The document discusses two approaches for companies to enter new markets: the waterfall approach and the sprinkler approach. The waterfall approach involves carefully planning an expansion into fewer markets to avoid overstretching resources, while the sprinkler approach is used when first-mover advantage is important in highly competitive markets. Developing markets like those in BRIC nations and Southeast Asia represent large potential markets as their populations account for 20% of the world's people and their incomes are rising. The document also provides examples of companies that earn significant portions of their revenues from emerging markets and strategies for identifying attractive new markets.

1. Which markets to enter?Which markets to enter?

2. How many markets toHow many markets to
enter?enter?
Waterfall approachWaterfall approach
Sprinkler approachSprinkler approach

3. WATERFALL APPROACHWATERFALL APPROACH

4. WaterfallWaterfall
Carefully plan extensionCarefully plan extension
Less likely to strainLess likely to strain
human and financialhuman and financial
resourcesresources

5. Sprinkler approachSprinkler approach
Used when firstUsed when first
mover advantage ismover advantage is
crucial and a highcrucial and a high
degree ofdegree of
competitive intensitycompetitive intensity
prevailsprevails
Main risk: substantialMain risk: substantial
resources needed,resources needed,
planning entryplanning entry
strategiesstrategies

7. Developing marketsDeveloping markets
BRICBRIC
nations,Indonesia,nations,Indonesia,
South Africa.South Africa.
Unmet needs —>Unmet needs —>
potential marketspotential markets
Account for 20% ofAccount for 20% of
world’s populationworld’s population

8. TextText
•
Coca-cola, Unilever earn 5-15% of their total revenue from China,Coca-cola, Unilever earn 5-15% of their total revenue from China,
India, and Indonesia.India, and Indonesia.
•
Developing markets make up over 25% of Kraft’s total business.Developing markets make up over 25% of Kraft’s total business.
•
Nestle estimates 1 billion consumers in emerging markets will increaseNestle estimates 1 billion consumers in emerging markets will increase
their incomes enough to afford its products within the next decade.their incomes enough to afford its products within the next decade.

9. Serving “invisible” customersServing “invisible” customers

10. Sends staff to people’sSends staff to people’s
homes for a weekhomes for a week
98% of food purchased from “kirana” stores98% of food purchased from “kirana” stores
Big hit in IndiaBig hit in India

11. Evaluating potentialEvaluating potential
marketsmarkets
•
Psychic proximityPsychic proximity
•
Familiar languages, laws lead brands to sell inFamiliar languages, laws lead brands to sell in
neighbouring countries.neighbouring countries.

12. TextText
•
Coke and Suntory- looking for Opportunities outsideCoke and Suntory- looking for Opportunities outside
saturated North Americasaturated North America
•
Red Bull and Monster rule - focuss on less competitiveRed Bull and Monster rule - focuss on less competitive
markets Asia and Western Europemarkets Asia and Western Europe

13. TextText
•
Betchel Corporation, the construction giant -Betchel Corporation, the construction giant - Cost-Cost-
benefit analysisbenefit analysis of overseas markets.of overseas markets.
•
Looks for untapped needsLooks for untapped needs