Developing Countries

1. Emerging Markets

2. 1. The political and economic changes affecting
global marketing.
1. The political and economic changes affecting
global marketing.
2. The connection between the economic level
of a country and the marketing task
2. The connection between the economic level
of a country and the marketing task
3. Marketing’s contribution to the growth and
development of a country’s economy
3. Marketing’s contribution to the growth and
development of a country’s economy

3. 5. The political and economic factors that affect
stability of regional market groups
5. The political and economic factors that affect
stability of regional market groups
4. The growth of developing markets and their
importance to regional trade
4. The growth of developing markets and their
importance to regional trade
6. The NIC growth factors and their role in
economic development
6. The NIC growth factors and their role in
economic development

4. Introduction
• Not many years ago, many countries were hostile toward foreign
investment and imposed severe regulatory barriers to foreign trade
• Not many years ago, many countries were hostile toward foreign
investment and imposed severe regulatory barriers to foreign trade
• However, now they seek economic growth,
improved standards of living, and an opportunity
for the good life most people want as part of the
global consumer world
• However, now they seek economic growth,
improved standards of living, and an opportunity
for the good life most people want as part of the
global consumer world
• China, South Korea, Poland, Argentina, Brazil, ­Mexico, and
India are some of the countries undergoing impressive changes in
their economies and emerging as vast markets.
• China, South Korea, Poland, Argentina, Brazil, ­Mexico, and
India are some of the countries undergoing impressive changes in
their economies and emerging as vast markets.

5. Marketing and Economic Development
• The economic level of a country is the single most important
environmental element to which the foreign marketer must adjust the
marketing task
• The economic level of a country is the single most important
environmental element to which the foreign marketer must adjust the
marketing task
• The stage of economic growth within a country
affects the attitudes toward foreign business
activity, the demand for goods, the distribution
systems found within a country, and the entire
marketing process
• The stage of economic growth within a country
affects the attitudes toward foreign business
activity, the demand for goods, the distribution
systems found within a country, and the entire
marketing process
• Marketing is constantly faced with the challenge
of detecting and providing for new levels of
consumption, and marketing efforts must be
matched with ever-changing market needs and
wants.
• Marketing is constantly faced with the challenge
of detecting and providing for new levels of
consumption, and marketing efforts must be
matched with ever-changing market needs and
wants.
• Economic development is generally results in an increase in the average
per capita gross domestic product (GDP)
• Economic development is generally results in an increase in the average
per capita gross domestic product (GDP)

6. Stages of Economic Development
• Walt Rostow classified countries by different stages of
economic development
• Each stage is a function of the cost of labor, the technical
capability of the buyers, the scale of operations, interest rates,
and the level of product sophistication
• Walt Rostow classified countries by different stages of
economic development
• Each stage is a function of the cost of labor, the technical
capability of the buyers, the scale of operations, interest rates,
and the level of product sophistication
The stages are as follows:
Stage 1: The traditional society
Stage 2: The preconditions for take-off
Stage 3: The take-off
Stage 4: The drive to maturity
Stage 5: The age of high mass consumption
The stages are as follows:
Stage 1: The traditional society
Stage 2: The preconditions for take-off
Stage 3: The take-off
Stage 4: The drive to maturity
Stage 5: The age of high mass consumption

7. Stages of Economic Development: United
Nations Classification Scheme
• United Nations classifies a country’s stage of economic
development based on its level of industrialization into three
categories:
• United Nations classifies a country’s stage of economic
development based on its level of industrialization into three
categories:
(1) MDCs (more-developed countries),
e.g., Canada, England, France,
Germany, Japan, and the United States.
(2) LDCs (less-developed countries), e.g.,
countries in Asia and Latin America
(3) LLDCs (least-developed countries),
e.g., countries in Central Africa
(1) MDCs (more-developed countries),
e.g., Canada, England, France,
Germany, Japan, and the United States.
(2) LDCs (less-developed countries), e.g.,
countries in Asia and Latin America
(3) LLDCs (least-developed countries),
e.g., countries in Central Africa

8. • Countries that are experiencing rapid economic expansion and
industrialization and do not exactly fit as LDCs or MDCs are more
typically referred to as newly industrialized countries (NICs), e.g.,
Chile, Brazil, Mexico, South Korea, Singapore, and Taiwan
• Countries that are experiencing rapid economic expansion and
industrialization and do not exactly fit as LDCs or MDCs are more
typically referred to as newly industrialized countries (NICs), e.g.,
Chile, Brazil, Mexico, South Korea, Singapore, and Taiwan
NIC Growth Factors
• Some factors that contributed to economic
growth of NICs are:
1. Political stability in policies affecting their development
2. Economic and legal reforms
3. Entrepreneurship
4. Planning
5. Outward orientation
6. Factors of production
7. Privatization of state-owned enterprises (SOEs)

9. Information Technology, the Internet, and Economic
Development
• In addition to the growth factors previously discussed, a
country’s investment in information technology (IT) is an
important key to economic growth.
• The cellular phone, the Internet, and other advances in IT
open opportunities for emerging economies to catch up with
richer ones.
• New, innovative electronic technologies can be the key to a
sustainable future for developed and developing nations
alike.
• Mobile phones and other wireless technologies greatly
reduce the need to lay down a costly telecom infrastructure
to bring telephone service to areas not now served.
• The Internet allows for innovative services at a relatively
inexpensive cost.

10. Infrastructure and Development
• One indicator of economic development is the extent of social
overhead capital, or infrastructure, within the economy.
• One indicator of economic development is the extent of social
overhead capital, or infrastructure, within the economy.
• Countries begin to lose economic development ground when
their infrastructure cannot support an expanding population and
economy
• Countries begin to lose economic development ground when
their infrastructure cannot support an expanding population and
economy
• Infrastructure represents those types
of capital goods that serve the
activities of many industries.
• Included in a country’s infrastructure
are paved roads, railroads, seaports,
communications networks, and energy
supplies—all necessary to support
production and marketing
• Infrastructure represents those types
of capital goods that serve the
activities of many industries.
• Included in a country’s infrastructure
are paved roads, railroads, seaports,
communications networks, and energy
supplies—all necessary to support
production and marketing

11. Marketing in a Developing Country
• A marketer cannot superimpose a sophisticated marketing strategy
on an underdeveloped economy
• In evaluating the potential in a developing country, the marketer
must make an assessment of the existing level of market
development within the country
• A marketer cannot superimpose a sophisticated marketing strategy
on an underdeveloped economy
• In evaluating the potential in a developing country, the marketer
must make an assessment of the existing level of market
development within the country
• The level of market development roughly
parallels the stages of economic
development
• As countries develop, the distribution and
channel systems develop and mom-and-pop
stores give way to larger establishments
• Advertising agencies, facilities for
marketing research, repair services,
specialized consumer-financing agencies,
and storage and warehousing facilities are
facilitating agencies created to serve the
particular needs of expanded markets and
economies
• The level of market development roughly
parallels the stages of economic
development
• As countries develop, the distribution and
channel systems develop and mom-and-pop
stores give way to larger establishments
• Advertising agencies, facilities for
marketing research, repair services,
specialized consumer-financing agencies,
and storage and warehousing facilities are
facilitating agencies created to serve the
particular needs of expanded markets and
economies

12. Developing Countries and Big Emerging
Markets
Big emerging markets share a number of important traits as follows:
1. Are all physically large
2. Have significant populations
3. Represent considerable markets for a wide range of products
4. Have strong rates of growth or the potential for significant
growth
5. Have undertaken significant programs of economic reform
6. Are of major political importance within their regions
7. Are “regional economic drivers”
8. Will engender further expansion in neighboring markets as they
grow

13. Strategic Implications for Marketing
• As a country develops, incomes change, population concentrations
shift, expectations for a better life adjust to higher standards, new
infrastructures evolve, and social capital investments are made
• Market behavior changes and eventually groups of consumers with
common tastes and needs (i.e., market segments) arise
• When incomes rise, new demand is generated at all income levels for
everything from soap to automobiles
• This means that knowledge of stage of market development is important
in helping to develop marketing strategies that are tailored to the level
of economic development