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DN's method for companies to develop new products for emerging markets

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Emerging markets eu

  1. 1. 2011 September EU Frederick RickmannEMERGINGMARKETS
  2. 2. Emerging Markets 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 your company to create products and services better suited to the societies in the world where annual 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.
  3. 3. What you get from Charactistic of these markets is that they need products and services which are quite different the program from the mainstream ones developed for the US and EU. There is also a corporate logic in harnessing the dynamic of these markets where there is ample space for your company to thrive and continue its success even when traditional markets 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
  4. 4. How it works – case 1 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 products innovatively, a new generation of possibilities arises. The Tata Nano was created to make a car affordable to people who had never owned one before – especially in India, Tata’s home market.
  5. 5. Tata Nano – case 1 The logic of Emerging Market innovation is that normal product development is turned partly on its head. Market volume and sales price are defined first before product content. Sales Price 2000 US $” Good design is when you can’t take more away”Some of the Nano design’s many cost-reducinginnovations. 3000 US $The Nanos boot is only accessible from insidethe car, as the rear hatch does not open.One windscreen wiper instead 2No power steering3 nuts on the wheels instead of the usual 4 4000 US $Only one wing mirrorNo radio or CD player The Tata Nano’s standard sales price inNo airbags in base model India is 2,900 US $ in dec. 2010623cc engine has only 2 cylinders 5000 US $No air conditioning in base model The European version costs 6,000 US $The car’s exterior was designed in Italy 6000 US $ Data source: 300 m cars 400 m cars 500 m cars A.T.Kearneys
  6. 6. DN’s designs get B2B for the Chinese market B2B Electronics – Hand-held industrial computers are developed in a competitive market where features rather Case 2 than actual user needs set the agenda. By addressing actual needs , costs can be cut to about 50% and the market increased 3 fold.Western companies in US and Europe are often One of Motorola’s hand-heldmarket leaders and compete successfully by barcode scannersusing advanced features to distance themselvesfrom Asian competition. Asian companies have atendency 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 computersB2B also means Back to Basics
  7. 7. Netbooks – case 3 Netbook computers are an ideal example of design for Emerging Markets. Originally introduced by Asus this type of no frills computing had sales of 0.4 m in 2007, 35 m in 2009 and forcasts over 100 m by 2012The One Laptop Per Child [OLPC] non-profitproject was a similar exercise in creating a basiccomputer for emerging nations, but from the topdown. Originally set at 100 US $ per unit, theproject never reached production on a massscale – and the price level remained about 200US $,Netbook computers reached the same pricelevels quicker giving the opportunity forcomputing to a wide range of societies.Due to the low prices, netbooks are also popularin developed countries
  8. 8. Achieving low prices. 1 Research what the users really need at the most fundamental level. DN’s 8 Principles 2 Get rid of features which are not needed. [Ignore what competitors do and be constructively critical of western practice] 3 Use mass production and high volumes to reduce prices even more and expand the potential of the market 4 Export to several markets concurrently to maximise volumes and reduce prices
  9. 9. DN’s 8 Principles 5 Use market volume as the target. Reduce production costs to an extreme level to suit the market – but keep healthy margins. 6 Use the highest hi-tech where costs allow. New hi tech is usually cheaper than old low tech. In emerging economies a whole generation of technology can be jumped over. 7 Get the cultural content right – but make it trendy and status enhancing 8 Maximise demand through design originality and innovative simplicity
  10. 10. What you also get As mentioned with netbooks – the developed markets are also hungry for innovative low costfrom the program products. So by opening up Emerging Markets, with low cost solutions, the developed countries in the West also respond with interest – and appealing market growth. The program is not only centred on corporate well-being. Emerging societies are by their definition emerging from poverty and often from poor social and economic organisation. Ethical trading standards and care for the planet from your company go hand in hand with progress in these communities. In addition, the responsible governance of your own company has a positive knock-on effect in your own society and local region through stable employment and engaged staff.
  11. 11. A unique opportunity The demand in emerging nations for responsible no-frills products is large. for European Sophisticated, intelligent solutions are sought when the price is right. European and Scandi- companies to enter navian values are greatly recognised and if these can be combined with attention to the new markets needs and economics of the new markets then significant 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 obvious opportunity to introduce new solutions. This is the chance now for also medium-sized companies to rapidly establish markets with their own new presence. For more inspiration on this aspect contact DN Group. See the last page.
  12. 12. Who on earth is DN? DN Group is an international design and innovation consultancy . Some recent DN Clients From our offices in Denmark and Taiwan we help major international clients as well as Schneider Electric local start-up companies to innovate and to ZyXEL grow. By building innovative business strategies Procare International with companies like yours, we deliver market RTX Telecom success through award-winning design in products, CBI graphics and branding. FLSmidth Tetra Pak Hoyer The wide variation of market knowledge NEC experienced together with our clients DSB partnerships has contributed to our constant focus on new-thinking at the very edge of CipherLab innovation. Dali Loudspeakers ADLink Your success becomes our success - especially through a long term partnership.
  13. 13. Emerging Markets The Emerging Markets program is one of DN’s initiatives to help our clients and other interested companies to reach new potential. Emerging Markets – typical program modules The program is a catalyst for progress in that 1 we co-work by stimulating new thinking and Mentoring: Defining the strategic vision excellence in design and operations in your own Researching the target markets in-house staffs. The program itself is divided Strategic value creation New branding into a tailor-made modules to suit your own specific requirements and visions. 2 Development and Innovation Re-innovating products and service Marketing testing New thinking starts at the top – not at the User interface and appeal bottom . So the first modules are mentoring Co-creation with inhouse marketing + R&D teams modules with management. Through R&D and 3 marketing the modules take on a more Implementation Specifications, definition and aims consultative and guiding content. Launch Promotion Media coverage The bottom line is getting value onto the market with wide customer – and media appeal
  14. 14. Contact one of the below for more detailed information on how the DN Emerging Markets program can help your company. DN Aps DN Aps Mejlgade 50 16F –3 Baghuset 2. 530 Ying Cai Road 8000 Aarhus C Taichung 40360 Denmark Taiwanwww.dngroup.dk www.dngroup.dk fr@dngroup.dk hwj@dngroup.dk +45 7022 1012 +886 4 2305 1011