International Marketing: Chapter 9 Key Concepts u What does the stage of economic growth impact? u Evolution of the market process u Stages of economic growth (United Nations) u Role of information technology in economic development u Educational level of women & impact on economic progress u Role of infrastructure u Important considerations for marketing in a developing country u Big emerging markets (BEMs) u Important traits of BEMs u American market regions u Latin American Economic Cooperation u Opportunities & challenges presented by BEMs (strategic implications)

Marketing and Economic Development u 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 u The Internet accelerates economic development u Speeds diffusion of new technologies u Allows for innovative services at a relatively inexpensive cost u Wireless technologies circumvent lack of infrastructure

Objectives of Developing Countries u Industrialization u Economic growth –Better education –Better and more effective government –Elimination of many social inequities –Improvements in moral and ethical responsibilities

Infrastructure and Economic Development u Infrastructure must support expanding population and economy u Paved roads, railroads u Seaports u Communication networks

Important Considerations: Marketing in a Developing Country u Level of market development –Physical infrastructure –Specialized marketing institutions –How much adjustment is necessary u Level of market demand –Literacy, income, living conditions? –What kind of market? F Traditional rural/agricultural sector F Modern urban/high-income sector F Transitional sector (with urban slums)

Big Emerging Markets (BEMs) u The U.S. Department of Commerce projections for the next two decades u Developing and newly industrialized countries u 75% of expected growth in world trade u 50% of the world’s population u 50% of world’s gross domestic product u India, China, Brazil, Mexico, Poland, Turkey, South Africa +

Important Traits of Big Emerging Markets u All geographically large u Significant populations u Sizeable markets for many products u Strong growth rates u Significant programs of economic reform u Regional political drivers u Regional economic drivers u Engender expansion in neighboring markets

American Market Regions u North American Free Trade Agreement (NAFTA) u United States-Central American Free Trade Agreement-Dominican Republic Free Trade Agreement (DR-CAFTA) u Southern Cone Free Trade Area (Mercosur)

Latin American Economic Cooperation u Latin American Integration Association (LAIA) u Carribean Community and Common Market (CARICOM)

Strategic Implications for Marketing u Stage of economic development is important u Big emerging markets present opportunities and challenges u Opportunities: –Large consumer markets –Rapid rates of economic growth –Increasing demand for consumer products u Challenges: –Lack of infrastructure –Unequal income distribution –Low rate of literacy among the poor