1. Emerging Markets

2. 9 - 3Global PerspectiveWal-Mart, Tide, and Three-Snake Wine China and other emerging markets throughout the world willaccount for 75% of the worlds total growth in the nextdecade and beyond. As countries prosper and their people are exposed to newideas and behavior patterns via global communicationnetworks, old stereotypes, traditions, and habits are cast asideor tempered, and new patterns of consumer behavior emerge. A pattern of economic growth and global trade that willextend well into the 21stcentury appear to be emerging.- Three multinational market regions Europe, Asia, and America 3. 9 - 4Marketing and Economic Development The stage of economic growth within a country affects theattitudes toward foreign business activity, the demand forgoods, the distribution systems found within a country, andthe entire marketing process.- Static economy- Dynamic economy Economic Development is generally understood to mean anincrease in national production that results in an increase inthe average per capita gross domestic product, (GNP). 4. 9 - 6Stages of Economic Development Stage 1: The traditional society Stage 2: The preconditions for takeoff Stage 3: The takeoff Stage 4: The drive to maturity Stage 5: The age of high mass consumption The United Nations groups countries into three categories:- MDCs (more-developed countries)- LDCs (less-developed countries)- LLDCs (least-developed countries) Newly Industrialized Countries (NICs) - Countries that areexperiencing rapid economic expansion and industrialization anddo not exactly fit as LDCs or MDCs 5. 9 - 7Economic and Social Data forSelected Countries Exhibit 9.1 6. 9 - 8Impact of Emerging Economies onWorld MarketsVietnamese Coffee GrowersImpact World Market PriceBrazilian Coffee GrowersSuffer the Consequences 7. 9 - 9Newly Industrialized Countries Growth Factors The factors that existed to some extent during the economicgrowth of NICs were as follows:- Political stability in policies affecting their development- Economic and legal reforms- Entrepreneurship- Planning- Outward orientation- Factors of production- Industries targeted for growth- Incentives to force a high domestic rate of savings and to directcapital to update the infrastructure, transportation, housing,education, and training- Privatization of state-owned enterprises (SOEs) that placed a drainon national budgets 8. 9 - 10Newly Industrialized Countries Growth FactorsIndian Pharmaceutical Companies Hampered 9. 9 - 12Objectives of Developing Countries Industrialization is the fundamental objective of mostdeveloping countries. Most countries see in economic growth the achievementof social as well as economic goals.- Better education- Better and more effective government- Elimination of many social inequities- Improvements in moral and ethical responsibilities The trend toward privatization is currently a majoreconomic phenomenon in industrialized as well as indeveloping countries. 10. 9 - 14Infrastructure of Selected Countries Insert Exhibit 9.2 11. 9 - 16Marketings Contributions 12. 9 - 19Market Indicators in Selected Countries Insert Exhibit 9.4 13. 9 - 20Dynamic Transformation of BOPM Clusters Insert Exhibit 9.5Eric Arnold & Jakki Mohr July 2005 14. 9 - 22Big Emerging Markets Exhibit 9.6 15. 9 - 23The Americas 16. 9 - 26Eastern European Markets 17. 9 - 27Eastern European Markets Insert Exhibit 9.9 18. 9 - 29Asian Markets 19. 9 - 30Asian Markets Selected Countries Exhibit 9.11 20. 9 - 35Newest Emerging Markets The U.S. decision to lift the embargo against Vietnam.- If Vietnam follows the same pattern of development as otherSoutheast Asian countries, it could become another Asian Tiger. The United Nations lifting of the embargo against SouthAfrica.- South Africa has an industrial base that will help propel it into rapideconomic growth.- The South African market also has a developed infrastructure. Vietnam and South Africa future development willdepend on government action and external investmentby other governments and multinational firms. 21. 9 - 36Strategic Implications for Marketing As a country develops:- Incomes change- Population concentrations shift- Expectations for a better life adjust to higher standards- New infrastructures evolve- Social capital investments made When incomes rise, new demand is generated at all incomelevels for everything from soap to automobiles. If a company fails to appreciate the strategic implications ofthe $10,000 Club, it will miss the opportunity to participate inthe worlds fastest-growing global consumer segment. 22. 9 - 37Living Standards in Selected Countries Insert Exhibit 9.12 23. 9 - 38Consumption Patterns in Selected Countries Insert Exhibit 9.13