emerging markets eu
DESCRIPTION
DN's method for companies to develop new products for emerging marketsTRANSCRIPT
2011 September EU
Frederick Rickmann
EMERGINGMARKETS
Welcome to a new program which is created to let companies continue with rapid global growth in a time of recession in western markets and in Japan.
The focus of the program is to allow yourcompany to create products and services bettersuited to the societies in the world whereannual growth is still in or around double figures.
DN is an international design and innovation company with offices in Denmark and Taiwan. From this global insight in design and strategy, we have created this program for major corporations to continue growth and success.
Emerging Markets
Charactistic of these markets is that they needproducts and services which are quite differentfrom the mainstream ones developed for the US and EU.
There is also a corporate logic in harnessingthe dynamic of these markets where there is ample space for your company to thrive and continue its success even when traditionalmarkets are in stagnation.
In essence the program consists of:
- Research in your new target markets- Re-innovation of products and services- Definition and specification- Co-development with your inhouse teams- Implementation and Launch
What you get from the program
Over the past decade, your products have probably been based on the countries of the developed world, their standards and practices.
These are not always the right ingredients for emerging economies. By redefining productsinnovatively, a new generation of possibilitiesarises.
How it works – case 1
The Tata Nano was created to make a caraffordable to people who had never ownedone before – especially in India, Tata’shome market.
The logic of Emerging Market innovation is thatnormal product development is turned partlyon its head. Market volume and sales price aredefined first before product content.
Tata Nano – case 1
The Tata Nano’s standard sales price in India is 2,900 US $ in dec. 2010
The European version costs 6,000 US $
Sales Price2000 US $
5000 US $
6000 US $300 m cars 400 m cars 500 m cars
3000 US $
4000 US $
” Good design is when you can’t take more away”
Some of the Nano design’s many cost-reducing innovations.
The Nano's boot is only accessible from inside the car, as the rear hatch does not open.One windscreen wiper instead 2No power steering3 nuts on the wheels instead of the usual 4Only one wing mirrorNo radio or CD playerNo airbags in base model623cc engine has only 2 cylindersNo air conditioning in base model
The car’s exterior was designed in Italy
Data source: A.T.Kearneys
Hand-held industrial computers are developedin a competitive market where features ratherthan actual user needs set the agenda. By addressing actual needs , costs can be cut to about 50% and the market increased 3 fold.
B2B Electronics –Case 2
Western companies in US and Europe are oftenmarket leaders and compete successfully by using advanced features to distance themselvesfrom Asian competition. Asian companies have a tendency to follow the market leaders ratherthan carrying out original research – usingvolume production as a price competitive factor.
Markets in India, ASEAN and China of abouttriple the present size exist for re-thought handheld computers
B2B also means Back to Basics
One of Motorola’s hand-heldbarcode scanners
DN’s designs get B2B for the Chinese market
Netbook computers are an ideal example of design for Emerging Markets. Originallyintroduced by Asus this type of no frillscomputing had sales of 0.4 m in 2007, 35 m in 2009 and forcasts over 100 m by 2012
Netbooks – case 3
The One Laptop Per Child [OLPC] non-profitproject was a similar exercise in creating a basiccomputer for emerging nations, but from the top down. Originally set at 100 US $ per unit, the project never reached production on a massscale – and the price level remained about 200 US $,
Netbook computers reached the same pricelevels quicker giving the opportunity for computing to a wide range of societies.
Due to the low prices, netbooks are also popularin developed countries
1 Research what the users really need at the most fundamental level.
2 Get rid of features which are not needed. [Ignore what competitors do and beconstructively critical of western practice]
3 Use mass production and high volumesto reduce prices even more and expandthe potential of the market
4 Export to several markets concurrentlyto maximise volumes and reduce prices
Achieving low prices.DN’s 8 Principles
5 Use market volume as the target. Reduce production costs to an extremelevel to suit the market – but keep healthymargins.
6 Use the highest hi-tech where costsallow. New hi tech is usually cheaper thanold low tech. In emerging economies a whole generation of technology can bejumped over.
7 Get the cultural content right – but make it trendy and status enhancing
8 Maximise demand through design originality and innovative simplicity
DN’s 8 Principles
As mentioned with netbooks – the developedmarkets are also hungry for innovative low costproducts. So by opening up Emerging Markets, with low cost solutions, the developedcountries in the West also respond with interest– and appealing market growth.
The program is not only centred on corporatewell-being. Emerging societies are by theirdefinition emerging from poverty and oftenfrom poor social and economic organisation. Ethical trading standards and care for the planet from your company go hand in hand withprogress in these communities.
In addition, the responsible governance of yourown company has a positive knock-on effect in your own society and local region throughstable employment and engaged staff.
What you also getfrom the program
The demand in emerging nations for responsible no-frills products is large. Sophisticated, intelligent solutions are soughtwhen the price is right. European and Scandi-navian values are greatly recognised and ifthese can be combined with attention to the needs and economics of the new markets thensignificant growth can be achieved
In these markets , where many products and service are being initiated for the first time to millions of consumers, there is the obviousopportunity to introduce new solutions. This is the chance now for also medium-sizedcompanies to rapidly establish markets withtheir own new presence.
For more inspiration on this aspect contact DN Group. See the last page.
A unique opportunityfor European
companies to enternew markets
DN Group is an international design and innovation consultancy .
From our offices in Denmark and Taiwan we help major international clients as well as local start-up companies to innovate and to grow. By building innovative business strategies with companies like yours, we deliver market success through award-winning design in products, CBI graphics and branding.
The wide variation of market knowledge experienced together with our clients partnerships has contributed to our constantfocus on new-thinking at the very edge of innovation.
Your success becomes our success - especially through a long term partnership.
Who on earth is DN?
Some recent DN Clients
Schneider Electric
ZyXEL
Procare International
RTX Telecom
FLSmidth
Tetra Pak Hoyer
NEC
DSB
CipherLab
Dali Loudspeakers
ADLink
The Emerging Markets program is one of DN’sinitiatives to help our clients and otherinterested companies to reach new potential.
The program is a catalyst for progress in thatwe co-work by stimulating new thinking and excellence in design and operations in your ownin-house staffs. The program itself is dividedinto a tailor-made modules to suit your ownspecific requirements and visions.
New thinking starts at the top – not at the bottom . So the first modules are mentoringmodules with management. Through R&D and marketing the modules take on a more consultative and guiding content.
The bottom line is getting value onto the market with wide customer – and media appeal
Emerging Markets
Emerging Markets – typical program modules
1Mentoring:Defining the strategic visionResearching the target marketsStrategic value creationNew branding
2Development and InnovationRe-innovating products and serviceMarketing testingUser interface and appealCo-creation with inhouse marketing + R&D teams
3ImplementationSpecifications, definition and aimsLaunchPromotionMedia coverage
DN ApsMejlgade 50Baghuset 2.
8000 Aarhus CDenmark
+45 7022 1012
DN Aps16F –3 530 Ying Cai RoadTaichung 40360Taiwan
+886 4 2305 1011
Contact one of the below for more detailed information onhow the DN Emerging Markets program can help yourcompany.