Market Opportunities in Surprising Places

The last time Brazil played in the final World Cup football matches, there was a surge of large flat screen television sales in Brazilian cities. That shouldn't surprise any marketer. What was surprising was who was buying them. The urban poor living in favelas (shantytowns) of major cities were the main consumers of these high-end consumer products. But how is that possible? Groups of neighbors pooled their money together to buy one TV for several families.

Those business professionals trained in industrialized countries often look for similar market characteristics when we expand our companies into overseas markets. If I sell cars to a certain segment of the domestic market, I look for the same segment in overseas markets. That may initially lead me to markets in Canada, Japan, and the European Union.

Entrepreneurs always need to think smarter than their larger competitors in order to survive and to thrive. One market opportunity that should not be overlooked is the possibility of selling into lower income markets overseas.

Wait a minute - with limited resources I should try selling my product into markets with LESS disposable income? Depending on circumstances, yes. I'm a big fan of C.K. Prahalad, who has researched and written extensively on serving the world's poor without sacrificing profits.

Here are some reasons why:

Group Buying Power
Many cultures are more collectivist and may be comfortable buying as a group of neighbors or as a village. This pools together buying power, like the favela flat screens. In China, families often pool several incomes together to buy the highest status car that the family can afford.

Gotta Have It Products
Cultural values can affect buying behavior. China's one-child policy has created families where one child is supported often by two working parents and up to four working grandparents. That child's future, especially through education, is the entire family's priority. Any product or service that helps to improve a child's academic performance even slightly would be very marketable in China regardless of the country's lower GDP per capita.

Repackaging Can Be the Answer
In my culture (U.S.), buying products in bulk is practically a sport. The reasoning is that the bigger the package, the better the value. In most other countries, products are sold in smaller quantities. Instead of a package of 10 men's razors, a consumer would buy just one razor at a time. Instead of buying a computer, a consumer might pay per use at a computer kiosk near their home.

According to Dr. Prahalad in his HBR (9/02) article, there are approximately 100 million people on the planet with annual income over $20,000. There are 2 billion people with income of $2,000-20,000 and another 4 billion with incomes under $2,000. Is your product or service one that could be altered to profitably serve the majority of the world's consumers?

If you have questions about overseas marketing strategies, including how to sell into developing countries, please send me an email: intl.entrepreneur@gmail.com