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Going to Market in Developing Economies: The Consumer Insight Advantage

January 19, 2012 by Amitabh Mall, Vaishali Rastogi, and Jeff Walters
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In This Article
  • Consumer-facing companies must rethink their strategies in developing economies, where there is rarely a state-of-the-art marketing, distribution, or retailing infrastructure.
  • Unless companies understand consumers’ unmet needs in these markets and create goods and services that have appeal, they will not win customers.
  • Consumer insight is more important than ever because the landscape in developing countries is changing so rapidly and the rules of the road are being written on the fly.
 

Developing markets represent the future for many businesses. Brazil, Russia, India, China, and Indonesia make up 60 percent of the world’s population and account for 40 percent of global GDP growth. But companies cannot treat these markets as fledgling versions of the developed economies that have been their mainstay. They must rethink how they go to market in these places, which frequently do not have a state-of-the-art marketing, distribution, or retailing infrastructure. This article is the first in a series on how consumer-facing companies can succeed in developing markets through excellence in consumer insight, channel management, and in-store execution.

Going to Market in Developing Economies

Consumer insight can be the beginning of a beautiful relationship with customers—to paraphrase the last line of Casablanca. Unless companies understand consumers’ unmet needs and create goods and services that have appeal, they will not win customers. In developing markets, this capability is more important than ever because the landscape is changing so rapidly, the rules of the road are being written on the fly, and solid research—the keystone of consumer insight—is hard to gather.

Consider the case of a global fast-moving consumer goods company in India with interest in the nutritional space. When scanning the market for growth opportunities, the company realized that the disease burden in India was going through a dramatic shift. Chronic “lifestyle” illnesses such as diabetes and cardiovascular disease were expected to jump from around 30 percent of the total disease burden in 1990 to almost 60 percent by 2020. Deeper consumer research made clear the willingness of Indian consumers to trade up for products that improve their children’s health—insight that unearthed specific opportunities for targeting children.

In response, the company evaluated its global portfolio, identified specific products that would cater to the health needs of children, and accelerated its launch plan. Further research indicated the importance to consumers of including doctors and nutritionists when selecting the right brands to push, and this then formed the platform for a successful launch. Without the insights generated from local research, the company would likely have continued to apply its global launch priorities in India, hence missing out on a key opportunity to introduce relevant, high-growth products.

The rewards of figuring out what consumers want and acting on those insights can be great. But this is no easy task, given the difficulties of doing business in developing markets.