How To Profit From Neglected Markets Around The Globe
Monday, July 8, 2013
Neglected markets are potential customers for a company’s existing products which managers and marketers routinely overlook or write off altogether, as these markets are either too small in terms of revenue potential or too costly in terms of the operation expenses required to tap to them. Or at least, so it was thought at the time the decision to write off these customers was made.
That may be a big mistake, as the parameters of the cost-revenue equation may change by creating the right business partnerships or by altering the attributes of the product offering.
Japan’s market for supplemental health and life insurance products is a case in point. For years, local insurance giants overlooked this market, because they thought it was too small to be profitable. Foreign insurers thought the market was too costly to tap, due to strict government regulations.
But that wasn’t the case with AFLAC (NYSE:AFL), an American leader in supplemental insurance. The company entered the market in 1974 by forging a number of strategic alliances with domestic insurers, including the second largest insurer, Daichi Mutual Insurance, to operate medical and nursing services in the country.
AFLAC was among the first insurance companies to introduce the “insurance ladies,” that is, they recruited women to sell insurance door-to-door, a program modeled after Avon’s “cosmetic ladies.”