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ACT Kazakhstan tried to find out the perceptions of poverty among Almaty residents, feelings about the dynamics of poverty in the country, as well as the amount of income at which a person is poor. According to the survey, most of the respondents (62%) believed that the number of poor people in Kazakhstan had increased in the last three years. Of them, 46% believed that it had increased significantly, 16% felt a slight increase. Only 11% believed that the number of poor people had decreased (of them, 9% believed that it had decreased significantly, 16% felt a slight decrease). 13% of the respondents noted no change in the number of poor people in three years.
By age groups, the middle-aged and senior people (35-54 years) were more pessimistic since they believed the number of poor people had increased significantly. On the contrary, young people (18-24 years) thought that the situation had not changed or had even improved since they believed the number of poor people had decreased. According to the survey, one-third of Almaty residents consider the income of KZT 30,000-50,000 per family member as a sign of poverty. 16% of the respondents consider the income of KZT 20,000-30,000 per family member as a sign of poverty.
49% of Almaty residents stated they had never felt poor. Of them, 25% had the personal income of KZT 50,000-100,000, and 22% had the personal income of KZT 100,000-200,000. Out of the respondents who had ever felt poor, some felt poor in their childhood or student years (18% each), 15% felt poor in the 1990s, 13% said they always feel poor, and 11% felt poor after getting married.
The survey was conducted in January 2018 among the population of the city of Almaty on a sample representing the city population. The survey was conducted in the form of a personal interview. The sample size was 396 respondents. The sampling error does not exceed 4.9%, CI = 95%. The use of survey materials is permitted with the obligatory mention of the author of the survey.
AСT Kazakhstan continues to hold discussions with business representatives. This time, we turned to the advertising industry and invited Sabina Reingold, the founder and the producer of the Red Jolbors communications and advertising festival. Sabina is a unique representative of the advertising industry. She has a broad view not only on the Kazakhstani market but also on the Russian market, and the Central Asian market in general. Sabina works in an advertising agency (Friends Moscow) and actively communicating with other advertising agencies while organizing and holding the festival, so she has a good understanding and feeling of the advertising industry. During the interview, we touched the topics of evolution of the industry, and its standing in the current post-COVID period, the current market trends, creative advertising activities. We also talked a little about the Red Jolbors festival. This article summarizes the key insights gained during the discussion.
Evolution of the advertising industry in Central Asia
All Central Asian countries have developed in different ways. Kazakhstan is notable for the fact that at the stage of the formation of its advertising industry, international network advertising agencies entered the market to set a certain system in the local advertising industry. They trained the market and the local specialists on international approaches in the operation of advertising agencies. They explained, among other things, the ways to develop a creative campaign, the strategies, etc. Other Central Asian countries experienced different evolutionary development of the advertising industry. Kyrgyzstan and Tajikistan have less attractive markets due to their economic resources; Uzbekistan, although more appealing, is more conservative and closed. International advertising agencies were less interested in those countries; their markets were formed rather spontaneously, and the local design and production agencies prevailed.
Market development is inherently linked to the economic situation in the country. Economic downturns, devaluation processes significantly affect advertising market development. For example, the economic downturn in Kazakhstan in 2014 and the related devaluation of the national currency had a significant impact on the ability of advertising agencies to attract ex-pats who used to occupy leading positions in advertising agencies in management, creativity, and strategy. Their operation in Kazakhstan had set a certain tone, quite a high bar. However, during the crisis, the advertising agencies had to abandon the involvement of foreign specialists and also reduce the number of local staff. The histories of economic downturns and crises indicate that the companies’ budgets planned for marketing and advertising are most often subject to optimization in the first place. Therefore each crisis of this kind inevitably negatively affects the advertising market.
However, the market not only presents crises; it also provides opportunities to study, also online, and participate in various festivals. In turn, these options give opportunities to share experiences and collaborate between countries that undoubtedly serves for market development.
The standing of Kazakhstani advertising market after the COVID-19 pandemic
Today, advertising agencies in Kazakhstan and throughout the world experience tough times. The key difference of the current situation from the economic crises of the past is the conjunction of several circumstances such as the state of emergency and the quarantine, that has paralyzed the work of enterprises, the collapse of oil markets and the lack of accurate forecasts of the epidemic situation (the increase in the number of COVID19-infected in Kazakhstan that results in more stringent quarantine measures and awaiting of the autumn wave of isolation). However, the crisis gave a powerful impetus to the development of online businesses or online directions of existing companies. Such a relatively new direction may represent a new opportunity and a niche of stability for advertising agencies. It should be noted that the end consumer of the advertising business services has also changed. The consumers are now thinking more often about how exactly they consume goods and services. The emerging trend of conscious consumption and the savings in consumption will gain momentum. Moreover, the current situation has led to an increase in the unemployment rate, which invariably leads to a revaluation of the personal consumption model.
Trends and creativity
People are getting tired of hearing about COVID that makes the main topic of news, chats, posts in social networks, and this topic will give up its positions gradually. Storytelling is a today’s trend cause it emotionally connects the consumer values with the brand values. Building emotional ties with the consumer strengthens the brand’s position, especially in times of crisis.
Creativity distinguishes itself by an idea behind it. The modern consumer deals with huge information flow, and advertising has to compete not only with other brands’ ads but with a huge amount of other content: films, TV series, music. Therefore, it is important to be noticed, not get lost in this information flow. Creativity ensures that you are not only noticed but understood. Creativity is a tool that ensures that the advertising is seen or heard to the end. Today, a good creative product also demonstrates the values of people, is based on the emotional perception of the idea by the consumer, on the insights close to the consumer.
What is the situation with creativity here in Kazakhstan?
The advertising market in Central Asia is somewhat weaker compared to other regional markets, and this is also due to the specifics of the markets and their evolution. Creative advertising emerges in a co-operation between the advertising agency and the client from the agency’s capacity in the form of an idea and the client’s readiness to pay for the idea. The joke “what is the brief, so is the creative” is fully applicable to the current situation in terms of creativity in the advertising market. It speaks about the level of training, the professional level of both sides.
Future advertising specialists do not receive proper training (including higher school vocational education); the existing curriculum is far behind the market. For example, Russia, unlike Central Asia, has the schools of advertising where you can receive training; there are many short programs aimed at increasing the specialists’ competence. In Central Asia, advertising professionals take care of their professional development themselves. If an ad agency has a strategist (which is often not the case), it is more likely that the developed idea will be creative and will be accepted by the client. The work of a strategist is also essential because the strategist allows creating communication that will not only deliver business results but places proper accents to let the advertisement remain in consumer memory. Nevertheless, the fact that advertising agencies from Central Asia actively participate in festivals and take prizes indicates the development of the local advertising market, which is good news.
Here are the creative products from Central Asia that deserve special attention:
- TBWA\CAC\Tashkent – Technomart consumer electronics store advertisement by the Women’s Day (March 08)
- GForce Gray – Kaspi.kz advertisement about a raccoon-dishwasher
- Kombinat and Voskhod Advertising Agencies – ForteBank, Forte Femme advertisements
- Kombinat Advertising Agency – ForteBank advertisement, the longest advertisement for the fastest transfers
-MA’NO BRANDING – Logo and identity of Tashkent
About the Red Jolbors festival
This festival has already become an important event for the region. It serves for the formation of a market community uniting the creative agencies. The festival has become a communication and educational platform providing opportunities for development and training, exchange of experiences, the creation and implementation of joint projects between agencies (see www.jolbors.com for more information about the festival).
In 2020, the festival will be held online. The festival agenda is kept secret to maintain intrigue. At the RJ-2020 festival, you can definitely expect a rich educational program and a unique atmosphere, which the organizers will try to reproduce online.
ACT Kazakhstan continues a series of articles devoted to the study of the impact the emergency regime and the self-isolation regime have on Kazakhstanis. 51% of Kazakhstanis have noted that the introduced social distancing regime partly influenced their customary lifestyle. One-third of the respondents (32%) say that the social distancing regime has strongly influenced their customary lifestyle. 16% are not affected by the social distancing regime. The survey also aimed to study the behavioral patterns of Kazakhstanis in the settings of the COVID-19 pandemic.
In terms of the emotional perception of the quarantine-related situation, Kazakhstanis demonstrate a high level of adaptivity to the conditions (TOP5):
In terms of difficulties/inconveniences that Kazakhstanis are facing with the introduction of social distancing regime, we got the following answers:
And, finally, we tried to use the survey to look into the future and learn what will happen after the pandemic, would the Kazakhstanis return to their usual life and what kind of relationship between people will develop. The results have instilled in us optimism and deep faith in our people. 46% of Kazakhstanis believe that people will become more supportive of each other; 27% think that nothing will change after the pandemic is over. Оnly 18% believe that people will take care more about themselves and their close ones, and 9% had no answer. Still, there is an interesting difference between age groups in how they see future relations between people. Younger people aged 18 to 24 years mostly believe that people will take care more only about themselves and their close ones. Half of the Kazakhstanis aged 25-34 years believe that nothing will change in the relations between people; another half thinks that people will support each other more. People aged 35 years and older expect that, after the COVID-19 pandemic, people will support each other more.
The survey was conducted on 17-22 April 2020 among the population of the Republic of Kazakhstan on a sample representing the country’s population. The geographical, age- and gender-related quotas corresponded to the data of the Statistical Committee MNE RK. The survey was conducted by the method of phone interviews. The sample included 600 respondents. The sampling error does not exceed 4%, CI = 95%.The use of survey materials is permitted with the obligatory mention of the author of the survey.
We continue #DialoguesWithBusiness. The project is aimed at a better understanding of the market situation. Within our #Dialogues, we also focus on various topics in the marketing field. We invited Aiman Kazybayeva, Ph.D., Associate Professor, the leader of the “Marketing” educational program and the head of the Neuromarketing laboratory at Almaty Management University, to discuss an interesting topic of neuromarketing.
A conversation about neuromarketing should start with the origins of this concept, its roots, namely the consumer behavior. Since the dawn of the new millennium, the consumers and consumer behavior have changed significantly. The basic paradigm in the consumer’s mind has changed. Staying in a massive flow of information, the conditions of vast choice, the consumers often behave spontaneously, at a higher degree of emotionality. The rational model of behavior is giving way to the emotional one. The purchase decision algorithm is changing – the emotion comes first, then follows the action, and after that, the consumer analyzes the reason for the actions made.
Such a state of affairs made both theorists and producers of goods and services think about it. Manufacturers began to analyze deep insights of consumers and the emotional and value factors that influence the decision making. This has been reflected in the communicative policy of brands, in advertising which has become more emotional and intertwines the value guidelines of the brand with consumer values. Such communication leads to both steady growths of sales and increased consumer loyalty. Theoretical grounds evidence the irrationality of consumer actions and a high level of emotional influence. The developed and proven theories allow predicting consumer behavior, but the emotional component of behavior is always intriguing. So, how can we measure emotions? Neuromarketing allows us to study consumer behavior in different settings in terms of the processes going in the brain.
Neuromarketing solves the following tasks:
The neuromarketing portfolio includes the following biometric measurement tools: Eye Tracker, electroencephalographs, polygraphs, Facial scanners, MRI. These tools allow tracking consumer reaction patterns. Almaty Management University has become the basis for studying the effectiveness of mastering the educational material depending on the inclusion of audio/video aids. The results inspire: the involvement of students in the learning process has increased by 20%.
In fact, these methodological measurements indicate that neuromarketing is an efficient tool that can help an educator build a productive training course. Recent years have witnessed the rising interest in neuromarketing in Kazakhstan. An increasing number of brands are looking for additional insights into consumer behavior. However, neuromarketing is more of an applied research method. Further development of neuromarketing as an industry is possible subject to the popularization of this direction, raising the public awareness by research companies/centers possessing this technology, and the presence of competition in the market.
Personnel training is aimed at expanding the specialist’s qualifications, improve his/her adaptation to social and economic changes, and the development of new professional activities, as well as obtaining new knowledge and skills based on the development of technologies and international standards. We are observing rapid external (economy, legislation, etc.) and internal (changes in labor conditions, new jobs, technical development, etc.) changes in the corporate environment. These changes suggest that the knowledge acquired earlier requires constant improvement to be enough for professional activities. The US has even invented a specific term to characterize this factor – “competence half-life” – which defines the time after which the previously acquired knowledge and professional experience become obsolete.
Other main reasons for the need for training include:
1. Motivation. Each employee who receives new knowledge at the expense of the employer feels care from the management and seeks to justify the funds invested.
2. International cooperation. In some industries, an employee shall possess many diplomas and certificates to be hired by a large company.
3. Lack of narrow-focused specialists. Employers often tend to train their employees because the labor market lacks the needed specialists.
4. Advanced training. The employee who has gained new knowledge can propose new ideas and quickly solve difficulties that arise in the course of work.
There are two types of corporate training: internal and external. External training means courses, seminars conducted by various training companies; internal training means, for example, mentoring and training of newcomers by more experienced employees. We use both types of training to raise the competence of our employees. An example is the transfer of experience from the mentor to the mentee. Each newcomer is placed in real situations that require decision-making in his/her area of responsibility. The skills of our mentors and flexible management style have contributed to the formation of inclusive corporate culture in ACT and made the company an incubator of talents and an effective medium for young leaders and managers.
Thus, this January, two specialists from the Statistics and Analysis Department have been trained at ACT headquarters in Tbilisi on using SPSS, STG, and data visualization software. The training included a basic course in statistical processing and database analysis – the tasks that we face every day. The trainees practiced in real projects in programming questionnaires, writing logics, database cleaning, data analyzing. For each of our employees, training is also a path to receiving rewards for developing skills through our bonus program.
ACT Kazakhstan continues to hold panel discussions with business representatives. This time, small business owners were invited to the discussion. We invited business owners from different areas of the business to get a wide range of opinions. The discussion was held online, with the participation of representatives of the service sector (hair and beauty salons, cargo freight, letting premises for commercial use), trade (trading garments), and production (leather accessories, confectionery). The attending businesses were operating before the onset of the emergency and related restrictive measures for business and has resumed (and some never stopped their activities) or are preparing to resume their activities. This article summarizes key insights from the discussions with small business representatives. We, as researchers, were interested to understand the current standing of small businesses, how it has managed through the state of emergency, and its mood after the isolation. The discussion has also served as a platform to exchange experiences, opinions, and ideas.
WHAT WERE YOU DOING DURING THE QUARANTINE?
Most representatives of small and medium enterprises (SME) said they used the time for personal growth, learning new trends in the industry, and doing work for which they had no time before. In addition to the implementation of previously postponed plans, many were able to rebuild their business to new realities and launch new areas of operation. The most common area of development was the use of an online sales channel, which either did not exist before or was less active compared to offline sales.
“During the quarantine, we managed to grow many times over, so we did a good job. Before that, we limped in many areas, and we managed to cope with that during the quarantine. We have learned to work online.” Aliakpar, manufacture of Luciano leather bags
We found out that business owners who were active online before the quarantine did not lose touch to their customers, but experienced difficulties with the logistics of goods both from abroad and to the nearby regions. Those areas of business that cannot operate online experienced all the quarantine-related difficulties (out of those presented, the logistics (cargo freight), hair and beauty salons, giving premises for rent). Representatives of such businesses confirmed they were bearing losses due to delays in goods delivery because of the closed borders, etc.
“We are getting a lot of orders now, but the problem is the lack of goods because of the problems at the borders and a very few incoming flights.” Asel, “Street 48+” clothing store.
WHICH WAS YOUR STAFFING BEFORE THE QUARANTINE? DID YOU HAVE TO REDUCE IT?
The target segment representatives largely confirmed many predictions regarding the impact of the emergency on the unemployment rate (see the ACT Kazakhstan’s measurements of the COVID-19 pandemic impact on employment rate: https://kazakhstan.act-global.com/news/1665/). Among small businesses, some had to reduce staff, others – to cut wages, and some had to dissolve the team for the period of emergency completely.
“We had only one freight voyage in 2 months – the truck went to Poland. Although our enterprise is small and we have 5-6 people working, this was not enough to pay wages to people.” Elena, cargo freight, IE Zakomorny.
However, business owners predict a gradual recovery of staffing as the country emerges from quarantine and the sales recover.
HOW EFFICIENT WAS THE GOVERNMENTAL SUPPORT FOR SME?
Regarding support from the government and large businesses, the SME owners commented they did not receive the necessary support, and the solutions proposed by the state did not apply to their businesses. Some respondents noted that they and their employees received social assistance from the state in the amount of KZT42,500. They hoped to receive the same aid in May. Some respondents were very surprised by that opportunity, and some noted that it was the first time they received such targeted material support (albeit not great) from the state.
HOW DID YOU AGREE WITH THE LANDLORD? DID HE CHANGE THE TERMS OF RENT?
All the participants could successfully settle the rental issue. Their landlords showed understanding and charged no rent during the shutdown. Some business owners said they own their business premises, so they had no issues with landlords. One of the participants, who was the owner of a company letting premises for commercial use, noted that he lost income during this time, but took account of his leasers’ situation and did not charge them rent.
“I have not charged rent since mid-March, I only asked to pay utilities.” Kuanysh, letting premises for commercial use
One SME representative shared his dissatisfaction that he was not allowed to access his workplace during the quarantine, even during sanitization.
“I had an unpleasant incident when I came and called in the staff to sanitize my salon. Police officials watched us. It was very unpleasant that we had not entitled to enter our premises.” Zhanna, “Berik Ismailov” beauty salon
HOW DID YOU OPERATE DURING THE EMERGENCY AND THE QUARANTINE? WAS IT EASY FOR YOU TO RECEIVE A MOVEMENT PERMIT FOR THE EMPLOYEES?
SME representatives shared different experiences about receiving permits to move around the city. The companies involved in “permitted” activities could receive the permits much faster while other companies were facing difficulties. The participants commented that the requirements for getting permits were changing daily, and one had to react very fast to receive permits before the requirements would change.
“Since we are in the food industry, we had no problems with that. We were in all the lists. We just had to act very quickly; there were changes all the time, and that made things difficult.” Dinara, “Asatu” confectionery
DO YOU PLAN TO APPLY TO BANKS FOR FINANCIAL ASSISTANCE?
Being asked about new challenges and how to be prepared for them, most of the SME representatives said they made no long-term plans but rather focused on the short term activities. Most of the participants positively assess the near future of their business and rely only on themselves. Therefore, not all enterprises consider the possibility of additional financing through a bank loan. The opinions of SME owners differ significantly depending on their core activity. Representatives of trade and production noted the need for working capital, but the amount required varied considerably. When choosing the way to obtain additional financing, business owners will consider a possibility of getting working capital micro-financing or a business development loan (in a more significant amount) after the crisis but on favorable terms as offered by the state at the moment. One of the panelists shared his experience in attracting investing partners. In his opinion, this approach is more acceptable for his business than bank loans.
HAS YOUR CONSUMER CHANGED? WHAT HAS CHANGED IN YOUR CONSUMERS DURING THE QUARANTINE?
The SME representatives believe the consumer habits will change under the pressure of circumstances, and more people will use online shopping and delivery services. These changes in consumer behavior will force businesses to go online and respond to customer needs and requests at a faster pace. We got a very interesting insight regarded one of the most popular sales channels – Instagram. This social network has its life cycle, like other channels; therefore, it might disappear over time. For this reason, a company should develop its corporate website in addition to maintaining accounts on main online-sites, said one of the participants to the discussion.
“I have a page of my store on Instagram, but I am already starting to make a website. ‘Cause Instagram will die someday, so we need to look further.” Asel, “Street 48+” clothing store.
Comparing the discussions with large and small businesses, we see a significant difference in the perception of the situation and the mood of people. Small businesses are more positive. They rely only on themselves and believe that if they make every effort, they can cope with the crisis. For them, it is also easier to reformat their work, change processes, or even start a new direction, while for a large business, such options require significant resources (HR, time, finances). However, both large companies and SMEs agree on the need to go online and quickly respond to consumer needs.
* ACT Kazakhstan will continue the series of panel discussions with experts in various fields.