.K. U.S. Japan France Germany Brazil China India Mexico

Q14. What do you think the role of innovation is for brands today and in the future? (today) 10-country global total and in China.


consumers believe brands are innovating to make more money for the company

in 2 3

Global Australia U.K. U.S. Japan France Germany Brazil China India Mexican


Insight 2

Consumer acceptance of brand innovation cannot be bought. It must be earned.

The stakes: Because of their concerns, they’re not buying

Q27. Thinking about the below, please indicate which of the following you feel is happening in the world today. … IMPACT ON PURCHASING DECISION 1 = Has no impact on what I buy … 4 = Makes me not want to buy something. In China.

say they will not buy because of their concerns


90%

Privacy issues

Being always on

Security Environment

3 in 5 have privacy concerns Privacy concerns are especially strong in Germany, the U.K., the U.S. and Australia.

Q22. Thinking about the below, please indicate which of the following you feel is happening in the world today. 10-country global total and in China


Privacy issues

58%

1 in 3 are concerned about having to be always on Germany and Brazil are most concerned; Japan and China are less so.



Being always on

36%

1 in 3 have security concerns Security concerns are highest in Japan and the U.S., and less of an issue in China.


Security 33%

“Some back door issues may leak personal information, including personal banking details.” Yao, China


And the majority have concerns about the impact on the environment Environmental concerns are global, but strongest in Europe and Latin America.


Impact on environment

52%

“Technology and innovation bring convenience, but it brings problems, too. Cars change my life, but too many cars result in air pollution, traffic jams and parking problems.” Yao, China



Insight 3

While the promise of innovation inspires, people first need to be reassured.

Consumers are twice as likely to want to be reassured than inspired by a brand

Q35: When a brand tells me about something, I want it to… “Reassure me of quality,” “Inspire me” 10-country global total


people want to be REASSURED

in 2 3 people want to be INSPIRED

in 1 3

We may be innovating, but we are failing them as marketers


say brands are not moving in the right direction in how they communicate

in 2 3 Q20: Thinking about change in the past 5 years, how do you feel the [ … ] industry has evolved in relation to the following factors: How brands in this sector…(communicate with me) / (listen to me) // (moving in wrong direction) 10-country global total.

They feel like brands are shouting at them. In most markets, what brands say doesn’t feel real

Q21: Please indicate how much you agree or disagree with the following statements. (I’m getting bored/frustrated by constantly being told I need to upgrade/update the products I already have.) (Top 2 box) 10-country global total and in China.


57%

are bored/frustrated by constantly being told they need to upgrade/update 52%


Insight 4

“I rely on my peers to reassure me. Because their experience is my evidence.”

We’ve always known that peers provide recommendations, but today peers also help convert purchasers

Q41: Thinking about the conversations you have online and offline with friends and other people like you about brands, products and services you purchase, what impact do they have on you?

Build inspiration

Push consideration


8% 18% 18%

36% 41%

31% 30%

37%

They get me

They give me a sense community

They suggest products/services

They push me to try new things

They make me trust the brand more

They help me make decisions They help me overcome my concerns

about the product / service They warn me about the risks

The impact of online/offline conversations about brands with friends and other people like me:

Moment of truth

The channels consumers rely on to be reassured are peer-to-peer, rather than brand-to-consumer

When millennials want to learn about brand innovation, their go-to channels are peer-to-peer.


Brands win if they power the peer conversation

“Our unique asset is our host community.” Nathan Blecharczyk, founder of AirBnB

Q36. How much do you agree or disagree with the following statements? in China.


67%

I trust a brand more if it encourages me and and other customers to review its products and services

I trust a brand more if I find it easy to review its products and services

64%

82%

81%


Recommendation of four brand behaviors

Two-thirds of consumers are undecided about innovation. What do they need from brands?

Last mover First mover

8% 15%

Percent of respondents who fall into each consumer innovation typology:


Methodology: Statistical analysis of consumer groupings based on their attitudes to brand innovation showed that 66% of consumers are open to innovation—but have concerns that need to be addressed before they will buy. They also have specific expectations for how brands must behave to address those concerns. Other consumers were either “first movers” (15%), “last movers” (8%), or resistant to innovation (11%).

66%

Undecided Consumers

What undecided consumers need from brands when it comes to innovation


Statistical analysis of consumer groupings based on their attitudes to brand innovation, and their risk concerns.

Source: mobile diaries, qualitative groups and quantitative segmentation

Reassure me about my personal

concerns

Inspire me by doing something new and different

Show me how I can participate in your brand

Reassure me about my societal

concerns

The 4 brand behaviors that address consumer needs around innovation:

Have a Purpose

Inform and Educate

Make your Mark

Live your Character

Reassure me about my personal

concerns

Inspire me by doing something new and different

Show me how I can participate in your brand

Reassure me about my societal

concerns


Brand Behaviors


Inform and Educate inform transparently so that

you can educate consumers and help them make choices


Brand behaviors: •  Explain your motive for innovating. •  Address concerns about the social and

environmental impacts. •  Engage and educate consumers across

different channels and platforms.

Consumer need: I am empowered by information. Give me all the details and let me go as deep as I want.

To reassure me about my personal

concerns


Have a Purpose

operate with purpose to show how you fit into the bigger picture and are an active participant in society


Consumer need: I believe in progress—but not at the cost of hurting my community or compromising my values.

Brand behavior: •  Be authentic. •  Show that you value human interaction and

have respect for tradition and heritage. •  Add value beyond your product and service.

To reassure me about my societal

concerns


Make your Mark

make your mark by doing something unique or differentiating that is worthy of attention


Consumer need: I like to be inspired by new ideas—as long as they really are new and different. Let’s solve a problem in a cool, creative way!

Brand behaviors: •  Show how you stand out from the crowd. •  Offer engaging content that is timely, has

resonance, and is entertaining. •  Spark peer conversations and debate on

many channels with a clear and consistent brand voice.

To inspire me by doing something new and different


Live your Character

live with character that is true to your brand and has a personality that consumers can buy into


Consumer need: Brands can help me express my identity. I want to look smart, creative and connected.

Brand behaviors: •  Be transparent when it comes to

consumer privacy and sharing of data. •  Offer inspirational, exciting brand

experiences in which consumers can participate.

And show me how I can participate in

your brand



Case Study: The Freshest Orange Juice


Case Study: Samsung Safety Truck

Case Study: Adobe Photoshop Murder Mystery


Case Study: Dove #Choosebeautiful

Recommendation: Four brand behaviors


Statistical analysis of consumer groupings based on their attitudes to brand innovation, and their risk concerns.

Brand Behaviors


Have a Purpose

Inform and Educate

Make your Mark

Live your Character


Thank you.

Innovation and the Earned Brand


For new business requests, please contact : Sanjay Nair, Managing Director, Edelman Beijing ([email protected]) Sonny Shen, Managing Director, Edelman Shanghai ([email protected]) For all other inquiries, please contact: Rannie Boydston, Senior Marketing Manager, Edelman China ([email protected])

Edelman - Innovation China

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