August 31, 2011
2 minute read
My Dad used to say that the relentless pursuit of growth would all end in tears because eventually everyone would have pretty much what they need and then there would be no one left to sell to. There are of course some pretty major qualifications needed to make this philosophy robust not least of which that it assumes that in the long run 7 billion people will have enough food, water, clothes, education, housing and transport – seems pretty unlikely and there will always be markets for goods and services that meet people’s needs at the right price. However, on the nearer horizon and in the developing and developed worlds we are facing the major challenge of how to grow economies fast enough to sustain the expectations of not just the billion people who have middle class expectations but the new billion in the BRIC countries. Recent economic events show how difficult it is going to be when these countries want to sell to the Western Europe, USA and Japan in order to improve the lot of their citizens but we don’t have any money to buy from them.
Marketing is about the creation of demand and the driving of aspiration, and as the BRIC countries awaken to the growth opportunities provided by stimulating domestic demand new opportunities will be created for foreign brands and services. Marketing skills are embryonic in these markets and it is here that the UK with its long history of marketing knowhow and expertise can do good business – increasingly the opportunities will not be just here but beyond our shores. But more importantly are the opportunities for us to export our famous brands to these markets. There is a huge appetite for UK brands in China for example where we are associated with quality and good breeding. Jaguar Landrover can sell every car they export and the average Range Rover with tax retails at close to £200,000! The trick however will be to provide products that are affordable by the mass middle class of which there are 450 million – more than the population of the EU. There is much work to do to understand the drivers, motivators and buying behaviour and to create a credible segmentation that truly represents the consumer. A thoughtful approach to matching UK brands and products to segments will be a great step forward.
Relevant insight, product positioning, targeting and communication needs good data and that is rare in developing countries. Brands already in these markets and those planning on entering must take the lead and specify data strategies in their marketing plans. This will lead to the growth of infrastructure and the setting of the right standards for privacy and commercial arrangements.