Designing for Emerging Markets
This article by Sagentia's Dan Edwards and Geoff Waite in the Summer issue of the Innovation Journal explores the opportunities in the emerging markets.
Centuries ago, the riches of the Far East held an almost mythical allure for European traders hoping to sell exotic jewels and spices in the West. Today, the riches of the East are the emerging markets of China and India (and, to a lesser extent, Brazil, Mexico, Turkey, South Korea, Russia and Indonesia), where rapid economic growth and the potential for high-volume sales has once again entranced Western traders. But this time, the West is trying to sell to the East.
With sales growth flat for many Western markets, multinational companies are hoping to tap emerging markets across a variety of sectors. Whether the products they’re hawking are elevators, dishwashers, air fresheners, ATMs, personal-care products, industrial or manufacturing equipment, banking services or electrocardiograms, the hot markets are halfway around the globe. Some 700 cities with more than half a million people are incubating the consumers, construction and manufacturing that will drive major economic gains in the 21st century. According to one estimate, 70 percent of global GDP growth will come from emerging markets by 2015. It’s no wonder many Western companies are staking their growth agendas there. Understanding Your New Customers
There’s just one problem: Selling to emerging markets isn’t as simple as bundling a sack of off-the-shelf goods onto a fast boat to China. An effective strategy requires end-to-end innovation, from market research and business models to product development and production processes. To make things more complicated, each emerging market is different in terms of its socioeconomic profile, geographical characteristics, cultural identity, value chains, supply chains, regulations and so on. There are no one-size-fits-all solutions for selling to emerging markets, and no shortcuts, either.
Read the full article in the pdf below.