How to Reach the Next Billion Consumers? – Dan Hodges

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The fastest engines of global growth for several years to come will be the emerging markets of Brazil, India and China where the next billion consumers live. According to the International Monetary Fund, Brazil, India and China will see growth rates significantly higher than mature western economies.

To be successful in emerging markets it is critical to have a deep understanding of the culture and economics. According to Boston Consulting, nearly 60 percent of workers in emerging markets do not have formal jobs and 82 percent are paid cash. Most households pool their income, which means that large decisions are made collectively.

The CEOs and CMOs of major consumer brands have set strategic goals to reach the next billion consumers. The growth rates in mature western economies are not sufficient to support their business goals. A powerful combination of stagnant economic and population growth is causing many companies to re-think their global growth strategies.

The mobile phone is the primary way to reach the next billion consumers. These consumers will use their phones to receive education, government services, news, health information, banking, entertainment, shopping and much more.

The mobile phone is also an engine for economic growth. According to a 2012 study by the Groupe Speciale Mobile Association, increases in mobile penetration are directly related to GDP growth.

Reaching the next billion consumers will require long-term planning, constant innovation and the need to take risks to accelerate positive change. Companies will also need to understand the emerging markets value chain and create new networks for local partnerships.

Old media as we know it does not exist in emerging markets. Models for reaching the next billion consumers need to be created. It will also require the creation of new partnerships for distribution, content creation for different screen sizes, new and innovative user interfaces, the measurement of contextual relevance along with new revenue models.

Here are five categories of partnerships that will be essential to establish in order to achieve this goal:

Operators: The operators will have direct connections to the seven billion mobile subscribers projected for 2020 and are one of the most important partners to reach the next billion consumers.

Handset Manufacturers: The handset manufacturers offer brands the opportunity to include branded applications imbedded into handset itself. This will help distribute the brands to billions of people buying handsets over the next decade.

Social Media Networks: Mobile transacted social media has replaced desktop in mature markets and is the primary way emerging markets access social media. Establishing mobile partnerships with Facebook, Twitter and like services around the world will help reach new consumers and markets.

Governments & NGOs: Working with governments and NGOs to improve education, health and economic development can accelerate market development and your brand’s business objectives.

Leading Brands: Strong, mutually beneficial partnerships with non-competitive brands

can help accelerate learning and leverage resources needed for scale.

A Unique Opportunity

There are unique global forces at work today that are changing consumer behavior and the economics of reaching consumers worldwide. The impact mobile offers brands is staggering in both reach and results.

Here are two important recommendations for partnerships.

Innovation partnerships must extend beyond the usual suspects.

Innovation partners need to strategically engage with a larger purpose.

The time to innovate is now!

Dan Hodges is CEO and Founder, Consumers in Motion LLC. He can be reached atDan

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