“The 86 percent” here is an estimate of people living in countries with per capita gross national product of less than $10,000. Of the world’s six billion-plus inhabitants, only 14 percent live in countries where this measure is over $10,000. According to Vijay Mahajan and Kamini Banga, companies can no longer afford to not pay attention to emerging economies. Their book is a persuasive argument that is full of nitty-gritty advice and practical examples.
The book is likely to appeal to managers trying to expand market reach as well as managers in developing countries who want to think differently about strategies that may succeed in their own environment. This book may also benefit leaders of governments, non-governmental organizations, and other organizations who want to better understand the complexities of the developing world’s business environment.
Both authors are well-versed in the challenges of marketing to the poor. Vijay Mahajan holds a chair in business at the University of Texas at Austin and is a former dean of the Indian School of Business. Kamini Banga is an independent marketing consultant and managing director of Dimensions Consultancy Pvt. Ltd. She travels widely conducting training programs on market research and consumer behavior, and writes and edits articles for top Indian business publications.
Beginning even in the first few pages, their practical ideas make sense: Scale down the product size for bulk items to a sachet. Provide built-in cooling for products that are best kept refrigerated. Create mechanisms to allow products purchased by someone in a developed economy to be used or consumed by someone in a different country. These basic concepts mean learning to think small—in terms of package size, installment pay options, and products that fulfill just bare-bones minimal needs; building your own infrastructure to develop and deliver products; and creating a “ricochet economy” that serves the needs of immigrants abroad who maintain strong connections to their country of origin.
It is very important that as companies refocus their strategies they also consider customer needs most appropriately. For example, how could people in villages and cities without reliable sources of electricity be expected to purchase and use products that don’t come with a back-up source of energy?
Mahajan and Banga challenge all managers to reevaluate what they believe about customer needs in developing countries and to make them more basic and realistic. If you don’t know what an inverter is, then you’re not there yet.
- Cynthia D. Churchwell