Matakuliah : J0474 International Marketing
Tahun
: 2009
Emerging Markets
Chapter 7
Learning Outcome
• Marketing and Economic Development.
• Marketing in a Developing Country.
• Developing Countries and Emerging Markets
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Marketing and Economic Development
The sage of economic growth within a country affects
the attitudes toward foreign business activity, the demand
for goods, the distribution systems found within a country,
and the entire marketing process.
Economic development presents a two-sided challenge.
1. A study of the general aspects of economic development
is necessary to gain empathy regarding
the economic climate within developing countries.
2. The state of economic development must be studied
with respect to market potential,
including the present economic level
and the economy’s growth potential.
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Marketing and Economic Development
Economic development is generally understood to mean
an increase in national production that results in an increase
in the average per capita Gross Domestic Product (GNP).
Economic development as commonly defined today, tends to mean
rapid economic growth and increases in consumer demandimprovements achieved rather than centuries.
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1. Stages of Economic Development
Stage 1. The traditional society
Stage 2. The preconditions for takeoff
Stage 3. The takeoff
Stage 4. The drive to maturity
Stage 5. The age of high mass consumption
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1. Stages of Economic Development
The United Nations classifies
a country’s stage of economic development based on
its level of industrialization.
MD Cs (more-developed countries)
LD Cs (less-developed countries)
LLD Cs (least-developed countries)
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2. NIC Growth Factors
(Newly Industrialized Countries)
1. Political stability in policies affecting their development.
2. Economic and legal reforms.
3. Entrepreneurship.
4. Planning
5. Outward orientation.
6. Factors of production.
7. Industries targeted for growth.
8. Incentives to force a high domestic rate of saving
and to direct capital to update the infrastructure,
transportation, housing, education, and training.
9. Privatization of state-owned enterprises (SO Es)
that placed a drain on national budgets.
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3. Information Technology, the Internet,
and Economic Development
A country’s investment in IT is an important key to economic growth.
The cellular phone, the internet, and other advances in IT
open opportunities for emerging economies to catch up with richer ones.
Internet uses :
1. Accelerates the process of economic growth
by speeding up the diffusion of new technologies to emerging economies.
2. Facilitates education, a fundamental underpinning for economic development.
3. The internet allows for innovative services at a relatively inexpensive cost
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4. Objectives of Developing Countries
Industrialization is the
fundamental objective
of most developing
countries.
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Many countries have
deregulated industry,
opened their doors to
foreign investment,
lowered trade
barriers and begun
privatizing SO Es.
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5. Infrastructure and Development
Infrastructure represents
those types of capital goods
that serve the activities of
many industries
The quality of an
infrastructure
directly affects a
country’s economic
growth potential and
their ability of an
enterprise to engage
effectively in
business.
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Included in a country’s
infrastructure are paved
roads, railroads, seaports,
communications, networks,
financial networks and
energy supplies- all
necessary to support
production and marketing.
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6. Marketing’s Contributions
The marketing process is the
critical element in
effectively utilizing
production resulting from
economic growth,
The marketing is
instrumental in laying
the groundwork for
effective distribution.
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The marketing can create
a balance between higher
production and higher
consumption.
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Marketing in a Developing Country
Agglomeration of
related craft and
marketing entities
External Inputs:
•Foreign direct investment (FDI)
•Resources from external partners
•Communication with/access to
external markets.
Cluster Characteristics :,
•Efficiency in supply, distribution
and transportation.
•Specialization of labor.
•Efficiency of training.
•Ongoing links to local markets, suppliers
and inputs.
•Retention of authenticity/distinctiveness
of indigenous products.
•Effective boundary-spanning leader.
•Effective mobilization of embedded ties
•Shared normative governance
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Vibrant Industry Cluster :
•Growth in output
•Enhanced product diversity
•Improved product quality
Dynamic Transformation of BOPM Clusters
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Developing Countries and Emerging Markets
Big Emerging Markets (BE Ms) share a number of important traits.
They :
1. Are all physically large.
2. Have significant populations.
3. Represent considerable markets for a wide range of products.
4. Have strong rates of growth or the potential for significant growth.
5. Have undertaken significant programs of economic reform.
6. Are of major political importance within their regions.
7. Are regional economic drivers.
8. Will engender further expansion in neighboring markets as they grow.
How with emerging markets
in Latin America, Eastern
Europe and the Baltic
States,
Asia Pacific Rim , China,
etc?
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Summary
• The foreign marketer of today and tomorrow must be
able to react to market changes rapidly and to anticipate
new trends within constantly evolving market segments
that may not have existed as recently as last year.
• As nations develop their productive capacity, all
segments of their economics will feel the pressure to
improve.
• Emerging markets create new marketing opportunities
for MN Cs as new market segments evolve.
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