International Marketing: Chapter 9 Key Concepts

What does the stage of economic growth impact? Evolution of the market process Stages of economic growth (United Nations) Role of information technology in economic development Educational level of women & impact on economic progress Role of infrastructure Important considerations for marketing in a developing country Big emerging markets (BEMs) Important traits of BEMs American market regions Latin American Economic Cooperation Opportunities & challenges presented by BEMs (strategic implications)

Marketing and Economic Development

The stage of economic growth affects:– Attitudes toward foreign companies– Demand for goods– Distribution systems– Entire marketing process

Evolution of Marketing Process

Stages of Economic Growth(United Nations Categories)

Information Technology and Economic Development

The Internet accelerates economic development

Speeds diffusion of new technologies

Allows for innovative services at a relatively inexpensive cost

Wireless technologies circumvent lack of infrastructure

Objectives of Developing Countries

Industrialization

Economic growth

– Better education

– Better and more effective government

– Elimination of many social inequities

– Improvements in moral and ethical responsibilities

Infrastructure and Economic Development

Infrastructure must support expanding population and economy

Paved roads, railroads

Seaports

Communication networks

Important Considerations:Marketing in a Developing Country

Level of market development

– Physical infrastructure

– Specialized marketing institutions

– How much adjustment is necessary

Level of market demand

– Literacy, income, living conditions?

– What kind of market? Traditional rural/agricultural sector

Modern urban/high-income sector

Transitional sector (with urban slums)

Big Emerging Markets (BEMs)

The U.S. Department of Commerce projections for the next two decades

Developing and newly industrialized countries

75% of expected growth in world trade

50% of the world’s population

50% of world’s gross domestic product

India, China, Brazil, Mexico, Poland, Turkey, South Africa +

Important Traits of Big Emerging Markets

All geographically large

Significant populations

Sizeable markets for many products

Strong growth rates

Significant programs of economic reform

Regional political drivers

Regional economic drivers

Engender expansion in neighboring markets

American Market Regions

North American Free Trade Agreement (NAFTA)

United States-Central American Free Trade Agreement-Dominican Republic Free Trade Agreement (DR-CAFTA)

Southern Cone Free Trade Area (Mercosur)

Latin American Economic Cooperation

Latin American Integration Association (LAIA)

Carribean Community and Common Market (CARICOM)

Strategic Implications for Marketing

Stage of economic development is important

Big emerging markets present opportunities and challenges

Opportunities:– Large consumer markets– Rapid rates of economic growth– Increasing demand for consumer products

Challenges:– Lack of infrastructure– Unequal income distribution– Low rate of literacy among the poor