Another turns into online sales platform to

    Another
important characteristic of emerging country is that, they have higher GDP
(Gross Domestic Product) rate than developed countries which means, they are
producing more. Higher GDP rate also increase investments to country’s economy
because international firms try to produce more to increase their market share.
Emerging countries also less affected from global financial crisis because
investments and production are high. International Monetary Fund (2015)
reports that in 2013, emerging markets continued to grow by 5.0%, compared to
the stagnation or contraction experienced by major developed markets (1.4%) and
although the growth in emerging markets was lower in 2014 (4.6%), this contrasted
with the U.S. (2.4%), Japan (-0.1%) and the Euro area (0.8%). There are a serious number of producers making
moves into emerging markets in recent times, including companies like Unilever
that turns into online sales platform to expand its existence of products in
China market (Forbes, 2015), and Ikea’s continued expansion into countries like
India, China, and Brazil (Kowitt, 2015).

    Emerging countries have weak distribution channels,
and this is one of the negative character of emerging countries. In emerging markets, regional
differences in shopping behaviour based on brands are more likely to reflect
differences in distribution systems (Schlager
and Maas, 2013).
Weak channels create disadvantage for supplying products by the international
firms. In large cities of emerging countries, distribution channels are
often through small, hole-in-the-wall shops such as the ”paanwalla”
shops in India, the ”tiendas de la esquinas” in Mexico, and ”sari-sari”
stores in the Philippines (Banga & Mahajan, 2005). The lack of railways, roadways for
big lorries, securities and electricity of roads creates serious barriers for
international firms because they cannot flow products across country. As
Jean-Luc Chereau, head of Carrefour in China suggests, lack of distribution
channels (railways) effected seriously on this issue because they try to serve
fresh foods and vegetables to their customers across the country, but transportation
time is 3-4 days between each big city reason to this is, always they were
trying to transport their products with big lorries.  In some developing countries, villages don’t
have retail outlets at all, and some distribution opportunities, such as market
days or carnivals, are temporary in these areas. Egede E. (2013) argue that government
requirements have a significant impact on distribution channel selection,
because “Local Content” Laws may require products be manufactured (fully or
partially in the local countries). Agents may be forced on manufacturers rather
than own their distribution network. The standard channels of retail and
wholesale organisation are not many and the agency, traders, merchant dealers
and distributors are all government-controlled structures that do not support
the market operations as obtain in the developed economises. In emerging countries
there are few end-to-end logistics providers, which allow manufacturers to reduce
costs. Decreasing cost will increase international firms trade with emerging
countries.

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Most of the product markets are sole because
customer’s needs and tastes are unique to each country. Local companies in emerging
country are the first to understand that and to build businesses around typical
national features. According to this, international brands tries to customize
their products according to emerging country’s characteristics. For example,
Nando’s is growing in South Africa by producing and supplying cooked chicken
that suits local palates by doing this they increase their profits and market
shares (Khanna & Palepu, 2006). The best way for international
firms to serve appropriate products to suitable groups is segmenting customers.
Consumers in emerging markets have
different demographic and psychographic profiles from their developed market
counterparts, which leads to the need to segment these groups using different
variables (Cui and Liu, 2001; Dou et al., 2006). For example,
Unilever segmentation and targeting strategy in Brasil was interesting. Their
research and observations let them to target low income people which is general
characteristic of developing countries but especially main characteristic of
India. Unilever created new washing powder brand according to women’s cloth
washing culture and they are successful.

Source: Harvard Business Review

     To begin, customers from emerging country is
highly demand to different products from global world. Emerging countries
trying to connect their local market to global markets and they are doing this
by increasing importing and exporting with developed countries. Customers from
developing countries wants to consume higher quality products with cheap prices
but problem is customer preferences are changeable because more product
opportunities available for them. According to this, customers from emerging
countries have not yet developed culture of consumerism (Banga & Mahajan,
2005). For the international firms’ market research is getting harder and
harder because marketers cannot do predictions, they should be effective and
try to apply best marketing strategies. Moreover, primary source of data needed
by the companies because quickly changeable preferences creates unreliable
secondary data. To solve these problems company managers tries to hire experts
from local citizens. Most of the experts from foreign countries are failed to
do beneficial research for their companies. Reason to this is cultural
differences which includes different norms and beliefs. People from emerging
countries emigrate to developed countries because of better life but when they
turned back to their home country they have opportunity to work as an expert.
Learned experience from developed countries can gives them chance to research different
markets opportunities in their home countries and work as a research expert for
international firms. Foreign experts cannot set up research methods, which is
appropriate for the consumers because reactions of consumers are unpredictable
and risky. For example, most of the middle-east countries are Muslim countries,
so jewellery companies cannot obtain healthy results from their market
researches because of religion barriers. Local women are closing their hair and
faces so you cannot do observational researches or questionnaires about product
preferences. This also effects which products should exist in these markets. Buyer
behaviour and brand preferences are important for international firms. High
quality products and good brand name is major for every international company
because they try to supply appropriate goods or services to emerging countries.
In emerging markets product groups divided into 4. First one is ”global tier”
which means that customer segment that wants to consume products of global
quality and with global features- that is, offerings with the same quality and
features that goods in developed countries have and willing to pay same prices from
global markets. Second product market group is ”glocal”. This means that
segment group that demands products of global quality but with local features
(and local values) at less than global prices. Example to this segment is
McDonalds which is localize their food menus according to every country. This
brand is global, but their marketing strategies are localised. Third segment is
called ”local” which is consumers wants local products with local features at
local prices. For example, customers happy to buy local products, this does not
mean that they are trying to buy cheap products. Local product qualities and
features increase their satisfaction. Final segment is ”bottom” which is
bottom of the pyramid (Khanna & Palepu, 2006). In this customer group
important point for them is cheap products. People try to buy least expensive
products from the market. Preferred products are always cheapest ones and does
not matter the quality. To give example to this segment is most of the Turkish
customers buys electronical products from China because of cheap prices and quality
is not matter. Table below shows pyramid
of market structure in developing countries.

     Emerging and developing countries have
their own characteristics, this means that their market structures and company’s
marketing strategies are different from each emerging country and from
developed countries. Emerging markets
are often characterized by political instability, cultural barriers,
technological gaps, inaccurate information and inconsistent data across various
sources. Understanding of the most emerging markets requires the expertise and
the understanding of customers in transition (SIS International Research, 2017). Moreover,
essay will continue with detailed characteristics of emerging markets, market
research barriers, information about what are the mistakes that international
companies doing in emerging markets and how can they improve their strategies.

     Emerging markets are fast-growing economies
that is concentrated on economic developments and reform programs for trading
with global world (Reference, 2017). These markets started to ”emerge” into
the global scene. Emerging countries are moving from traditional economy to market
economy which means normally, they are earning their money from agriculture and
export of raw materials. These are the
countries that are typically transitioning to a market economy, such as MSCI Emerging Market Index lists
23 countries. They
are Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Morocco, Qatar, Peru,
Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand,
Turkey, and United Arab Emirates. Nowadays, these countries try to adopt and
work in free market or mix market economies. Emerging markets enjoying demand
from other countries, like capital inflows because of increasing exports and
increasing demand to products raises prices. Most
of the emerging markets had locational advantages in natural resources and lower
labour cost because of that most of the international firms try to trade with them.

Nowadays, globalisation creates significant
opportunities for international firms to increase their market shares.
International firms trying to decrease their production costs and increase
their profits. They are doing this by trading with emerging markets. Their reason
is produce products with lower costs or selling their imported products to
local customers. This essay will include, information about marketing
structures of developing and emerging countries which is chosen by
international firms for trading. Firms can be successful but on the other hand
companies are facing with some problems to understand nature of markets and
preferences of customers and this cause them to launch unsuccessful marketing
strategies. My research is about what are the characteristics of emerging
markets, what are the barriers that international firms are facing in emerging
countries, how can they set up their marketing strategies and solve their
problems about market researches. Moreover, this essay will give details about marketing
discussions on this topic and new ideas for international firms who are trying
to trade with developing countries.