Breakout

Strategies
for
Emerging
Markets

UPSCALING THE OFFER

( CHAPTER 5 )
Upscaling The Offer
• This chapter talks about ‘How companies can add value or increase
the existing value of the brand or product that they offer.’
• As income rise, both consumer’s ability and willingness to pay higher
prices increase. They’re also more likely to be more discerning about
quality and other non-price aspect of the offer.
• Consequently, brands can upscale to match what their consumers can
afford.
• Adding value to a brand focuses consumers’ choice evaluation on
performance rather than on price.
Upscaling The Offer
• Adding or Changing Packaging
• Positioning
• Enhancing Services and Benefits
• Reversing the Brand Lifecycle
• Leveraging the Country of Origin
Adding or Changing Packaging
• One of the ways that the companies can add value is by introducing
packaging in ways that are either novel to a market or allow products
to be sold differently because of the packaging.
• Adding packing enhances quality and life of the product which adds
value.
• However, packaging also adds costs, which then leads to higher
prices.
• Both quality enhancements and higher prices contribute to upscaling
a brand.
Packaging of Moroccan dates
• The demand for in Morocco far outstrips supply due to lack of
consistency in quality and quantity , and due to poor packaging.
• The Fruit Tree Productivity Project has taken steps to improve
irrigation infrastructure, expand date palm plantation and etc.
• Packaging preserves the fruits and enables to withstand treacherous
transport.
• Not only is packaging a marketing tool, but it also
helps comply with legal labeling requirements.
• With these practices, the Moroccan government
Is increasing agricultural exports and thus
Increasing income in rural areas.
Positioning
• Companies can also upscale their offer by positioning their brand in
such a way that it becomes more valuable in a new, relatively more
affluent market.
• Positioning is having a company’s offer and image occupy a favored
place in the mind of the consumer.
• Companies can reap the positive financial outcomes of positioning
without necessarily incurring the additional costs of changing their
marketing mix
• Ford Motors Company did exactly that in the Middle East by simply
repositioning itself to focus on elements of its offer in other countires.
Enhancing Services and Benefits
• Intangible benefits often helps differentiate brands in competitive
environments.
• So companies increasingly use superior service, financing, loyalty
programs, warranties, and even customer-oriented business
processes to win customer loyalty.
• Examples
Safaricon in Kenya giving two loyalty programs called bonga points &
Okao Jahazi.
Airlines from the Middle East
Reversing the Brand Lifecycle
• Many brands start off their brand lifecycle by being proprietary,
patented, and priced at a premium.
• Reversing the brand lifecycle means starting with a low price, moving
up to becoming a value brand, and eventually becoming a premium
brand.
• Japanese carmakers like Toyota, Korean consumer electronics like
Samsung, and Chinese telecom companies like Huawei have all
successfully followed this path in the United States and other parts of
the world.
Rapoo in China
• In 2007, after five years of success in original design manufacturing for
mouse and keyboards dealers from America, Europe and Asia, the founder
and CEO of Hot Key Co. Hoa Zeng, decided to create and launch his brand
in China’s market.
• Two months later, the first 2.4 GHz Rapoo Branded wireless mouse model
7100 appeared on the market.
• In year 2008, Rapoo market share 42.7 % & Logitech market share became
27%.
• Rapoo hired over 1000 people in R&D department, accounting for one
third of total employees.
• By year 2011, Rapoo grabbed 56.3% market share.
Leveraging the Country of Origin
• The country of origin refers to how a country’s reputation influences
the perceived value of products originating from that country in
overseas market.
• In emerging markets, the general proposition is that items from
developed countries or world have superior attributes.
• Example include French wines, German cars, Italian designs, Korean
and Japanese consumers electronics and American pop culture, and
so on.
• Foreign Brands in China