Developing Winning Products for Emerging Markets | Emerging Markets |

A large automaker designed, developed, and—with appropriate fanfare—launched a commercial truck in India’s burgeoning and highly competitive market. The vehicle was engineered to let owners in a range of emerging markets run the trucks longer and faster, and at a relatively low operating cost. Higher asset utilization, company leaders believed, would improve profits for truck owners and, ultimately, the automaker.


The truck was a disappointment. The company hadn’t adequately accounted for India’s poor roads and infrastructure, which often prevent vehicles from maintaining the most efficient operating speeds. Even though the truck’s price was competitive against local offerings—and half that of a comparable vehicle in developed markets—in the buyers’ eyes the potentially higher utilization wasn’t worth the expense.


Think this was a ham-fisted multinational dabbling in a market it didn’t fully understand? Think again: the automaker was based in India. To be sure, multinationals tend to suffer such setbacks more often than local players do, but this company’s example underscores the difficulty of understanding customer needs in fast-changing emerging markets.

Via The Learning Factor