Why Do Companies Such as Procter & Gamble Target Emerging Markets?
1. Why do Companies such as Procter & Gamble target emerging markets? Do you agree with this strategy?
Big companies such as Procter & Gamble target emerging markets because they are determined to grow. Their strategy is to capture as much customers as they can. Procter & Gamble had a goal of reaching a billion more consumers by penetrating the emerging markets with the most population and development such as India and China. By doing this, they are creating a profitable future, and it worked since by doing this their net sales grew ($82.6 billion) 5% for 2011. By P&G having most of the market in developed countries, gave them a low and slow growth in a long term due to market saturation. Investing in emerging markets provides new market share, be able to capture growing markets and increase revenues. I agree with this strategy due to that it’s essential for companies to keep on growing and conquering unknown lands or unexploited markets. As a business man and future company owner, growth means prosperity.
2. What are the dangers of targeting emerging markets?
Some of the dangers that can be encountered by targeting emerging markets can be the culture difference, poor infrastructure, or even the country’s GDP. A mayor problem that they can come upon is not being able to acquire the consumer’s acceptance of their products. In the emerging countries, the consumers have different consumption behavior. For example, in china people wash cloth with cold water and some even by hand, something that the regular products made by P&G for the developed countries such as USA and Europe are not made for. Another problem that can be encountered is the poor infrastructure inside these emerging countries. This can create problems to their logistics department due to lack of well made roads, high levels of traffic, busy ports or airports for cargo, and poor storage services. GDP is something very important to be taken in consideration since the PPP per capita is lower in emerging
Big companies such as Procter & Gamble target emerging markets because they are determined to grow. Their strategy is to capture as much customers as they can. Procter & Gamble had a goal of reaching a billion more consumers by penetrating the emerging markets with the most population and development such as India and China. By doing this, they are creating a profitable future, and it worked since by doing this their net sales grew ($82.6 billion) 5% for 2011. By P&G having most of the market in developed countries, gave them a low and slow growth in a long term due to market saturation. Investing in emerging markets provides new market share, be able to capture growing markets and increase revenues. I agree with this strategy due to that it’s essential for companies to keep on growing and conquering unknown lands or unexploited markets. As a business man and future company owner, growth means prosperity.
2. What are the dangers of targeting emerging markets?
Some of the dangers that can be encountered by targeting emerging markets can be the culture difference, poor infrastructure, or even the country’s GDP. A mayor problem that they can come upon is not being able to acquire the consumer’s acceptance of their products. In the emerging countries, the consumers have different consumption behavior. For example, in china people wash cloth with cold water and some even by hand, something that the regular products made by P&G for the developed countries such as USA and Europe are not made for. Another problem that can be encountered is the poor infrastructure inside these emerging countries. This can create problems to their logistics department due to lack of well made roads, high levels of traffic, busy ports or airports for cargo, and poor storage services. GDP is something very important to be taken in consideration since the PPP per capita is lower in emerging