Abstract
This paper examines the customer value creation framework and discusses the design of the key elements for product development in emerging markets. A scientometric/bibliometric scoping literature review identifies a clear gap in the current research in studying prerequisites for customer value creation in emerging market contexts. Observing experiences of Daikin and Renault in the context of India, the purpose of this paper is to identify value creation strategic choices following which comprehensive customer value offerings in products and services can be successfully created by firms across the four facets of the framework in emerging markets. Value creation strategies include having a nuanced understanding of the latent contextual needs to offer localized high-quality products that embody distinct functional attributes that provide a functional value and being responsive to specific emotional needs and epistemic experiences of the target customers in product and service offerings to deliver a greater experiential value. Furthermore, the products should adopt a localized operational excellence strategy throughout the value chain to reduce costs for competitive price offerings in order to deliver superior cost value and develop brand image and equity strategy, thereby allowing for the provision of a greater symbolic value. Experiences of successful firms demonstrate the need for extensive local research into the emerging market followed by localization of production and development of a distribution network to be able to offer customized products at competitive prices whilst maintaining the brand value. We thus extend the customer value creation framework by introducing localization as a necessary condition for successful organizational performance in emerging markets.
Highlights
The growth of emerging markets (EMs) far outstrips that of developed countries; each location is fraught with idiosyncratic contextual differences
The Duster is valued by Indian customers for its extremely competitive price compared to other foreign SUV makers; its design; internal features; and practical benefits, such as engine capacity, strengthened suspension, and off-roading capabilities, which are essential in the Indian context
These means of self-expression symbolized by the prestige and status of having an SUV and the association of the Duster with Indian cricket, as well as the pleasure that is created by the driving and owning of a Duster, were the keys to success in the EM context
Summary
The growth of emerging markets (EMs) far outstrips that of developed countries; each location is fraught with idiosyncratic contextual differences. Growing middle-class customers in EMs with an increasing disposable income are diverse, enjoy brand awareness, and show inclinations to access a range of high-quality products at affordable prices (Dawar and Chattopadhyay 2002). These consumers have a preference for localized products that are sufficiently robust, possess maximum flexibility in product use, and can be repaired and maintained at the local level. Multinational companies (MNCs) from developed countries find it difficult and increasingly risky to manage innovation and succeed in EMs, as these firms are not accustomed to striking a balance between specific product demand and affordability criteria of EM customers (Christensen and Overdorf 2000; Hang et al 2010). It is challenging for foreign MNCs to develop and sustain uniquely attractive propositions
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