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A brief understanding of the impact of branding in Tier 2 and Tier 3 cities
A brief understanding of the impact of branding in Tier 2 and Tier 3 cities

December 31, 2021

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Branding is among the few concepts of modern age marketing which has revolutionised several industries over time. Right from the 1950s, branding has given birth to a plethora of strategies and concepts like brand awareness, brand identity, brand promotion, etc., which have led to rise of influences and associations across several multinationals and have modified the consumer perception for good.

The June 2020 Edelman Trust Barometer Special Report states that 70% of the consumers say trusting a brand is more important today than in the past, and more people are choosing to spend money with brands they trust.

Brands are not built in a day, and neither is the trust and perception of the consumers towards the brand. The constant toiling, strategizing and efforts in the operations, marketing and promotion and most importantly, customer service for decades reward a company with a brand status for its product and service.

Brand building in Tier 2 or a Tier 3 city is identified as a goldmine of opportunities for the company as these are some of the fastest-growing territories of the nation. According to the March 2020 issue of Reputation Today, the FMCG market in these cities are expected to grow at a CAGR of 14.6% between 2016 and 2025. Digitalisation has been a game-changer here, too, making branding easier in these cities, which once faced a lot of difficulties in finding distributors and marketers and, most importantly, gaining the trust of the consumers from tier 2 and tier 3 cities.

The state of Global Customer Service Report 2017 by Microsoft indicates that across the globe, 96% of the consumers say customer service is an important factor in their choice of loyalty to a brand. This is followed by a report by Ameyo on August 2020, stating 67% of consumers worldwide believe that customer engagement levels have improved in the last two years.

With the ever-increasing traction of social media and e-commerce platforms in tier 2 and 3 cities, branding and its associated concepts have been witnessing remarkable growth. Thanks to their power of influencing consumer behaviour and buying decisions, these digital platforms witnessed a huge influx of companies engaging in virtual combat to establish a solid brand name.

According to a report by GlobalWebIndex on November 2020, 71% of the purchase decisions are influenced by social media platforms and e-commerce sites, followed by 62% of the consumers taking the online reputation of the brands into consideration.

Standardisation has evolved as a crucial factor for branding that determines the degree of loyalty and positive perception of the consumers towards the brand. Quality, customer service and satisfaction, super-fast product/service deliverability are some of the reasons behind the popularity of brands.

Before the social media and e-commerce era, brands used to toil years and even decades to establish a reputation in the market. The outburst of these platforms however, redefined and transformed the concepts and ways of brand building.  

Brands like Patanjali, Boat, Nykaa, Yellow Diamond and a lot more have effectively portrayed the do’s and don’ts in branding while catering to the tier 2 and 3 cities of the nation. Right from advertising in vernacular language, using local lingo for promotions to establishing a solid influencer base on virtual media, these brands have been using extensive marketing efforts to penetrate the tier 2 and 3 consumer markets.

According to the  December 2020 OBERLO Statics Library , 64% of the consumers would buy or boycott a brand solely because of its position on a social or political issue, and 89% of shoppers stay loyal to brands that share their value. Brands have also been portraying their concern towards the society by participating in social welfare movements and also undertaking the initiatives. This creates much needed brand value and also leaves a strong impression in the society.

The brands operating in the Tier 2 and 3 cities are expected to gain more prominence in the future than the ones which only concentrate on Tier 1 cities. Such brands are known for customisation based on regional differences, making them more preferable.  

The survey ‘The Future of Shopping: How Changing Consumer Habits Are Inspiring Physical Store Transformation’ by Infosys done in February 2019 states that 86% of the customers confirmed customisation is a key that influences their purchase decisions. Apart from the degree of customisation, even the smallest differences in the way a product or service is delivered will influence the consumers of tier 2 and 3 cities at a large scale.

Overall, the future of branding in tier 2 and 3 cities will depend on the brands’ approach towards sustainable development, usage of futuristic technology, and personalised interactions with consumers. Implementing gratification strategies for the consumer will lead to building awareness and take purpose of branding to newer heights.

 


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Dr. Vikram Kumar

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