Skip to Navigation

Amitava Chattopadhyay


Amitava Chattopadhyay
Emerging Market Multinationals - Amitava Chattopadhyay


The Low Price Trap

Business Standard

Consumers buy based on perceived value. By underpricing their products or services, emerging market multinationals face the spectre of instantly lowering the perceived value

Our research suggests that starting in the low price tiers is a double-edged sword. While it allows EMNCs to leverage their strengths, the firms that started in the lowest price tier with their own brand, like Ned from Arcelik or Dopod from HTC, found it very difficult to generate margins or loyal customer bases. Such low prices and margins naturally do not create the resources to reinvest in the business (for R&D or brand building) and thus work against long-term viability: there is no takeoff to the “virtuous cycle” of higher prices, higher margins, higher quality, and stronger, sustainable brands. In fact, without such eventual building of a consumer franchise, even a “push,” channel-oriented strategy is vulnerable to failure. Unless there eventually is adequate consumer “pull” for the brand, the trade too will wither in its willingness to carry and promote it.




Read On


  Nov 12, 2012 | In the Media





SHARE




PREV


NEXT


Thoughts?

 


Recent Tweets



Sat, 06 Aug @ 04:41 pm

Perfect summer day in Hautvillers tasting champagne! https://t.co/YVf4uFmCZR

via Twitter for Android
Sat, 06 Aug @ 09:18 am

Very happy! This m#$%er fu#$%÷r made money exploiting the pain of families. He is a despicable monster. #AlexJoneshttps://t.co/YiNZuC6NXL

via Twitter for Android
Fri, 05 Aug @ 09:41 am

#XiJinping_Pres neutered old pooch dry humping in frustration! 😀 "China sanctions Nancy Pelosi over Taiwan visit, s… https://t.co/VSBsoRMP9G

via Twitter for Android
Thu, 04 Aug @ 10:21 pm

#Xi and #China behaving like a neutered dog humping! Futile, empty posturing. "China fires missiles near Taiwan aft… https://t.co/Hv07i04mzE

via Twitter for Android
Sat, 30 Jul @ 07:09 pm

Soon all intellectual activity will be banned and we will have prescribed readings and opinions. No room for discus… https://t.co/t1AGth5I0N

via Twitter for Android
Fri, 29 Jul @ 08:13 pm

Amazing how robotic humans are. Never questioning social mores. Need a prime minister to give permission for a blin… https://t.co/m0Q0UeRR4A

via Twitter for Android

  Close About Papers Cases Books Teaching Musings Media Gallery Ask Amitava