Emerging Markets Cateora ch' 9 10th ed

1
Emerging MarketsCateora ch. 9 (10th ed)

• markets which are experiencing rapid, long-term
  growth
• East and Southeast Asia
• Latin America
• Eastern Europe
• See the weekly page of statistics,
  Emerging-Market Indicators, in The Economist
  (usually the last page of each issue).

2
Development growth with equitygrowth
combined with a reasonable income distribution

• selected development indicators
• World Bank World Development Indicators (annual)
• GDP / PPP per capita / income distribution
• economic structure Primary/Secondary/Tertiary
• nutrition
• life expectancy and child / mother mortality
• health care (doctors/nurses per 1000)
• environmental variables (pollution)
• literacy rates
• labor force participation (male/female)

3
Stages of Economic Development W.W. Rostow p.
227

• 1. traditional society lack capability to
  increase productivity absence of technology /
  know-how
• 2. precondition for take-offearly contact w/
  technology beginning development of
  infrastructure
• 3. take-off growth spreads throughout economy
  sustainable expansion
• 4. drive to maturity technology spreads and
  deepens country open to outside
• 5. mass consumption majority of consumers
  participate in money economy, discretionary
  income continues to increase

4
Rapid Growth CountriesNICs and Tigers

• two basic and opposing growth strategies
• 1. import substitution typical of West Africa
  and Latin America (1960s-80s)
• 2. export-led growth typical of many East and
  Southeast Asian countries

5
Economic Development Issues economic development
strategies

• import substitution
• nationalistic outlook - closed economy
• produce as much as possible locally
• develop and protect national industries
• reduce imports whenever possible
• export orientation
• international outlook - open economy
• promote exports
• attract foreign capital / technology
• comparative advantage principle

6
An East Asian Miracle?

• 1965-90 East Asia grew faster than all other
  regions of the world
• due essentially to miraculous growth in just
  eight countries
• Japan
• the Four Tigers (HK, Korea, Singapore, Taiwan)
• China
• known as the high-performing Asian economies
  (HPAEs)

7
Reasons for Growththeories and speculation

• neoclassical economics
• free and open markets and good government policy
  with macroeconomic stability and reliable legal
  framework led to high productivity and
  competition
• industrial policy - revisionist view
• government intervention and leadership dominant
• cultural and sociological view
• Asian values, thrift, loyalty (Confucius)

8
Marketing and Development Economic Dualism

• rural poor
• rural India toothpaste, sugar, coffee, washing
  soap, bathing soap, kerosene p. 238
• only 20 of rural population in China brush their
  teeth daily
• urban rich
• recent survey of Chinese managers, cadres
• 100 owned refrigerator and washing machine
• 90 owned watch costing gt US 500
• 50 owned home computer (FEER, 981126 76)

9
Marketing systems evolve with economyfrom
production to sales to marketing orientation

• subsistence economy
• agricultural economy
• basic manufacturing
• modern industrial economy

• no marketing
• basic exchange small merchants, traders
• exchange/physical distribution merchants,
  wholesalers
• integrated channels of distribution mass
  retailing
• Exh. 9-3, p. 237

10
Marketing and Infrastructure

• infrastructure transport, communications, etc
• a condition for modern marketing
• but also the largest market presently in emerging
  economies (energy, telecommunications, transport
  equipment, etc)
• marketing infrastructure
• availability of distribution networks
  formal/informal
• cost of distribution
• availability of media

11
From Asian Miracle to Asian Crisistwenty good
years now at end?a temporary rest or the end of
a miracle?

• currency crisis (summer 1997 Thailand)
• financial crisis
• economic crisis
• social crisis

12
Marketing Development

• development how to define/measure
• income levels and distribution
• education
• technology
• capital vs labor  (capital intensity)
• specialization / economies of scale
• growth / changing economic and social structures

13
Marketing Development

• what comes first?
• synergies/ interdependencies ?
• marketing as agent of change

14
Marketing and Society / Economy

• market personal / impersonal
• society et family / individual
• communications (pub / mass media)
• sales (et relations)
• distribution
• products (variety / standardization)
• pricing (price set by whom and how?)