Marketing to the Bottom of the Pyramid
This points fundamental inconsistency in the emerging markets of MNC’s. This results in low penetration, disappointing market shares and poor profitability. The main purpose:-To understand the nature of emerging markets. Examine company responses to the challenges faced in these markets.
Example:- Kellogs entered in INDIA in mid 1990’sIts sales was only $10 million in 3 yrs which is less Reason:- Advertisement was not appealing to the masses & Prices were high Revised their strategy – introduced chocobuiscuits (Rs. 5 for 50 gms ),used extensive distribution coverage.
MNC’s have resisted targeting the local consumers preferring to transplant offerings developed for their traditional markets.3 reasons for reticence to localize are:-Mass market is not large enough to justify the effort and cost of localization. Emerging market consumers are growing more affluent in preferences and purchasing power.
To adapt to local market undermines core assumptions of standardization. Common features of emerging markets are:-Low per capita income and its impact on consumer behavior. Immense variability in consumers and infrastructure Relative cheapness of labor.
Low Incomes Segmentation Segments are coarse and diverse because the costs of segmentation are high. Mass media are not finely segmented. Examples:- Soaps in Indonesia; Media in India and Brazil vs. the US Product Products need to be functional, built to last and basic. Rapid obsolescence is a mistake.
7. Examples:- Volkswagen in Brazil , China ; Suzuki in India Pricing Large volumes, and low margins drive profitability. Consumers gauge prices in relation to a local basket of purchases. Example:- South African Breweries in China; Cadbury’s in India
8. Distribution Retail distribution is highly fragmented, but nevertheless powerful. Example:- Retail trade in China ; Unilever in India; United Phosphorous Ltd. , India. Communication Persuade consumers to consume more and non-consumers to adopt the product Example:- Coca
Example:- Kellogs entered in INDIA in mid 1990’sIts sales was only $10 million in 3 yrs which is less Reason:- Advertisement was not appealing to the masses & Prices were high Revised their strategy – introduced chocobuiscuits (Rs. 5 for 50 gms ),used extensive distribution coverage.
MNC’s have resisted targeting the local consumers preferring to transplant offerings developed for their traditional markets.3 reasons for reticence to localize are:-Mass market is not large enough to justify the effort and cost of localization. Emerging market consumers are growing more affluent in preferences and purchasing power.
To adapt to local market undermines core assumptions of standardization. Common features of emerging markets are:-Low per capita income and its impact on consumer behavior. Immense variability in consumers and infrastructure Relative cheapness of labor.
Low Incomes Segmentation Segments are coarse and diverse because the costs of segmentation are high. Mass media are not finely segmented. Examples:- Soaps in Indonesia; Media in India and Brazil vs. the US Product Products need to be functional, built to last and basic. Rapid obsolescence is a mistake.
7. Examples:- Volkswagen in Brazil , China ; Suzuki in India Pricing Large volumes, and low margins drive profitability. Consumers gauge prices in relation to a local basket of purchases. Example:- South African Breweries in China; Cadbury’s in India
8. Distribution Retail distribution is highly fragmented, but nevertheless powerful. Example:- Retail trade in China ; Unilever in India; United Phosphorous Ltd. , India. Communication Persuade consumers to consume more and non-consumers to adopt the product Example:- Coca