Analysis of the article:

Better marketing to developing countries: why and

how?
by Emanuel Yujuico, Betsy D. Gelb.
1. OVERVIEW
Targeting less developed countries.
The new tendency, explained in the case developed by Emmanuel Yujuico,
and Betsy D. Gelb from the Kelley school of business, teach us how, in
recent decades, marketing efforts were concentrated on the upper part of
the pyramid (first world countries) but this market has already become
saturated, so profits are decreasing. Now, astute managers in many
industries have come to recognize that growing countries (third world), that
are less developed, are the next emerging markets, so they are targeting
less developed countries. The papers explain how United States needs to
consume less and export more to countries from which it imports so that
this countries generate internal demand. So the marketing expertise that
are now focused on the developed world, must shift to emerging and
developing economies, like the ones on third world countries.
Why shift toward less developed countries?
This summarize in long term economic self-preservation. As said before,
marketers must shift, so that countries like United States consumes less and
export more. To do this, it requires increasing consumption in LDCs to
reduce the imbalances, which currently threaten the world economy. The
recommendations begin by analyzing the scenario that requires changing a
business as usual approach. Then you should point out how proactive
managers in developed nations can help their companies to increase
consumption in the developing nations, and thus taken together bring much
needed balance to the world economy. Finally, move from the case that
targeting consumers in developing nations is a macroeconomic necessity to
illustrations of how markets can lower their risk in doing so.
The problem: Unbalanced world trade
In the year 2009, the world trade got unbalanced, this decline was no
surprise because is the result to the unwinding of unsustainable
consumption in developed countries. This decline were followed by the
Asian financial crisis, which later affected parts of Eastern Europe and Latin

America. The crisis shifted the emphasis from overvalued exchange rates to
undervalued exchanges rates to facilitate export competitiveness. So there
is an unbalanced world trade, that causing all this problems.
Consequences of imbalances
United States consumes about 18% of global GDP. Asia has an export led
economy and the Middle East never stops producing oil, so the nations are
counterbalancing Americas substantial external deficits. They describe how
African nations have largely kept pace with Asia rapid rate of reserve
accumulation. The problem comes with holding excess reserves. Third world
countries apply techniques that are not adequate like covering 3 months
worth of imports, or for short-term debt maturing within a year, and that has
a cost. Countries start losing money because of that because on the interest
rate differential between debt issuance, as well as revaluation. So countries
are dependent on the marketing expertise of its businesses to raise
consumption in LDCs. Reserves, cannot be spent on socially beneficial
domestic programs like education, retirement or healthcare because of the
loss.
Putting marketing to work
To change marketing views toward increasing consumption in emerging
markets call for a shift from short-term to longer-term thinking. This change
will lead to companies aiming for new markets, and toward buyers in the
developing world.
A wrong move from most develop countries will be to reduce the
consumption of overseas good through tariff. This move will create a price
war, which will not bring advantage to anyone. Experts support this idea
because during great depression in the 30s, tariff instead of helping the
economy, shrink even more peoples economy and started a price war.
Protectionism is another solution that can bring more harm than good.
Besides reducing consumption, protectionism can bring retaliation between
countries. A country-giving tariff to foreign products is prone to be imposed
with tariff to their products that sell overseas, leading to an escalade of
prices. When prices increase, people will change into saving more money,
creating a cycle of lowering consumption and shrinking the economy. This
happened to Chine during 2000s. When prices rose due to exchange rates
and increasing of prices, investments were affected and the all economy
reduce, as GDP of those years exhibit.

2. PROBLEM DEFINITION
To implementing a better marketing to developing countries, have not to
focus on just the macroeconomic conditions of each countries, because
marketing is not just about the money countries would spend with a better
marketing. A better marketing also includes cultural factors, language, and
creativity. So, the problem is that they focus more about the macroeconomic
conditions.

3. SWOT Analysis
STRENGTHS

Help to the self-preservation of big companies.

Help to reduce the imbalances which currently threaten the world
economy.
Pro-actives managers in developed nations can help their
companies to increase
Developing countries as a whole have run a current account
surplus.
LDCs strategy will lead to a realization that actions by business in
the aggregate hold the key to countering the challenges of
lopsided globalization.

WEAKNESSES

LDCs strategy decreased combined current account balances in

the developed countries, since by accounting identity all current
account balances must sum to zero.
Rise of domestic protectionism sentiment negatively affects world
trade.
Reserves cannot be spent on socially beneficial domestic programs
like healthcare, education and retirement.
Less developed countries lose an estimated 1% of GDP annually
due to holding excess reserves.
Investment barriers can likewise prompt international retaliation.

OPPORTUNITIES

Marketers in developed world will need to create and promote

products that will encourage consumption in developing countries.
Focused in the marketing research.

Markets have become saturated and profits from targeting the top
are thinning, astute managers recognize the latent possibilities
which lie in marketing to what has been called the bottom of the
pyramid.

Firms operating in developing countries are likelier to prosper if

they protect their workers and the environment.

THREATS

Current global macroeconomic scenario is unsustainable.

Globalization can lead to organizational decline for companies that
are slow to adapt.

Low income and low willingness to spend, continue to thwart

consumption in the developing word.

4. CONCLUSIONS AND RECOMMENDATIONS

Among all the recommendations the case gives theres one that can be
entitled like the most important because englobes all of the others, and this
is: Firms needs to shift away from markets that has already provided them
their possible share, being the low hanging fruit, to those that will mean
facing a short term challenge, but with a big possibility of a long term
reward.
Businesses in the developed world must not see instability being political or
economic in LDCs as a wall that forbids making any kind of business there;
this will mean a huge loss in potential market. So companies may need to
work on their responsiveness to these concerns to take advantage of this
situation for example making the most out of an economic imbalance in a
certain country. Marketers must learn and study their counterparts in the
LDCs to either mirror their success or avoid making the same mistakes. In
order to succeed in a LDC marketers need to apply already successful
technique that those from the inside use.
Although marketing efforts alone will by no means solve the imbalances we
have described, it will certainly help to reduce them, allowing a companys
success in this scenario.
Recommendations
The Marketing in developing countries vary extensively between nations
thats why the authors cleverly made a list of possible challenges that

international marketers may need to faces and the suggested approach for
each challenge as following:

If Consumer priorities change the firm should examine the needs for a
more productive lifestyle and then compare them and adapt them to
the corporate capabilities.

When your objectives need to be renovated; the firm must consider

producing in small quantities, payment plans even in low cost items
at tiny margins but high volume.

In LDC the rewarding system needs to change; designers must be

rewarded for reducing expenses rather than higher them

When adapting to the LDCs you need to be open to making business

with in country firms in to improve logistics and acquiring knowledge
about each countrys lifestyle.

Benefiting from Buyers priorities in LDCs; priorities in LDCs are:

Education, Healthcare and retirement.