Innovation in Emerging Markets

How very interesting, and self gratifying, I might add, to find this summary of Deloitte‘s recent survey on emerging markets. In my last post, I’d said,

  1. You need to really understand your local customer and how
    they’re similar to your existing customers. More importantly, where and
    how they differ from your local customers.
  2. The entry strategy should come from these insights – products,
    pricing and promotion. I’d say the 4P’s but the fourth P is "place" and
    that will drive the other three.
  3. A strong global brand will only go so far, or provide initial round
    of profits based on high margins. Locally entrenched brands are better
    known in many cases and formulated to suit tastes and culture.
  4. Price will become a factor, innovations in supply chain strategies and local options may be required to stay profitable.

Mind you, I was deriving these points from the China Daily News article (it’s illuminating to note that the Gary Coleman quoted in said article works for the same department as that conducting this survey) and my own experience in India.

Deloitte’s new research identifies five characteristics of companies
that are able to grow profitably in emerging markets. These companies:

  1. Develop tailored product offerings for the local market at cost
    structures, price points and business models that match GDP per capita
    economics.
  2. Build research and development capabilities in emerging markets and connect with local commercial managers.
  3. Leverage global value chain competencies to maintain margins and effectively manage costs.
  4. Acquire deeper customer knowledge and localize marketing strategies to reach customers and capture market share.
  5. Win the war for talent by tailoring strategies that effectively deploy, develop and connect people.

Far more interesting to me is this graphic demonstrating the variance in products designed for a particular country. The green is the percentage of difference – note that India’s is the highest of all the countries listed, with China coming a close second.

Products_emerging_markt_1

I wouldn’t be surprised to see this gap increasing in the future either. And even more fascinating would be to take a look at the breakdown of the kinds of products, or the categories – i.e. which can stay the same, which must change to be enter successfully. This is a topic I’ll come back to, expect to see this visual again.

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