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

Roland Berger Strategy Consultants
Brand positioning – Simple but creative
The "country of origin" effect
Rising incomes in emerging countries encourage consumers to
change their brand purchasing behavior. A welcome consequence
of this for Western companies is their increasing preference for
established Western brands. Local brands are often left far behind
in the competition. For example, no local brand features among
the leading fashion brands in Saudi Arabia, and only one domestic
brand in India makes it into the top 10 beauty brands.
f7 Manufacturers in emerging countries own just 12% of the world's
500 most valuable brands. China leads the pack, with 27 internationally
distributed brands, followed by Brazil, with 10 brands.
In the long term, brands from emerging markets are likely to
become more prominent in Europe as manufacturers shift their
attention from domestic to world markets. Products that are
successful in emerging markets can often also be sold globally.
For instance, Chinese automakers – notably the company behind
the Qoros brand – are confident that they can expand into Europe
following the example of global Chinese brands in the IT sector,
such as Lenovo.
Brand origination is a matter of considerable importance in
emerging markets. The "country of origin" effect means that
people associate particular countries with certain product
characteristics. Consumers worldwide, for example, frequently
associate German products with quality, reliability and durability.
In the past, consumer goods manufacturers such as Coca-Cola
transferred their successful national brands, logos and advertising
to their worldwide subsidiaries. But building brand awareness
today calls for more imagination. Western companies must
adapt to local and regional conditions. Often the most innovative
marketing technique is the simplest. In several emerging
countries, for example, Coca-Cola gives paint in its signature red
F8
Top-selling brands in emerging countries
Sales by brand, 2012 (retail value, USD million)
Top-selling fashion brands in Saudi Arabia – No homegrown brands
Mothercare
Next
Zara
Aldo
Bossini/Sparkle
Marks & Spencer
Clarks Footwear
Bershka
Milano
Calvin Klein
231
191
164
159
121
70
60
60
47
47
Top-selling beauty brands in India – Dabur is the only Indian brand
Fair & Lovely
Colgate
Lux
Lifebuoy
Godrej
Dettol
Santoor
Dove
Clinic Plus
Dabur
465
353
336
305
257
244
208
196
159
156
Source: Euromonitor