The rapid growth of emerging markets gives millions of consumers new spending power. At the same time, they must cope with an increasingly complex marketing environment. As a result, many marketing scholars are seeking to better understand the complexities of this dynamic market. To do so, they must look beyond the traditional marketing framework and hone their ability to identify and adapt to new realities.
One of the most obvious differences between advanced and emerging markets is the influence of sociopolitical institutions on the way in which consumers interact with brands. These include religion, government, business groups and nongovernmental organizations. Consumers in emerging countries tend to be highly influenced by these institutions, and they are more likely to use them as sources of information in making purchase decisions than consumers in advanced markets.
In addition, emerging markets typically suffer from underdeveloped infrastructure that affects both product distribution and marketing transactions. This can mean lack of roads and other transport facilities, inadequate point-of-sale terminals or basic banking functions, and a general absence of information technology, including e-commerce and mobile communication. In some cases, poor infrastructure can even prevent the sale of products or services.
These factors make it essential for marketers in emerging markets to develop strategies that are both local and global. For example, to reach the large numbers of consumers who live in rural areas, Coca-Cola has deployed numerous initiatives to train and educate local retail distributors to improve in-store execution. To reach consumers who shop at nontraditional outlets (for instance, the thousands of corner stores in China that are not part of a national chain), the company has distributed free coolers and dispensers. It also offers a training program for local merchants on how to best sell its products.
Another key characteristic of emerging markets why not is the existence of large state-owned enterprises that are positioned to become major global competitors. These companies range from oil giants like Gazprom and Petrobras to banks, utilities, steel manufacturers and even airlines such as China Airlines and India’s Jet Airways. This is a result of the transformations that have occurred in these markets as a result of economic reform and industrial policy.
Despite these challenges, there are some clear learning points from the growing literature on emerging marketing. First, there is a need to define what it means to be an emerging market. Various organizations produce different statistics that generate different lists of countries that qualify as emerging markets. These include the World Bank, IMF and a host of global economic and political organizations.
Generally, an emerging market is defined as a country that is growing rapidly and has some of the characteristics of a developed economy such as high per capita income or widespread industrialization. The most prominent examples are Brazil, Russia, India and China—often referred to as the BRIC nations. Other countries in South America, Africa and Asia also qualify as emerging markets.