Technological and Economic Factors

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Technological andEconomic Factors
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Session Outline

• Advances in technology
• Economic development
• Market classification
• Marketings role
• Economic crises
• Changing business environment and consumer
  behaviour
• Impact on marketing strategy
• Case Weight Watchers Mexico

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Advances in technology

• Impact on international marketing
• New markets
• i.e. Indias software industry exports of over 6
  billion in 2000-2001. Expected tenfold increase
  in 8 years
• New channels of communication
• Increased flow of information
• Within organisations
• B2C
• B2B
• More entrepreneurial approach to
  internationalisation
• Increased efficiencies and reduced costs
• Global sourcing

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Economic Development Indicators

• Economic activity
• Primary - Agriculture and extractive processes
• Secondary - Manufacturing activities
• Tertiary - Service activities
• Gross Domestic Product
• Infrastructure
• Highways, railways, trucks and buses in use,
  electricity production, newspaper sales
• Population growth/birth rate

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Market Classification
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What factors might hinder the implementation of
marketing strategies in less developed/
developing markets?
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Barriers to International Marketing

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Evolution of Marketing
Determining the needs and wants of target markets
and delivering the desired satisfactions more
effectively and efficiently than competitors in a
way that maintains or improves the consumers and
societys well-being
Society (Well-Being)
Societal Marketing
Consumers (Satisfaction)
Company (Profits)
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Societal Marketing in Developing Markets

• Nestle - Infant formula controversy
• Developing countries infants were malnourished
  or dying because mothers could not properly use
  commercial infant formulas
• Marketing practices
• General advertising in the public media
• Promoting bottle feeding as the modern way
• Employment of milk nurses (sales agents)
• Distribution of samples to new mothers
• Promotional schemes aimed at doctors, nurses,
  health professionals
• Culture collision
• Free-enterprise Western culture
• Poorer, less literate, less marketing savvy
  cultures

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Societal Marketing in Developing Markets

• Global boycott of Nestle products 1979
• Adoption of an infant formula marketing code by
  the World Health Organisation in 1981
• Restricts the promotion of infant formula
• Requirements for labeling of all infant formula
  products
• Nestle changed its promotion policy
• Nestle 1999 - Joint working group
• Nestle Research Centre
• International Federation of the Red Cross and Red
  Crescent Societies
• Provision of food in the field during emergency
  relief

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Economic Crisis Indicators

• Economic crises are increasing in frequency and
  severity
• More than 65 serious financial crises have
  erupted over the past ten years almost one and
  a half times the number recorded during the 1980s
• Crises are characterised by the co-movement of
  many macroeconomic indicators
• Decrease in real output (GDP)
• High levels of inflation
• High levels of unemployment
• Unstable currency

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What impact did the Asian Crisis have on both the
business environment and consumer behaviour?
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Changing Business Environment

• Research indicates that the Asian crisis
• Accelerated the opening of the Asian economies
• Forced Asians to acknowledge good corporate
  governance
• Made the region concentrate on its real
  competitive strengths
• Provided a hard lesson about globalisation
• Forced a withdrawal of government from key
  economic sectors
• Finance, insurance, banking and
  telecommunications
• Prompted companies to revamp business strategies
  to pursue aggressively opportunities for
  expansion in new markets

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Changing Consumer Environment
Changed Consumer Values
(Reid, 1999)
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Surviving an Economic Crisis

• Unilever in Indonesia
• Luis Vuitton in Japan

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Unilever in Indonesia

• Marketing Strategy
• Changed marketing objectives
• Altered product packaging
• Minimise role of wholesalers
• Distribution network to reach small villages
• Strengthened relationships with retailers
• Performance
• Sales have steadily increased
• Keys to success
• Learning from past experience
• Rapid response
• Flexibility
• Willingness to adapt

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Louis Vuitton Japan

• How does a luxury brand thrive during an economic
  recession?

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Case Weight Watchers Mexico
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Summary Key Points

• Information technology innovations
• Facilitated an increase in international
  marketing activity
• Technological change
• New technologies create new markets and
  opportunities
• Pose a threat to old technologies and industries
  that might be tied to them
• Economic growth
• Often outweighs other environmental factors
• Economic development
• Marketing in less developed countries requires a
  societal marketing orientation
• Economic crisis
• Can present both problems and opportunities