Large retail chains and the emerging market puzzle


Large retail chains such as Walmart, Carrefour, and Tesco etc are finding it tough to conquer emerging markets. These retailers first tried to implement the same business model that they used in developed markets, in developing ones too. This model was one of having large supermarket or hypermarket stores, located at some distance away from city centers. Most Walmart stores in America are located in suburban areas. Car ownership is high in America and gasoline prices are relatively low. Road network is also good there. Therefore American customers easily drive to suburban Walmart stores when they want to buy grocery or other household items.

In an emerging market such as India, the situation is different. Car ownership is low and gasoline (petrol & diesel) prices are higher, as a proportion of per capita income. Road network is often very poor outside cities. Customers cannot drive to a suburban Walmart store, every time they want to buy grocery, in India. So Walmart’s American business model cannot work in India.

In emerging markets such as India, the need is for smaller stores that are located near the homes of target customers. Many retail chains have started following this small, convenience store model in these markets. The commercial rent for smaller stores is also less. High commercial rent is a major problem in India due to shortage of high-quality retail space.

Consumers in emerging markets too want to have a good shopping experience. They too want to buy products at discounted prices. Retail chains just need to tweak their business model to suit local conditions more. The focus of these chains should not be too much on expansion of number of stores. The focus should be on ensuring profitability. A retail chain should open a new store once the previously opened store has become profitable. Tata group’s Trent chain in India follows this policy and therefore has been a sustainable business for long.

The potential of retail industry is huge in India and other emerging markets. According to a recent report by consulting firm, McKinsey & Company, by the year 2025 consumer spending in emerging economies will rise to $30 trillion. This will amount to half the total global consumption. Retail chains – both domestic and international – which show flexibility in term of business model and do not become too eager about expansion will definitely be able to tap this huge opportunity.

Why brick-and-mortar businesses need digital marketing?

Digital-marketing-2 Whatever be the nature of your business, digital marketing has become a necessity. Many brick-and-mortar businesses think that they do not need digital presence.


A brick-and-mortar business is one that doesn’t do any type of business using the internet or online medium. For instance, if you own a retail chain or a restaurant chain that doesn’t have any type of online presence then you are running a brick-and-mortar business. The term brick-and-mortar was first used to distinguish physical retail stores from online retail stores.Now coming back to the issue of digital marketing; suppose there is a brick-and-mortar restaurant that doesn’t have any online presence whatsoever. The customers of the restaurant come to its place, order their food and eat it in its premises.


The owner or management of such a restaurant is of the view that they do not need any form of digital marketing. This view is fallacious. By promoting their restaurant business online, on social media platforms like Facebook, they can reach their target audience more effectively. They can spread word about their restaurant more effectively among their target audience. They can increase the visibility of their business by getting themselves registered on an online restaurant guide like Zomato. And all this can be done without incurring any great expenditure. Digital marketing can be done at a fraction of the cost of traditional mass media marketing.


Having a website of the brick-and-mortar business can increase the effectiveness of digital marketing and overall marketing. So for instance, customers who go and eat at the restaurant that we talk about can go to the website of the restaurant afterwards and give their feedback. Prospective customers can check the website and get an idea about the ambiance, menu and prices of the restaurant. Having a website will enable the restaurant business to enhance its interaction with customers. This will lead to higher customer satisfaction. Higher customer satisfaction will mean higher customer loyalty, more revenues and more profits.


Digital marketers can enhance their marketing messages and advertisements by increasing the visual content. Images and videos make the campaign more interesting and engaging for the target audience.Digital marketing should also be done on the mobile platform. A large number of consumers now access the internet through their smartphone. Marketing campaigns should be especially designed for smartphone platform.


The issue of Native Advertising should be kept in mind during digital marketing. Native advertising means matching the look and form of the advertisement to the platform on which it is appearing. So an advertisement appearing on Facebook should be compatible with the look and format of Facebook in order to be more effective.


Don’t pay for Likes; just follow these steps to make your promotion viral!

Digital-marketing-2In this age of social media, promotion of products on social media platforms like Facebook is very effective strategy for businesses, especially for new, startup ones.


The challenge however is how to make the promotional campaign of the product or service go viral in a big way. By viral it is meant how to make more of social media users see your promotional campaign and share it with other users on the network.One way to make the social media promotional campaign go viral is to offer some incentive to customers and existing users of the product to promote the social media campaign with their friends and other people in their network. An example of such an incentive is offering discounts to customers if they share the social media campaign of the company with a minimum number of people in their network.


Another effective way is to give an emotional incentive to customers to share the social media promotional campaign with others. Long ago from the current age of digital, interconnected world, Coca-Cola achieved this feat through its iconic Santa Claus campaign. In the decade of 30s, America was struggling in the aftermath of the Great Depression. Coco-cola came up with an advertising campaign that showed a cheerful Santa Claus, dressed in red and white and giving gifts to people. The image was able to emotionally motivate ordinary Americans.


It became a talking point; customers talked about the campaign and spread the word-of-mouth publicity. An emotional social media campaign can make customers share information about the product with others in their network.If the product is such that sharing its benefits enhances the value of the product then it is easier to make the promotional campaigns go viral. For instance a digital camera company can encourage customers to share online the photos taken by their digital camera on the company’s social media page.


When a product or service is aligned with a powerful, positive idea then existing customers are encouraged to spread word-of-mouth about the product on social media. Cadbury has been very successful in doing this in India. Its promotional campaign, “There is something special in each of us,” has encouraged generations of customers to talk about it and spread word-of-mouth about the chocolates.


Customers can have doubts about the product or service of a new company or business. The company should then encourage those who have used the product or service to share their positive experience with using the product or service with others in their network. In return the company can offer these users some monetary incentives like free future usage or discounts. It can thus turn a weakness into strength by getting these customers go viral with their positive campaign about the company and recruit new customers.


Social Media Marketing: Facebook, Twitter et al.

images (3) Social Media is the term used to define websites that allow people to interact with each other through their accounts and pages on these websites. Examples of social media websites are Facebook, Twitter, Google +,Orkut, MySpace etc.


Social media marketing has become very important in today’s business environment. Social media websites like Facebook have a reach that is even more extensive than traditional mass media. For instance Facebook has 1.35 billion monthly active users; Twitter has 284 million monthly active users. Monthly active users are those users who access their social media account at least once a month.Social media therefore gives a big opportunity to businesses to reach to their target customers.It enables them to communicate with their target customers.


Businesses are using social media for advertising their products and services. They are also using social media for communicating with their customers. Every major company today has a Facebook page where it tries to interact with its target customers. Continuous communication with target customers enables businesses to understand their needs and expectations in a better way. They are also able to address the grievances and complaints of customers more effectively. This in turn leads to higher customer satisfaction.


Social media can be used by new businesses for marketing their products and services to target customers. Social media marketing can be done at relatively lower costs than marketing on traditional mass media like print and television.While devising the social media marketing strategy, a company or business should be careful about choosing the right social media platform. That social media platform should be chosen which has highest penetration among the target customer segment of the business.


Presence on too many social media platforms at the same time can dilute the effectiveness of social media marketing strategy. The business should try to have personal, continuous, concentrated communication with members of its target audience instead of diffused, impersonal, random communication with a large number of people on a number of social media sites.


A dedicated team of employees should be devoted to social media marketing. This team should handle the communication of the company on the social media. It should respond in a timely manner to queries of customers. This team should also collaborate with the advertising agency of the business on social media advertising and promotional campaigns. Often companied have a social media page without having a social media team.