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Rethinking marketing programs for emerging markets

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The authors point to a fundamental inconsistency in the emerging market strategies of multinational firms. On the one hand, they seek billions of new consumers in the emerging markets of China, India, Indonesia, and Latin America; on the other, their marketing programs are scarcely adapted to the emerging conditions. The result is low market penetration, low market shares, and poor profitability. These multinationals are trapped by their own devices in gilded cages, serving the affluent few and ignoring the potential of billions of new consumers that attracted them in the first place. In this paper, the authors propose that, in order to fulfil the promise of serving billions of new consumers, the marketing programs of multinationals need to be rethought from the ground up. They identify three key factors that characterize emerging markets: (1) low incomes, (2) variability in consumers and infrastructure, and (3) the relative cheapness of labor, which is often substituted for capital. They draw on numerous case studies from around the world to illustrate how marketing programs can be designed from the groundup in order to incorporate these realities. They conclude with a discussion of the implications of such an approach for the multinational's core strategic assumptions.

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