As Brands Go Global, Innovation Is Key for Attracting Consumers in Emerging Markets
In today’s globalized world, emerging markets are playing an increasingly important role. Emerging markets are countries that are right on the edge of becoming developed markets. Traditionally, the term was used to describe the four BRIC countries—Brazil, Russia, India and China—but as economic conditions in Latin America and the Asia-Pacific region have improved, more countries have achieved emerging market status. While consumers in emerging markets have traditionally relied on locally sourced products, they are increasingly interested in buying consumer packaged goods. As a result, consumer packaged good (CPG) companies are faced with a new global economic climate that includes a more diverse base of customers. Emerging markets offer CPG companies an unprecedented opportunity to expand their consumer base.
Taking Advantage of Opportunities in Emerging Markets
As CPG companies reach out to emerging markets, they need to understand that not all emerging markets are the same. Consumer demand will be differ depending on the economic conditions, climate, and cultural values of the country. Mexico and Indonesia are both considered to be emerging markets, but the CPG needs of their populations are considerably different. There is no doubt that in some countries certain products are poised to take off, the way that disposable diapers exploded in popularity when they were introduced in China. CPG companies need to be able to identify these goods and market them in the appropriate emerging markets in order to expand their consumer base.
Many CPG companies are using innovative informatics systems to determine which of their existing products will appeal to consumers in each emerging market country. These allow companies to integrate economic and marketing data with laboratory research results. Using this information, CPG companies can organize the products they have and market them to the emerging markets where they will be the most successful. This data-driven approach is far more likely to be successful than simply guessing which products will be popular. As companies try to establish a foothold in multiple emerging markets, they can’t afford to waste resources marketing a product in a country where it is bound to fail.
Laboratory informatics systems are also helping CPG companies expand on existing formulations in order to tailor them to the specific needs of consumers in emerging markets. Integrating scientific research results with data from economic and marketing studies allows CPG companies to figure out what their current products are lacking when it come to the needs of consumers in emerging markets. From there, they can start developing new formulations that cater to the needs of consumers in emerging markets.
Marketing the right products to emerging markets helps CPG companies build brand credibility. Studies show that consumers in emerging markets show brand loyalty,1 so CPG companies need to establish the quality of their products in order to gain consumers’ trust and secure their loyalty for the future. Informatics systems provide the information that CPG companies need to ensure that they are only offering products that are relevant to consumers. This is critical, because consumers won’t put their faith in a brand that doesn’t provide useful products. By targeting the right products to the right countries, CPG companies can establish a solid foothold in each emerging market that will last for years to come.
How Innovation Can Improve CPG Companies’ Standing in Developed Markets
The new products that a CPG company designs for emerging markets may also appeal to consumers in developed markets where the company has long been established. In a world where social media facilitates instant global contact, customers in developed markets can easily learn about new products being sold in emerging markets and they might be interested in trying them out. Again, informatics systems can help CPG companies analyze data to find out whether their new products will appeal to traditional consumers. Introducing these products can re-excite the existing consumer base in developed markets, which will bolster brand credibility and establish the company’s reputation for providing the most innovative products on the market.
Some CPG companies are even looking to design new formulations that appeal to consumers in both emerging markets and developed markets. In emerging markets where the average income is relatively high, consumers are demanding the same types of “premium” products as the consumers in developed countries.2 In order to identify these products and figure out what can be done to improve existing formulations, CPG companies can use informatics systems to integrate lab research results with economic data from both emerging and developed markets. In the past, such analyses would have been overly complex and prone to error, but informatics systems make it easy to integrate data from multiple sources in order to make informed business decisions.
Keeping Pace with Changing Conditions
As CPG companies develop new products for emerging markets, they have to keep pace with rapidly shifting economic conditions and consumer trends in emerging markets. That means accelerating research and development processes in order to get new formulations to emerging markets as quickly as possible. Laboratory informatics systems separate each step of the process in order to streamline workflow from start to finish, which allows CPG companies to get a product into the hands of consumers before a trend loses momentum. It also ensures that the company won’t fall behind competing firms that are also trying to break into emerging markets.
The modular architecture of informatics systems can also help CPG companies to adapt to sudden shifts in emerging markets. Even in the midst of the development process, unexpected economic changes can be analyzed in the context of existing data and leveraged to inform research and business decisions—all without compromising the overall design of the marketing campaign. In a world of instant communication where trends in emerging markets can shift without warning, having this flexibility is crucial.
BIOVIA Experiment is a comprehensive informatics system that offers the analytical capabilities and efficiency improvements that your CPG company needs for success in emerging markets. Please contact us today to learn more about how this revolutionary system can help your company go global.
- “6 Truths About Emerging Market Consumers,” 2004, http://www.strategy-business.com/article/04106?gko=cac3d ↩
- “Three myths about growth in consumer packaged goods,” June 2015, http://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/three-myths-about-growth-in-consumer-packaged-goods ↩