Chapter 9
Emerging Markets
Emerging Markets
Economic Development - an increase in
production that results in an increase in a nation’s
GDP.
I. Theories of Economic Development
A) Rostow’s Modernization Theory
1) Traditional Society
2) Transitional Society
3) Take-off
4) Technological Maturity
5) High Mass Consumption
Emerging Markets
Theories of Economic Development (cont.)
B) Radical Theories
C) Institutional theories
II.
NICs
III. Infrastructure and Development
United Nations Economic
Development System
More-Developed Countries (MDC)
Less-Developed Countries (LDC)
Least-Developed Countries (LLDC)
Newly Industrialized Countries
Growth Factors
•
•
•
•
•
•
•
•
•
•
•
Political Stability
Economic, Political, and Legal Reforms
Entrepreneurship
Central Planning
Outward Orientation
Factors of Production
Industries Targeted for Growth
Financial Incentives
Privatized State-Owned Enterprises
Large, Accessible Markets
Low Tariffs
Infrastructure of Selected Countries
Highways*
(paved km)
(000)
Railways
(km)
(000)
Trucks
and Buses
in Use (000)
Electricity
Production
(million kwh)
United States
6,243.2
214.3
42,298
3,268,200
Brazil
1,670.1
22.1
2,450
222,195
Japan
1,115.6
26.5
22,694
857,273
Colombia
12.6
3.3
4,154
36,000
Germany
618.2
43.9
4,145
440,400
8.3
2.7
110
3,000
Mexico
242.3
26.5
3,679
150,800
Spain
318.0
15.3
2,959
141,000
India
1,100
62.4
1,839
380,100
South Africa
55.4
21.4
1,597
182,400
China
170
58.3
4,927
983,700
Country
Kenya
*Includes unpaved and paved.
SOURCES: "Big Emerging Markets," Business America, Special Issue 1994, pp. 59-65. For additional
information, see “International Marketing and Statistics, 1997 (London: Euromonitor Publications, 1997) and
"Indicators of Market Size for 115 Countries,” Crossborder Monitor August 27, 1997, p.4.
Emerging Markets
IV.
Marketing in a Developing Country
1) Level of Marketing Development
2) Demand
V.
Big Emerging Markets
VI. The Americas
VII. Eastern Europe
VIII. Asia
Common Traits of Big Emerging Markets
•
Are physically large.
•
Have significant populations.
•
Represent considerable markets for a wide
range of products.
•
Have strong rates of growth or the potential for significant
growth.
•
Have undertaken significant programs or economic reform.
•
Are of major political importance within their regions.
•
Are "Regional Economic Drivers".
•
Will engender further expansion in neighboring markets as they
grow.
Big Emerging Markets
Population
(millions)
GDP
($ billions)
GDP
(per capita)
Trade*
($ billions)
Asia
ASEAN^
413.7
CEA (Chinese Economic Area)‡ 1,188.0
India
870.0
South Korea
43.7
$ 508.4
435.6
238.3
296.8
$ 12,192
367
274
6,799
$ 464.6
135.9
42.2
150.6
89.5
33.1
156.8
333.3
228.8
409.2
3,722
6,912
2,609
85.9
21.2
55.8
39.8
114.8
2,882
17.1
38.4
58.8
83.6
156.0
2,178
2,747
35.6
38.9
33.4
20.3
43.5
60.4
1,303
2,984
12.3
25.2
Latin America
Mexico
Argentina
Brazil
Africa
South Africa
Europe
Poland
Turkey
Possible Additions
Colombia
Venezuela
* Imports and exports.
^ASEAN includes Brunei, Indonesia, Malaysia, Philippines, Singapore, Thailand, Vietnam.
‡CEA consists of the provinces of Southern China, Hong Kong, and Taiwan.
SOURCES: "Big Emerging Markets," Business America, Special Issue 1994, pp. 59-65. For additional
information, see "Indicators of Market Size for 115 Countries,” Crossborder Monitor, August 27, 1997, p.4.
The Americas
GREENLAND
(DENMARK)
Alaska
(United States)
CANADA
Montreal
Toronto
San Francisco
Los Angeles
UNITED
STATES
Chicago
Dallas
Detroit
Miami
CUBA
Hawaii
(United States)
GUATEMALA
HONDURAS
ST. SALVADOR
NICABAGUA
COSTA RICA
PANAMA
ECUADOR
HAITI
JAMAICA
VENEZUELA
COLOMBIA
BRAZIL
PERU
BOLIVIA
PARAGUAY
PACIFIC OCEAN
GUYANA
SURINAME
FRENCH GUIANA
Belo Horizonte
Rio de Janeiro
Sao Paulo
URUGUAY
Buenos Aires
Economic and Social Data for
Selected Countries
Food
($ million)
Country
United States
Consumer Spending
Hospital Number
Percent
Clothing Percent Beds per
of
of
($ million)**
of
(000s)
Doctors
Total*
Total* Population
Literacy Tourism
(Percent) Receipts
($ million)**
$ 741,340
18.1%
$221,800
5.4%
5.1
560,300
99.5%
$45,579
Argentina
16,952
38.8%
2,332
5.3%
5.3
96,000
93.9%
2,336
Brazil
81,934
31.2%
12,799
4.9%
3.5
169,488
77.8%
1,559
9,264
35.2%
1,597
6.1%
1.5
29,353
85.2%
410
Mexico
57,900
33.7%
12,066
7.0%
0.7
130,000
87.6 %
4,355
Venezuela
15,501
43.2%
3,679
10.2%
2.6
*28,400
84.7%
36.5
Colombia
* Percent of all consumer spending.
** In U.S. dollars, basis 1988.
Eastern Europe and the Baltic States
ESTONIA
LATVIA
Baltic
Sea
LITHUANIA
POLAND
CZECH
REPUBLIC SLOVAKIA
SLOVENIA
HUNGARY
ROMANIA
Black
Sea
BOSNIA AND
HERCEGOVINA
YUGOSLAVIA
BULGARIA
MACEDONIA
Tyrmenian
Sea
ALBANIA
GREECE
Aegean
Sea
TURKEY
Eastern European Markets
Population
GDP
GDP
Exports
Imports
(millions) ($ billions) ($ per capita) ($ millions) ($ millions)
9-11
Albania
Bosnia/
Herzegovina (*)
Bulgaria
Croatia (*)
Czech Republic(**)
Hungary
Macedonia(*)
Poland
Romania
Slovakia(**)
3.28
$ 2.7
$ 820
$ 80
$ 147
2.66
9.00
4.78
10.30
10.30
2.05
38.40
22.80
5.27
0.8
10.1
26.3
52.0
45.7
4.8
135.3
34.8
20.7
300
1,220
5,600
5,050
4,505
2,400
3,500
1,544
1,763
NA
4,303
4,633
14,575
19,100
1,244
25,751
8,385
12,063
NA
3,271
7,582
16,284
15,224
1,420
42,307
10,131
13,003
(*) Former republics of Yugoslavia.
(**) Former republics of Czechoslovakia.
Irwin/McGraw-Hill
Sources: “Indicators of Market Size for 115 Countries,” Country Monitor,
December 25, 2000; and International Trade Statistics yearbook (New York:
United Nationa, 2999).
Asia
N. K0REA
JAPAN
S. K0REA
CHINA
NEPAL
TAIWAN
BHUTAN
Hong Kong
MYANMAR
INDIA
LAOS
PAKISTAN
BANGLADESH
VIETNAM
CAMBODIA
THAILAND
BRUNEI
MALAYSIA
SRI LANKA
SINGAPORE
INDONESIA
INDIAN OCEAN
PHILIPPINES
Asian Markets - Selected Countries
Population
GDP
GDP
Exports
Imports
(millions) ($ billions) ($ per capita) ($ millions) ($ millions)
Australia
18.5
$ 411.0
$ 22,000
$ 52,966
$ 61,347
1,230.1
917.7
746
148,755
132,007
6.5
173.6
26,701
173,546
192,764
India
955.2
437.2
458
30,537
34,456
Indonesia
199.9
215.0
1,076
43,285
39,456
Japan
126.2
4,199.5
33,277
443,000
335,871
South Korea
46.0
476.0
10,361
125,365
135,153
Taiwan
21.5
283.3
13,000
111,837
103,652
China
9-13
Hong Kong
Irwin/McGraw-Hill
SOURCES: “Indicators of Market Size for 115 Countries,”
Country Monitor. December 25, 2000; and S.T.E.T.
Capitalism with Chinese Characters
Jiang Zemin’s Reform Agenda
• Restructure state enterprises. SOEs account for about twofifths of the industrial output but soak up four-fifths of
investment.
• Strengthen financial markets. Expand and ensure the
integrity of capital markets.
• Sell state assets. Sell off all but 1,000 of China’s 305,000
state enterprises and allow some to go bankrupt.
• Build social services. Create housing, pension programs,
and other services to relieve burdens on SOEs and to care
for millions who may lose jobs.
• Slash tariffs. Reduce average tariffs to 17 percent in 1997
and to 15 percent by 2000 as part of China’s bid to join the
World Trade Organization.
Living Standards in Selected Countries
Households
(000)
9-16
Brazil
Chile
China
Colombia
Ecuador
Hong Kong
India
Indonesia
Japan
Peru
Philippines
Singapore
South Africa
United States
Irwin/McGraw-Hill
38,434
3,216
357,064
8,482
2,626
1,797
185,048
43,065
40,548
5,057
12,750
815
13,300
100,308
Persons per
Household
4.05
4.35
3.40
4.14
4.36
3.44
5.00
4.50
3.09
4.65
5.37
3.67
3.37
2.62
Percent of Households
Piped
Flush
Electric
Water
Toilers
Lighting
73%
70%
90%
76%
52%
98%
10%
12%
93%
49%
NA
48%
96%
99%
76%
59%
NA
64%
33%
80%
5%
15%
65%
43%
NA
42%
35%
99%
69%
88%
NA
87%
62%
93%
16%
30%
98%
48%
NA
37%
90%
99%
SOURCES: For additional data, see Demographic Yearbook 1997
(New York: United Nations, 1997); and International Marketing Data
Statistics, 18th ed. (London: Euromonitor Publications, 1997).
Which of the Following have you
Purchased in the Past Three Months?
Product
Percent
in
United
States
Percent
in
Australia
Percent
in
Brazil
Percent
in
Germany
Percent
in
Japan
Percent
in
United
Kingdom
Soft drinks
96
90
93
83
91
94
Fast-food
94
94
91
70
86
85
Athletic footwear
59
40
54
33
30
49
Blue jeans
56
39
62
45
42
44
Beer*
46
50
60
46
57
57
Cigarettes*
24
33
30
38
39
40
* Among adults 18+. Source: Yankelovich Clancy Shulman.
SOURCE: Nancy Giges, "Global Spending Patterns Emerge,"
Advertising Age, November 11, 1991, p. 64.
Consumption Patterns in Selected Countries
(percent of household expenditures)
U.S.
Food
Germany Singapore
Mexico
Poland
Iran
Kenya Thailand India
10%
12%
19%
35%
29%
37%
38%
30%
52%
6%
7%
8%
10%
9%
9%
7%
16%
11%
Gross rent
18%
18%
11%
8%
6%
23%
12%
7%
10%
Medical care
14%
13%
7%
5%
6%
6%
3%
5%
3%
8%
6%
12%
5%
7%
5%
10%
5%
4%
Transport/
communications 14%
13%
13%
12%
8%
6%
8%
13%
7%
Appliances/
other durables
31%
30%
25%
35%
14%
22%
24%
13%
Clothing
Education
30%
SOURCE: For additional data, see Ricardo Sookdeo, "The New global consumer."
Fortune, Autumn-Winter 1993, pp. 68-72.
Living Standards in Selected Countries
9-19
Country
Household
(000)
Brazil
Chile
China
Colombia
Ecuador
Hong Kong
India
Indonesia
Japan
Peru
Philippines
Singapore
South Korea
United States
38,434
3,216
357,064
8,482
2,626
1,797
185,048
43,065
40,548
5,057
12,750
815
13,300
100,308
Irwin/McGraw-Hill
Persons per
Household
4.05
4.35
3.40
4.14
4.36
3.44
5.00
4.50
3.09
4.65
5.37
3.67
3.37
2.62
Percent of Households
Piped
Flush
Electric
Water
Toilets
Lighting
73%
70%
90%
76%
52%
98%
10%
12%
93%
49%
NA
48%
96%
99%
76%
59%
N/A
64%
33%
80%
5%
15%
65%
43%
N/A
42%
35%
99%
69%
88%
N/A
87%
62%
93%
16%
30%
98%
48%
N/A
37%
90%
99%
SOURCE: Demographic Yearbook 1997 (New York: United
Nation, 1997); and International Marketing Data and Statistics,
1997 (London: Euromonitor Publication, 1997)