Planning and Segmentation in Early Stage and Emerging Markets- Playing to Win and overcoming 3 main challenges

A challenge many organizations face is in the development of effective planning for both early stage and emerging markets and the setting of meaningful longer-term strategies for these vital new potential sales and service points.

In the past decade I have identified three main challenges that are faced by management teams in setting appropriate strategies and developing useful plans for Early Stage/Emerging Markets that are:

1)Difficulty in Segmentation

2)Challenge in Market Sizing

3)Absence of historical data

The three challenges are indeed frustrating however they do not need to stop the ability to build a meaningful strategy. Here are some suggestions that have worked well for many organizations:

Difficulty in Segmentation- How to overcome

• Revisit the criteria you are using to build the segmentation- is it appropriate for this particular market? Remind your teams that each Early Stage markets typically require new criteria unique to their environment and buying styles. Develop new and refined criteria as required.
• Define your product and market segments relative to the perceived needs and buying methods and channels of each Early Stage market and do not fall to the temptation of using a one size fits all global model. Test for understanding by asking a local supplier to evaluate your product/market segments and provide feedback on their validity.
• Develop a stronger understanding of the buying process in the Early Stage market with the explicit awareness that it can differ substantially from what your more traditional and mature markets may be utilizing. The buying process deeply understood will assist your teams in better identifying segmentation.

Challenge in Market Sizing- It’s not the size, it’s how you use the data

• Understandably your board will be asking for quantification on how large a market is and equally challenging will be to answer the question in a meaningful way. The early stage market may very well not have available data and if the data does exist it can be wrong or dated information. In many cases the end result is that you will need to size the segments yourself and in which case pay particular attention to:
• Intensity of competition
• Impact of regulation
• Potential conflicts of interest with partners and suppliers
• Changes in population incomes
• Maturity growth curve of the market segment

Once you have collected the data review it carefully and contrast it against overall understanding of the populations within each segment and how they will evaluate your products and services in respect to alternatives. The definition of alternatives should be studied carefully here as well with careful attention to the variation in problems your products and services resolve for the market segment.

Absence of Historical Data- Of course that is why it is called an Early Stage Market

Historical Data can be useful in gaining insight and providing potential comparison baselines for trends. An Early Stage Market does not have Historical Data and that is why it is called an Early Stage Market! This being said, do not get stuck in analysis paralysis looking for data or building correlations that are not relevant and rather be prepared to:

1)Invest in and conduct primary market research

2)Develop greater understanding of your customers at base level

3)Critically question and revisit in particular distributor and agency provided data

Just because your products and services are working well in mature developed markets does not mean they can work well in Early Stage Markets.

There is a good chance however your corporate image, service, and positioning have already reached into the market through communication, trade fairs, employee bases, capital investments in or nearby, and awareness of the very high quality service and product offerings your organizations can offer to the market.

Early Stage markets are challenging: the rewards are also interesting and provide a strong strategic advantage to your companies when managed correctly.