Marketing Smartly in Emerging Markets

By: Manish Gupta

In the last decade, emerging markets have become critical to global retail and consumer goods companies seeking low-cost sources of goods and high-growth sources of revenue. Companies around the world are drawn to the business opportunities these markets present, especially the billions of potential new customers with higher disposable income in India and China. Successfully harnessing these opportunities in emerging markets requires a deeper understanding of the consumer market.

Consumers in emerging markets are finding the marketplace as complex and greatly evolving compared to developed economies. Product choices and communication channels are exploding. Technology is unleashing the possibility of increasingly deep customer engagement at each phase of the purchase journey.  Additionally, there are some important twists reflecting differences in the characteristics of emerging market consumers, who generally don’t have the same level of experience with brands and product categories as their developed market counterparts do.

There are three key primary differences between emerging and developed-market consumers. Better understanding of the following principles can help brands succeed in emerging markets:

  1. Harness the Power of Word Of Mouth (WOM): Given that consumers in emerging markets are more likely to be first time buyers and have less familiarity with brands, a culture of societal validation, and a fragmented media landscape, WOM experience becomes invaluable. As per automotive news, more than 60 percent of Chinese auto purchasers are buying their first car – few brands have been around long enough to ensure loyalty. The less a consumer knows about a product and the more conspicuous the choice, the more likely the consumer will care about the opinions of others.
  2. Higher Importance to be in Consumer’s Consideration Set: The initial brand consideration set is likely to be much smaller in emerging markets than developed ones. To include a brand in the initial consideration set, consumers must obviously be aware of it, so achieving visibility through advertising on TV and other broader reach media that are unique to the market is an essential first step. Here again, geographic focus is critical. Emerging market consumers not only live close to friends and family but also tend to view local TV channels and read local newspapers rather than national ones. China, for example, has about 3,000 mostly local TV stations as compared to around 1,500 in the U.S. Gaining a high share of voice through local outlets in targeted geographies can help brands be perceived as leaders
  3. In-store Purchase Journey is Longer: The in-store experience influences a higher portion of consumers’ final decisions in emerging markets as they rarely skip the hands-on in-store experience when making their decisions. The typical path to purchase for a consumer in India in one major consumer electronics category takes at least two months and involves more than four store visits,, per the McKinsey Quarterly from September 2012. These consumers like to test products, interact with sales reps to collect product information and negotiate with retailers to get the best deal. As a result, in emerging markets there is significantly more room to influence and shape consumer decisions at the moment of purchase.

While these principles may sound obvious, acting on them is not easy. It requires bold investment decisions, efforts to build the skills of local teams, and the courage to operate in ways that are localized and could be different from what headquarters might regard as normal. Fortunately, the potential rewards are immense for manufacturers. When emerging market consumers perceive a brand consistently and positively across the major touch points, including friends and family and the in-store experience, they are far more likely to choose that brand, profiting the companies that spend smartly rather than heavily.

How can we help you supercharge growth and profitability?


95% of CPG, retail, and health and beauty companies in the Fortune 100 work with us

Enter security code:
 Security code