Going to Market in Developing Economies
By catering to smaller market segments, companies can discover hidden pockets of opportunity in diverse emerging markets. Find out how to win big by targeting small.Read the article
Details matter. Those are words to remember for any company looking to transform its strategy for competing in emerging markets. Individual markets can be vastly diverse in terms of income, consumer preferences, and shopping preferences.
Instead of approaching each market as a one single mass, companies can segment the market into smaller customer or geographical segments (beyond the obvious levels of regions and provinces). Doing so can reveal truly local opportunities that might otherwise go unnoticed.
Capturing and leveraging such granular insights can help companies tailor their marketing and promotional programs, and fine-tune sales and marketing interventions. But it takes more than just cutting the market pie into smaller slices.
Companies need to arm their local sales managers and representatives with new geoanalytical tools and the authority to create compelling offerings for customers in these small segments. Sales managers effectively become CEOs of their territories, with the freedom and decision rights to execute strategies that will appeal to local customers. We call this approach street-smart sales.
The payoff is considerable. Even in markets where growth is tapering, companies have consistently demonstrated revenue gains of 5-8% over business as usual by following this approach.
There are five elements to consider when building a street-smart sales approach:
The field staff will have to learn new ways of thinking and working. It will need to combine the art of closing a sale with the science of analyzing market intelligence, sales, market share, and geoanalytical data. This new approach requires training, development, and encouragement.
The field staff will require technologies to capture market knowledge and generate dynamic geoanalytical insights. These tools do not have to be industrial grade. Excel spreadsheets, cell phones, and foot soldiers work just fine.
Local managers will need more authority to tweak offerings and even pricing in some cases. The performance metrics of sales managers and field staff will need to be expanded to include their ability to develop insights from geoanalytics and to devise go-to-market plans.
To facilitate the sharing of best practices and ensure that the new way of working is taking hold, organizations should assign managers or small teams to monitor the performance of these new segments and train the sales force. These teams must be viewed as the sales force’s allies, not adversaries.
such as sales and operating planning, capital budgeting, and for telecom companies, network planning. The data and inputs generated in the field must be fed back to the center so that the company can adapt to market conditions and spread best practices.