Exploration- and Exploitation-Oriented Marketing Strategies and Sales Growth in Emerging Markets

Abstract

Extant marketing literature recognizes unique and varied aspects of marketing in emerging markets (EMs), and in this study, we also argue that significant market-structure changes within many EMs are creating new challenges and opportunities for managers. In particular, we propose that managers must simultaneously implement exploitation and exploration strategies to confront a high degree of dynamism in EMs reflected via changes in retail structures, competitive intensities, and category characteristics. The results from a panel dataset of 15 EMs across Africa, Asia, Europe, and South America find evidence for the critical nature of exploitation strategies aimed at expanding the affordability and availability of existing products. We also find support for the importance of exploration strategies, in the form of innovative product portfolio, as a way to mitigate the effects of changes in market conditions. The results indicate that marketing managers must emphasize ambidextrous marketing strategy in EMs instead of viewing EMs strictly as sources of horizontal growth for established products in developed markets.