Defending Turf: Marketing Strategies for Emerging Market Companies

Abstract

In the marketplace of the global village, multinational-owned megabrands have rapidly become ubiquitous. The crumbling of the iron curtain, the institution of economic reforms in China and the liberalization of economies from India to Brazil have opened up large markets to multinational corporations (MNCs). As trade barriers have disintegrated, MNCs have rushed in, seeking sales growth and respite from their intensely competitive and saturated home markets. As a result, erstwhile protected markets have experienced an abrupt deluge of international brands. For the choice-starved consumers in these emerging markets, this a welcome change from the meager choice and low quality products to which they had grown accustomed. However, for local brands in these newly liberalized markets, the influx of foreign players spells a different reality. For many emerging market companies (EMCs), the experience is a first taste of international competition. To them, the large-scale entry of international firms is a major threat. At best, it results in erosion of local firms’ market shares, and at worst it could spell their demise. Even if local firms do survive, the transition may allow powerful and well-endowed multinationals to wrest control of the rules of the market.