“We are a state in a state. We build complete new cities where there was only wilderness before.” These were the winged words of the IT Director of Gazproms’ IT subsidiary. He continued: “When we discover new gas fields in Siberia we design and then build new roads, schools, hospitals, residential buildings and airports. Then we fly in the engineers who build the gas exploitation infrastructure. And lastly we put the topological information in databases to keep track of the gas fields. So we use all of your design software products to accomplish this.” I learned this amazing fact in Russia when working at Autodesk.

In China I had a similar mind expanding experience. A customer, BeoSteel, told us the following: “We have difficulties fitting our working files on our computers.” Our first reaction was to conclude they used complex software on outdated computers. Great was our surprise when the engineers explained they handled the software on state of the art workstations maxed out in processing power and internal memory. To our knowledge no other customer in the world had run into this hardware limitation.

Gazprom, Beosteel and many other examples thought me that emerging markets possess surprisingly sophisticated companies that are capable of competing with any developed world company, sometimes even surpassing them in technology usage. They also have the same complex needs when it comes to IT, and are willing and able to spend on technology.

But these world class emerging markets companies are usually a minority on the market, maybe making up 20-30% of the total customers. The other 70-80% customers are another breed, with different needs in terms of IT and technology. These are the ‘good-enough-customers’, where technology has to be good enough, not state of the art, nor sophisticated. Reason for this good enough need, is the price. These companies usually compete locally and struggle to grow. For them a good enough product at low cost is more important than the technological competitive advantage richer firms are willing to dish out for.

So how to deal with these two different sets of customers? Lower the price and you lose revenue from the world class companies that are able to pay premium prices for sophisticated products. Set prices high and you give away the good enough market segment to low cost competitors. And global pricing frameworks that take into account local salaries and other factors are usually standardized by country and miss out on the 2-pronged internal market.

The 2-pronged go to market approach is something I observed by companies smart enough to realize this polarity within an emerging market. They concluded that selling their latest, most sophisticated products to world class companies at premium prices is something to keep. And for the good enough customers they release older or stripped down versions of their products. So for instance in Russia you sell a product v. 2012, with full functionality, localized and standardized at premium prices. And at the same time you sell product v. 2008, stripped from any extra functionality at half or one third of the price, thereby guaranteeing revenue streams from two different market segments and defending both segments against competitors.

This 2-pronged GTM approach needs careful planning and ensuring the whole ecosystem, vendor, support, services, partners and customers benefit from it. But when executed flawlessly it guarantees long term success in the wildly expansive emerging markets.

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