Quick Look at Key Global Market Challenges
In Emerging and Developed Markets
- a solid business expansion plan
- marketing expansion plan
Different challenges exist for entry into emerging markets. It is important to understand how consumers will interact with your product. If the product is new and first to market, consumers will spend much more time trying to understand how the products works. If the product is competing with other established products in market, then they will spend time to understand its benefits and its trustworthiness.
- word of mouth awareness – In emerging markets, family and friends are the support center for consumers. They are more likely to trust family and friends advice than advertising efforts.
- distribution – Distribution is not always easy through channels due to logistical and infrastructure challenges in emerging markets. It is important to identify key distribution methods that are reliable and safe to ensure your product can get to your customers. Also consider the potential higher distribution costs to reach your market.
- pricing – Most emerging markets GDP is much lower than developed markets, thus expect lower pricing requirements to stay competitive which could adversely affect your pricing margins and even generate a loss in the initial years to capture market share.
- personal selling – Internet penetration could be much lower in emerging markets, taking away the obvious digital marketing efforts used in developed markets. The brick and mortar approach is required to engage your customers through in-store personal selling. Each market is different so an integrated online / offline approach is needed.
- longer product engagement – Expect a longer time frame for consumers to really engage with your product as they continue to become familiar with its benefits. A simple way to engage your audience more quickly is to offer free trials of your product. For example, Unilever found that smaller size free samples of product is the best way to enhance product trial. This also helped encourage word of mouth awareness with the key word being “Free”
- competition – Developed markets mean more competition and market share to steal. Be prepared to understand your product strengths and weaknesses in the market and how do you stack up to competition. Competition also forces organizations to research and develop new product innovation to enhance the product against competition to maintain or establish a competitive edge.
- value proposition – As with competition, your value proposition is what differentiates you from your competitors in the market. Only strong value propositions can succeed based on the strength of the product itself. Prepare to position yourself in the market based on either quality, pricing or reliability.
- transparency – In today’s developed markets, expect consumers to be more insightful to not only wanting more information about your product but also your organization as well. Many consumers expect organizations to be socially responsible within their community and this drives trust.
- social media – Expect social media to be part of any developed market. It is important to develop your digital strategy integrated with your marketing strategy. A lack of social media leads back to a lack of transparency.
- customer engagement – Take the time to really understand your customers. Customers in developed markets expect more from the products they purchase especially after the purchase. Create customer service programs to address customers complaints in a quick and efficient manner.
If you are looking to enter a new market or to be more competitive in your existing area, understanding these key challenges can help you better prepare.