• by Eamonn Kelly , November 13, 2014

How big is the global “middle class”? According to Homi Kharas’s definition and calculations for the OECD, it amounted to 1.8 billion people in 2009 and will surge to 3.2 billion by 2020. For marketers, these new consumers — the next billion — represent a massive opportunity. They will be far poorer than today’s average middle class consumer, having just inched over the line, but they are on the move. As a group they are aspirational, have increased educational opportunities, have mobile-enabled internet access, and are almost certain to get wealthier over time. And an additional billion will follow hard on their heels.

If you are, or aspire to be, a CMO in a globally oriented business — well, it is hard to imagine a more extraordinary, historic, and perhaps career-defining opportunity. Separating the greatest marketing professionals of our era from the seat-warmers will be the creativity, intelligence, and enthusiasm with which they approach this vast new market as it opens up at an unprecedented pace. 

Seizing the opportunities will mean wrestling with daunting challenges. As firms turn their attention to the next billion, many will discover they can’t succeed by simply stripping down the products and services that have worked in the West, and exporting more affordable versions of them. Nor can they simply tweak the marketing messages that appeal to their traditional customers. Yet the reality will remain that tailoring offerings for every local market is impractical and expensive.

Serving the next billion effectively will depend on working harder to understand unfamiliar consumer needs. For example, some global packaged-goods companies are fortifying their food products with micronutrients to address vitamin and mineral deficiencies — a problem experienced by over a third of the people in developing countries. 

Moreover, CMOs will need to relearn—or learn for the first time—how to compete in emergent categories. Western managers have sometimes regarded emerging-market consumers as merely the latest of “late adopters” in categories that have largely played out at home. As a result they invest little in rethinking offerings as they aim to scoop up marginal sales from the new global consumers who most resemble their domestic buyers. 

Contrast this with the global leaders who engage in category development work — that is, who invest in educating consumers about problems they might not fully understand and the solutions that are available to them.  One food company outfitted demonstration vans to drive into rural areas spreading knowledge about healthy diets and safe food preparation. It knew that the value of its offerings wouldn’t be appreciated until consumers were informed about nutrition. Competing in markets relevant to the next billion, many other marketers will come to learn that there is a world of difference between market entry (competing in an existing category that consumers understand and are familiar with) and market development (competing in a nascent category that consumers have limited understanding of and experience with).                      

For CMOs as professionals, the emergence of the next billion will have another implication: They will have to learn to collaborate more effectively with their C-Suite colleagues to take on a challenge that dwarfs any market opportunity they have targeted in the past. Most C-Suites today are not well-equipped to set and pursue shared, coherent agendas and priorities. Over the last twenty years, we have seen the typical C-Suite double in size by adding mainly function-specific “Chiefs” with very different areas of expertise and agendas. The coordinated response required to serve the next billion well — and other business transformations ahead — will demand that talents within the C-suite be immaculately aligned. 

Where to start forging that better collaboration? The most obvious interface for the CMO is with the CIO/CTO, given the profound role of both digital engagement and data access/interpretation in reaching, understanding, and influencing the next billion. As business models and organizational models continue to evolve — often with the customer as a central actor in new and co-creative ecosystems — similar collaborations with Chief Strategy Officers and Chief Talent Officers will also rise in importance. The successful CMO in 10 years’ time will be not only a marketing expert, but an expert collaborator with other leaders, joined at the hip and jointly focused on creating sustainable value in a rapidly changing world.