Countries once hostile to foreign trade
• Now see it as necessary to economic growth
Trade through 21st century changing
• Transition from socialist to market-driven economies • Liberalization of trade, investment policies in developing
Americas, Europe, and Asia
• Industrialized, industrializing, underdeveloped countries in each bloc
Exhibit 9.1 Three Regional Trading Areas Roughly Defined by Time Zones
9-7 The foundational market metrics of American nations
9-8 The growing importance of trading associations among American nations
International Time Zones
Learning Objectives 2 of 2
9-5 Growth factors and their role in economic development
9-6 Marketing’s contribution to the growth and development of a country’s economy
• Incentives to force a high domestic rate of savings and direct capital to update infrastructure
• Large, accessible markets with low tariffs
• Outward orientation
• Usually good relationships among contiguous countries
• Associated pattern of economic growth and global trade • Three market regions or trading blocs based on time zone: the
industrialized and developing countries
Marketing and Economic Development 7 of 9
Infrastructure
• Assortment of capital goods
• Serve activities of many industries • Support production and marketing
Marketing and Economic Development 3 of 9
Newly Industrialized Countries (NICs)
• UN classification system has been criticized
• No longer seems relevant in rapidly industrializing world
Important in Business
• International marketers deal with three kinds of distance
• Miles, time zones, cultural tance • Time zones have greatest impact on success abroad
• Strong infrastructure necessary for exporting goods • Must support country’s expanding population and economy
Business Development
In Jamaica, Pepsi partners with a local fast-food company, co-branding and supporting local development efforts.
Region The Americas Europe and Africa Asia Pacific
Population 1.01 billion 2.00 billion 4.55 billion
GDP $25.2 trillion $21.2 trillion $28.7 trillion
Marketing and Economic Development 1 of 9
• United Nation’s stages of economic development
• More-developed countries (MDCs) • Less-developed countries (LDCs) • Least-developed countries (LLDCs)
• Effectively utilizing production resulting from economic growth
Marketing and Economic Development 9 of 9
Marketing’s Contributions continued
• Five weaknesses that indicate need for adjustment in emerging markets (Sheth)
• Investment in information technology (IT) important
• Key to economic growth • Innovation can lead to sustainable future for developed and
developing nations • Internet cuts transaction costs; increases global reach • Speeds up the diffusion of new technologies • Mobile phones and wireless technologies reduce expense of costly
telecom infrastructure
Marketing and Economic Development 6 of 9
Objectives of Developing Countries
• Industrialization fundamental objective for most
• Allows for achievement of both economic and social goals
• Foreign investors now seen as vital partners to process
• Sometimes feared as having goals that conflict with host country • But many countries welcome foreign investment • Trend toward privatization a major economic phenomenon in
countries • Transfer of public-sector enterprises to private sector • Rapid development of regional marketing alliances
Marketing and Economic Development 2 of 9
© John Graham
Marketing and Economic Development 8 of 9
Marketing’s Contributions
• Marketing vital for nation’s growth
• Efficiency of distribution a key component
Chapter 9
Economic Development and the Americas
Learning Objectives 1 of 2
9-1 The importance of time zones for trade relationships and marketing operations
9-2 The political and economic changes affecting global marketing
9-3 The connection between the economic level of a country and the marketing task
9-4 The variety of stages of economic development among American nations
• Impacts business efficiency of enterprises
• Crucial component of uncontrollable elements facing marketers
• Directly impacts country’s economic growth potential
Economic Level
• The stage of economic development in a country
• Affects consumer behavior