Chapter 9 Emerging Markets

Countries

such as China, South Korea, Poland, Argentina, Brazil, Mexico, and India are undergoing extensive changes in their economies and emerging as vast markets.

Marketers must consider

Levels of economic development

GDP per capita Levels of income and wealth

Non-economic factors

Newly Industrialized Countries (NICs)

Countries that are experiencing rapid economic expansion and industrialization.

NIC Growth Factors

1. Political stability in development policies 2. Economic and legal reforms

3. Entrepreneurship
4. Planning 5. Outward orientation

NIC Growth Factors

6. Factors of production

7. Industries targeted for growth 8. Privatization of stateowned enterprises (SOEs) 9. Accessibility of large markets

Development of Information Technology

Investment in information technology (IT) is important for economic growth. Leapfrog technology Wireless technology reduces the need for infrastructure The Internet allows for inexpensive services

Marketing Needs Infrastructure

Does

the Infrastructure exist?

Utilities Communications Transportation Is the Infrastructure Reliable?

Countries begin to lose economic development ground when their infrastructure cannot support an expanding population and economy

Marketing in a Developing Country

Level of market development Distribution channels Facilitating agencies

Level of Demand Economic Dualism Traditional Modern

Big Emerging Markets

Traits of Big Emerging Markets: 1. Physically large 2. Significant populations 3. Considerable markets for a wide range of products 4. Have strong rates of growth or the potential for growth

Big Emerging Markets

5. Have undertaken economic reform 6. Are of major political importance in their regions 7. Are regional economic drivers 8. Support growth in neighboring markets

The Americas

Eastern Europe

Eastern Europe and the Balkans

Life Pop. expect (million) 77.8 3.6

Country Albania

GDP Import Export 6,400 4.8 1.5

Czech Rep. Poland Slovenia Turkey Ukraine

26,800 17,800 30,800 12,900 7,800

145.1 213.9 38.1 204.8 82.5

150.5 190.5 34.3 141.8 64.9

76.6 75.4 76.7 73.1 68.1

10.2 38.5 2.0 71.9 46.0

www.cia.gov/library/publications/the-world-factbook/

Asia

Asia
Life Pop. expect (million) 44.2 32.7

Country Afghanistan

GDP Import Export 800 4.9 0.33

Cambodia China India Japan Laos Philippines Singapore

2,100 6,100 2,900 35,300 2,100 3,400 52,900

6.4 1,156 288 696 1.28 63.4 307

4.6 1,465 178 777 1.03 50.9 349

61.7 73.2 69.3 82 56.3 70.8 81.9

14.2 1,330 1,147 127 6.7 96 4.6

www.cia.gov/library/publications/the-world-factbook/

Africa

Africa
Life Pop. expect (million) 52.6 15.3 71.9 81.7 46.5 146 40.9 6.3 48.9 48.8

Country Burkina Faso Egypt

GDP Import Export 1,300 1.7 0.8 5,500 56.4 33.4

Nigeria Sierra Leone South Africa

2,200 700 10,400

46.4 0.56 87.3

83.1 0.22 81.5

www.cia.gov/library/publications/the-world-factbook/

Strategic Implications for Marketing

As a country develops:
incomes rise population concentrations shift expectations for a better life lead to higher standards new infrastructures evolve social capital investments are made

When incomes rise, new demand is generated New market segments are created.

Strategic Implications for Marketing

Knowledge of the stage of market development is important in helping to develop marketing strategies that are tailored to the level of economic development.

Strategic Implications for Marketing

Country
Population
(millions)

GDP
per capita

Cars

TVs

PCs
per 1000

per 1000 per 1000

Canada China India Kenya

33.4 35,700 1,321.9 1,129.8 36.9 7,800 3,800 1,200

581 8 8 13

655 306 58 22

460 19 6 6

Mexico

108 10,700

151

241

69

It is suggested that

A person earning $250 annually in a developing country can afford Gillette razors At $1,000 a year he or she can become a Sony television owner A Nissan or Volkswagen could be possible with a $10,000 income Whirlpool estimates that in Eastern Europe a family with an annual income of $1,000 can afford a refrigerator, and with $2,000 they can buy an automatic washer as well.

It is suggested that

At the $5,000 per capita mark, people are more brand conscious and forego local brands for foreign brands they recognize At $10,000, they join those with higher incomes who are exposed to same global information sources. They join the Club of consumers with homogeneous demands who share a common knowledge of products and brands. They become global consumers

The End

Country Ukraine Canada Turkey South Africa Cambodia

Land Lines Cell phones 12,858,000 21,000,000 18,413,000 4,642,000 37,500

Land line / Cell 55,240,000 0.23 18,749,000 61,976,000 42,300,000 2,583,000 1.12 0.30 0.11 0.01

https://www.cia.gov/library/publications/the-world-factbook/index.html