Why Engagement with Emerging Markets Matters More than Ever

Just over 20 years ago, I made a radical career decision: I left a cushy position with a global telecom company to move to the Democratic Republic of the Congo with my 10-year-old black labrador. The job was to leverage my consumer marketing skills to build the first-ever network of more than 100 reproductive health centers following the country’s emergence from a brutal civil war.

It was a move that supercharged my mission to make a difference in the world. It sparked a passion for providing people with a better shot at prosperity by improving access to health services, often by working in some of the world’s most challenging places.

My public health journey has had a lot of high points and reached another milestone this week with the launch of the FINN Partners Global Health Impact Group dedicated to harnessing the potential for health to catalyze economic growth in emerging markets and underserved communities around the world.

Looking back, I could not have wished for a better time to shift to public health. I started my career working in the consumer goods sector in Southeast Asia when countries there were the hottest economies around. This background and my corporate experience in the U.S. prepared me to blend traditional marketing and communications practices with the real-world challenges that confronted me in DR Congo and many other African and Asian countries where I would later work.

In the years since I moved to Kinshasa, a historic shift in the balance of power has gained momentum as traditionally poor and middle-income countries – nations whose citizens make roughly between $1,100 and $13,000 per year – gain prominence on the global economic stage.

“The rise of the rest,” as author and CNN Commentator Fareed once called this phenomenon, captures the growth of the group of low- and middle-income countries that now contribute almost 34 trillion dollars to the global economy, nearly one-third of total worldwide output, according to the World Bank.  To highlight the tremendous pace that developing countries have set over the past two decades, consider:  Real Gross Domestic Product (GDP), as reported by the International Monetary Fund, increased at an average rate of 4 percent among developing economies, compared with an average just under 2 percent growth for advanced countries.

While the astounding population growth of young African consumers has not yet translated to an economic boom, as global health communication advocate Mark Chataway notes, I remain optimistic that the dynamic growth we need to drive the global economy will come from the future markets of Africa and Asia.

The emergence of lower-income consumers as a major market force in these two regions offers tremendous opportunities for companies that can re-tool their marketing mix from a model that has traditionally targeted the most affluent one billion people on the planet to one that efficiently reaches the following several billion people.

While this idea isn’t new, it warrants renewed interest and investment in a post-pandemic, highly fractured world flirting with a rejection of globalism in favor of economically ruinous national isolationism.

Here’s why U.S. companies need to deepen their engagement with emerging markets: As incomes continue to rise in more than 100 countries throughout Africa, Asia and Latin America, so too will the demand for better healthcare, convenience products, electronics, and household staples, to name a few categories. 

How can organizations most effectively and sustainably succeed in this environment? In evaluating strategies for entry and sustainable management in many emerging markets, companies should consider establishing alliances with an unlikely resource: leading Non-Governmental Organizations (NGOs) operating locally. 

Building public-private partnerships between corporate and non-profit organizations can benefit both groups working in nascent and emerging markets. NGOs can often provide sharp insight into consumer habits and preferences, access to government influencers, and opportunities to build significant goodwill, brand recognition, and loyalty among local communities through the effective sponsorship of corporate social responsibility projects.

A strategic alliance between non-profits and companies also offers a less threatening means for global firms to operate in a new country than through the development of a venture with a local company in the same industry, a potential competitor that could receive protection from a host government down the road.

International and locally based NGOs have operated in developing countries for decades and have learned through tough lessons what works and what will often lead to failure.  Working with lean budgets and staff, many of these organizations have succeeded in grassroots outreach, communications, mobilization, and behavior change within population segments, often well outside of conventional marketing channels.  Those segments define the middle and bottom-of-the-pyramid consumers now sought after by multinational firms trying to build their brands and sustain competitive advantage in emerging markets.

At the same time, many non-profit organizations now view partnerships with the private sector as essential to their long-term ability to fulfill their mission of serving local populations.  Highly effective corporate responsibility programs have become mainstream in emerging markets as companies work with NGOs to contribute goodwill to needy populations while also meeting operational interests, such as improving employee and community health or safeguarding valuable natural resources that drive local economies.

The power of partnerships can offer three areas of strategic advantage to firms entering developing markets, particularly in Africa and South Asia:

• 360^o Market Data: Rather than relying solely on outside research firms, companies can work with NGO partners to round out their understanding of the consumer landscape in a new country, mainly when vital economic and cultural elements are in play. By operating in poorer communities and managing customer research and outreach operations over several years, NGOs often have a ready-built network of communities for private companies to engage as part of their market shaping.  These communities may deliver a more representative study sample, and the methodology for any consumer research efforts will be more informed through the input that NGOs and local community representatives can offer. At the same time, NGOs need more sophisticated marketing and outreach tools, particularly in segmenting populations, to deliver more relevant messaging.  These are areas of technical expertise that private sector partners can share.

• Access to Government Decision Makers: The emergence of mainstream consumerism in developing countries alters how some governments can support private sector development and direct foreign investment. Local and international NGOs have valuable insights regarding which government contacts are most appropriate to engage and how best to work with them. Money may talk in emerging markets, but transparent relationships with key government decision-makers are paramount for long-term operational success and competitive advantage. NGOs are an integral resource for helping companies to forge these government relationships. Correspondingly, the changing world of international aid requires NGOs to develop multilateral funding streams. Public-private partnerships offer a means for NGOs to build greater credibility and differentiation by demonstrating that they have the project scope and capacity to appeal to a broad base of donors.

• Brand Equity Development: Corporate responsibility programs offer a platform for companies to create brand awareness and loyalty in new markets while building goodwill in under-resourced populations. A partnership with an NGO operating in a developing country provides the opportunity to identify projects that meet a community’s social needs and the sponsoring company’s interests. NGOs undertaking projects may also gain positive recognition through such partnerships, particularly in countries where the reputations of development organizations have suffered from aid fatigue.

The risks are significant for firms venturing into low- and middle-income markets.  Market data, local relationships, and flexible operating models are indispensable resources, as are the right alliances.  Before relying on traditional approaches for assessing new market opportunities, consider how successful engagement and communication with NGO partners may offer the insights and understanding required for companies to reach efficiently and sustainably some of the most promising but untapped segments of the world’s population.