Singapore Sessions: What’s the Right Entry Point for Emerging Markets?

Vivaldi CEO and Founder Erich Joachimstaler took an opportunity to outline key differences between the markets, both existing and emerging, in the western world and in the eastern world, specifically Asia. A considerable number of companies have shifted their attention to Asia with plans to capitalize on the rise of their middle class. The issue with this approach is that there are remarkable differences between the markets in the west and those in Asia, especially as it relates to the rising middle class.

Traditional western marketing strategies have little to no weight in Asia, as the middle class is growing far more rapidly than it ever has in the west, and with little to no brand loyalty. The level of competition in these markets is incredibly fierce because of the lack of established brands in pre-existing years and markets. This emerging middle class has two general reference points, the rising lower-tier rising up and the upper-tier that is purchasing down. Contributing to the complexity are the various companies entering in the middle of the markets, being chased by smaller companies, offering products that are “good-enough” as well as from more intricate products from larger companies.

“There are significant differences…between the West and the East when it comes to realizing the potential opportunities afforded by the rising emerging markets middle class.”

Consumers are becoming more informed and demanding quality. Companies are finding it difficult to enter the market without brand equity and are being limited to two choices; entering at the bottom of the market and competing based on lower price-points or they can position themselves at the higher end of the market by trying to appeal to customer wants and desires, which requires a strong brand. In order to select and execute the right approach in Asian markets, companies need to understand both local and cultural context and find a way to properly insert their brand and their product within the framework of that context.

• Topics:
• Growth Strategy