STRATEGIC MARKETING
Emerging market &
Global vs Local
Introduction • Developing winning products for emerging markets,
Written by Sauri Gudlavaletti, Shivanshu Gupta & Ananth Narayanan, in May 2013 (McKinsey&Company)
• Is your emerging-market strategy local enough? • The diversity and dynamism of China, India, and Brazil defy any one-
size-fits-all approach. But by targeting city clusters within them,
companies can seize growth opportunities, • Written by Yuval Atsmon, Ari Kertesz & Ireena Vittal,
in April 2011 (McKinsey&Company)
Introduction • Big changes in fast-changing emerging markets • Death of the one-size-fits-all approach
• Importance of submarkets • New need to adapt products and strategy on a
global basis
• Two main drivers: rapidity and variability
First article: Developing winning products for emerging markets
• Customers are price conscious and demanding, they want the same product quality than developed countries
• Fast-changing needs in emerging markets
First article: Developing winning products for emerging markets
• Need to change the global business approach by mixing traditional tools and new mind-set
• « Design to value »
First article: Developing winning products for emerging markets • 3 methods: • Organising workshops to generate insights (collision
workshops, brainstorming, customer feedbacks…) • Restart from the original idea and adapt every aspects
to a specific market • Gain money on design manufacturing
In Brief
• A lot of examples to demonstrate that traditional approaches are not efficient anymore.
• Global brands need to shake their thinking to modify the way they design, develop and manufacture products.
Second article: Is your emerging-market strategy local enough? • Economy has shifted
• In 15 years, 57% of the 1 billion household earning greater than $20 000 will be in the developing world.
• Global brands need to change their strategy so as to fit this evolution.
Second article: Is your emerging-market strategy local enough? • Country level strategy isn’t strong enough
• Focus on cluster size and not city size • China example
Second article: Is your emerging-market strategy local enough? • The importance of WOM & Networking vs
advertising: limited reach of national media
>
Second article: Is your emerging-market strategy local enough? • No extrapolation on global patterns > Everything is
different everytime
• Generalities can’t exist anymore. • China TV use/ coverage
Second article: Is your emerging-market strategy local enough? • More interest in poor household > High growth
potential in mass market products
• Sao Paulo vs Northeast region of Brazil
Second article: Is your emerging-market strategy local enough?
• Rich people / Big city = saturated market > Focus on developing premium products
In Brief
1 size fits all model is
over Need to tailor strategy according to competitive intensity/ product growth rate, consumer preferences and retail channels.
LINKAGES • It isn’t enough to develop a country-level strategy ;
companies need to focus on local specificities
LINKAGES • Need to understand that each emerging market is
different
LINKAGES • Need to know well the target and be attentive to
behavioral evolution
LINKAGES • Adapt the product and the distribution to these
specific markets
LINKAGES • Must be quick and flexible to succeed
PERSONAL CRITICS • Doubting that this strategy can bring a ROI enough
regarding to what is going to be spend for each cluster
PERSONAL CRITICS • Complicated to get to know well each different
target (costs of surveys)
PERSONAL CRITICS • Wondering if multinationals companies can be so
flexible (instant reactivity vs hierarchic staticity)
PERSONAL CRITICS • Wish we could know more about others sectors or
type of companies than those mentioned in the articles
RECOMMENDATIONS • Should try it only on one emerging market at the time
and on a small number of clusters
• Clusters strategy must be part of a more global strategy
• Must measure closely results and ROI
• Adapt the production to reduce the cost without minimizing the quality
• Do not forget that some people inside the clusters want the same quality than people in developped market
• THANK YOU FOR YOUR ATTENTION!