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Characteristics of EM

Welcome to class of Emerging Markets by Dr. Satyendra Singh Professor, Marketing and International Business University of Winnipeg Canada s.singh@uwinnipeg.ca http://abem.uwinnipeg.ca www.abem.ca/conference. Characteristics of EM. GNI per capita per year < $10,000 High birth rate

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Characteristics of EM

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  1. Welcome to class of Emerging MarketsbyDr. Satyendra SinghProfessor, Marketing and International BusinessUniversity of WinnipegCanadas.singh@uwinnipeg.cahttp://abem.uwinnipeg.cawww.abem.ca/conference

  2. Characteristics of EM • GNI per capita per year < $10,000 • High birth rate • Undeveloped infra structure • Several languages/dialects • Close family ties • Less women in workforce • Cultural issues • 2/3rd of the world is either developing country or emerging markets.

  3. Common Traits of Big EM • Physically large • Significant populations • Represent markets for a wide range of products • Strong rate/potential of/for growth • Undertaken programs of economic reform • Major political importance within their regions • Regional economic drivers • Engender neighbouring markets as they grow

  4. Eastern European EM

  5. Asian EM

  6. Four-Tigers of Asia • South Korea, Taiwan, Hong Kong, Singapore • ↑ QOL deregulating their domestic economies and opening up to global markets • Industrialization by assembling products from the U.S., Japan, and other developed countries. •  Learning is important • They are now major world competitors.

  7. Brazil • Japan one of the largest trading partner • World’s sixth-largest weapons exporter • Steel and agricultural  compete Canada • Embraer (Brazilian aircraft manufacturer)  competes with Canada’s Bombardier. • Ships cars, trucks, and buses to EM annually • Volkswagen produced 3 million VW Beetles. • Auto makers invested $3b in Mercosur • 200m population • Argentina, Brazil, Paraguay, Uruguay, Venezuela • 5 full member, 5 associate, 2 observer (NZ/Mexico) • Common market

  8. India… • Improving the investment climate • Reforming agriculture, food processing, and small-scale industry • Eliminating red tape • Instituting better corporate governance

  9. India… • Privatizing state-owned companies as opposed to merely selling shares in them. • Strategic investors can have 51% mgmt control • Deregulating telecom sector’s • Demolishing monopolies of state-owned companies.

  10. India • Maintaining the momentum to reform the • petroleum sector • long-distance phone services • housing • real estate • retail sectors to foreign direct investment

  11. China… • China’s dual economic system • socialismand capitalism economic boom • GNP 8-10% since 1970 • This growth is possible for the next 10-15 years • If so, China’s GNP >USA • This growth depends on China’s ability to • deregulate industry • import modern technology • privatize overstaffed • inefficient state-owned enterprises, and • continue to attract foreign investment

  12. China… • It has 6 regions size, diversity, and political organization different (6 regions vs single country). • There is no one-growth strategy for China, each region: • is at a different stage economically • its own link to other regions and world • has its own investment patterns • is taxed differently • has substantial autonomy in how it is governed • While each region is separate enough to be considered individually, each is linked at the top to the central government in Beijing

  13. China’s 6 regions

  14. China--Issue • Corruption • Human rights issues (working conditions…) • Foreign exchange rate (controversial) • Reform of legal system

  15. Research shows that • If per capita income/year > $5,000 • people become more brand conscious • forego local brands; seek foreign brands • At $10,000 • they join the same income group elsewhere who are exposed to the same global information sources. • they join the “$10,000 Club” of consumers with homogeneous demands who share a common knowledge of products and brands. • If >$10,000, they become global consumers

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