Emerging markets are completely revolutionizing the way the world does business as they are supported by labor that is low cost yet highly skilled. These markets are witnessing increased consumer awareness about brands and a willingness to buy, resulting in dynamic markets as against developed markets which have stagnated over the past few years. The strong drive towards development in the emerging markets is bringing about considerable differences in power.
According to current reports, 70% of growth in the global economy will be from emerging markets, with 40% from China and India alone. The global economic crisis resulting from the U.S housing crash was buffered to a large extent due to emerging markets specifically India, China and Brazil.
Another factor that is brought to the fore is that in emerging markets like Brazil and India, there is a good ratio of working: retirees, thereby supporting the country’s income and looking after its aged, while in developed nations like the U.S, there are not enough tax payers to amount for services like social welfare for the retired. As people in emerging markets are earning more they tend to spend more, which makes emerging markets a prime market for growth. Further on, studies have revealed that emerging market like Brazil have rapidly changing middle class markets. Companies in Brazil have resorted to marketing sustainable buying practices to ensure sales. In India, a stark change in the consumer market in urban and rural areas is showing high sale of utility durables (like watches, radios, television, refrigerators, two wheelers, washing machines, or mixer/grinders) of different price ranges.
Catering to customer needs in such emerging markets requires careful strategizing, focusing on local requirements and global acceptance. When a customer walks into a store to buy a shampoo, the sale begins well before the actual purchase, playing on a host of factors like the quality, visibility, reviews and availability, amongst others. To successfully build your brand and customer loyalty in an emerging market, fresh marketing strategies should be implemented at every phase of customer buying cycle.
The plethora of choices that exist for every product in the market warrant an intelligent marketing strategy that capitalizes on the strength of the product in order to be one up against competitors. Apart from that, there are certain specifications that are specific to targeted countries which companies should be aware of. For example, a well known chocolate company introduced their specialty chocolates in India, not taking into consideration India’s largely hot and humid climate and the non –availability of refrigerators in rural and semi urban areas. When the chocolates weren’t refrigerated they melted and lost consistency, which meant that a considerably large population of Indians did not have access to the chocolates. When they were prepared in such a manner that they maintained consistency even without refrigeration, their sales soared, bringing in profits.
In order to understand what would help a product sell, it is imperative to learn and understand your customers’ buying cycle. To help understand the concept better, let us look at the example of creating a corporate website for a mobile phone company that is hoping to make it big in the emerging markets.
Four Phases of Buying Cycle
1. Initiation phase is when a consumer decides he needs to buy a product for general or some specific use. During this phase, customers identify a need and realize your business can offer it to him. To optimize your marketing strategy, you should create targeted content, which emphasizes on the consumers’ need for a certain product/service.
Emerging markets developed a whole array of indigenous mobile phones that served the purpose of basic telecommunication, rendering mobile phones from the International market to an elite few. Then came internet connectivity which brought in a whole new ball game altogether. With globalization and the rampant strides in connectivity brought in by the internet, namely social media, e-commerce and skype, people soon began to feel the need to buy mobile phones from the overseas market which proclaimed increased connectivity and better features. When compared with the costs of personal computers, international mobile phones with internet connectivity seemed a safer bet.
A corporate website should therefore make clear the needs of the customer that would be addressed by the product, as it is very important for people in developing nations to feel that they require a product rather than as mere luxury. As most prospective buyers are just moving away from a cash strapped era, the urge to save rather than spend is far more intense.
2. Research or considerations phase is when a consumer starts to research competition in hopes of finding the best product/service for him. This is a great phase to offer your clients detailed information on your solution or product.
When designing the corporate website for an emerging market, it is not only important to point out what’s great about the product on offer but a comparative analysis should also be considered, bringing out the advantages in the product or service. Moreover, since most people in emerging markets use feature phones (which are phones that use QWERTY keypad instead of touch screen), websites and mobile Apps should be optimized for such phones. Designing a great website that looks wonderful when using a Smartphone will not help in reaching out to the many who use feature phones.
In order to reach out to as many people as possible, sites offer customers, iPhone versions, iPad versions or even Android versions which allow customers to use the version that is compatible with their phone.
Another aspect to focus on is to create websites with an option to view in the local language, which would be a huge draw in the emerging markets, where English is not the primary language. Instructions and descriptions in the local language will get more people interested, catering to the language differences while appealing to them.
3. Without any doubt, all of us have certain shopping habits developed over the years. Third phase or actual purchase phase is the time that brands in emerging markets have with them to change consumers’ shopping habits and steal them from competition.
Price plays an important role during this phase. There are many local brands that you may be competing with and fixing a price that would attract prospective customers away from competitors would be deal clinchers.
Here is a study conducted by Dan Arien and published in his book ‘Predictably Irrational’. 100 MIT students were asked which subscription option they would pick for the Economist.
16 students preferred option A while 84 preferred Option C. No one chose option B. Considering this; Dan conducted another study, removing the 2nd option.
When another 100 students were asked which option they would prefer, more number of students now preferred option A to C, indicating that option B in the original study played an important role in decision making.
Therefore pricing is not just about being the cheapest brand but creating the image of giving more for less.
For brands with online stores, it is essential that during the purchase phase the store employees create a fulfilling experience for their clients. In emerging markets, time differences need to be taken into account, and putting in place professional customer support after hours will ensure that customers are attended to well at all times.
4. Imagine this, the client has chosen your product over competition and everything is fine. Your business revenue increases and you can concentrate on future clients, right? Not exactly. While it may seem that work is done once your product has been bought, engaging your clients does not end here and now they are in post-purchase phase.
A good idea would be to introduce some kind of feedback survey. Keep the survey short and easy to understand so that every customer would find the time to complete it. Moreover, comments from clients should be taken seriously and appropriate action taken, this gives customers the feeling that they have been a part of a change in your organization and the feeling that they are being heard.
Emerging markets are developing rapidly and to capitalize on this growth, the customer buying cycle should be meticulously charted out. It is not about how big your brand is elsewhere, but how big you want it to grow in these nascent yet rapidly growing markets.
Global Economy Reports from: http://www.forbes.com/pictures/eglg45gdjd/emerging-market-growth-beats-us-2/
Brazil Growth Statistics from: http://www.theguardian.com/sustainable-business/2014/aug/06/encouraging-brazil-emerging-middle-class-buy-sustainably
Consumer Behavior Studies: http://www.seminarski-diplomski.co.rs/EN-Marketing/Changes-in-consumer-behaviour.html
Company Culture Building Techniques from: http://www.corporate-eye.com/main/how-to-build-a-company-culture-that-supports-your-brand/
Main Types of After Hour Services: http://www.continentalmessage.com/services/answering-service/after-hours-answering-service
Market Volatility Through iOS: https://itunes.apple.com/us/app/netotrade-mobile-trader/id502403562?mt=8