Photo: Wikimedia Commons
It’s no secret that the largest companies in the world see emerging markets as their future. The Boston Consulting Group estimates that the growing middle class in China and India will spend $10 trillion by 2020. That’s just one segment of two countries, the total growth in emerging markets will be much higher.Becoming a big force in those markets is a financial necessity. Bloomberg’s Matthew Boyle describes how Unilever, which sells consumer products ranging from Dove shampoo to Lipton tea, has cracked the code under CEO Paul Polman.
The company’s sales are growing at double the rate of Procter and Gamble’s, and the stock is up 68 per cent since Polman took over.
They’ve done it with some remarkably simple strategies. As Polman told Bloomberg, “Our business is not rocket science.”
For example, the company gives discounts to shop owners in places like Indonesia to put their products right up front, and sends sales representatives to even the smallest stores to check that things are always in stock and neatly displayed.
Hari Sumarno, who owns one such store in Jakarta sums up how aggressive the company’s been, telling Bloomberg “You can’t fight Unilever.” Competing brands sit on dusty shelves at the back of his store.
The company captures less wealthy consumers in developing markets by selling smaller, cheaper versions of products that people can actually afford, in addition to higher end, more profitable items targeting the emerging middle class.
10 million free samples and aggressive marketing helped lead to a very successful launch of TRESemme shampoo in Brazil.
It all goes to show that it doesn’t always take breakthrough products or complicated strategy to succeed. These are techniques that can be applied in any country, and by implementing them early and aggressively, Unilever’s building a position in these markets that will serve it for years to come.
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