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EMERGING MARKETS

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

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  1. EMERGING MARKETS Chapter 9

  2. 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

  3. 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

  4. 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”

  5. 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?

  6. 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

  7. 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

  8. 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)

  9. 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”

  10. 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

  11. 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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