The developed world's wealthiest 14% have been the traditional focus of global businesses. However, these markets are now over-served and hyper-competitive, making growth difficult. The biggest opportunity of the 21st century is selling to the remaining 86% in developing nations. Tremendous growth and profits can be achieved by selling into emerging markets. The "rules of engagement" differ in these markets though. Simply offering third-world versions of existing products won't work. You need to be aware of the nine specific characteristics of emerging markets, and use nine tailored strategies. To succeed, prevailing business wisdom must be challenged. Each emerging market trait represents a chance to gain competitive advantage for creative companies. Overall, the 86% market is so substantial that the key question is not whether you should be in it, but whether you can afford not to be.
To succeed in emerging markets, companies must go beyond offering inferior versions of existing products. Quality is crucial, even at low prices, and businesses should innovate to reduce costs without compromising value. For example, reducing maintenance costs can enhance the total value proposition. Introducing innovative solutions from other markets can also be effective. A product like a disposable toothbrush, useful for camping in the U.S., might be well-received in areas with limited clean water access. Such products may find unexpected demand in secondary markets. Understanding the local consumer landscape is essential. Traditional marketing concepts like lifetime guarantees may not resonate. Instead, quality can be communicated through endorsements or certifications, considering the varying ethical standards across cultures. Cultural and religious considerations are paramount. Products must comply with local practices, such as "halal" standards in predominantly Muslim countries. In India, for instance, Hindustan Lever developed a specialty laundry soap bar to respect the cultural significance of hand-washing clothes. Influential consumer groups, such as affluent housewives, can drive market trends. Winning over this segment can lead to broader market adoption, as their practices are often emulated by others.
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