2006 Corporate Executive Board. All Rights Reserved.
Catalog No: RD14GY5CZ
ISSUE OVERVIEW: CENTERING INNOVATION AROUND A NEW TARGET CONSUMER AND MARKET
In today’s global economy, emerging markets provide multinational corporations (MNCs)
with valuable new sources of revenue and growth. Low income consumers in emerging
markets, a base often referred to as the ‘Bottom of the Economic Pyramid’ (BOP),
account for the largest percentage of purchasing power in the world. These consumers
maintain drastically different purchasing and market characteristics than consumers in
developed nations , and thus remain a difficult target for many global companies. Low
income emerging markets provide substantial opportunities for MNCs, but BOP consumer
and market limitations require companies to develop new approaches to innovation.
MNCs must create innovative, high-quality products for low income consumers to adapt to
the wholly unique characteristics of these markets.
This study provides global companies with innovative strategies to successfully penetrate
low income emerging markets. By integrating comprehensive insight of BOP regions with
a highly creative NPD approach, MNCs can achieve success in some of the world’s most
critical future markets.
Rather than focusing on improving existing NPD processes and products, MNCs must rethink traditional business
models and NPD strategies to successfully reach low income consumers in emerging markets.
Many MNCs fail to capture BOP market share because they utilize conventional business and product development strategies
that focus on creating more efficient NPD processes in existing markets. MNCs must break down traditional frameworks and
develop new business and NPD strategies that focus on meeting the unique needs of low income consumers.
Firms that successfully target BOP markets seek out a deep understanding of local consumer preferences, limitations,