Attraction of Developed Markets for Emerging Market Brands Essay - 1

Attraction of Developed Markets for Emerging Market Brands - Essay Example This paper illustrates emerging markets as the markets or nations that have economies classified as being in their relatively early development stages. These nations’ financial markets are less developed compared to the major financial centers from all over the world. However, these markets are becoming increasingly integrated and sophisticated into the international and developed markets. The emerging markets spread across the globe and they differ extensively in their cultures, political, and economic behavior, as well as in factors that drive their market growth. There has been an increasing attraction of the developed markets for the emerging market brands, though they face numerous challenges. Emerging markets face numerous challenges in their efforts of joining and competing in the developed markets. Agtmael stated that limited financial resources and the lack of international experience force the emerging markets into becoming low-cost equipment manufacturers and provid ers for the developed markets. The result is that the developed markets consider the products within the emerging markets as commodities and competitive, which leads to lower performance levels of the emerging markets, as well as the products within these markets. An additional obstacle for emerging markets venturing into the developed markets is that the developed markets are the negative stigma that consumers in these markets have on products from the emerging markets. Most of the consumers within the developed markets, as Agtmael states, are usually not willing to pay the market price of emerging commodities. This forces the companies within the emerging markets to lower their sales prices to make sales. In return, the companies get little or no income, and at times, they make losses on the products they provide to the markets. The negative stigma of the developed markets makes it difficult for the brands within the emerging markets to grow and join the developed markets. Emergin g market brands seek to join the developed markets for various reasons. The different reasons are mainly to benefit from the greater developed market. The main reason is to gain a greater market. Developed markets have more customers compared to the emerging market. These markets provide a wider range of consumers for the products that exist within the markets compared to the developing markets. The developed markets usually have more participants, who are willing and committed to trading business activities.