12-09-2013, 03:05 PM
Global Economic Environment
Economic Environment.ppt (Size: 60.5 KB / Downloads: 25)
Learning Objectives
Understand the main differences between economic systems found around the world
Learn ways of classifying countries by their market development
Understand consumption patterns in different countries
Know the main regional economic co-operation agreements
The World Economy - Overview
During the last 50 years:
Emergence of global markets
Integration of world economy
Capital movements are driving force
Production is “uncoupled” from employment
Macroeconomics of individual countries no longer control economic outcomes
Economic Systems – Command Allocation
State has broad powers to serve public interest
Decides which products to make
Decides how to make them
Elements of marketing mix are not used as strategic variables
Countries that relied upon command allocation systems for decades: China, former USSR, India
Stages of Market Development
Countries/markets are at different stages of development
GNP per capita provides a useful way of grouping countries into 5 categories
Categories are a useful basis for:
Market segmentation
Target marketing
Stages of Market Development –
Basket Cases
A country with economic, social & political problems that are so serious they make the country unattractive for investment and operations
Low-income, no-growth countries (E.g.. Ethiopia)
One-time growing & successful countries that have become divided by political struggles
Summary
Economic environment is major determinant of global market potential & opportunity
World economies can be categorized into market allocation systems, command allocation systems, & mixed systems
For many products, most important indicator of market potential is income