Emerging Markets

1
Chapter 9
Emerging Markets
2
Emerging Markets

• Economic Development - an increase in
  production that results in an increase in a
  nations GDP.
• I. Theories of Economic Development
• A) Rostows Modernization Theory
• 1) Traditional Society
• 2) Transitional Society
• 3) Take-off
• 4) Technological Maturity
• 5) High Mass Consumption

3
Emerging Markets

• Theories of Economic Development (cont.)
• B) Radical Theories
• C) Institutional theories
• II. NICs
• III. Infrastructure and Development

4
United Nations Economic Development System
More-Developed Countries (MDC)
Less-Developed Countries (LDC)
Least-Developed Countries (LLDC)
5
Newly Industrialized Countries Growth Factors

• Political Stability
• Economic, Political, and Legal Reforms
• Entrepreneurship
• Central Planning
• Outward Orientation
• Factors of Production
• Industries Targeted for Growth
• Financial Incentives
• Privatized State-Owned Enterprises
• Large, Accessible Markets
• Low Tariffs

6
Infrastructure of Selected Countries
SOURCES "Big Emerging Markets," Business
America, Special Issue 1994, pp. 59-65. For
additional information, see International
Marketing and Statistics, 1997 (London
Euromonitor Publications, 1997) and "Indicators
of Market Size for 115 Countries, Crossborder
Monitor August 27, 1997, p.4.
7
Emerging Markets

• IV. Marketing in a Developing Country
• 1) Level of Marketing Development
• 2) Demand
• V. Big Emerging Markets
• VI. The Americas
• VII. Eastern Europe
• VIII. Asia

8
Common Traits of Big Emerging Markets

• Are physically large.
• Have significant populations.
• Represent considerable markets for a wide range
  of products.
• Have strong rates of growth or the potential for
  significant growth.
• Have undertaken significant programs or economic
  reform.
• Are of major political importance within their
  regions.
• Are "Regional Economic Drivers".
• Will engender further expansion in neighboring
  markets as they grow.

9
Big Emerging Markets
Population GDP GDP Trade (millions) (
billions) (per capita) ( billions)
AsiaASEAN 413.7 508.4 12,192 464.6CEA
(Chinese Economic Area) 1,188.0 435.6 367 135.9
India 870.0 238.3 274 42.2South
Korea 43.7 296.8 6,799 150.6 Latin
AmericaMexico 89.5 333.3 3,722 85.9 Argentina 33
.1 228.8 6,912 21.2 Brazil 156.8 409.2 2,609 55.
8 AfricaSouth Africa 39.8 114.8 2,882 17.1 Europe
Poland 38.4 83.6 2,178 35.6Turkey 58.8 156.0 2,
747 38.9 Possible AdditionsColombia 33.4 43.5 1,3
03 12.3Venezuela 20.3 60.4 2,984 25.2
Imports and exports. ASEAN includes Brunei,
Indonesia, Malaysia, Philippines, Singapore,
Thailand, Vietnam. CEA consists of the provinces
of Southern China, Hong Kong, and
Taiwan. SOURCES "Big Emerging Markets,"
Business America, Special Issue 1994, pp.
59-65. For additional information, see
"Indicators of Market Size for 115 Countries,
Crossborder Monitor, August 27, 1997, p.4.
10
The Americas
11
Economic and Social Data for Selected Countries
Consumer Spending Hospital Number
Literacy Tourism Food Percent Clothing Percent B
eds per of (Percent) Receipts ( million) of (
million) of (000s) Doctors (
million) Country Total Total Population
United States 741,340 18.1 221,800 5.4 5.1 5
60,300 99.5 45,579 Argentina 16,952 38.8
2,332 5.3 5.3 96,000 93.9 2,336 Brazil
81,934 31.2 12,799 4.9 3.5 169,488 77.8 1,559
Colombia 9,264 35.2 1,597 6.1 1.5 29,353 85.2
410 Mexico 57,900 33.7 12,066 7.0 0.7 130,000 8
7.6 4,355 Venezuela 15,501 43.2 3,679 10.2 2.
6 28,400 84.7 36.5
Percent of all consumer spending. In U.S.
dollars, basis 1988.
12
Eastern Europe and the Baltic States
Gulf of Finland
BalticSea
BlackSea
Adriatic Sea
TyrmenianSea
AegeanSea
13
Eastern European Markets
Population GDP GDP Exports Imports (millions) (
billions) ( per capita) ( millions) (
millions)
Albania 3.28 2.7 820 80
147 Bosnia/Herzegovina () 2.66 0.8 300 NA NA Bul
garia 9.00 10.1 1,220 4,303 3,271 Croatia
() 4.78 26.3 5,600 4,633 7,582 Czech
Republic() 10.30 52.0 5,050 14,575 16,284 Hungar
y 10.30 45.7 4,505 19,100 15,224 Macedonia() 2.05
4.8 2,400 1,244 1,420 Poland 38.40 135.3 3,500 2
5,751 42,307 Romania 22.80 34.8 1,544 8,385 10,131
Slovakia() 5.27 20.7 1,763 12,063 13,003
9-11
() Former republics of Yugoslavia. () Former
republics of Czechoslovakia.
Sources Indicators of Market Size for 115
Countries, Country Monitor, December 25, 2000
and International Trade Statistics yearbook (New
York United Nationa, 2999).
Irwin/McGraw-Hill
14
Asia
15
Asian Markets - Selected Countries
Population GDP GDP Exports Imports (millions) (
billions) ( per capita) ( millions) (
millions)
Australia 18.5 411.0 22,000 52,966
61,347 China 1,230.1 917.7 746 148,755 132,007 Ho
ng Kong 6.5 173.6 26,701 173,546 192,764 India
955.2 437.2 458 30,537 34,456 Indonesia 199.9 215
.0 1,076 43,285 39,456 Japan 126.2 4,199.5 33,277
443,000 335,871 South Korea 46.0 476.0 10,361 12
5,365 135,153 Taiwan 21.5 283.3 13,000 111,837 103
,652
9-13
SOURCES Indicators of Market Size for 115
Countries, Country Monitor. December 25, 2000
and S.T.E.T.
Irwin/McGraw-Hill
16
Capitalism with Chinese Characters Jiang Zemins
Reform Agenda

• Restructure state enterprises. SOEs account for
  about two-fifths of the industrial output but
  soak up four-fifths of investment.
• Strengthen financial markets. Expand and ensure
  the integrity of capital markets.
• Sell state assets. Sell off all but 1,000 of
  Chinas 305,000 state enterprises and allow some
  to go bankrupt.
• Build social services. Create housing, pension
  programs, and other services to relieve burdens
  on SOEs and to care for millions who may lose
  jobs.
• Slash tariffs. Reduce average tariffs to 17
  percent in 1997 and to 15 percent by 2000 as part
  of Chinas bid to join the World Trade
  Organization.

17
Living Standards in Selected Countries
Percent of Households Households Persons
per Piped Flush Electric (000) Household Water T
oilers Lighting
Brazil 38,434 4.05 73 76 69 Chile
3,216 4.35 70 59 88 China 357,064 3.40 90 NA
NA Colombia 8,482 4.14 76 64 87 Ecuador 2,626
4.36 52 33 62 Hong Kong 1,797 3.44 98 80 93
India 185,048 5.00 10 5 16 Indonesia
43,065 4.50 12 15 30 Japan 40,548 3.09 93 65
98 Peru 5,057 4.65 49 43 48 Philippines
12,750 5.37 NA NA NA Singapore 815 3.67 48 42 3
7 South Africa 13,300 3.37 96 35 90 United
States 100,308 2.62 99 99 99
9-16
SOURCES For additional data, see Demographic
Yearbook 1997
(New York United Nations, 1997) and
International Marketing Data
Statistics, 18th ed. (London
Euromonitor Publications, 1997).
Irwin/McGraw-Hill
18
Which of the Following have you Purchased in the
Past Three Months?
Product Percent Percent Percent Percent Percent Pe
rcent in in in in in in United Australia Brazil
Germany Japan United States Kingdom
Soft drinks 96 90 93 83 91 94 Fast-food
94 94 91 70 86 85 Athletic footwear 59 40 54 33 3
0 49 Blue jeans 56 39 62 45 42 44 Beer 46 50 60
46 57 57 Cigarettes 24 33 30 38 39 40
Among adults 18. Source Yankelovich Clancy
Shulman. SOURCE Nancy Giges, "Global Spending
Patterns Emerge," Advertising Age, November
11, 1991, p. 64.
19
Consumption Patterns in Selected Countries
(percent of household expenditures)
U.S. Germany Singapore Mexico Poland Iran Kenya T
hailand India
Food 10 12 19 35 29 37 38 30
52 Clothing 6 7 8 10 9 9 7 16 11 Gross
rent 18 18 11 8 6 23 12 7 10 Medical
care 14 13 7 5 6 6 3 5 3 Education 8 6
12 5 7 5 10 5 4 Transport/communications
14 13 13 12 8 6 8 13 7 Appliances/other
durables 30 31 30 25 35 14 22 24 13
SOURCE For additional data, see Ricardo Sookdeo,
"The New global consumer."Fortune, Autumn-Winter
1993, pp. 68-72.
20
Living Standards in Selected Countries
Percent of Households Country Household Person
s per Piped Flush Electric (000) Household
Water Toilets Lighting
Brazil 38,434 4.05 73 76 69 Chile
3,216 4.35 70 59 88 China 357,064 3.40 90 N/A
N/A Colombia 8,482 4.14 76 64 87 Ecuador 2,62
6 4.36 52 33 62 Hong Kong 1,797 3.44 98 80 93
India 185,048 5.00 10 5 16 Indonesia 43,065 4
.50 12 15 30 Japan 40,548 3.09 93 65 98 Per
u 5,057 4.65 49 43 48 Philippines 12,750 5.37
NA N/A N/A Singapore 815 3.67 48 42 37 South
Korea 13,300 3.37 96 35 90 United
States 100,308 2.62 99 99 99
9-19
SOURCE Demographic Yearbook 1997 (New York
United Nation, 1997) and International Marketing
Data and Statistics, 1997 (London Euromonitor
Publication, 1997)
Irwin/McGraw-Hill