Marketing in Emerging Countries Emerging Markets v Emerging

Marketing in Emerging Countries

Emerging Markets v. Emerging Markets refer to countries in Eastern Europe – Russia, Poland, Baltic States, China and India v. Marketing in these countries faces special problems ØMarkets are not as developed as in US ØInfrastructure bottlenecks exists ØMarket segmentation is not clearly defined ØMiddle Class in Emerging countries are not the same as middle class in US & Europe

Market Segmentation v. Market Segmentation based on income levels and geographic location & demographics v. Consumers have more sophisticated tastes and preferences than what appears on the surface v. Poor Income levels must not be mistaken for having lower aspirations on quality and performance v. Lower Income levels does not correlate with low priced durable goods v. Upscale & Premium positioning targeted at the high income market segment works

Product Positioning v. Mass market for basic needs tends to be price sensitive v. Choice of domestic alternatives for basic tends to be limited in rural areas – this is changing rapidly as we speak v. Products developed specifically for the local markets have a higher success rate v. Products with Premium positioning has its markets limited to large urban cities

Pricing v. Pricing in emerging countries is a balance between affordability and upper-end positioning v. MNC’s tend to adapt skimming price – to ensure a quick payback v. Lower penetration price ensures affordability but requires large volume of sales v. Smaller sized package, store credit & liberal credit terms are used to increase affordability ØE. g: Sachet sized shampoo

Distribution v. Distribution network beyond the urban centers is severely constrained v. Large geographic distances and lack of land transportation facilities are a major challenge v. Poor communication infrastructure in rural areas v. Lack of storage facilities, small & fragmented retail sector demands bi-weekly supply by manufacturer

Promotion v. Promotion channels were once very limited v. Rapid changes has made promotional channels on par with the developed world v. TV, Print, Radio as a mass communication channel is very effective v. Educational promotion campaign is necessary to educate rural customers v. Demonstration of utility and use has a big impact on consumer behavior

Closing Thoughts v. Emerging Markets like Russia, India and China offer huge potential v. Market conditions are a lot different in these countries when compared to developed world v. Upper end markets in emerging countries are similar to developed world v. Middle class want latest quality products and dislike old technology or inferior products v. Distribution challenges must be overcome