How to reach emerging market consumers with new ... - Roland Berger

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Roland Berger Strategy Consultants for epidemics. Indeed, one child dies every 15 seconds as a result of consuming water polluted with human excreta. Diarrheal diseases cause up to 50% of all deaths in emergency, refugee and IDP camp situations – more than 80% of them children under two years of age. Potential solutions These health and environmental challenges stimulate innovation. For example, Swedish architect Anders Wilhelmson designed "Peepoo", a personal, single-use, self-sanitizing, fully bio degradable toilet that prevents feces from contaminating the immediate surrounding area and ecosystem. After use, Peepoo turns into valuable fertilizer that can improve livelihoods and food security. In India, 40% to 60% of the urban population live in poorly developed, unhygienic conditions. In an effort to improve standards, an in ventive Indian real estate company introduced a program to offer small land parcels with decent infrastructure and with a price tag of just USD 6,500 each. The examples of successful innovation don't stop there, either. Three years ago, Tata Motors launched the world's cheapest car, priced at just EUR 1,500. The company has now designed the Nano house, a 20 m 2 coconut and jute fiber unit that can be erected in just a week and is built to last only a few years. Tata's plan is to offer affordable shelter to poor people around the world. It believes that governmentsponsored mass residential developments for slum dwellers and the homeless will be one of its biggest markets. In developing the Nano house, Tata consulted local decision-makers, ensuring that the product met local requirements. The company is now analyzing user feedback from a pilot project in rural India. It plans to price the new home at about USD 700 – roughly what industrialized world consumers might pay for a new iPad. The design of low-cost housing also needs to take climate change into account. A German initiative, ASH (Africa Sustainable House), has developed the world's first low-cost, climate-friendly home for Africa and Asia. Delivered in containers, the units are constructed on site in a single day. They are fitted with a solar module for lighting and radio reception, and even include air conditioning. Novel building materials can also make housing affordable. Taiwanese architect Arthur Huang developed a method of creating construction materials out of plastic waste. The EcoArk, built from 1.5 million plastic bricks, was shown in November 2010 at Taipei's International Garden Festival. Even plastic bottles can be used to build houses. Assisted by experts in London, a Nigerian building project initiated by the non-governmental organization DARE (Development Association for Renewable Energies) is creating homes out of plastic bottles that can withstand earthquakes, fire and even bullets. By using unconventional building materials, DARE seeks to address two problems simultaneously: plastic bottles that pollute roads, sewers and gutters are recycled into buildings, and at the same time help alleviate housing shortages in Africa's most populous country. Demand for prime location luxury buildings in emerging markets is growing almost as fast as local incomes. The international property consulting firm Knight Frank regularly surveys top real estate advisors to ask which nationalities will become the most important prime property buyers over the next five years. Chinese, Russian, Middle Eastern, Latin American and other high-growth economies consistently lead recent predictions. For example, emerging market cities such as Nairobi have seen prime property prices soar more than 25% above 2011 prices, while Bali and Jakarta have seen prices increase about 15% – more than in London or Vancouver. The more people congregate in cities, the more critical it becomes to find ways to control streams of goods and waste. One promising method suggested by research into contemporary urban data management is "smart" city designs – that apply innovative IT applications in building design, city planning and infrastructure. These aren't just drawing board recommendations, either. Singapore has become a model of urban IT prowess. The city collates and interlinks data on water and power supplies, traffic volumes for shipping, aircraft, cars and taxis, temperature and telephony, all in real time. The scope of the IT system is such that a subway train driver knows capacity loads, why trains are slowing down and whether it's advisable to wait longer at a particular station. The modern city dweller will increasingly require a smartphone to navigate the modern urban data jungle. A "virtuous commercial circle" will evolve as more data stimulates greater demand for multifunctional smart technologies. The potential for highly individualized distribution and marketing is almost unlimited: some vending machines in Asia even scan a person's face to customize advertising.
Study 15 Getting to know CONSUMERS in emerging markets The pace of change is speeding up. Living standards and the built environment are evolving faster than ever and markets are increasingly diverse in terms of educational levels, incomes and geographies. Consumer diversity creates a puzzle for marketing. How can companies identify niches for their new products and services? Their first step must be to analyze consumer habits and brand values. With this in mind, Roland Berger designed a customiz able tool, the RB Profiler, to measure how consumers perceive brands. Using a specially developed questionnaire, the RB Profiler investigates 20 fundamental values that influence all aspects of customer behavior. The RB Profiler analyzes what people's requirements are and how they view brands, generating a range of consumer profiles. Companies can use these profiles to develop product positioning options and compare the performance of their current products with targets. At the same time, the tool's intuitive format and statistical validation encourages organizational buy-in and efficient application in marketing. f6 Here's an example of the tool in action: Between 2000 and 2030, China's urban population will nearly double, growing from 36% to 69% of the total population. This new urban population will demonstrate significant differences in terms of tastes and aspirations. A Roland Berger study using the RB Profiler asked Chinese consumers about their brand perceptions and differentiation, consumption behavior, purchase patterns and lifestyle. The study showed that consumer preferences vary significantly according to urban size and geographical location. Looking at the differences in more detail, it appears that smaller tier-3 cities exhibit different values and priorities than megacities, reflecting their regional orientation. Typical tier-3 cities include Tongcheng in Anhui province, with roughly 744,000 inhabitants, and Fengcheng on the Yellow Sea coast, with a population of approximately 630,000. To illustrate how the RB Profiler works, figure 6 translates the profiles for megacities and tier-3 cities into two prototype customers, Susan Gan and Neil Zheng. The differences between the two are immediately obvious. F6 The people behind the profiles – A possible translation of two typical consumer value profiles Chinese consumer value profiles with prototype customers, megacities vs. tier-3 cities Susan Gan, single, 35, from Guangzhou, megacity Works as a systems administrator for a major Chinese company Main source of news: Internet Newspaper: National daily Credit cards owned: Two Use of credit card: Several times a week Travels for leisure: Twice a year Clothes shopping: Once a week Preferred grocery shopping: Mall Accommodation: One bedroom flat near the city center Hours spent on watching TV a day: 1 Hours spent on using the Internet a day: 3 Likes: Risk-taking, innovative things, trendy features, just-in-time, price-defined buying decisions Neil Zheng, married, 43, one child, from tier-3 city Runs a small stationery shop Main source of news: TV Newspaper: Local daily Credit cards owned: None Use of credit card: Never Travels for leisure: Once every three years Clothes shopping: Twice a year Preferred grocery shopping: Supermarket and own plot to grow vegetables Accommodation: Small house in the suburbs Hours spent watching TV a day: 3 Hours spent on the Internet a week: 1 Likes: Fitness, family, elegance
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