Marketing in the 3rd world: Teaching, Pricing and community

usage:
What would be the main idea here: some of the challenges of the developing marketing in a
developing country is to get the consumer to use the product and to offer it in the right sizes.
This is where the advertising and retailing comes.
As mentioned in our book the toughest task for Gillet ( shaver and foam company) is to
convince or to persuade men to shave. So based on their marketing strategy (promotion) they
do send a portable theatre on every villages to show men the benefits of shaving
In south Africa and Indonesia a confused man entered a locker room and he was thought by his
friend on how to shave and in mexico a handsome sherrif is tracking the culprits who kidnapped
a woman he then pauses on a trail and shave at the end ofcourse he got the woman
This is like educating your costumer how to use your product a good example here in the
Philippines is Bigen commercial (shows off the video)
For Another reason Latin American appreciate smaller bottles of perfume . Price is an important
consideration but Mary kay (fragrance perfume for woman from france) learned that Latin
American loves to wear wardrobe or variety of perfume in opposite to European and U.S. whos
loyal to single brand.
Loreal paris was had struggled in Brazil because they do not applied the strategy of door to door
selling though Latin woman are used to direct selling ( a selling strategy in which the person
sells of his/her product to another peers or person to person interaction/ catalogue basis). Other
marketing strategy would include sending video vans to rural part of the country to educate its
customer on how to use their products.
The more developed an Economy, the greater the variety of marketing function demanded.
What is Marketing function? (A role that helps a company to identify and source potentially
successful products for the market place and promote them by differentiating them from similar
products)
As the country develops the distribution channel system develops (upgrading system)
In retail sector specialty store (department store a retailer of such store that carries a wide
variety of categories and brand assortment of goods), supermarkets ( large form of grocery
store), Hypermarket ( combination of grocery and department store), mom and pop business
(are small business usually ran by families) and local brands ( national brand) often give way to
larger establishments. In short the number of retail store declines and the volume of sales per
store increases. In simple terms demand increases because the supplier which is the retail
stores decreases.
So what could be done to facilitate the expanding needs of the market and developing country?
They have form some agencies or organization to attend the needs of the expanding market
such as advertising agencies which educates the mass on how to use a certain product, its
benefit and the launching of a new product in the market, facilities for marketing research and
repair to develop the needs of the costumer and continually develop it to more efficient,
sustainable and accessible to the costumer, storage and warehouse facility where the business
form can store its surplus or excess products for future use or consumption. And for the
communication system which includes internet and mobile networks (ofcourse it is the most
accessible and handy agency among all the given firms because anyone can actually log or call
them because now a days even the country which who experienced poverty do have their cell
phones or internet with them so the agency can attend their needs immediately)
This is not an easy task because some marketers especially the international business firms
need to study foreign environment to determine how much adjustment do they need to settle

inorder for their business to be more effective in modern marketing system because there would
be a possibility that if the people wouldnt be able to catch up with the product you are going to
launch or people were not ready to the modernization of a specific product so they will just
decline it. then there would be disruptive marketing and a possibility to fail in the production
growth.

DEMAND IN DEVELOPING COUNTRIES

In accordance to Euromonitor International 2012 the percentage of the expenditures in
developing countries prioritized food rather than in wealthy countries who spend most of their
money for their shelter. You may also recall that the government tax from other affluent or
wealthy countries delivers equal or longevity to their citizen especially in Japan. Estimating the
market potential in less developed country adds challenges such as
1. The traditional rural or agricultural sectors which often lives in countryside / provinces and
works in agricultural or poulty farm
2. The modern Urban or highly income sectors and lastly lives in central capital region and
highly civilized region which includes high skyscrapers, jet airports etc
3. The often very large transitional sectors (low-income or slums) lives in slums areas, has the
lowest income
In order to develop their economy some company firms make a research about their costumer
McCans company learned that people who are living in rural are fond of basic
commodities/goods only like foods, oral hygienic wash, kerosene etc. unlike in Urban areas
which are fond of spending their money in many things like leisure purposes for their hobby
aside from their basic needs.
The most challenging part is when the Mc Cans group of company send their employees to live
with the 3rd level customer who are earning from $350-$700 a month. A lot of videos and
questionnaire were sent as an output in their office and the most output who got their attention
is the quote saying that people in the third level has a narrow perception within a product given
as an example in Nido their perception was that it is a formula only for babies so as a remedy
Nestle form an advertisement which says if you drink this milk you will be strong and productive
which is pertaining to adults ofcourse to educate their consumer as well.

BIG EMERGING MARKET

Dept. of Commerce predicts that over 75% of the expected world trade will account or will be
from more than 130+ country so what are those developing countries? (Africa, Asia, Latin
America and Middle East)
Imports to the country identified as BEM whos accounting to 25% of the Industrialized Gross
domestic product ( is one of the primary indicators use to gauge the health of the countrys
economy, it represent the total dollar value of a;; goods and services produced a specific time
period/ size of the economy,
With half of the population yet still they contributes to the 25% of the industrialized GDP today
will soon be 50% since the countrys population spontaneously growing.
BEM share a number of important traits.
*They are all geographically large (large when it comes to location or area size)
*Have significant population/ having a particular number of population
*Represent a sizable (fairly large) Markets for a wide variety of product
Have a strong rates of growth or the potential of the significant growth (there is a capability of
growth and development)
*have undertaken significant program of economic reform (government programs to reduce

distortion/unwanted caused by market failure)

*Are of major political importance within their region the significance of their political parties are
important in their region
*Are regional economic drivers (as it relates to the industries, specific entities, and related
spheres of influence we need to pay attention to risk management activities such as
food, shelter, clothing, government, transportation, communication, Information Processing,
Energy, industrialzed Metals and Entertainment
*will engender(generate or produce) further expansion in neighbouring markets as they grow.
Although some of the countries werent able to meet all the expectations and regulations India,
china, brazil, Mexico, Poland, turkey and south Africa are the prominent (example) of BEM.
Other country such as Egypt, Philippines, Venezuela and Colombia may be warrant
(Authorized) inclusion (to be included in the near future) the list is liquid (not consistent meaning
they change in a specific time) some may be dropped off and some might be included in the
economic condition change,
Increased in economic activity means more job means more income. Since a lot of countries
lack modern infrastructure (physical and organizational structures and facilities). Much of the
expected growth will be on industrialized (developed) sectors such as Information technology,
environmental technology, energy tech, transportation and health tech.
After the world war Europe reconstruct its industrial bases which creates a large amount of
demand from its people in which they werent able to provide as more money was infused (been
filled or put) into their economy, During that period U.S. was the principal supplier because most
of the countries was currently reconstructing or rebuilding their economies. Meeting these
demands produces the largest boom the U.S. had ever experienced.

THE AMERICAS
These part of the America has been a continuous trading partner United States, Canada,
Central America, and South America. As in Europe the Americas are engage in all sorts of
economic cooperative agreements such as NAFTA (being the most important), Mercosur ( the
common market of the south <Argentina, brazil, Paraguay>) and Dr. CAFTA gaining importance
( first free trading agreement between US and a group of smaller developing countries such as
costa Rica, Guatemala, Honduras and Nicaragua)

THE NAFTA
In 1994, The North American free trade Agreement came into effect, creating one of the largest
free trade zone and laying the foundation for strong economic growth and rising prosperity for
Canada, CFTA or Canada free trade act was also established to remove the trade barriers
among the two countries The United States and Mexico. Since then NAFTA has demonstrated
how free trade increases wealth and competitiveness, delivering real benefits to families,
farmers, workers, manufacturers and consumers.
The NAFTA partners have created this website to provide Canadians, Americans and Mexicans
with Information about NAFTA works and Many ways in which it has improved the lives of North
Americans.
The Nafta required three countries to remove all the tariffs and barriers. So the Mexico as well
announced a free trade on United states so there it goes 3 countries in an alliance so officially
all the tariffs and barriers had been dropped off

KEY PROVISIONS OF NAFTA

Market access within 10 years of implementation all tariffs will be eliminated on North
America Industrial products traded among Canada, Mexico and United States. The non-duty
free goods from Canada will be duty free and it will stay entirely within 15 years, Mexico will
eliminate the tariffs (a tax in goods coming into or leaving the country.) on nearly 50% of all
industrial goods and the remaining tariffs will be phased out entirely.

Nontariff barriers
In addition to the elimination of tariffs, Mexico will eliminate the non-tariff barriers and other trade
distorting restriction.
NAFTA also eliminates local- content (when a foreign company makes product in a country, the
parts or the materials being used are from the country itself rather than being imported from the
other country or rather giving the foreigner an authorization to manufacture its product to the
country), local production (whether an enterprise manufactured locally is majorly affected by the
product they offer), export performance (most common and fastest spreading measures used by
the host countries in their dealings with multiple corporations) that have limited U.S. exports

Rules of origin
NAFTA reduces Tariffs from North America only, rules of origin are designed to prevent free
riders from benefitting through minor processing of or transhipping of NON-NAFTA goods. As for
example Japan decided to assemble a technology but werent been able to do it in Mexico
chances are in order for them to avoid quotas and tariffs part of their machinery or technology
usually 62.5% must come from North America.

Customs administration
Canada, U.S. and Mexico agreed to implement uniform customs, to ensure that exporters who
market their products in NAFTA countries doesnt have to adapt to multiple customs procedures
most procedures are governing rules of origin documentation, record keeping and verification,
the three countries will issue advance rulings, on request, about whether or not the product
qualifies to tariff preference under the NAFTA rules of origin

Investment
NAFTA will eliminate the investment condition that restrict the trade of goods to Mexico. Among
the conditions were eliminated are the requirements, given a percentage that foreign investors
export a given level of goods or services, transfer the technology and limit imports to a certain
percentage

Services
NAFTA established the first comprehensive set of principle (or guidelines) governing services
trade. Both U.S. and Canadian financial institution are permitted to openly owned subsidiaries (a
government or state-owned enterprise.) in Mexico and all the restriction in the services will be
lifted. NAFTA opens Mexicos market for International truck, bus and railways and eliminates the
requirements of loading off the cargo to Mexican vehicle that will surely saves time and money,
also US and Canada will have the rights to use their own drivers and equipment for cross border
for goods and passenger to Mexico.

Intellectual property
NAFTA will provide the highest protection of Intellectual property available in any bilateral or
international agreement including Patents, trademarks, copy right, trade secret etc.

Government Procurement
NAFTA guarantees business fair and open competition for procurement (the act of procuring, or
obtaining or getting by effort, care, or the use of special means) in North America through
procedures. In Mexico PEMEX ( the national Oil company) and CFE (the national Electric

company) and other government owned enterprises will be opened to US and Canadian
suppliers

Standards
NAFTA prohibits the use of standard and technical regulations used as obstacle to trade (In
recent years, the number of technical regulations and standards adopted by countries has grown
significantly. Increased regulatory policy can be seen as the result of higher standards of living worldwide,
which have boosted consumers' demand for safe and high-quality products, and of growing problems of
water, air and soil pollution which have encouraged modern societies to explore environmentally-friendly
products. it certainly involves significant costs for producers and exporters. In general, these costs arise
from the translation of foreign regulations, hiring of technical experts to explain foreign regulations, and
adjustment of production facilities to comply with the requirements. The high costs involved may
discourage manufacturers from trying to sell abroad. In the absence of international disciplines, a risk
exists that technical regulations and standards could be adopted and applied solely to protect domestic
industries. Technical regulations and standards set out specific characteristics of a product such as its
size, shape, design, functions and performance, or the way it is labelled or packaged before it is put on
sale.) HOWEVER NAFTA provisions do not require the United States or Canada to lower existing health,
environmental or safety regulations, nor does NAFTA require the importation of products that fail to meet
each countrys health and safety standards

Dr.Cafta
In August 2005 President Geroge Bush signed into Law a comprehensive(most) free trade
agreement among (developing countries) such as costa rica, the dominican republic, el
salvador, guetamalla, Honduras, Nicaragua and United States. The law included a wide array of
tariff reductions aimed at increasing employment among seven signatories.

Southern Cone Free Trade Area (Mercosur)

Merosur including Argentine, Bolivia, brazil, Chile, Paraguay and Uruguay is the
second largest market agreement in America after NAFTA .
The treaty of Asuncion which provided legal basis for Mercosur was signed in 1991
and formally inagurated (to Introduce or to celebrate) in 1995. The treaty calls for a
common market that would eventually allow the free movement of goods, capital,
labor and services among the member countries with a uniform external tariff.
Mercosur has become the most influential and successful free trade area in South
America. With the addition of of Bolivia and Chile in 1996 it became the market of
220 million people with combined GDP of nearly 1 trillion and third largest free trade
area in the world. More recently Colombia, Ecuador, Venezuela and Mexico was
been associated shortly as well. It became successful shortly and it would be a
credit to their government who is willing to confront even the toughest issues they
are encountering,
In addition the first region to region free trade ageement was established between
the Mercosu and Europe. It do faces a lot of difficulties when it comes to Europes
highly protected agricultural sector but later on one of the official Europe Union
indicated thet they were ready in the process of reforming its commong
agricultural policy

Latin American Progress

A political and economic revolution has been taking place in Latin America Over the
past three decades. Most of the countries have moved from military dictatorship ro

democratically elected government. Inspite of the backsliding of Venezuela.

Privatization of state owned enterprises and other ecomomic enterprises shows a
broad shift away from the inward looking policy (instead of importing they would
rather provide or manufacture the product at their home) state ownerhip was once
the ideal engine for economic growth

NAFTA OR FTAA
It serves as the blue print for free trading extending from Alaska to Argentina.
The first new country to enter the NAFTA fold was to be CHILE , then membership was
extend south until there was FTA (Federal Trade of the America Act)
The question now is whether there will be FTAA or tri-country NAFTA led by Brazil and
other MERCOSUR country. The answer to this question relies with Issue of fast
track legislation and pres. Obamas policies
The fast track negotiating authority for trade agreements is the authority of the
President of the United States to negotiate international agreements that Congress can
approve or disapprove but cannot amend or filibuster. Also called trade promotion
authority (TPA) since 2002, fast track negotiating authority is a temporary and
controversial power granted to the President by Congress. The authority was in effect
from 1975 to 1994, pursuant to the Trade Act of 1974, and from 2002 to 2007 by the
Trade Act of 2002. Although it expired for new agreements on July 1, 2007, it continued
to apply to agreements already under negotiation until they were eventually passed into
law in 2011. In 2012, the Obama administration began seeking renewal of the authority.
In June 2015, the TPA passed the Senate and currently awaits the signature of the
President.[1] This final approval to legislation granted President Obama "enhanced power
to negotiate major trade agreements with Asia and Europe

Strategic Implications for Marketing

As the country develops income changes, population concentration shift, expectations
to better life adjust to higher standards, new infrastructure evolve, and social
capital investment are made