New product pricing strategy in emerging markets

Abstract

Rising costs and availability of improved quality labor force in eastern and middle-eastern economies prompted big firms to set their eyes toward emerging economies in this changing playfield. However, emerging nations entrepreneurial firms have posed certain serious challenges to established firms of west and at times even shaking the firm foundations by providing similar services or products at much cheaper prices and of equivalent quality if not better. As part of this research term paper, we looked at various pricing mechanism and we try to understand how established firms can come up with pricing strategies and replicate the success in emerging economies. One such interesting example is Cisco Systems vs Huawei. Huawei has been gaining market share successfully however Cisco systems have struggled to keep up its dominance in Network equipments. As part of this research we worked with Cisco Systems Product marketing team and approached various account managers for their inputs via in-person interviews.