Design management in emerging markets

Role of design management in emerging markets

By 2030, according to the World Bank, 93 percent of the global middle class will live in emerging markets. In 20 years, nine out of every 10 people if the global market will live in a country that today we probably do not fully understand. The global market is split into major units, viz., developed market of the west and emerging markets. Huge debt, burdens, and a sluggish recovery slowing growth is the status of the developed  economies. Hence, the businesses are prioritizing consumers in emerging markets in order to capture a piece of the next wave of expansion.
Discussion of emerging markets often blends with discussions about the Base of the pyramid (BoP)
These circumstances clearly present an opportunity for design management. Historically, companies would sell value-engineered or reduced-feature versions of developed-economy products in emerging markets. The conventional wisdom was that on a strict purchasing-power-parity basis, emerging markets consumers had less money to spend, making price the dominant, if not only, factor in their purchase decisions.
Purchasing Power Parity (PPP) is a theory, which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two markets. This means that the exchange rate between two markets should equal the ratio of the two markets’ price level of a fixed basket of goods and services.
Design had already been paid for and could be further amortized by extending the product into new markets. As spending power in emerging markets increases, consumers in countries like Brazil , Russia, India and China (BRIC) are no longer content with low-cost versions of products designed by the developed nations. For Consumers, the definition of good design is shaped by their own culture and way of life. In order to succeed in the next 20 years, companies need to understand what these consumers value and how they live their lives—and design management is their best chance for articulating a winning vision.  Because designers are the least biased of strategic thinkers. Designers are not inclined for the push of the low cost products or the technology push to emerging markets. Designer and design management has to play an important role to cater to the emerging markets. The role of design management in the emerging markets includes managing various design initiatives for products and services. Innovation emerges from truly understanding the fit between product and person. The design initiatives includes activities like to observe, listen to people with open mind, empathetic to their lives and asking how to make those lives better modestly, Designers need to really focus users in the emerging markets and their experience, and not merely design products by adding some user involvement. However, as the internal markets become increasingly influential in the design of new iterations of products and services.
Companies succeed when design is central to the planning, thinking and execution of new ventures, and that good design in emerging markets is driven by a strong adherence to the following principles.
The Conventions in a specific context exist on both macro and micro levels. These conventions are driven by culture. Conventions need to be considered when designing for people in emerging markets. Although examples can help us reevaluate what we see, there is no substitute for experience. Designers need to begin with an immersion process in emerging markets and thier cultures.
This will help the designers see, hear and taste the local culture and begin to understand the conventions that influence behavior and values. Ultimately, you will need to build a local team with the right blend of capability and native understanding. Many companies have already recognized this and have studios in China, but fewer are seizing opportunities in Brazil or Africa. The more global design becomes the more local it needs to be in order to succeed.
The challenge lays in understanding which differences are meaningful, as the meaningful differences will reveal opportunities for localized design.
Design management for emerging markets outlines key areas of difference—physical, psychological, cultural, environmental and financial—and provides a useful planning and analysis tool for design.
Physical: Anthropological differences like height and weight
Psychological: Mental and emotional states and perceptions of the particular environment.
Cultural: Customs and social norms within societies in emerging markets
Environmental: The spaces, public and private, where they live, work and play
Financial: Economic circumstances
Offering emerging-market consumers low-cost or feature reduced versions of products sold in developed economies is no longer sustainable—and is even risk prone—because it assumes that value is calculated only in terms of cost and the needs and desires are universal. Consumers in merging markets do not have the spending power of their counterparts in developed economies. However, this makes them less likely to purchase products solely based on price.
Design management involves design thinking, which is creating a meaningful solution for billions of emerging-markets consumers with design as their focus. This kind of thinking—design thinking—is the only way to succeed in emerging markets.
In the case of global branding in the emerging markets, the need is to unveil unique cultural and consumer perceptions for the diverse products from retailers’ like Wal-Marts. Design challenges from packaging and images to language and logos that must be addressed in presenting products to these emerging market consumers.  As the emerging market grows, Customers demand experiences designed uniquely for us. No company will succeed with a global product approach. This does not mean there is no value in economies of scale or platform approaches. As economic empowerment democratizes for people in emerging markets, design will represent the smartest, most efficient and most effective means to add value to their lives.  At a certain point, the logic of traditional capitalism reverses— innovation is created in the developing countries and then exported to the developed nations. It is called GLocalism business model developed by GE.  Design in BRIC countries is also influenced by the social diversity of these countries. Creativity is also an inherent characteristic of these cultures due to the lack of resources, which has forced them to find their own methods to solve problems. The design discipline also has much advancing to do. Design schools in these countries will be crucial in preparing their students to lead in the business environment.  They will need to learn to use design methodologies that integrate social sciences, anthropology, and ethnography with business and strategic planning. The world’s creative energy is relocating itself from the developed world to the emerging world, and it is there that companies will find opportunities to grow their businesses.  According to Business Week’ Bruce Nussbaum, Design thinking may have begun as a Western concept, but a reverse flow of concepts is just a matter of time.