September 2006 Propeller

By Dominic Mason, FutureBrand

With a combined population of more than 4 billion people living on less than $2 per day, developing or low-income markets are the world’s fastest-growing segment of consumers, and markets like China, India, Brazil, Mexico, Russia, Indonesia, Turkey, South Africa, and Thailand alone have an estimated GDP of $12.5 trillion, more than the GDP of Japan, Germany, France, the UK, and Italy combined.

While this represents a significant opportunity for brand owners, the challenge, particularly for Western brands, is to avoid making assumptions about culture and consumption behavior in search of global consistency and economies of scale. The risk of doing so is to miss the real opportunities these consumers represent and inhibit brand performance.

The debate in the marketing arena about the benefits of global versus local branding continues on a number of levels. Economies of scale across produc¬tion and marketing operations, consistency in building brand equity, and leveraging communication expenditures are only some of the benefits of globalization. In designing branding strategies for developing markets, however, an understanding of consumer needs in a cultural context through insight-driven research, strategy, and design often leads to greater payoffs.

For some brand owners, this is nothing new. Faced with slowing growth in developed markets, large consumer goods companies have already turned their attention to developing markets. In 2002 alone, the top twenty consum¬er goods companies invested more than $10 billion to expand their share of these markets, which now account for nearly 40 percent of all worldwide sales of clothing and grocery products.1)

To read the rest of the article, download the complete PDF. (972 KB)

Propeller offers FutureBrand insights, opinions and ideas on the world of branding. The cover art features FutureBrand creativity and visual thinking.

FutureBrand Propeller