Much has been written about the importance of emerging markets for driving future growth, but while most companies recognise their significance, they struggle to jump the first hurdle in addressing these opportunities: defining the right product. Many mistakes arise from the single misconception that emerging markets are all broadly the same and that you can tackle them with a single common strategy.
But you can't. To avoid this mistake as you develop your product strategy, keep in mind some common pitfalls:
- Don't assume uniformity across or within markets. Differences may include: socio-economic, appropriate business model, geographic, cultural, supply chain, infrastructure, regulatory/intellectual property and physical differences.
- Carefully define the scope of your customer research. When researching unmet needs, you will need to go beyond just focusing on stakeholders and settings within your niche. Emerging markets have entirely different ecosystems that extend beyond your limited setting. You need to understand the relationships along the entire clinical pathway and not just the step(s) during which your product is used. If you don't, you risk completely missing important commercial, user and technical insights that can make-or-break your product.
- If the necessary experience isn't in your group, consider looking to other divisions within your organisation, or you may need to partner externally.
- Make sure your plan includes a well-researched strategy for local sourcing and manufacturing. Consider this upfront during your research—don't wait until the end.
- More than ever, when building product concepts, challenge your old assumptions and explore frugal innovation as a route to real breakthroughs.
- Last but not least, cost is important, but it's not everything. Your aim is still to get the right product at the right cost and with the right level of availability.
These are just a few of the considerations that companies should take into account when entering these markets. Regardless of your approach, it's worth getting it "right" because it could be one of the keys to sustainable growth.
Cole Shelton is an innovation and technology management consultant at Sagentia Ltd.
Do you believe that a single corporate strategy is sufficient for the fragmented nature of the emerging markets? Source: www.pharmtech.com poll, conducted June-July 2011.