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Rethinking Marketing Programs for Emerging Markets

Author

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  • Niraj Dawar
  • Amitava Chattopadhyay

Abstract

We 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 for these markets. 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, we propose that, in order to attract billions of new consumers, the marketing programs of multinationals need to be rethought from the ground up. We 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. We draw on numerous case studies from around the world to illustrate how to incorporate these realities into marketing programs. We conclude with a discussion of the implications of such an approach for the multinational's core strategic assumptions.

Suggested Citation

  • Niraj Dawar & Amitava Chattopadhyay, 2000. "Rethinking Marketing Programs for Emerging Markets," William Davidson Institute Working Papers Series 320, William Davidson Institute at the University of Michigan.
  • Handle: RePEc:wdi:papers:2000-320
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    Keywords

    marketing; emerging market consumers; consumer behavior; multinationals;

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