Over winter break I traveled to Kampala, Uganda’s capital city, to explore how businesses in emerging markets can use marketing strategies to stand out from competitors—a concept known as differentiation. As a marketing and global affairs major, I have always sought ways to merge the two fields in impactful and creative ways. This curiosity led to my global affairs capstone project and business honors thesis, where I identified a significant gap in knowledge on product and service differentiation in Africa.

Differentiation has been a key competitive strategy since American businessman and Harvard professor Michael Porter defined it as a firm's effort to be unique in ways valued by buyers. Despite Africa being called the "last frontier" of global brands — a term that highlights its position as the final major market for global brands to enter and develop, my research found only six papers on differentiation in African markets, with just one focused on Uganda.

Given Africa's young population and rapid economic growth, understanding differentiation strategies is crucial as the region attracts global and local brands alike. Reports indicate that developing economies now drive over 70 percent of global growth, with sub-Saharan Africa home to six of the world’s 10 fastest-growing economies from 2001 to 2015. To assess the effectiveness of differentiation strategies, I interviewed 26 business owners from sports shops, spas, mini-markets, craft studios, pharmacies, medical suppliers and beauty companies.

Through these interviews and observations, I began to understand how people in Uganda incorporate their culture into their businesses. Before I visited Uganda, several Uganda natives, researchers and other Africans I knew described Ugandans as kind, welcoming and caring toward those around them.

These are traits I frequently observed when visiting their homes, churches, cultural events and even their places of work. For instance, one entrepreneur we talked to was nicknamed “Uncle” — a name signifying respect in the community — as he cared more about his customers than making profits. Uncle said that “relationships are more important than price.” In other interviews, I learned that this level of customer care takes precedence over competing with competitors. Some entrepreneurs go so far as to refer customers to competitors if they lack a product.

Another key insight from my trip to Uganda was the strong price sensitivity among customers. Without exception, when asked, “What differentiates you from your competitors?” entrepreneurs readily listed various unique aspects of their businesses. However, when questioned about whether this differentiation allowed them to charge a premium, they unanimously responded with a firm “no.” The ultimate goal is to attract customers, and even a slight price increase could drive them away. This pricing constraint is largely shaped by Uganda’s economic conditions, which many entrepreneurs describe as struggling and lacking opportunities. As a result, they prioritize sales volume over higher profit margins. Seeing this approach firsthand reshaped my understanding of business strategy, especially in contrast to Western models that emphasize profit-driven differentiation.

This project deepened my understanding of how emerging markets operate differently from Western markets. They tend to move at a slower pace, and product differentiation is essential, with customer care ranking as the second most important factor for customer loyalty after price. However, much more research is needed to grasp Uganda’s small business market structure, especially since most businesses operate informally and are not included in databases. Further, entrepreneurship in Uganda is one of the few viable paths to economic stability, providing jobs not only for business owners but also for their families and communities. Many entrepreneurs cited a lack of economic opportunities in Uganda as their motivation for starting a business, and some aim to create jobs to keep community members off the streets.

As a future professional, understanding how differentiation and pricing strategies interact to create competitive advantages will help me develop global marketing strategies that resonate with diverse markets. The realization that informal businesses are just as vital as formal ones reinforces the importance of considering all economic players when designing marketing strategies. Recognizing that emerging markets operate differently from Western ones will enable me to craft more effective business solutions tailored to these unique environments.

As a consumer, these insights will make me more discerning by deepening my appreciation for how culture and resilience shape entrepreneurship. I will be more mindful of the challenges businesses face, particularly in developing economies, and the significance of supporting both formal and informal enterprises. As a global citizen, I now recognize the crucial role emerging markets play in shaping the next generation of consumers. With Africa’s rapidly growing economy and young population, it is essential to understand and engage with these markets responsibly. Entrepreneurship is not just a business pursuit in places like Uganda; it is a lifeline that fosters job creation and community development. By understanding and appreciating these dynamics, I aspire to contribute to a more inclusive and globally aware business landscape.

Notre Dame senior Monay Licata will graduate in May with degrees in marketing and global affairs. After graduation, she will work as a financial technology consultant for the Cleveland, Ohio-based firm Clearsulting.

Originally published by Monay Licata at keough.nd.edu on April 17, 2025.