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International
Marketing
© Daniel W. Baack, Barbara
Czarnecka & Donald Baack
Part One
Essentials of international
marketing
Chapter 5
International marketing
planning, organization, and
control
Learning objectives
1. How do planning, organizing, and controlling activities influence international marketing programs?
2. What activities are involved in international strategic planning?
3. What forms of organizational structures do international companies use?
4. What are the basic components of an international marketing plan?
5. How does internal communication affect international planning, organizing, and control?
6. What emerging trends might affect international marketing in the future?
4
5
Learning objective #1
• How do planning, organizing, and controlling activities
influence international marketing programs?
6
International marketing and strategic planning
• Planning, organizing, and controlling international marketing
operations are critical elements of successful international
marketing.
• The planning process involves managers developing the
goals, strategies, and activities that will best position the
firm for success in the international marketplace.
• Organizing is the process through which management
designs the structure of the organization, assigns
responsibilities, and ensures effective communication flows
throughout the company.
7
International marketing and strategic planning
• Control in an international marketing environment focuses
on measuring progress against what was planned, taking
corrective actions when they are needed, and rewarding
success.
8
Planning, organizing, and controlling
9
International marketing efficiency and effectiveness
• Two important themes in strategic planning, organizing, and
controlling include organizational efficiency and
effectiveness.
– Efficiency means conducting international marketing
activities without wasting time and resources.
– Effectiveness focuses on conducting international
operations in ways that enable the firm to reach its
international marketing goals.
10
International marketing efficiency and effectiveness
• Management writers describe efficiency and “doing things
right” and effectiveness as “doing the right things.”
– Successful international marketing requires both.
11
Planning levels
• The international marketing planning process occurs at
three levels: strategic, tactical, and operational.
• Strategic planning focuses on the overall direction of the
firm, the development of goals, and the allocation of
resources in the pursuit of those goals.
– Top managers develop strategic plans, which identify the
long-term direction of a company.
• Tactical planning focuses on specific marketing activities
and programs that support the overall direction set at the
strategic level.
12
Planning levels
– Middle-level managers who normally concentrate on
specific marketing functions, such as product design,
advertising, or distribution, prepare tactical plans.
• Operational plans dictate the day-to-day entry-level
activities that are crucial parts of successful international
marketing programs.
– Operational plans guide the efforts of first-level managers.
13
Learning objective #2
• What activities are involved in international strategic
planning?
14
Elements of strategic planning
15
Mission statements
• The mission statement delineates why the organization exists and guides the overall direction of the firm.
– Recently, many mission statements have been revised to add the concept of seeking to serve a global marketplace.
– Ford Motor Company’s mission statement reads, “We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world.”
• Mission statements guide major company decisions.
– The company Google referenced its mission “to organize the world’s information and make it universally accessible and useful” when leaving the Chinese market.
16
Strategic business units
• Corporate-level planning also determines the division of the
firm into strategic business units, or parts of the overall
business.
– A strategic business unit operates in a specified market
area and has specific goals, objectives, and control
mechanisms.
– A strategic business unit for firm engaging in international
marketing may be a division or office in a foreign country.
17
Strategic business units
• The Volkswagen Group (Germany) consists of two main
divisions including the Automotive Group and the
Volkswagen Financial Services Group.
– The Automotive Group contains seven brands worldwide,
including Audi, Bentley, Bugatti, Lamborghini, SEAT,
Škoda, Scania, Volkswagen, and Volkswagen
Commercial Vehicles.
18
Environmental assessment
• The mission of the firm combined with an assessment of
potential market areas, countries to be served, and
marketing responsibilities determines how the firm will be
divided into strategic business units.
• These assessments include an analysis of various internal
and external factors present in the marketing environment.
– External factors have been described throughout this text,
including culture, language, political and legal systems,
economic systems, and infrastructure.
19
Environmental assessment
– Internal factors include factors also discussed throughout
the text, such as human and financial capital, competitive
advantage, market knowledge, and responsiveness to
market changes and demands.
20
SWOT analysis
21
Forecast future events
• Managers forecast in three main areas – economic
conditions, sales, and changes in technology – but some
events are impossible to predict.
• Economic conditions set the framework for the strategic
planning process.
– Issues include global economic growth and periods of
recession.
• Sales forecasts indicate levels of revenue a company
expects during the coming year.
22
Forecast future events
– When sales revenues increase, companies spend more
funds.
– When sales revenues decline, company leaders often cut
back.
• Changes in technology impact the overall marketplace.
– Companies may respond to changes in technology by
designing a new product.
23
Determination of goals
• At the strategic level, goals are often set in financial terms,
such as return on investment, sales figures, market share
attained, and overall market penetration.
• Strategic goals can also be nonfinancial, such as increased
brand recognition, awareness, or improved company image
worldwide.
• These company-wide standards provide the basis for the
strategic control process.
– They guide the general direction of the company and alert
managers when the organization has begun to drift off
course from its stated mission.
24
Allocation of resources in pursuit of the plan
• Allocating resources coincides with the development of an
overall organizational structure.
– Determining the most efficient and most effective
organizational structure is a major component of the
organizing element of international strategic marketing
planning.
– The organizational structure also impacts and is impacted
by organizational communication.
25
Learning objective #3
• What forms of organizational structures do international
companies use?
26
International marketing organization
• A well-defined organizational structure is usually already in
place for many international companies.
– Changes in the internal or external environment, the
decision to expand operations globally, or changes in
existing strategies often create the need for either a new
structure or at least an adaptation of the existing
structure.
• Regardless of the events that lead to the organizational
structure decision, all decisions should be based on
designing the most effective and efficient international
organization possible.
27
Organizational structures
• Numerous forms of organizational structure can be
employed by international businesses.
• Company executives base choices on the strategy of the
company and the intensity of international marketing
activities.
– A company that engages solely in international exporting
will have a very different structure than that of a truly
multinational corporation.
• The important task for managers is to select and install the
organizational structure that most effectively and efficiently
enables the firm to reach its international marketing goals.
28
Direct exporting structure
• A simple structure often used by businesses new to
international marketing supports direct exporting.
– In this form of structure, international orders are shipped
to customers from the company either directly or through
an intermediary.
• The decision to engage in either direct (home-based or
foreign-based) exporting or indirect exporting through agent
or merchant middlemen will be based on operational
efficiencies and synergies with existing strategies.
29
Direct exporting structure
– The responsibility for the exporting function, along with
responsibility for international sales, falls within the
marketing function.
– Efforts are largely undifferentiated between domestic and
international efforts.
• It will be difficult for a firm to continue with a direct exporting
form of structure when international sales begin to account
for a relatively large portion of revenue.
30
Direct exporting
31
International division structure
• As international activities begin to intensify, company
leaders might choose to develop an international
department, office, or division to oversee international sales.
– For smaller organizations, all international sales may be
managed domestically by the international office or
department.
o This structure is similar to the direct exporting
structure; the main difference is that one central control
department is responsible for international marketing
and sales activities and this division is held distinct
from domestic marketing activities.
32
International division structure
• The international division structure has many advantages.
– Allows the company the advantage of gaining a local
presence and creating better access to market-relevant
information
– Can help meet governmental requirements and gain favor
with foreign governments
33
International division
34
Direct functional reporting
• A compromise between the direct exporting and
international division structures is a functional structure with
direct reporting duties to a home-based marketing manager
or vice president.
• This method allows for the presence of foreign offices, but
streamlines the reporting duties directly to the domestic
marketing manager.
– The approach may be useful in limited situations, but
many global companies prefer to develop international
divisions or offices.
35
Direct functional reporting
36
Strategic alliances
• Many market entries involve partnering with local
companies.
• The type of control creates one key concern.
– The strategic alliance may be structured so that it has its
own independent management, and the alliance becomes
an entity with separate goals and decision making from
the partner companies.
o This may lead the strategic alliance to make choices
contrary to the interests of the companies that started
it.
37
Strategic alliances
– Under collective control, the partners work together to
manage the alliance, with the goal of generating optimal
mutual benefits for the partner companies, even at the
expense of the alliance.
38
Strategic alliances and trust
• Trust will be one of the key factors influencing the type of
organization and the degree of linkage between partners.
– In cases of high trust, companies share highly sensitive or
important knowledge with partners.
• Trust may be especially important in instances of partner
asymmetry, which occurs when one alliance partner is an
unequal member.
– Asymmetry results from differences in market position,
proprietary knowledge, overall company size, or a variety
of other factors.
39
Strategic alliances and trust
– Asymmetry is rooted in unequal contributions or benefits.
– Organizational structure, particularly control and
structured contributions, can help mitigate the effects of
asymmetry.
40
Region-based organization
• A truly global organization may choose to have distinct office
locations, and strategic business units in each specific
region served, i.e., a region-based organization.
– It offers the advantage of allowing the company to be
responsive to local market differences while presenting a
relatively simple organizational structure with clear lines
of authority and responsibility.
• As trade areas (such as the European Union or NAFTA)
continue to grow in importance for international marketers,
the region-based approach grows in popularity.
41
Region-based organization
– The regional structure will be viable as long as trade
barriers remain minimal within the targeted regions.
– When barriers become significant, a different form of
structure may become more attractive for international
marketing purposes.
42
Region-based organization
43
Matrix organization
• Some successful international marketing firms choose an
organizational design that is not limited to geographic
responsibilities, but instead groups some employees based
on skills or product focus.
– These groups of employees then report to various
broader regional or national managers.
• The matrix form of structure allows flexibility as a group of
engineers or financing experts can provide services to
various regions.
44
Matrix organization
– The main concern with a matrix organization is that it can
lead to conflicts when different regions have different
needs or goals.
– The engineering team, for example, might find itself being
pulled in different directions by the various regional
operations that have authority over the team’s activities.
45
Matrix organization example
46
Internal factors and organizational design
• Internal and external factors influence the design of
organizational design in a way similar to how they impact
overall strategic planning.
– Some of the most compelling factors include the
company’s international orientation, communication and
control issues, the intensity of international marketing
efforts, a company’s existing organizational design, and
the degree of technology development.
– Executives make an important strategic choice involving
the form of structure to utilize after considering these
factors.
47
Company orientation
• Ethnocentric organizations prefer to use home-market
employees at both home and abroad.
– When the management team believes that nationals from
the home country are best able to drive international
marketing activities, a home-country orientation results.
• Polycentric companies employ locals in the host country to
conduct operations, and each market is treated as being
unique.
– The skills and local knowledge of host-country nationals
influence decision making.
48
Company orientation
• Regiocentric companies utilize employees from several
countries in a region, thereby pooling the expertise of
employees in different countries.
• Geocentric companies focus on utilizing the best employees
available, regardless of specific country location.
– These companies maintain a global orientation.
49
Communication and Control
• Communication and control refer to the degree to which a
home office directs activities in various home countries.
• When strong, daily involvement is required, companies
develop sophisticated communication and control systems.
• Some managers prefer to maintain tight controls and
frequent contact with overseas markets, whereas others
favor a much less rigid approach.
• These approaches impact organizational design.
50
Communication and Control
– A direct-reporting, functional approach may work better
when tight control and frequent communication is desired;
a national or regional approach may work better when
control and communication concerns are not as
significant.
51
Intensity of international marketing efforts
• When a company devotes considerable resources to and
derives substantial business from international markets, the
organizational design will be different from that of a firm that
does little business in foreign markets.
– A company with a small percentage of international
business may prefer a simple export approach.
– A truly global organization requires organizational designs
such as the regional or matrix form of structure.
– These differences may also be at the product level.
52
Existing organizational design
• In the event that a firm is relatively new in the international
marketplace, the existing organizational design often affects
its international structure.
– The new structure tends to develop slowly and
deliberately.
– A new entry to international marketing may begin its
operations with a simple exporting strategy and eventually
move to one of the other designs.
53
Technological investment
• The level of technological sophistication and commitment of a company often influences organizational design.
• While technology remains important in all aspects of international marketing, it becomes especially important when establishing international communication and control systems.
– Communicating with offices in international markets requires efficient and effective technology.
– For simpler designs, such as direct exporting, relatively modest technological investments are required.
– Synchronizing operations with locations around the globe often requires significant investments.
54
External factors and organizational design
• External factors also influence organizational design
decisions.
• These factors include levels of international competition,
distances from international customers, customer profiles,
and governmental forces.
– These external factors require responses, including how
the company will be structured in order to cope with them.
55
International competition
• Organizational structure decisions are affected by the level
and intensity of international competition.
– When few international competitors are present, or if the
level of competition stays low, companies may choose to
engage largely in exporting and maintain a functional,
direct exporting structure.
– For more intense levels of competition, a national or
regional presence may be more effective.
56
Distance to international customers
• Companies desiring to stay close to international customers
often choose the region-based approaches to organizational
design.
– The local presence afforded by these alternatives can be
an important part of maintaining close relationships with
international customers.
– Close relationships are more readily maintained when
there are a number of customers clustered in regions that
are far from a firm’s world headquarters.
57
Customer profiles
• Regardless of distance to international customers, some
customers simply demand a local presence, such as a local
sales office.
– The international division alternative can work well in
these situations.
• Establishing a presence in a country will be more important
when frequent contacts are made between buyer and seller,
as when rebuy or modified rebuy situations are the norm.
– In many industrial buying situations, a matrix
organizational design specific to regions grants an
effective level of coordination and control.
58
Governmental forces
• Governmental forces can dictate organizational structure
when tariffs or other barriers to trade make exporting to the
market too expensive.
– In those cases, companies may instead choose to set up
subsidiaries within the country.
– These subsidiaries may lead to a different organizational
form.
• Governments may also require that companies use a local
partner when setting up a subsidiary.
59
Governmental forces
– In some cases, the local partner may be required to have
a majority stake in the local business.
– These requirements may also lead to a different
organizational form.
60
Learning objective #4
• What are the basic components of the international
marketing plan?
61
International marketing tactics and the marketing plan
• Tactical planning concentrates on specific international
marketing activities, guided by the overall strategic-level
planning process.
• Tactical-level planning involves management of the
segmentation, targeting, and positioning of the firm’s
products or services in specific international markets
combined with the other elements of the marketing mix—
pricing, promotion, and distribution.
62
The international marketing plan
63
Planning tactics and strategic plans
• Many of the efforts listed in the international marketing plan
are similar to those conducted as part of the strategic
planning process.
– International marketing plans are generally constructed
for specific programs, products, or services in specific
international markets.
– In most cases, these plans are devised for specific SBUs.
• Strategic plans outline the direction of the overall
organization, specifically its structure, direction, and goals.
64
Learning objective #5
• How does internal communication affect international
planning, organizing, and control?
65
Internal marketing communication
• Organizational communication plays a vital role in international marketing success.
– The flow and clarity of international communication within the company impacts planning, organizing, and control activities as well as the success of international marketing plans.
• The quality and quantity of international communication directly affect strategic and tactical plans.
• Many challenges exist in international communication.
– Effective communication systems overcome these problems and provide the basis of high-quality international marketing programs.
66
Formal communication in global companies
• Organizational communication takes two primary forms:
– Formal communication travels through channels that are
designated or chosen by organizational leaders.
– Informal communication takes place in the form of rumors
or gossip, and messages that travel through the
organizational grapevine.
67
Formal internal communication channels
68
Traditional formal communication channels
• Many internal communications continue to rely on traditional
channels.
– A supervisor speaking to an employee (a direct address)
takes place on a daily basis.
– Meetings are held both in person and through the use of
newer electronic technologies.
• In international companies, these traditional channels
remain useful tools.
69
Traditional formal communication channels
– A direct address may take place on the phone or through
a visual format such as Skype.
– Direct communications assist both employees and
managers in asking and answering questions, making
and fulfilling requests, receiving and clarifying
assignments and directions, and in creating relationships
with coworkers.
70
Emerging formal communication channels
• Global trade has been vastly improved through the use of
emerging formal communication channels, and these
communication channels work within the overall corporate
structure.
– Company websites connect employees with customers
and with each other.
– An Intranet system serves a variety of purposes.
– Teleconferencing, mobile phones, and satellite
transmissions connect employees with each other and
with managers at higher ranks.
71
Intranet uses
72
Barriers to international formal communication
73
Overcoming barriers to formal communication
• When managing strategic marketing operations in foreign
countries, communication processes are challenging but
also vital to effective functioning, planning, organizing, and
control.
• To successfully navigate the pitfalls that can disrupt formal
communication in such organizations, the following
concepts are helpful:
– Cultural training for employees
– Careful selection of media when transmitting messages
74
Overcoming barriers to formal communication
– Use of multiple channels for important messages
– Establishing effective management information systems
– Monitoring informal communication
75
Overcoming barriers to formal communication
• Cultural training will be used to complement and
supplement other forms of employee instruction.
– Individuals who will be transferred to host nations receive
information about the company and how it operates in
conjunction with messages regarding how operations
differ in various nations.
– The training of expatriate employees creates a vital link
between the company’s home office and its marketing
activities in other countries.
76
Overcoming barriers to formal communication
• When sending messages to and from the home office and
foreign subsidiaries, media selection plays a vital role.
– In the current landscape, many expatriates are likely to
prefer newer technologies, such as smartphones, tablets,
and the Internet.
– Messages can be transmitted more quickly through these
formats than through traditional channels.
• Employees in both the host and home countries are advised
to use multiple channels for important information.
77
International marketing control
• International marketing control includes assessments of all
marketing activities individually and collectively within
international markets.
– The assessment may be at the regional, national, or other
appropriate levels.
– Marketing controls are based on the standards set in the
planning process.
– Control is more than examining numbers: It represents
carefully analyzing all of the factors that lead to
organization success.
78
Four steps of marketing controls
• In general, international control consists of four steps:
– Restate the standard.
– Measure performance as it relates to the standard.
– Compare performance to the standard.
– Make a decision (make corrections or reward success).
• The first step is to restate the standard that was set as part
of the planning function.
– In current terminology, many standards are known as
metrics, which is another term for performance measures.
79
Control measures
• Strategic controls are those that apply to the CEO and any
other manager involved in directing the portfolios of
businesses or activities held by a single company or
corporation.
– These standards are more encompassing than goals set
by a marketing department.
– They include corporate profitability figures measured by
return on investments, the value of a share of common
stock, overall company growth in assets, and similar
measures.
80
Control measures
• At the strategic level, the typical objectives and goals
established for the marketing department’s planning and
control systems are found in the areas of
– Market share
– Sales
– Profitability
– Customer satisfaction
– Corporate and brand image.
81
Marketing controls
82
Corrections
• The final step of control is to either reward success or make
corrections.
• Strategic corrections
– Strategic management at the top level of the company will
focus on either a resource-based approach to strategic
direction or a competitive approach.
• Tactical corrections
– Tactical corrections may be developed by brand, by
product, and by function.
83
Corrections
– Tactical corrections may also be functional and include
changing promotional methods, such as starting a new
advertising campaign, or changing the channel used.
• Operational corrections
– Operational corrections include changing methods for
conducting daily activities.
84
Learning objective #6
• What emerging trends might affect international marketing
in the future?
85
Emerging trends in international marketing
• Many trends affect international marketing practices.
• It is likely that the following issues will affect international
marketing in the foreseeable future.
– Technological
– Cultural
– Economic issues.
86
Technological issues
• The proliferation of cell phones and smartphones worldwide
has had a major impact on international marketing.
– The impact of smartphone technology influences many
international businesses, but especially international
service providers.
– Increased usage of smartphones directly affects cellular
phone companies dependent on sales of lower-end,
more-traditional phones.
• In emerging or less-developed markets, counterfeit
smartphones constitute a growing market.
87
Technological issues
– Forty percent of the smartphones manufactured in China
are counterfeits.
– Beyond being less expensive, in many cases new product
features are offered.
o Some fake iPhones in China allow the user to install
two SIM cards.
o Counterfeits in Ghana can receive television
broadcasts.
o In Kenya, counterfeit phones feature quotes from
President Obama.
88
Technological issues
• Citizens of developing countries also typically exhibit higher
usage rates of new mobile and digital technologies than
many individuals in mature markets.
– India already has approximately 765 million phones, with
95% of the phones being mobile.
• A recent survey revealed that only 27% of Canadians who
were online had written a blog post or posted on an online
forum.
– In comparison, 51% of online Brazilians and 88% of
online Chinese had done so.
89
Technological issues
– Also, 92% of online Thais and 88% of online Malaysians
had shared personal photographs while using the
Internet, compared to only 60% of Canadians.
– For all of these activities, emerging-market consumers
are more likely to use a cell phone, whereas Canadians
are more likely to use a personal computer.
90
The top fifteen cellular phone user countries
91
Cultural issues
• Differences in culture continue to be a major cause of
international marketing misunderstandings.
– International marketers that correctly adjust to cultural
differences and the interaction between culture and
technology will generate substantial advantages over
competitors.
– Culture’s pervasive influence, particularly on
consumption, presents a challenge for marketers globally.
– The future of international marketing will likely be
influenced by cultural convergence.
92
Cultural convergence
• Cultural convergence refers to the growing similarities
between consumers globally.
• Technological similarities and adoption of those
technologies may help drive increased convergence
globally.
• Convergence may also be accelerated by political and
economic changes.
– The transition to a more capitalist economy and open,
democratic political structure often leads to more similar
consumption patterns by consumers across those
growing economies.
93
Cultural convergence
• Businesses also influence this process.
– As businesses move into countries, the employment of
local salespeople and distributors, and eventually the
establishment of local subsidiaries, also lead to increased
cultural convergence.
94
Cultural convergence
• Product preferences rooted in a culture may cause some people to resist outside goods and new patterns of behavior.
– The persistence of specific values due to sociocultural influences, particularly in the face of outside alternatives, is cultural divergence.
• Cultural crossvergence refers to the emergence of a new, global value system as countries become more interconnected.
– Consumers take the best from various locations and a global culture starts to emerge.
– The ubiquity of soy sauce and the increasing popularity of fruits from all over the world are examples.
95
Economic issues
• After the fall of the former Soviet Union and the transition
toward a more capitalist system for the People’s Republic of
China, Eastern Europe, and much of Latin America, many
nations became increasingly “American” in their approaches
to business.
• The economic recession that started in December 2007 in
the United States and the following year for many Western
countries was contrary to this trend.
– The underlying financial crisis at the root of the economic
downturn increased skepticism of the traditional Anglo-
Saxon model.
96
Economic issues
– In the United States, more than 8 million jobs were lost in
late December 2007 and early 2008, which raised the
unemployment rate from 4.4% to above 10%.
– The recession lasted eighteen months, longer than any
downturn since the Great Depression.
– In response, unprecedented steps were taken by the
Federal Reserve and the Treasury Department.
97
Economic issues
• The Great Recession had an unequal impact globally.
Developed economies, particularly Western Europe, faced
steep downturns.
– While France, Germany, and Japan avoided sharp drops,
the United Kingdom and much of the remaining
developed countries did not.
– The recession hit Portugal, Ireland, Greece, and Spain
(known as the PIGS, although this acronym is offensive to
some) particularly hard.
98
Economic issues
– The crisis put pressure on maintaining both the euro and
the connection between countries, but also to some
degree, drew the members of the European Union closer
together.
99
Gross domestic product growth for key developed economies, 2008–2010
100
Responses to financial crises
• Companies exhibit differing responses to financial crises.
– Retrenchment refers to a reduction in spending and investment, with the focus on weathering the downturn.
– Divestment involves selling low-performing assets. Together, these tactics may result in companies leaving the most difficult markets.
• For other companies, financial crises can represent an opportunity.
– One typical response to a crisis is extreme movement in lending rates and a company may be able to react to these high or low rates by increasing its amount of lending or borrowing.
101
Responses to financial crises
• Many company leaders believe that marketing investments
during a recession will result in an improved company
position when the economy recovers.
– Academic research has revealed some support for this
approach, particularly when investments in research and
development or advertising are thoughtful and targeted.
102
Emerging markets ascending
• The decreased dominance of the traditional Western
powers due to the recession shifted the focus to the rising
powers in Asia and Latin America.
– During the downturn, China continued to grow, with GDP
expansion of 8.3% in 2009 after 9% in 2008.
– The growth pattern was partially due to aggressive
government action, including a large amount of spending.
– India’s economy continued to grow, as did Brazil’s.
103
Emerging markets ascending
• As a result, these emerging-market countries have
experienced greater political and economic influence.
– China has been a prime investor in Africa and helped to
support the Euro Zone during the bailout of Greece and
Ireland.
– India continued to increase its role in software offshoring,
and Brazil leveraged advantages in terms of natural
resources, including offshore oil.
104
Moving past “BRIC”
• As the developing world continues to make economic progress, prognosticators have begun to introduce new groupings of countries that move beyond Goldman Sach’s BRIC designation (Brazil, Russia, India, and China).
• Potential new groupings:
– CIVETS (Colombia, Indonesia, Vietnam, Egypt, Turkey, and South Africa)
– EAGLES (Emerging and Growth-Leading Economies)
o These include the BRIC countries plus South Korea, Indonesia, Mexico, Turkey, Egypt, and Taiwan.
– MIST countries (Mexico, Indonesia, South Korea, and Turkey)
105
Gross domestic product growth for key high-growth economy countries, 2008–2010
106
Bottom-of-the-Pyramid
• The global recession hurt many bottom-of-the-pyramid consumers.
– The World Bank estimated that 90 million more people globally moved to earning less than $1.25 a day during the downturn.
– Even with this setback, many believe international marketing firms will increasingly focus on bottom-of-the-pyramid consumers.
• The continent of Africa is home to a billion people, many of whom are bottom-of-the-pyramid consumers.
– Africa has the potential to emerge in the coming decades much as China and India have in the past twenty years.
107
Bottom-of-the-Pyramid
– The growth of middle-class Africans, as estimated by the
World Bank, is projected to be from 13 million in 2000 to
43 million by 2030.
– Many local African firms realize this potential and have
taken aggressive steps to meet the needs of the local
market.
108
