NEW STRATEGIES IN EMERGING MARKETS

Once viewed as ''less developed countries,'' emerging markets (EMs) no w offer a significant growth opportunity for multinational corporation s (MNCs). Because they differ dramatically from mature markets, howeve r, they raise new strategic questions that traditional marketing frame works do not resolve. While traditional models argue against first-mov er advantages in EMs, additional sources of advantage favorable govern ment relations, pent-up demand, marketing productivity, marketing reso urces, and consequent learning - can make early market entry a desirab le option. The authors provide a framework, oriented toward demand rat her than risk, that enables companies to assess long-term market poten tial, identify business prospects, and predict potential benefits. Usi ng the framework, companies can categorize EMs on the basis of short- and long-term potential. Once an MNC decides to enter a market, it nee ds new frameworks to guide product and partner policy decisions. The d ifferent patterns of marker development in EMs imply that, contrary to conventional models, companies can expand the market rapidly, should offer a combination of global imported brands and locally made joint v enture brands, and use EMs to lest product innovations. The design and management of relationships with local distributor partners is the mo st critical challenge for executives. In the areas of industry experie nce, direct selling, local autonomy, and exclusivity, experienced MNCs are adapting the approaches employed in developed markets in ways tha t are appropriate for emerging markets; As MNCs continue ta gain exper ience in EMs, marketing models willi have to change to incorporate the new practices and new learning that are coming from markets.