Finding, measuring and capturing market opportunities in emerging countries are critical tasks for multinational con- sumer goods companies. Central to these tasks is the need to collect and analyze income distribution data within a globally coherent framework and to move beyond income metrics based on national averages. This article describes a new framework and dataset that achieves this goal and demonstrates how income distribution data, combined with consumer and marketing data, can be incorporated into simple demand models such as the Bass diffusion model or the Golder-Tellis affordability model to understand market dynamics. Our analytical effort is the first example of income distribution data being used to assess market opportunities in emerging countries. We find that demand models based on the number of people within various income brackets at national or local levels are superior to models based on average income. We further find that combining income distribution data with pricing, marketing spending, consumer behavior and distribution coverage data makes it possible to measure which factors drive demand at the brand level — even in hard-to-analyze countries.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
13854.
Length: Date of creation: 2007 Date of revision: Publication status: Published in Problems and Perspectives in Management 2.6(2007): pp. 21-30 Handle: RePEc:pra:mprapa:13854
Find related papers by JEL classification: O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing C0 - Mathematical and Quantitative Methods - - General R20 - Urban, Rural, and Regional Economics - - Household Analysis - - - General M20 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - General
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