Developing Markets: Opportunity for Incremental Growth or Hot Houses for Brand Innovation?

Developing Markets:

Opportunity for Incremental Growth, or Hot Houses for Brand Innovation?

Are global brands missing a significant opportunity with their approach to developing markets? Is it possible for developing markets to drive more than incremental business growth? Is it possible for developing markets to become the catalyst for renewed brand growth in mature markets?

Consider a typical brand with a growing global footprint.  It likely has an established presence in mature markets. These markets are probably considered the center of gravity for the brand, garnering the bulk of global resources and driving many key global decisions. But they have also likely reached a level of diminishing growth. 

Thus they seek incremental growth in BRIC and Next 11 markets.  And they’re doing so by imposing established developed market practices, ranging from infrastructure conventions to marketing tactics on these developing markets. And because the mature markets’ size gives them an organizational edge, developing markets are left to fight for scarce resources and a voice in global decisions.

But because these markets are developing in a world unencumbered by deeply entrenched infrastructures, marketing and media practices of the mature markets, aren’t they providing brands with the unique chance to start with a clean sheet of paper? By definition, developing markets create an opportunity for brands to innovate in every aspect of the customer experience, and to do so in the context of the world today.

And the benefit of this innovation is not limited to developing markets.  Indeed they have the potential to provide significant benefit to the brand in every market. Successful innovations can be adapted to reignite growth in mature markets, and raise the brand’s stature globally.

But in order to allow this to happen, the developing markets must be regarded by the organization for their potential to create brand value beyond their incremental business contribution.  These markets should receive funding to invest in ‘brand R&D’ beyond the size of the current business opportunity, and they should have an equal seat at the brand decision table.

Innovate or Die

A Wake Up Call for the Automotive Industry

A study just published by the US Public Interest Group confirms what with the automotive industry has quietly feared…that younger people just don’t love cars.

Automakers have been trying to lure younger buyers with more connective technology and Facebook pages with little success.  Perhaps they are missing the point.  Instead, automakers may want to examine the relevance of their 100 year-old business model to the world that younger people know.

Younger people only know a world in which they can consume just about everything ‘on demand’.  When, where, and how much they want. 

They buy music one song at a time.  They download the latest TV show when they want to watch it.  They buy the latest games electronically, and play them within seconds of purchase. They can access their favorite apps from any screen.

When they do invest in something more enduring…like a smartphone or a laptop, they receive updates and upgrades as improvements are added.

Contrast that to making a 5 year commitment to something that they will not use everyday, have to pay to store it while they are not using it, and will be equipped with old technology and design by the time they dispose of it.

So perhaps the answer to reviving younger people’s interest in cars is to make cars fit in their world.

What if one payment allowed you to access different cars for different needs…a sedan for business, and a weekend SUV?

What if you could buy annual usage contracts like you can wireless phones, where you pay a monthly fee based upon how much you use your car?  What if there was a modular product approach that allowed for upgrades to electronics, engines, or safety equipment over the life of the car?

While these may not be the only answers, it seems that it’s time to fundamentally rethink the business.  And the first brand that does this might just be the brand that captures the hearts of the next generation of drivers.