Here is the translation of the article by Helen Edwards, SKOLKOVO Library Project Manager, published on Slon.ru. The original text in Russian is available here.
What chances do brands take to conquer emerging markets?
Multinational corporations producing foodstuff will not expend by means of developed markets. If your strategy doesn’t include emerging countries, you are already lagging behind. In the October issue of Harvard Business Review Bill Johnson, CEO of Heinz, notes that the interest of emerging markets in the company’s common income will make 20% this year. For instance, a couple of years ago it was less than 5%, under the Heinz calculation, by the year 2015 will exceed 30%. However even in case of global brands you have to adjust them to the tastes, needs and preferences of the locals. Otherwise nobody will buy your cow.
According to Datamonitor more than 20 000 new foodstuffs emerge in the world every year. The majority of them will disappear haven’t even managed to make a statement. Martin Lindstrom, brand expert, notes that the aim of a really successful global brand is to become identic in the whole world and share the same core values. And it does not only concern the same logo for all world countries, a brand must have a global meaning. In his books “Brand Sense“ and “Buyology” Mr Lindstrom highlights that a brand values exactly because of its emotional bonds with people.
It’s generally assumed that the majority of brands strives to influence visual perception. Meanwhile it’s time to focus on sounds, smells, taste and tactual sensations as well. Have you noticed the sound of an opening lid in beer advertisements? And Coca-Cola tries to express via sounds sensations from the first gulp; Pringles is advertised by means of crunching crisps. A try to influence all the five senses at the same time is of great importance because the taste of the same product may vary in different countries. And they may be served differently as well. For instance, in Korea ketchup Heinz is usually used to complement pizza but not fries. And in Papua-New Guinea the Johnson&Johnson baby dust is never applied to children as it is meant for funerals.
Appearing on a new market the core factor - availability of your product for consumers – should be taken into consideration. On emerging markets the Lays crisps are sold in small packages when that kind of size does not exist in the USA. Instead there are special TV-packages meant for the whole family. It should be taken into account whether people in that country have cars to transport your product or whether they have fridges big enough to keep your products.
Finally, channels of product transferring should be taken into consideration in each single country. In the USA the majority of people shops in supermarkets and in Indonesia only a third of population visit large grocery shops. Others prefer to shop on markets or in small family tents. In India network shops make only 15% of the market when in Russia it is 40%. And in Asia the Internet-shops are the most popular. For instance, in Korea 18% of all pet owners buy food for them in the Internet. It’s noteworthy that this index isn’t more than 2% on average in the world.
There is a mistaken opinion that the only possible way to win in hard conditions of the modern market is to reduce prices and go for a low equity. Successful competitiveness is not only the issue of financial efficiency. It is much more important to create a new, inspiring brand meaning for consumers. From everything that exists on the market today Coca-Cola is the best example of a global impressive brand. It is famous not only for its logo and unique bottle but also for association with happiness and joy. However even that company being an example of successful marketing has lost the world war for the red colour. In several countries in the world the red colour is associated with other products. That is why Coca-Cola had to experiment with the green colour on those markets.