MARKETING AND ECONOMIC
DEVELOPMENT
Here we talk about rapid
economic growth, increases in
consumer demand, and
achievements in decades rather
than centuries.
Stages of Economic
Development
The United Nations classifies it
according to its level of
industrialization into three
categories:
MDCs (more-developed
countries)
Industrialized countries with high
per capita income such as:
Canada England France
Germany Japan
LDCs (less-developed
countries).
Industrially developing countries
just entering world trade, many
of which are in Asia and Latin
America, with relatively low per
capita incomes.
Produced by: Liliana Ovando Pérez | Reference: Cateora, P.R., Gilly, M.C. y Graham, J.L. (2011) International Marketing. 15 ed. McGraw-Hill Irwin. (pp. 248-279)
Economic Growth Factors
The factors that existed to some
extent during the economic
growth of NICs were as follows:
The final factors that have been
present are large, accessible
markets with low tariffs.
Information Technology,
the Internet, and
Economic Development
The fact that countries invest
in all kinds of information
technology is an important
key to their economic growth.
Objectives of Developing
Countries
Industrialization is the
fundamental objective of
most developing countries.
LDCs (less-developed
countries).
Industrially developing countries
just entering world trade, many
of which are in Asia and Latin
America, with relatively low per
capita incomes.
Political stability Factors of production MARKETING IN A
DEVELOPING COUNTRY
Economic and legal reforms Industries targeted for growth
Marketing must be tailored to
each situation, tailored to each
Entrepreneurship Incentives
set of circumstances.
Planning Privatization of state-owned
enterprises (SOEs) that had
Level of Market Development
placed a drain on national
Outward orientation
budgets
The level of market development
roughly parallels the stages of
It can accelerate the process of economic growth by expediting economic development
Internet
the diffusion of new technologies to emerging economies.
Mobile They are responsible for greatly reducing the need to install Economic cooperation and assistance,
phones and expensive telecommunications infrastructure to bring phone technological change and political, social and
other wireless service to areas without service. cultural factors can cause significant
technologies deviations in the evolutionary process
A better education The more developed an economy, the greater
the variety of marketing functions that are
demanded and the more sophisticated and
Most countries see economic Improvements in moral and ethical specialized institutions become performing
growth as the achievement of responsibilities marketing functions.
social and economic objectives, Good governance that is effective
which is why their development
expectations are the following: Elimination of many social inequities Demand in Developing
Countries
Infrastructure and Marketing’s Contributions
Development Estimating the market potential
in less developed countries is
Industrialization is the Marketing is considered an arbiter of difficult as most of the difficulty
fundamental objective of the economy between productive arises from the coexistence of
most developing countries. capacity and consumer demand. three different types of markets
in each country:
The quality of an infrastructure can Sometimes they do not consider it
affect the economic growth potential of meaningful to those responsible for
a country and / or company. planning.

BIG EMERGING MARKETS
(BEMS)
Big emerging markets share a
number of important traits. They:
Are of major political importance
within their regions.
Are “regional economic drivers.”
Will engender further expansion in
neighboring markets as they grow.
The BEMs differ from other developing
countries in that they import more than
smaller markets and more than
economies of similar size.
THE AMERICAS
Natural business partners within the
Americas:
United States Canada Central America
Nicaragua
Produced by: Liliana Ovando Pérez | Reference: Cateora, P.R., Gilly, M.C. y Graham, J.L. (2011) International Marketing. 15 ed. McGraw-Hill Irwin. (pp. 248-279)
Are all geographically large
Have significant populations.
Represent sizable markets for a wide
range of products
Have strong rates of growth or the
potential for signifi can’t growth
Have undertaken signifi cant
programs of economic reform.
North American Free Trade
Agreement (NAFTA
The United States and Canada
had the largest bilateral trade
agreement in the world; this
before (NAFTA).
Each was the other's most
important business partner.
SouthAmerica
United States–Central American Free
Trade Agreement– Dominican Republic
Free Trade Agreement (DR-CAFTA)
In August 2005, the law of a comprehensive
free trade agreement between:
Guatemala Dominican Republic
It is centered in the capital city
and boasts jet airports,
international hotels, new
factories, and an expanding
westernized middle class.
Work in the field like they
always have
It includes those who move
from the countryside to the big
cities.
To further support commercial
activity, the two countries
established the United States
and Canada Free Trade Area
(CFTA), designed to remove all
trade barriers between the two
countries.
Despite this unique trade
relationship, tariffs and other
trade barriers hampered even
greater business activity.
Costa Rica El salvador
The traditional rural / agricultural sector
Modern Sector The modern urban/high-income sector
Tthe often very large transitional sector
usually represented by low-income urban
slums.
Traditional rural
sector
Transition Sector
The treaty calls for a common market Mercosur was aggressively seeking
that would eventually allow for the free agreements with other countries and
movement of goods, capital, labor, and trade groups.
services among the member countries,
with a uniform external tariff.
Negotiations for a free trade agreement
between the European Union and
The Treaty of Asunción, which provided Mercosur, the first free trade agreement
the legal basis for Mercosur, was signed between regions, have been underway
in 1991 and formally inaugurated in since 1999.
1995.
It is the second largest common market
agreement in the Americas after NAFTA, Argentina Bolivia
and it includes:
Chile Brazil
Southern Cone Free Trade
Area (Mercosur)
Paraguay Uruguay
The agreement includes
a wide range of tariff cuts
aimed at increasing
Honduras United States trade and employment
among the seven
signatories.

Latin American Progress
In the last 3 decades, an
economic and political revolution
took place in Latin America
Currently many Latin American
countries are in the liberation
stage.
In positive response to these
reforms, investors have invested
billions of dollars in manufacturing
plants, airlines, banks, public
works, and telecommunications
systems.
Due to its size and resource base,
the Latin American market has
always been considered to have
great economic and market
potential.
It is one that implies complete political and
economic integration, whether voluntary or
forced.
Produced by: Liliana Ovando Pérez | Reference: Cateora, P.R., Gilly, M.C. y Graham, J.L. (2011) International Marketing. 15 ed. McGraw-Hill Irwin. (pp. 248-279)
Latin American Economic
Cooperation
Latin American Integration
Association.
It is the gradual and progressive
establishment of a Latin
American common market, one of
its most important aspects is the
differential treatment of the
member countries. according to
their level of economic
development.
Caribbean Community and
Common Market (CARICOM)
Its success led to the creation of
the Caribbean Community and
Common Market, its member
countries continue in their efforts
to achieve true regional
integration
CARICOM continues to seek
stronger ties with other groups in
Latin America and has signed a
trade agreement with Cuba.
STRATEGIC IMPLICATIONS
FOR MARKETING
As a country develops, incomes
change, population
concentrations change,
expectations for a better life
adjust to higher standards, new
infrastructure evolves, and
investments are made in social
capital.
Markets are changing rapidly
and identifiable market
segments with similar
consumption patterns are found
in many countries. Emerging
markets will be the growth areas
of the 21st century.
Multinational market groups take other
forms, which vary significantly in the
degree of cooperation, dependency,
and interrelationship among
participating nations.
There are five fundamental groupings
for regional economic integration,
ranging from regional development
cooperation, which requires the least
amount of integration, to the final
integration of political union.
Political Union
For an economic union to survive, it
Economic must have agreements and mechanisms
Factors to resolve economic disputes.
LA RAISON D’ETRE
Political friendliness between countries
Successful economic union
Political is a basic requirement for the
requires favorable economic,
Factors development of supranational market
political, cultural, and geographic
agreements.
factors as a basis for success.
In general, the advantages of
economic union must be clear-cut
and signifi cant, and the benefi ts Geographic Countries that are widely separated
must greatly outweigh the and geographically have significant barriers
disadvantages before nations Temporal to overcome when attempting economic
forgo any part of their Proximity merger.
sovereignty.
Cultural similarity alleviates the impact of
economic cooperation between
countries. The more similar the culture,
PATTERNS OF Cultural
the more likely an agreement is to be
MULTINATIONAL Factors
COOPERATION successful, because members
understand the perspectives and points
of view of their colleagues.
The World Trade Organization
represents the most important
and comprehensive trade
agreement in history.
It is the most basic economic integration and
cooperation; in this agreement the governments
Regional Cooperation Groups
participate jointly to develop basic beneficial
industries for each economy.
It is an agreement between two or more countries
Free Trade Area to reduce or eliminate customs duties and non-
tariff trade barriers between partner countries.
The customs union is a logical stage of
Customs Union cooperation in the transition from an FTA to a
common market.
It is a common market for goods and services
(including labor) and capital. It is a unified
Common Market economy and only lacks political unity to become
a political union.