New Strategies in Emerging Markets

  • David J. Arnold and John A. Quelch
  • October 15, 1998

Corporate executives need to rethink their marketing policies to reflect the distinctly different environments of EMs.

Emerging markets (EMs) constitute the major growth opportunity in the evolving world economic order. Their potential has already effected a shift in multinational corporations (MNCs), which now customarily highlight EM investments when communicating with shareholders. Coca-Cola, for example, predicts that its $2 billion investment in China, India, and Indonesia, which together account for more than 40 percent of the world’s population, can produce sales in those countries that double every three years for the indefinite future, compared with Coke’s 4 percent to 5 percent average annual growth in the U.S. market in the past decade.1

In aggregate, the proportion of global foreign direct investment (FDI) inflows to developing countries has increased from 18 percent in 1992 to 33 percent in 1996, when it exceeded $100 billion.2 These investments are widely interpreted as heralds of a major restructuring of the global economy; a recent Delphi study of business, policy, and academic leaders placed overwhelming importance on EMs as the source of future growth.3 Governments too are jostling for attention in EMs: the U.S. administration’s export promotion strategy, for example, is centered on the “Big Emerging Markets Policy” launched in 1994 after the Department of Commerce was charged with answering the questions, “If we look toward the next century, where will we find the engines of American growth? What markets hold the most promise?”4

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