STRATEGIC MARKETING

Emerging market &

Global vs Local

Introduction •  Developing winning products for emerging markets,

Written by Sauri Gudlavaletti, Shivanshu Gupta & Ananth Narayanan, in May 2013 (McKinsey&Company)

•  Is your emerging-market strategy local enough? •  The diversity and dynamism of China, India, and Brazil defy any one-

size-fits-all approach. But by targeting city clusters within them,

companies can seize growth opportunities, •  Written by Yuval Atsmon, Ari Kertesz & Ireena Vittal,

in April 2011 (McKinsey&Company)

Introduction •  Big changes in fast-changing emerging markets •  Death of the one-size-fits-all approach

•  Importance of submarkets •  New need to adapt products and strategy on a

global basis

•  Two main drivers: rapidity and variability

First article: Developing winning products for emerging markets

•  Customers are price conscious and demanding, they want the same product quality than developed countries

•  Fast-changing needs in emerging markets

First article: Developing winning products for emerging markets

•  Need to change the global business approach by mixing traditional tools and new mind-set

•  « Design to value »

First article: Developing winning products for emerging markets •  3 methods: •  Organising workshops to generate insights (collision

workshops, brainstorming, customer feedbacks…) •  Restart from the original idea and adapt every aspects

to a specific market •  Gain money on design manufacturing

In Brief

•  A lot of examples to demonstrate that traditional approaches are not efficient anymore.

•  Global brands need to shake their thinking to modify the way they design, develop and manufacture products.

Second article: Is your emerging-market strategy local enough? •  Economy has shifted

•  In 15 years, 57% of the 1 billion household earning greater than $20 000 will be in the developing world.

•  Global brands need to change their strategy so as to fit this evolution.

Second article: Is your emerging-market strategy local enough? •  Country level strategy isn’t strong enough

•  Focus on cluster size and not city size •  China example

Second article: Is your emerging-market strategy local enough? •  The importance of WOM & Networking vs

advertising: limited reach of national media

>

Second article: Is your emerging-market strategy local enough? •  No extrapolation on global patterns > Everything is

different everytime

•  Generalities can’t exist anymore. •  China TV use/ coverage

Second article: Is your emerging-market strategy local enough? •  More interest in poor household > High growth

potential in mass market products

•  Sao Paulo vs Northeast region of Brazil

Second article: Is your emerging-market strategy local enough?

•  Rich people / Big city = saturated market > Focus on developing premium products

In Brief

1 size fits all model is

over Need to tailor strategy according to competitive intensity/ product growth rate, consumer preferences and retail channels.

LINKAGES •  It isn’t enough to develop a country-level strategy ;

companies need to focus on local specificities

LINKAGES •  Need to understand that each emerging market is

different

LINKAGES •  Need to know well the target and be attentive to

behavioral evolution

LINKAGES •  Adapt the product and the distribution to these

specific markets

LINKAGES •  Must be quick and flexible to succeed

PERSONAL CRITICS •  Doubting that this strategy can bring a ROI enough

regarding to what is going to be spend for each cluster

PERSONAL CRITICS •  Complicated to get to know well each different

target (costs of surveys)

PERSONAL CRITICS •  Wondering if multinationals companies can be so

flexible (instant reactivity vs hierarchic staticity)

PERSONAL CRITICS •  Wish we could know more about others sectors or

type of companies than those mentioned in the articles

RECOMMENDATIONS •  Should try it only on one emerging market at the time

and on a small number of clusters

•  Clusters strategy must be part of a more global strategy

•  Must measure closely results and ROI

•  Adapt the production to reduce the cost without minimizing the quality

•  Do not forget that some people inside the clusters want the same quality than people in developped market

•  THANK YOU FOR YOUR ATTENTION!