Some might read this and decide that this is the best approach for Emerging Markets. When I read the original article in HBR, regardless that I was in a middle of a 20hrs trip to an undisclosed location xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx, my thoughts was that we can apply the concepts below in every market, all the time. I truly believe that if we never stop thinking on:
- New ways to present our products or services
- Identifying unmet customer needs
- Providing affordability and accessibility to all economic classes
- Interviewing the consumers to understand how the product is being use
We will most likely be leading our business sector by finding and discovering new demographics and innovation. I’m convinced this will be a never ending very profitable loop.
New ways to present our products or services
Does it get old, to only know that you can have ketchup in burgers and fries? What if I told you that the best shrimp cocktail sauce I’ve ever had was made with Orange Juice and a fair amount of ketchup? That pasta taste excellent with heated ketchup vs. a spaghetti sauce?
A company that builds their products and believes that the consumer will only have one need is losing a huge market. There is an “unmet” market out there that is being ignored because many companies stop promoting different uses. This will take effort, will probably be a conflict with your R&D, marketing and your sales force, but it will also provide them with options, to impact new markets (marketing), bring new customer (sales) and be a source of inspiration to develop the new generation (R&D).
Identifying unmet customer needs
Imagine you enter a market where you are providing a service already being performed by your end user. Here is a good example… Going from washing your cloth in the river to a washing machine, okay maybe I took it to the extreme, but you get my drift.
People (customers) are your best R&D department, but don’t just focus on those that already buy your products. Going back to the ketchup example, if you spend time in some communities you will find that some were mixing pepper in their ketchup, well what did Heinz and other ketchup makers did, they release a product with Tabasco or any other spices to penetrate the market. I’m sure that we all can come up with past example, my challenge to you, and me is to keep your eyes open for new needs.
Providing affordability and accessibility to all economic classes
This is not about reducing your prices or services, nor about taking an existing product and sacrificing its quality in order to sell it for less, but it is about being creative and provide a product or service that can compete in that class without sacrificing quality. Let’s work with an example. Let’s say you own the #1 refreshment (soda) company in the United States and wish to expand into an emerging market (domestic or international). This market is made of middle class or low income class, and your competition is lemonade, ice tea and water. If you decide to take your highest quality product and do the following: reduce the quantity, create promotions, reduce the serving size, or create a hybrid that people can still compare it to the high quality product you offer, you will encounter with a peak of revenue on your new product follow by a tsunami of collateral damage to your main product, your new product and your brand.
The best way to service and impact this demographic group is by being creative, innovative, and understanding how your product can complement what is already there.
For this scenario options such as a powder product (mix with water), new packaging, or even a new formula are good options. Do not forget that just because you price it and market it for a target audience, you will not get a response for others market areas. Be ready to provide alternative uses for them. One audience can use it for their everyday drink, another for special occasions.
Had you notice that you can shop at Best Buy in the airport, but had you seen a best buy store in any airport. The answer is no. Best Buy discovered that they don’t need to have a present establishment in order to create a presence. Next time you are in the airport, take a look how this company took a concept used only for snacks and soda, the vending machine and applied it to their products. This is the true definition of accessibility.
For our refreshment case study, if the answer was a powder product, accessibility could be providing portion packaging versus a can, or large container. As you walk to supermarket, mall or even the airport, you can see how companies are looking for ways to not only be accessible but also to reach out in areas where needs for their services are required but not always found.
Interviewing the consumers to understand how the product is being use
If you think that your product is being used for the intention use you are selling, think again.
Make sure to interview, survey and investigate how your product is being use constantly. If it is being use other than the intentional use, then you just discover an opportunity to develop create or modify your product or. Follow this rules published in HBR as your guidelines to constantly discover the unmet needs.
- Study what your customers are doing with your product. Be aware that, as Peter Drucker famously said, “The customer rarely buys what the business thinks it sells him.”
- Look at the alternatives to your offerings that consumers buy. Investigate a wide range of substitutes for your products, not just what your competitors make.
- Watch for compensating behaviors. Discover what jobs people are satisfying poorly.
- Search for explanations. Uncover the root causes of consumers’ behavior by asking what people are trying to accomplish with the goods and services they use.
