consumer behavior in emerging markets
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Consumer Behavior Consumer Behavior in in
Developing and Emerging MarketsDeveloping and Emerging Markets
Sabrina FruehaufEric JohnsonDan Kopelow
References• 2011 COLLOQUY Cross-Cultural Loyalty Study
– Sponsored by Epsilon & LoyaltyOne– The study revealed stark contrasts in optimism between:
• Three developed nations (U.S., Canada and Australia) • Three emerging markets (India, China and Brazil)
• Organized Retail Comes of Age in India– McKinsey & Company
• How Half the World Shops: Apparel in Brazil, China, and India– McKinsey & Company
Consumers in emerging markets respond differently to new brands and
product opportunities than do their counterparts in developed nations.
FACTFACT
Outline• One size does not fit all• Developed vs. emerging markets• In depth: The emerging Indian market• In depth: The Brazilian apparel market
One size does not fit all
• "Consumer sentiment is incredibly important bellwether. While there are many imminent concerns for business on the horizon, corporations, especially those that are banking on loyalty for growth, would be wise to heed two strong prevailing themes: Success in North America requires a rewrite of the rules of engagement, and emerging markets will not be won with a one-size-fits-all mentality."
- LoyaltyOne President Bryan Pearson
• Colloquy Managing Director Kelly Hlavinka
One size does not fit all
• "There is vast loyalty opportunity to evolve how we engage customers in the developed markets. We've also uncovered a strong desire for special services & privileges in the emerging markets. Marketers would be well served to understand these trends and deploy strategies to capitalize on them.”
- Colloquy Managing Director Kelly Hlavinka
Developed vs. Emerging Markets
• Foreign vs. domestic brands– Preference– Chinese statistics• Foreign trustworthiness• Likeliness to be favorable about foreign competition
• Category management implication
Developed vs. Emerging Markets
• Credit card usage: BRIC Countries vs. USA/Canada
• Category management implication
Developed vs. Emerging Markets
• Privacy Concerns: Brazil USA China
• Category management implication– New credit card systems will have to be installed– Potential issues getting consumers to subscribe to
loyalty programs
Developed vs. Emerging Markets
• Brand loyalty
• Category management implication– Marketing strategies need to be oriented towards this word of mouth
means of information distribution
• Canadian and American opinions on loyalty– Only 12% of Americans and 10% of Canadians strongly agree that it
pays to be loyal to your favorite brands
The emerging Indian market
$450 billion retail market by 2015 ( = Italy)
$450 billion retail market by 2015 ( = Italy)
300 million shoppers300 million shoppers
Add $3-4 billions in GDP of five years
Add $3-4 billions in GDP of five years
Lower consumer price 3-5%Lower consumer price 3-5%
Lower waste via more efficient supply chains
Lower waste via more efficient supply chains
Larger tax baseLarger tax base1.6 millions retail
jobs1.6 millions retail jobs
The Brazilian Apparel Market
Worlds 5th Largest
Worlds 5th Largest
7% AnnualGrowth
7% AnnualGrowth
Fashion ranks in the top 3 attributes at preferred stores
Fashion ranks in the top 3 attributes at preferred stores
60% of Sales come from Domestic
Retailers
60% of Sales come from Domestic
Retailers
Lessons for Multinationals
• Hire Locally• Promotions• Private-Label Credit Offerings
Thank You!Thank You!
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