Chapter 9

Chapter 9: Economic Development and the Americas

Page 1

  • Overview of Chapter 9 detailing economic development and its implications in the Americas.

Key Topics

  1. Differences Between Emerging and Big (Top) Emerging Markets

  2. Comparison of USMCA and Mercosur

  3. Marketing Implications in Emerging Markets (Essay Question)

  4. Recap of Important Points

Marketing Challenges in Third World

  • Crossing Borders:

    • Question: What do you do when potential customers in poor countries do not know your product?

    • Marketing Strategies:

      • Marketing 1: Understanding and meeting customers’ wants and needs.

      • Marketing 2: Educating consumers and creating demand for your product.

Understanding Emerging Markets

  • Definition of Emerging Markets: Economies with low to middle per capital income; characterized by rapid economic development and liberalized government policies.

  • Characteristics of Emerging Markets:

    • Huge income gap between the wealthy and the poor.

    • Political and economic instability.

    • Lack of a robust legal framework.

    • Privatization of state-owned enterprises leading to increased competition and efficiency.

    • Poor marketing infrastructure (e.g., inadequate roads, railroads, etc.).

    • Rising middle-class population, creating opportunities for international companies.

    • Infrastructure: Essential physical structures needed for societal operation (roads, power supplies, etc.).

Characteristics of Big (Top) Emerging Markets

  • Definition: Big emerging markets are a subset of emerging markets with specific characteristics.

  • Characteristics:

    • Generally large geographical size.

    • Significant populations.

    • Sizable markets for various products.

    • Strong growth rates or potential.

    • Significant economic reform programs.

    • Major political importance in their regions.

    • Act as "regional economic drivers" that expand into neighboring markets.

Comparison of Trade Agreements

  • USMCA:

    • Replaced NAFTA on July 1, 2020.

    • Currently, no longer the largest trade area (RCEP is largest).

  • Crossing Borders: Taco Bell's entry into Mexico.

    • Entered Mexico City in 1992; reinvigorated strategy after marketing research.

    • Important lesson about adapting marketing strategies to local cultures.

  • Mercosur:

    • A regional trade bloc including Argentina, Brazil, Paraguay, Uruguay, and Venezuela.

    • Less integrated compared to USMCA and EU.

Market Strategies in Quebec

  • Market Share Analysis: Comparing Pepsi and Coke in Quebec.

  • Crossing Borders: Pepsi's marketing strategies in Quebec, emphasizing bilingualism.

Emerging Markets Dynamics

  1. Income Gap: Significant disparity between the wealthy and poor presents both challenges and opportunities.

  • Global brands vs. local brands.

  • Growing demand for luxury goods even among lower socio-economic groups, seeking social status.

  1. Marketing Infrastructure Issues:

  • Poor infrastructure increases marketing costs and complicates distribution.

  • Example: Papua New Guinea's cities disconnected by terrain affecting transportation costs.

  1. Legal System Challenges: Lack of legal frameworks necessitates a long-term marketing approach.

  2. Middle-Class Growth:

  • Rising incomes lead to increased demand for expensive goods, favorable for many businesses.

  • Marketing Implications:

    • Importance of adapting to local complexities from a marketing standpoint in emerging markets.

Recap of Important Points in Chapter 9

  1. Ability to compare characteristics of emerging vs. big emerging markets.

  2. Considerations for marketing in emerging markets and strategies to reach consumers (Essay Question).

  3. Comparative analysis between USMCA and Mercosur.