Last week, Google Africa launched its Gmail SMS service, which allows users to receive email directly to their phone. If you have a smartphone, this may sound less than groundbreaking, but to African customers, it’s a complete shift: emails are received in SMS format, meaning that no Internet access is required. Just like regular SMS, receiving an email is free, but responding to it costs the same as a text. Not only does it improve users’ social lives, it also creates new opportunities for companies looking to cost-effectively reach Africa’s “Bottom of the Pyramid” market. Though currently only available in Ghana, Nigeria, and Kenya, it can be expected to expand across the continent if it proves successful.
This isn’t the first time Google has launched the SMS service— in fact, it launched in the US over a year ago but failed, largely because it did not meet a perceived need in the market. (With smartphones now making up 50% of the US market, receiving an email SMS would feel like a step backward.) Rather than give up on the idea entirely, though, the team at Google found a more appropriate market. In fact, several multinational companies are relaunching failed products in new, (typically) emerging markets in an effort to recoup their losses.
Take, for instance, the Tata Nano. In spite of (or, perhaps, due to) a major publicity campaign, the “World’s Cheapest Car” flopped in the Indian market: fewer than 10,000 units are sold every month, instead of the expected 500,000 sales annually. The company seriously misjudged the market by assuming that lower-income consumers would flock to an inexpensive automobile rather than noisy or unsafe motorbikes. Instead, lower-income consumers largely avoided the brand, as no one wanted the stigma of only being able to afford the cheapest car in the world. As a result, in January 2012, managing director P.M. Telang announced that the company was planning to export its cars to Bangladesh, Thailand, Indonesia and Myanmar—markets where it is hoped that owning a cheap car will not be as problematic for consumers.
Tata is not the only car manufacturer reconsidering these markets. Nissan is expected to bring back the lower-end Datsun brand, which as been out of production for the past 30 years, to India, Indonesia, and Russia in 2014, and may consider expanding to Africa soon.
While all brand managers naturally hope that their brand will connect with their intended target immediately, these case studies demonstrate that initial failures can be still be salvaged, and that even seemingly long-gone brands can be brought back successfully. As consumers in emerging markets gain more purchase power, we can expect to see more companies identify opportunities to give brands a second life.