Developing markets represent the future for many businesses. Brazil, Russia, India, China, and Indonesia make up 60 percent of the world’s population and 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 third in a series on how consumer-facing companies can succeed in developing markets through excellence in consumer insight, channel management, and in-store execution.
The center of gravity for consumer-focused companies is subtly but unmistakably moving toward developing economies, such as Brazil, Russia, India, China, and Indonesia. The middle class in emerging markets will make up 30 percent of the global population by 2020. These customers represent the future.
Meeting their needs can be daunting. Retailing in developing markets is highly fragmented, and going to market requires a different set of strengths and commercial relationships than in developed markets. Consumers have vastly different levels of disposable income and extremely different needs and wants. They are accustomed to a shopping experience that is unlike what consumers in more developed markets are used to. At the same time, consumers in developing markets are less jaded and more trusting of pitches, promotions, and displays inside stores.
Many of the tried-and-true principles of in-store execution are universal. No matter where they live or how much they earn, consumers respond when they are offered the right products, at the right price, and in the right retail environment. But achieving that alluring mix of product, price, and environment is especially challenging in developing markets. Companies that can adapt to the specific challenges of in-store execution in these markets stand to win big.
This is our final piece on achieving a go-to-market advantage in developing economies. Prior articles covered the challenges of understanding what consumers want and moving goods and services to the outer reaches of global-distribution networks in the markets. While these articles are oriented toward consumer goods and retail companies, they are relevant to any organization—such as banks and telecom providers—that serves consumers. We collectively call them brand companies.