Emerging markets
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EMERGING MARKETS. Chapter 9. Global Perspective. Companies establish presence in “Emerging Markets” worldwide Wal-Mart Superstores are successful in China Proctor & Gamble Tide offered in bulk amounts in China was not a success Humidity issues Paper towels and diapers were not successful

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Emerging markets

EMERGING MARKETS

Chapter 9


Global perspective

Global Perspective

  • Companies establish presence in “Emerging Markets” worldwide

    • Wal-Mart

      • Superstores are successful in China

    • Proctor & Gamble

      • Tide offered in bulk amounts in China was not a success

        • Humidity issues

      • Paper towels and diapers were not successful

        • Paper towels were in large packages which caused problems for consumers to store in smaller apartments

        • Diapers were too expensive and seen as a luxury


Marketing economic development

Marketing & Economic Development

  • Economic level of a country

    • Most important environmental element for foreign marketers to consider and adapt

  • Stages of Economic Development

    • Walt Rostow’s 5 stage model:

      • 1. The Traditional Society (economically underdeveloped)

      • 2. The Preconditions for take-off (underdeveloped)

      • 3. The Take-off (underdeveloped)

      • 4. The Drive to Maturity

      • 5. The Age of High Mass Consumption


Marketing economic development1

Marketing & Economic Development

  • Stages of Economic Development

    • The United Nations 3 stage model (based on level of industrialization)

      • 1. MDCs (more developed countries)

      • 2. LDCs (less developed countries)

      • 3. LLDcs (least-developed countries)

        • Exhibit 9.1 pg. 246 “Economic and Social data”


Marketing economic development2

Marketing & Economic Development

  • Stages of Economic Development

    • NIC’S:

      • 1. Some countries do not fit the UN model exactly (not an MDC or LDC). These countries are commonly referred to Newly Industrialized Countries (NICs)

      • 2. What factors contribute to the economic growth of NICs?


Economic growth

Economic growth

  • Factors influencing economic growth:

    • 1. Information technology, internet

      • Crossing Borders 9.1 pg. 251 “The Benefits of Information Technology in Village Life”

    • 2. Investment in the Infrastructure

      • Communication, transportation systems, energy sources…

      • Exhibit 9.2 pg. 252

      • Crossing Borders 9.2 pg. 253 “Infrastructure: India”

    • 3. Marketing Contributions

      • Countries that are more “marketing” driven vs. “production” driven are better poised for economic development and foreign investments


Marketing in a developing country

Marketing in a Developing Country

  • What things to consider when marketing in developing countries

    • 1. Level of Market Development

      • Parallels Stages of Economic Development

        • See Exhibit 9.3 pg. 255

    • 2. Level of Demand

      • “Economic Dualism” - Consider differences in demand between modern sectors and traditional sectors within a country’s economy


Developing countries and emerging markets

Developing Countries and Emerging Markets

  • Consider the “BEM’s” (Big Emerging Markets)

    • BEM’s share these characteristics:

      • Physically large

      • Significant Populations

      • Represent considerable markets with wide range of products

      • Strong rates of growth

      • Undertaken significant economic reform programs

      • Major political importance within their region

      • Considered to be “regional economic drivers”

      • By their growth, will create further expansion in neighboring markets

        • (Exhibit 9.5 pg. 259 – the BEM’s)


Understanding opportunity and challenges

Understanding Opportunity and Challenges

  • Every country or group of countries has its opportunities and challenges:

    • 1. The Americas (ex. 9.6 pg. 261)

      • North America, Latin America

    • 2. Eastern Europe and the Baltic States

      • Exhibit 9.7 pg. 262

      • Exhibit 9.8 pg. 263 “Eastern European Markets”


Understanding opportunity and challenges con t

Understanding Opportunity and Challenges (con’t)

  • 3. Asia

    • Pacific rim, China, Hong Kong, Taiwan, India

      • Exhibits 9.9 and 9.10

  • Newest Emerging markets

    • Vietnam

      • Growth due to in part the NTR status with U.S.

    • South Africa

      • Growth due to ending of apartheid


  • Strategic implications for marketing

    Strategic Implications for Marketing

    • Consider opportunities to market products and services in emerging markets:

      • As countries develop, incomes increases, populations shift, expectations for a “better life” adjust to higher standards

        • See ex. 9.11 and 9.12 pgs. 272 & 273)


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