International Marketing: Chapter 11 Key Concepts

Economic growth areas for Asia Pacific region

Bottom-of-the-pyramid markets (BOPMs)

Opportunities & challenges of marketing in Asia Pacific LDCs and LLDCs (as discussed)

Multinational market regional groups in Asia Pacific region

Dynamic Economic Growth in the Asia Pacific Region

Greater China

– People’s Republic of China (PRC)

– Taiwan--Republic of China (ROC)

– Hong Kong

Japan

India

The Four Asian Tigers

– Hong Kong, Singapore

– South Korea, Taiwan

Vietnam

Greater China:People’s Republic of China (PRC)

Strained political relationship with ROC

Dual economic system (socialism/capitalism)

Economic boom since 1970s

Admission to World Trade Organization

Re-established normal trade relations with U.S.

Entry barriers eroding rapidly

Needs to improve human rights & legal system

Greater China:Hong Kong

155 years of British rule

Reverted to China in 1997

SAR of PRC (special administrative region)

High degree of autonomy

Free society with legally protected rights

Greater China:Taiwan

Billion dollar investments into Chinese factories

Increasing bilateral trade with China

Access to limitless pools of cheap Chinese labor

Japan

Amazing economic growth in 1970s and 1980s

Economy stalled drastically in 1990s

– Faulty economic policies

– Stock market crisis (Nikkei Index)

– Entrenched political bureaucracy

– Shrinking population

Now following slow-growth policy

Four Asian Tigers

After Japan, first four countries in Asia to move from developing country to NIC status

Rapid industrialization

Important economic leaders for other Asian countries

Vietnam

Poised for significant growth

Educated and motivated population

Government committed to economic growth

Historical constraints:

– Poor infrastructure

– Onerous government restrictions

– Minimal industrial base

– Competition for resources from China

– Lack of capital technology

India:Historical Constraints

Traditional, insular policies

Widespread corruption and bribery

High import tariffs

Poor protection of intellectual property rights

Anti-business attitude

India:Five Point Agenda

Improve investment climate

Develop comprehensive WTO strategy

Reform key industries

– Agriculture

– Food processing

– Small scale industry

Eliminate red tape

Institute better corporate governance

India:Significant Opportunities

Massive market

Cheap and qualified labor

English language fluency

Large, educated middle class (250,000 million)

Supplier and exporter expertise in IT

Competitive time zone (to conduct business with U.S.)

Ignored “bottom-of-the-pyramid” market (BOPM)

Bottom-of-the-Pyramid Markets (BOPMs)

Four (4) billion people across the globe with incomes of less than $1200

Not defined by national borders

Defined by pockets of poverty across countries

Concentrated in LDCs and LLDCs

Relatively ignored by international marketers

Misconceptions about their lack of resources

Lack of appropriateness of products and services usually developed for more affluent consumers

Dynamic Transformation of BOPM Clusters

Important Considerations:Marketing in a Developing Country (from Chapter 9)

Level of market development

– Physical infrastructure

– Specialized marketing institutions

– How much adjustment is necessary

Level of market demand

– Literacy, income, living conditions?

–What kind of market? Traditional rural/agricultural sector

Modern urban/high-income sector

Transitional sector (with urban slums)

Important Considerations:Marketing in a Developing Country (from Chapter 9)

Level of market development

– Physical infrastructure

– Specialized marketing institutions

– How much adjustment is necessary

Level of market demand

– Literacy, income, living conditions?

–What kind of market? Traditional rural/agricultural sector

Modern urban/high-income sector

Transitional sector (with urban slums)

Asia Pacific Trade Associations

Association of South East Asian Nations (ASEAN)

ASEAN+3

– ASEAN members plus ministers from China, Japan, and South Korea

Asia-Pacific Economic Cooperation (APEC)

Association of South East Asian Nations(ASEAN)

ASEAN

+ China+ Japan+ South Korea

• Result of Asian financial crisis of 1997-1998

• Consists of foreign and finance ministers of each country

• Meet annually to deal with trade and monetary issues facing Asia

Asia-Pacific Economic Cooperation(APEC)

Established in 1989

Includes all major economies of the region

Common goals and commitment:

– Open trade

– Increase economic collaboration

– Sustain regional growth and development

– Strengthen the multilateral trading system

– Reduce barriers to investment and trade