Breakout Strategies for Emerging Markets: Business and Marketing Tactics for Achieving Growth

4. Democratizing the Offer

When multinationals enter emerging markets, they often target the middle and upper tiers of the income pyramid by slightly tweaking the business models they import from developed countries. For years, the model for successful growth through international expansion involved making small changes, such as lowering prices, reducing pack sizes, and leveraging the entry country’s resources and advantages such as lower labor costs. However, Prahalad and Hammond (2002) cautioned that by solely focusing on upper echelon consumers, companies were ignoring the potential offered by the nearly four billion people at the bottom of the pyramid (BoP). By innovating in all aspects of marketing, companies could sell large volumes of ...