Comparison of Two Articles in Emerging Markets

Topics: Developed country, Emerging markets, Marketing Pages: 5 (1618 words) Published: June 3, 2012
In the following pages we are going to show how emerging markets have evolved, their key characteristics and show why marketing programs of companies must evolve to really get into the customer. Through the reading we are also going to connect some ideas of the article “Rethinking Marketing Programs for Emerging Markets” of Dawar and Chattopadhyay in 2002 to our reading “Impact of Emerging Markets on Marketing: Rethinking Existing Perspectives and Practices” of the author Jagdish N. Sheth. The objective of both articles is to point out the inconsistency in the emerging market strategies of multinational firms, giving as a result low market penetration, disappointing market shares and poor profitability. Dawar and Chattopadhyay demonstrate throughout a series of examples with several companies and draws important insight into how to design marketing programs from the ground up. Emerging markets have changed their habits but not as much as multinational companies wished they did. This is why companies must start to change their marketing strategies so they can really get in to the consumers eyes. So it can occur, companies must stop thinking that emerging markets have the same purchasing and power, needs, tastes and habits and begin to think more locally. Since multinational companies started thinking about reaching to emerging markets market they have tried to follow that same strategies they follow in the develop countries: production of premium products, products with unreachable prices, sales and promotions, products with good benefits but that are not valued in these countries, among other things. Companies do not want to change their strategy because they think that through the time consumers will change their habits to those in the developed countries, that the cost of focusing in local production and marketing is not worth it and that they will not have profit since they would not be able to use standardization which is their key to success. How are emerging market consumers according to Dawar and Chattopadhyay? Consumers have low per capita income, which affects consumer behavior. There is a wide variability in consumer preferences and infrastructure access that impedes multinationals segmentation of products. Labor is inexpensive, which is substituted for capital by customers and businesses. These characteristics might be important to consider in the future when emerging markets drive marketing practices. This is said because emerging markets are growing and are growing fast. Some factors described in Jagdish N. Sheth’s article that are causing it are economic reforms, which have helped countries to unlock their markets and become the some of the best capitalist markets today. Also, developed countries are getting old, so their markets are growing slow and their growth will probably depend in the future of the emerging markets. As well, world liberalization of trade and investment, agreements and regional economic integrations, have impulse the increase of choices of branded products and benefits for EM countries helping them to become stronger. Last, a new middle class has emerged in countries such as China and India helping to the creation of large-scale buyers of a wide variety of products, soap, cell phones, food, among others. So we can understand more about emerging markets the author has showed five characteristics that make emerging markets different from developed markets. These characteristics impact the four areas of marketing, theory, strategy, policy and practice and are: * Market heterogeneity due to fragmented, low scale and local markets, the owner also manages the store. * Sociopolitical governance which means that the sociopolitical institutions, business groups and religion influence in the emerging markets. This also contributes to the developed of monopolies. * Unbranded competition since 60% of consumption in these countries is from products and services without brands; this...
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