July 16, 2008
July 16, 2008
Knowledge @ Wharton has an interesting article about the growing middle class in emerging countries. If you sell overseas, or you could sell overseas, make sure you’re up to date on the trend, described in the early part of the article.
There will certainly be challenges in this market. One point mentioned is price. The new middle class in China and India have less income than the middle class in the Western world. So they will make discretionary purchases, they will learn to favor certain brands, but their lower incomes will make them more price sensitive than Western consumers are.
Not mentioned in the article, but well deserving of attention, is difficulty in hiring middle managers in these markets. The geniuses are there, and the masses are there, but they have little tradition of people in the middle who make decisions independently, solving problems without bucking everything up to senior management. If you are going to have a major presence in emerging countries, start hiring bright young people and training them to take initiative and deal with challenges.
### Bill Conerly is principal of Conerly Consulting LLC, chief economist of abcInvesting.com, and was previously Senior Vice President at First Interstate Bank. Bill Conerly writes up-to-date comments on the economy on his blog called “Businomics” and produces a monthly audio magazine available on CD. Conerly is author of “Businomics™: From the Headlines to Your Bottom Line: How to Profit in Any Economic Cycle”, which connects the dots between the economic news and business decisions.
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