Industry Analysis

This chapter discusses Emerging Markets and developing countries…but focuses on “Newly Democratized Countries” NDCs

In NDCs markets generally were the product of centralized planning economy which means that marketing activities are suspect, marketers need to be legitimized and there is traditional supremacy of producers over consumers.

Marketing in these countries goes against the old order and the old ways with puts people’s mindsets under stress…which is NOT what marketers want to do!

-There is a lot of education on the FREE MARKET SYSTEM that needs to be done in these markets.

Some of the Emerging Markets the book discusses are Russia, China, India, and other developing countries….some of the DEVELOPING COUNTRIES the book discusses are poor nations in Africa, Asia, and Central America (Nicaragua, Guatemala). These DEVELOPING COUNTRIES are primarily defined by Low Per Capita Income Levels and they are included in the realm of the NDCs, from a marketing standpoint, because both of these types of countries have a huge Lack Of Marketing Infrastructure.

LOCAL MARKETING IN DEVELOPING COUNTRIES

Some of the problems faced in these countries are:

-poor economic conditions

-low educational levels

-high illiteracy rate

-general overall apathy of the populace

Local Marketing in these types of countries is challenging.

Microenvironment in these countries are characterized by UNCERTAINTY which is why “environmental scanning” becomes necessary in these markets for local marketers.

Other problems in these NDCs are:

-radical political change can happen quickly and abruptly

-financial risks tend to be great

-value of revenues tends to be lessened due to convertibility problems, black markets, and exchange rate fluctuations

-there are risks for sudden changes in tariff rates and other trade-impeding measures…these factors make it necessary for these countries to work with international lending agencies like World Bank and International Monetary Fund

In these countries consumers have not had access to many consumer products in the past therefore their needs are basic and easy to identify. On the other side of this lack of products is that there is a poorly advanced marketing infrastructure:

-Distribution channels are few and have low productivity

-communication media are limited in reach and coverage

MARKETING RESEARCH in these areas should focus on feasibility of various marketing activites rather than the buyer, which is against everything we have been taught for marketing in developed and mature markets.

MARKET SEGMENTATION

Income Level represents the basic market segmentation criterion

Income Level is not necessarily described in terms of salary or wages per household but instead as “access to foreign or convertible currency.

Once income level is identified then standard demographics can be used to segment the market.

Because of low education and sophistication levels, segmenting based on any other aspect than geographical demographics is unecissary.

So…WHERE the customers are from is the second question after income level that needs to be answered for market segmentation.

On a side note it is important to not totally dismiss TASTE and PREFERENCE from the criterion…even though markets are relatively poor, there is still a sense of more than just functionality as a fulfillment that is