Chapter-009R

225Chapter9–EmergingMarketsTeachingObjectivesBarringamajorpoliticalandeconomicshiftinthedevelopingworld,evidenceisstrongthatthroughthefirstdecadeofthe21stcenturyemergingmarketswillbewherethemajorityofworld’stotaltradegrowthwilloccur.Growthwilloccuronavarietyoffronts:developmentofinfrastructure,opportunitiesofforeigninvestors,andaspectaculargrowthoftheconsumermarket.Theeventstakingplaceinemergingmarketsmakeinternationalbusinessexcitingandwillcreateopportunitiesandchallengesformultinationalfirms.Theimpactoftrendsthataresweepingthedevelopingcountries—transitionfromsocialisttomarket-driveneconomies,theliberalizationoftradeandinvestmentpoliciesindevelopingcountries,thetransferofpublic-sectorenterprisetotheprivatesector,andtherapiddevelopmentofregionalmarketalliances—shouldbetheemphasisofthischapter.Theemergingmarkets,especiallytheBEMs—thoseidentifiedbytheDepartmentofCommerceasbigemergingmarkets—willbethecenterpieceofglobaleconomicgrowth.Theteachingobjectivesofthischapterareto:1)Stresstheimportanceofthepoliticalandeconomicchangesaffectingglobalmarketing.2)Illustratetheconnectionbetweentheeconomiclevelofacountryandtheopportunitiescreatedaseconomicgrowthoccurs.3)ExplorethevariousdevelopingmarketsintheAmericas,EasternEuropeandtheBalticStates,andAsia.4)ExaminetheideaoftheDepartmentofCommerce’sBigEmergingMarkets.5)DiscussthegrowthofnewmarketsegmentsandtheemergingmiddleclassintheBEMsandotheremergingmarkets.CommentsandSuggestions1.Thegrowingimportanceofnewmarketsegmentsisreflectedinthenumberofstudiesonconsumersthatarebeingconducted.ArecentRoperStarchWorldwideglobalstudyof40,000consumersin40countriesidentifiedfourmajorstylesofshopping.DealMakers(29%),wholovetheprocessofbuying;PriceSeekers(27%),whoplaceprimaryvalueontheproducttheyare226buying;BrandLoyalists(23%),whopurchasenamebrandsandremaintruetothem;andLuxuryInnovators(21%),thosewhoseekthenew,prestigiousbrands.227Thefollowingisabreakdownbycountry.BrandLoyalistsPriceSeekersLuxuryInnovatorsDealMakersU.S.11.3%,35.5%,16.6%36.6%Mexico19.123.4,19.935.0China27.923.422.825.7India34.67.435.822.2Japan23.541.07.927.1SaudiArabia14.88.934.440.3France19.545.58.526.6Germany16.943.715.721.9Spain27.034.418.119.6U.K.28.727.217.525.5CzechRepublic23.926.925.722.61LectureOutlineI.GlobalPerspective:Wal-Mart,Tide,andThree-SnakeWineII.MarketingandEconomicDevelopmentA.StagesofEconomicDevelopmentB.NICGrowthFactorsC.InformationTechnology,theInternet,andEconomicDevelopmentD.ObjectivesofDevelopingCountriesE.InfrastructureandDevelopmentF.Marketing’sContributionsIII.MarketinginaDevelopingCountryA.LevelofMarketDevelopmentB.DemandinaDevelopingCountry1Source:“HowtheWorldShops,”AdvertisingAge,June5,1995,p.3228IV.DevelopingCountriesandEmergingMarketsA.TheAmericasB.EasternEuropeandtheBalticStatesC.AsiaD.NewestEmergingStatesV.StrategicImplicationsforMarketingDiscussionQuestions1.Define:UnderdevelopedBEMEconomicdevelopmentInfrastructureNICsEconomicdualism2.“ItispossibleforaneconomytoexperiencegrowthasmeasuredbytotalGNPwithoutacommensurateriseofthestandardofliving.”Discussfully.Acountry’s“grossnationalproduct”isthetotalofitseconomicoutputandassets.However,theGNPfigureinnowayindicatesthemannerinwhichthiswealthisdistributed.Onepercentofthepopulationmaycontrol80percentofthewealth,whichisthecaseinmanyso-called“underdeveloped”countries.Thus,thoughtheeconomymayexpandandtheGNPincreasegreatly,thelargestpercentageofthepopulationmaynotexperienceacommensurateriseintheirstandardofliving.Thereisalsotheproblemofpopulationgrowth.Thoughtotalnationalincomemaygreatlyincrease,theaveragepercapitaGNPwilldeclineifpopulationgrowthisextremelyhigh.3.Whydotechnicalassistanceprogramsofmoreaffluentnationstypicallyignorethedistributionproblemorrelegateittoaminorroleindevelopmentplanning?Explain.Ifanunderdevelopedcountrycannotproduceacertainproduct,itdoesnothavetoworryaboutdistributingthatproduct.Thefirstaimofatechnicalassistanceprogramistoseethatthecountryhasthecapacitytoturnoutthedesiredproduct.Butsometimesproductionissooveremphasizedthatthemarketingendisalmostcompletelyignored.Thereisalsotheproblemoftransferabilityofmarketingskillsandtechniques.Itiseasiertoteachtheproductionofaproductthanthemarketingofthesameproduct.Culturalandtraditionalbiasagainsttheconceptofmarketinginmanyforeigncountries229oftenmakesthemoreaffluentnationratherreluctanttopressitsideasonmarketingupontheunderdevelopednationitisaiding.4.Discusseachofthestagesofevolutionofthemarketingprocess.Illustrateeachstagewithaparticularcountry.Themarketinginstitutionswhichdevelopasacountrypassesfromonestagetoanotherareasfollows:AbriefstudyofExhibit9-3willrevealroughlythestateofmarketingateachstageofeconomicdevelopment.Asageneralization,anationdevelopsandindustrygrowswithmarketinginstitutionsevolvingtofulfillthedistributionneedscreatedateachnewlevel.Themoredevelopedaneconomy,thegreaterthevarietyofmarketingfunctionsdemanded,andthemoresophisticatedandspecializedtheinstitutionsbecometoperformmarketingfunctions.Alsodevelopedarethemyriadfacilitatingagenciesrequiredtosupportagrowingecon