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“Let Emerging

Market Customers
Be Your Teachers”
RM – 3, GROUP - 5

Presented By:
Abinash Sabat UM16184
Adarsh Patnaik UM16186
Biswajit Dash UM16198
Biswajit Raiguru UM16199
Lakshya UM16209
Praveen Dash UM16216
 Emerging markets are nations with social or business activity in the process of rapid growth and
 The economies of China and India are considered to be the largest.
 The seven largest emerging and developing economies by either nominal or inflation- adjusted GDP are
the BRIC countries (Brazil, Russia, India and China), as well as MIKT (Mexico, Indonesia, South-Korea and
 You’re vulnerable to competitors, particularly local ones, who know how emerging market shoppers think,
what they need, what they crave, and how they buy.
 You can learn a lot about consumer marketing in the developing world by looking at how retailers engage
with shoppers.

A Few Instances…
 North America: Baseball bats were met with amusement in soccer-loving Argentina;
 Gardening tools flopped in Latin America’s yard-less neighborhoods.
 Unilever, having established its Ala powder detergent as a leader in southern Brazil, was unable to build a strong
position in the northeastern part of the country, where women wash laundry in streams and prefer bar soap for the
 Procter & Gamble’s Always feminine hygiene line, which had done well in the United States, hit a wall in Mexico,
where women did not like the product.
 Quick to understand their customers and develop offerings and approaches that work for them.
 As a result, a new generation of retailers have steadily captured market share from
savvy street vendors
The retail aisle is where the marketing action is:
 China, as many as 45% of consumers make the buying decisions inside stores compared with
24% in the United States.

 Strategy In developed countries,
 First winning the approval of early adopters in the upper segments of the pyramid and then
simplifying the offering and reducing the price until the product is accepted by the much larger
segments at the bottom.

 In emerging markets, that strategy doesn’t work!


 The number of affluent consumers who could adopt and champion your product
remains small.
 The distribution looks less like a pyramid than like a small stone (the wealthy)
perched on a thin column (the upper middle class) that stands on a vast base
(the middle and lower classes).
 Consumers in emerging markets buy a lot of the cheapest and a little of the
best—and often ignore the middle.
 Focus on essentials, favoring the lowest-priced items that offer acceptable
quality, even when it comes to luxuries.
They tend to know the exact price of everything they want and
refuse to pay more.

They also refuse to buy in greater quantities than they need.

Shoppers typically save up to indulge in more aspirational

categories such as sport shoes, cosmetics, and plasma TVs.

Thus they purchase a lot of the cheapest and a little of the best,
often omitting the middle entirely.

Multinationals, enamored of the middle and the high end, often

miss that fact.

In developed economies, many companies successfully position their brands as

status symbols.

Areas with low incomes, Shoppers care most about quality.

Multinationals may feel they’ve got the quality issue covered, but it’s not always
that simple.

 Unlike most developed world retailers, those in emerging economies face

the daunting task of keeping up with rapid market expansion and
demographic change.
 The consumer base is growing rapidly constantly, and, despite recent
setbacks due to the global downturn, average incomes have been rising
 Consumers, once mainly rural, are now largely urban—75% of Brazil’s and
47% of China’s citizens live in cities.
Each of the retailers in the study deals with the problems in its own way. These solutions share certain broad features, which have far reaching implications for
multinationals’ marketing strategies.

 There is no high end segment in emerging Cater to the demands of the cheapest and the  In an emerging market, a store must be
markets best by: much more than a source of basic necessities,
 Forget about the demographic pyramid. Little it must be a centre of knowledge and learning
elasticity of demand in the lower segments even  Providing decent quality at the low end  The salespeople and the retail stores must
if you somehow get the product started transfer as much knowledge to customers
 Make changes to the product to make it  Providing aspirational choices at the high end about the products, brands and recent
affordable to the masses consumer trends as possible.
 Aim the products at the lower income
segments from the very beginning


TIGO – Paraguay Malteria Lima - Peru Pick n Pay – South Africa

Hesitated to lower minimum recharge on its Rather than positioning its packaged Barley Connected with the lowest earners who visit the
phone card initially, but the co. tripled its sales breakfast as an alternative to Quaker Oats’ high store out of curiosity and for entertainment.
when it allowed users to recharge for tiny end offering, it was marketed as a less expensive Displayed broadest possible range of items by
amounts. Consumers were using cards as saving product for the lower end. Comes as one meal stocking limited quantities of each just to entice
vehicles and calling at night, when the rates serving, good nutritional value, chocolate the customers. Turned salespeople to frontline
were lower, thereby increasing utilization during flavoring and endorsement from Peru’s Heart educators.
off peak hours association.
Each of the retailers in the study deals with the problems in its own way. These solutions share certain broad features, which have far reaching implications for
multinationals’ marketing strategies.

 it is absolutely necessary in emerging markets  Emerging market consumers respond well to  Emerging market retailers have a great deal
for the companies to demonstrate that they care companies that watch out for their comfort , to teach multinationals about flexibility, rapid
for their customers security and dignity adaptation, and expecting the unexpected –
 The initial reaction of customers towards  Come up with innovative ways to ensure that qualities that have helped the chains stay
multinationals, large corporations and chain the customer experiences a safe and delightful competitive
stores is one of mistrust shopping experience  Multinationals need to take their time to
 Show your concern for consumers and their understand local markets and adjusting to
values and you will be rewarded with loyalty and changes in customers’ attitude and
affection innovations in selling


BIM - Turkey Pick n Pay – South Africa Magazine Luiza - Brazil

During Hyperinflation in Turkey, BIM a discount Stores used text messaging and displayed Nimble and adaptable in its deployment of no
grocer with more than 2,500 stores froze prices cahiers’ names at checkouts. Works hard to inventory stores, 300 stores across the nation.
for 100 important items for 3 months while make its stores where customers feel safe. Customers can find salespeople and online
other retailers were increasing prices. This Constant surveillance systems monitor the aisle catalogs but no physical inventory. Salespeople
yielded significant gains in consumer trust as well and the company maintains its own highly assist customers with online catalog, provide
as market share. Other example: Tansas, Turkey. trained but customer friendly security force. product knowledge, establish credit terms, close
the sale and arrange for home delivery.


(Developing World)

 Vying for customers’ affection

 Understanding the importance of value of nimbleness
 Approach with openness and a sense of discovery
 Always remember, customers are on a journey towards
greater affluence, and a marketer’s job is to understand the
realities of that journey