Posts tagged Habits

A Non-tariff Barrier for Brands: Early Childhood

I am loathe to become as repetitive as I am derivative, but I will start my post today in a similar fashion to the one I posted last week: by linking to an article written by someone better qualified, with greater business knowledge, experience and insight than I could scrape together. They are probably better looking and more sophisticated but let us not dwell overlong on my failings.

In The Marmite Effect, The Economist gives us a brief overview of new insight into some peculiar consumer behavior. The behavior in question is the tendency of expats and immigrants to pay a premium for food brands and ingredients from their region of origin while there are alternatives of equal quality available for a fraction of the price. While this phenomenon is well known, up to date no research has been able to fully explain why this is.

                            

Apparently, the habits and tastes formed during our early childhood have a profound effect on our consumption habits later in life. While this is certainly not new information, what is startling is how long human beings will adhere to these tastes once they have moved away from their region of origin. According to the study (which can be found here, logging in at a remarkably svelte 50 pages), consumer will cling to these preferences for as long as 20 years, sometimes even as long as 50 years, after having immigrated!

Other than putting truth to the old adage “Old habits die hard” how does this affect brands that operate on an international scale? For one: unless a company is in the enviable position of creating a whole new market when it enters another country, it is likely to face considerable difficulties trying to capture market share from local competitors. The findings seem to imply that there is a anthropological “non-tariff barrier” that frustrates entry into foreign markets. One way of overcoming this barrier could be to play the long game. Brands could enter the market focusing on imprinting on consumers as early as possible, and waiting for market share to grow over the course of several decades. While this would create a stable consumer base 20 years down the road, it is doubtful most companies (let alone Wall Street) would be willing to wait for so long.

Another question that arises is: does the same phenomenon hold true for other types of products? Truthfully, the best I would be able to offer at this junction is idle and somewhat flippant, speculation, as I have no data on the matter, nor was I able to come up with any after a few quick web searches. I could imagine, however, that consumers are far more likely to buy the same laundry detergent that their parents used, or smoke the same cigarette brand. Thus, brand managers would be wise to either convince parents, which would take significant effort and capital, or to stick to that other old cliche “Get em young”.