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

Roland Berger Strategy Consultants
The advertising landscape is also changing rapidly in emerging
countries. Advertisers are figuring out how to deliver relevant,
measurable advertising to their next billion consumers. Mobile
marketing spend will likely grow sixfold to more than USD 6 billion
by 2016 in markets such as China, India and Brazil. By contrast,
Europe's mobile marketing projections for 2016 are roughly the
same as they were in 2012, at just USD 1 billion.
f12 What lies behind this cultural divide? The principal reason is that
mobile devices are the primary digital platform in emerging
countries, while PCs are more common in economically advanced
countries. For example, Indian advertisers will be spending
approximately 51% of their total digital advertising budgets on
mobile channels by 2016, while US companies will spend just 11%.
Over 80% of cell phone users in emerging markets use prepaid
phones. Additional cell phone minutes are being offered as
a reward for customers completing surveys, receiving advertisements
or purchasing products. Customers appear to be happy
with this arrangement, too: In Brazil, 74% of prepaid users take
a positive attitude toward receiving advertising on their mobile
devices in return for free airtime minutes, according to one
recent study.
F12
Mobile advertising on the rise
Mobile channels as percentage of total digital advertising budget
Indian companies
51%
Distribution – Go "glocal"
Products must be delivered not only to emerging middle-class
consumers in cities but also to consumers in rural regions. In
2030, the share of the rural population in developing countries will
still be 45% (compared to 19% in developed countries). Companies
need to adapt their distribution strategies to local conditions. For
example, in countries where low-density rural areas predominate,
firms should prioritize specific geographical areas and work
closely with distribution partners. Often it will be too expensive to
supply remote areas directly, especially at the market-entry
stage.
Large and less developed markets such as China are best
approached city by city, using distributors to provide services
such as physical distribution and cash collection. Beiersdorf, for
example, serves smaller tier-2 or tier-3 cities through a number
of local and regional distributors and sub-distributors in China.
Distributors typically work on a non-exclusive basis.
Simple distribution technologies such as ordering products by cell
phone can help overcome deficiencies in the rural infrastructure.
US companies
11%
Source: Digital Capital Advisors