Today is the age of Globalisation and localisation simultaneously. Today’s businesses can’t claim to serve to the global population without having knowledge of the local culture. Thus today, marketing is much of a Glocal phenomenon. The term Glocal, encompasses within itself, elements of both-Globalisation & Localisation. Glocal means “think Globally but act locally”. And the best part being, there are no two ways about it. Take McDonald’s example. It is the shining example of a Glocal organisation. McDonald’s has beef burger in its menu abroad. But in India, the same is removed from its menu and instead we have Mc Aloo Tikki burger.
Marketing, today is a much more complex activity. A marketer must be knowledgeable in all respects today. The marketer has to have a fair idea of all the major world markets. It is in this context that we shall have a brief understanding of the major markets in the world.
The international markets can be briefly classified into the following kinds:
Less Developed Nations, Developing Nations, South American Nations, East European Nations, and Selected Asian Nations.
A typical problem existing in the less developed nations is that of Economic Dualism i.e. gap between the poor & rich is great. Thus, the companies have to penetrate to the bottom level. This was not understood by Emami and Dabur in India in the past. But HUL very well understood the importance of Rural Marketing.
It is projected that 75% of world trade growth is likely to come from 130 or so Developing & newly industrialised countries having big emerging markets.
50% of world population lives in these countries called Big emerging Markets (BEM). By 2010 GDP of these countries shall be 50% of GDP of industrialised nations.
These nations have achieved significant economic reforms started recently, they have a strong rate of growth or potential thereof, they are physically large and hence significant population, they enjoy large sized markets for wide range of products, they enjoy significant political position in their region.
In Asia, the major BEMs are India, China, South Korea. In South America it is Argentina, Brazil, Columbia, Mexico, Venezuela. Poland & Turkey are the BEMs in Europe.
BEM countries generally import large amounts of Capital goods, to build up their manufacturing base & improve infrastructure. It leads to faster economic growth, as well as helps to create more jobs. This in turn increases the per capita income of the nation, which in turn increases the consumption of newer goods and services. The cycle finally ends with a demand for more manufactured goods.
In South American nations, the government is democratically elected unlike military dictators of the past. Most of them have initiated economic liberalisation and privatisation of their state owned enterprises (SOE).
State ownership was considered ideal driver of economic growth in the past. But now local and foreign private investments of billions of dollars are being made in manufacturing, banks, airlines, textiles, etc.
The major BEMs of Latin America, Argentina, Brazil & Mexico, are attracting world attention in the form of trade & investments.
The East European nations comprise of nations that were erstwhile socialist economies, viz. Poland, Czech Republic, Hungary, Romania, Slovakia and others. A very interesting fact here is that, the economies of these different countries are at different levels of development.
Countries like Czech Republic, who initiated reform process immediately after parting company of communists, have grown the fastest, whereas, Hungary, Poland & Romania remained under the influence of communist Bureaucrats for long, their economic growth is minimal.
Majority of the East European nations, except Albania, Bosnia, Croatia & Macedonia has been admitted into European Union in 2006. Their trade and economy is likely to grow substantially through free movement of labour & investments among the EU nations.
No business discussion is complete without a mention of the prominent Asian economies today. It is believed that in the near future, Asian economies would be the driving forces in the world trade.
Asia has been the fastest growing area since 1970s and the indications are that it shall continue in the future as well. Size of market & their growth is commendable.
This growth is particularly conspicuous in countries on Asia-Pacific ring, viz. Japan (GDP=US $ 5648 billion), China (GDP= US $ 1117 billion), South Korea (GDP=US $ 639 billion), India (GDP= US $ 493 billion), Taiwan (GDP= US $ 282 billion), Indonesia (GDP= US $ 217 billion) and Hong Kong (GDP= US $ 165 billion).
Lets consider China’s case. It’s dual economic system of socialism along with practices of capitalism has produced remarkable economic boom that attract, copious foreign investments, leading to double digit rate of growth. At this rate it is likely to catch up USA by 2015.
China requires further deregulation of industries, import of modern technology, privatisation of overstaffed & inefficient SOEs, so that it continues attracting foreign investments.
USA has granted Permanent Normal Trade Relations (PNTR) in 2000. China, became a member of WTO in 2004. So, it is expected that Chinese economy would reflect both of these and behave more rationally in the world trade.
From the size diversity & political organisation, China may be considered as a group of 6 regions instead of a single market. Each region has its own growth strategy, own link with other regions & rest of the world. They also have separate investment & taxation pattern, but are co-ordinated at the top by Central Government at Beijing.
Actually, the China we see today is a combination of two emerging Chinas- one which is Bureaucratic with bottomless money pit of corruption and the other, a market driven China leading in Consumer driven goods. Future potential would be driven by large sized domestic demand compared to Japan’s which is driven by exports.
In the case of Hong Kong, it reverted back to China after 155 years of British rule in 1997. It was made a Special Administration Region (SAR) of Peoples Republic of China. It follows a “one country two systems” form of government, under an agreement, which grants autonomy to Hong Kong in social & economic system, lifestyle, rights & freedom, for the next 50 years.
The markets are continuing to operate with a free market philosophy, entrepreneual drive, absence of trade barriers, well established rule of law, low & predictable taxes, complete freedom of capital movement.
There is no wonder Hong Kong is attracting foreign investment. It has become the largest investment destination in mainland China.
The other notable markets in Asia include Taiwan, Vietnam, South Korea and undoubtedly India.
If we, as marketers have to be successful in a particular market, then it is beyond doubt that we need to take a thorough note of the different characteristics of world markets.