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GIRA Dairy ClubGeneva 12 September 2011Emerging Market OpportunitiesPeter WennströmPresident and Expert consultant
The HMT was founded as a joint venture between global brandingagency DesignBridge and marketing strategy expert Peter Wennström.
The vision is to give clients expert guidance in the increasingly complex global landscape of nutrition health and wellness ! from category direction to creativestrategy. The mission is to help clients to better targeted launches and faster projectsby understanding the reasons for failures and successes.
Today the HMT is a team of global experts supporting clients in all parts of the world
Together with hands on Consulting in Innovation, Marketing and Brand Positioning, we also support our clients with Inspiration and Training on How to be a Winner in the Nutrition, Health & Wellness market
Find out more on thehmt.com
How does DAIRY get it RIGHT in the Emerging Mass Market? B IR C
The Emerging Consumers
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An emerging market?!
What does it mean for market drivers and consumer motivation? What will we expect to see?
What is the difference between an emerging and a developed market?
Phsychology of Market Stages
1. TRADITIONAL 2. EMERGING 3. DEVELOPED
OLD
NEW
TOMORROW WILL BE LIKE TODAY
TOMORROW WILL BE BETTER!
I DON T CARE ABOUT TOMORROW
Dairy: It s significance for Mass Market Consumers
Dairy: It s significance for Mass Market Consumers
Dairy is considered the GOLD STANDARD nutritional food for children in most emerging markets
In China and SE Asia, while the Category Essence was traditionally not as strong as above, government education has started positioning Milk/Dairy as above
In most of these markets, there is a strong consumer motivation too of investing in the child s future and hence ensuring that he/she gets a Healthy Head Start in life
Hence, the opportunity to leverage above and innovate with Dairy in Mass Markets in these markets is significant.
The Rules for a successful market entry
1. Remember the Category Significance and Category Essence of Milk and hence Dairy in the new market.
2. Understand the consumer s changing needs and how that impacts expectations from dairy
3. Then determine the Role of the Brand as well as it s Market Entry Strategy to create a relevant and competitive dairy marketing mix to serve the Mass Market consumer.
4. Innovate and create value by leveraging and fitting into established habits and category codes
In sum Know the Consumer! Listen to Her! Understand her Context!
Five key Market Entry Strategies
Five Market Entry Strategies with varying Innovation quotients & Marketdisruption ability:
Market Entry Strategy Relevance for Mass Markets
Leveraging hidden nutritional assets
New category creation Not relevant for Mass Market
New segment creation
Category substitution A supporting strategy!!
The functional foods make-over
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Leveraging Hidden Nutritional Assets Dairy in Emerging Markets
LHNA:Market the intrinsic healthiness that advances in nutritional science and awareness have uncovered in everyday foods and beverages.
What does it mean for dairy:Huge relevance for Dairy in Emerging markets... This strategy enhances the relevance of foods and beverages that consumers are already familiar with by highlighting the natural goodness within them thereby reassuring emerging market consumers about their familiar choices.
The success of local dairies/milk co-operatives in many emerging markets bears testimony to this strategy.
Local dairies have also successfully branded traditional dairy categories by highlighting the authentic goodness of milk-based categories
Some brands have even tried to promote more foreign dairy categories like cheese in some emerging markets by leveraging the MILK quotient of cheese.
New Segment in Category Dairy in Emerging Markets
NSC:Create a new health proposition and a new segment within the category.Bring a new health benefit into an existing category
What does it mean for dairy:Creating new segments within the dairy category has huge potential to increase the share of throat for dairy in emerging markets
GUMs fortified with DHA with the promise of enhancing mental sharpness of growing up children has been very successful in many emerging markets
Flavoured Milk/yogurts to make MILK fun for children
To give children the milk with the extra something to help them grow and develop..
Mengniu is the trusted Chinese dairy .Future Star Milk fortified with DHA promises to give children the milk with the extra something to help them grow and develop..
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Functional Foods Makeover Dairy in Emerging Markets
FFMO: A Me Too strategy where the later players offer the same benefits as the Early Entrants.
What does it mean for dairy:In the West therefore the only differentiator in this strategy is Lower Price However
In Emerging Markets, given the huge Mass Market opportunity as well as the Bottom of the Pyramid opportunity, this Market Entry Strategy can pay rich dividends for Dairy.
Simply ensuring GOLD STANDARD quality and purity of milk at an affordable price can create significant brand loyalty and hence business value.
The challenge is to create Better Value price is only one factor.
Accessible Milk Goodness in the Consumer s Hands is the key deliverable of this strategy hence innovations in business models, pack innovations, formulation innovations, innovative education are all equally critical.
Functional Foods Makeover Dairy in Emerging Markets
Role of Brands in Dairy in Emerging Markets
Emerging markets have traditionally seen more uncertainty that their European/US counterparts.
Hence, brands are powerful guarantors of reassurance and safety.
Once a brand earns the trust of consumers, it gains the Right to Play in that category through multiple formats/extensions.
Particularly in dairy which has strong NURTURANCE values in most emerging markets, brand credentials are a huge asset. Hence, a brand that has succeeded in setting a STANDARD in DAIRY can then innovate and lead the consumer to trying new formats and ranges within Dairy.
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Brands can take 3 Roles in Dairy in Emerging Markets
Brand from abroadInternational brand that leverages its Global Credentials particularly in Science
The role of such brands will always be somehow limited in the Mass Market as they tend to earn the trust of the consumer by being the EXPERT BRAND, which comes at a price premium.
Brands can take 3 Roles in Dairy in Emerging Markets
Glocal BrandGlocal brand that innovates by adapting it s Global expertise with Local Preferences
Brands can take 3 Roles in Dairy in Emerging Markets
National Pride BrandLocal brand that builds on it s local heritage and positions itself as the National Pride
To recap: the rules for a successful Market Entry in Emerging Markets
Choose a familiar dairy category
Enhance it s intrinsic Nutritional Quotient further (e.g. Fortify with micro-nutrients)