States, Canada, Japan, and most of Western Europe, where consumers generally have higher incomes and standards of living. Thus, they can and want to purchase a variety of products and services. Developed countries have the economic infrastructure in terms of the communications, transportation, financial, and distribution networks needed to conduct business in these markets effectively. By contrast, many developing countries lack purchasing power and have limited communications networks available to firms that want to promote their products or services to these markets.
For most companies, industrialized nations represent the greatest marketing and advertising opportunities. But most of these countries have stable population bases, and their markets for many products and services are already saturated. Many marketers are turning their attention to parts of the world whose economies and consumer markets are growing. In the early to mid-1990s many marketers began turning their attention to the "four Tigers" of Asia—South Korea, Singapore, Hong Kong, and Taiwan—which were among the fastest-growing markets in the world.14 However, in 1997 the Asian economic crisis hit, and these countries, as well as other parts of Asia, experienced a severe recession which resulted in major declines in consumer spending. Latin America also has been experiencing a severe economic crisis over the past several years. The economy has been particularly bad in Argentina as a result of government instability and fiscal policies that have resulted in the peso losing 70 percent of its value against the dollar and euro.15 Advertising spending in Argentina declined from more than $3 billion in 1999 to barely half a billion in 2002. Brazil, which is another major market in Latin America, has also experienced economic problems recently.16
The global economic slowdown that began in 2001 has created problems for most multinational companies and has led to reductions in advertising spending in most countries. The economies in many countries are stagnant, making it difficult for companies to meet their growth objectives. However, a number of multinational companies are focusing on markets experiencing stronger economic growth, such as those in China.17 Many are also turning their attention to third-world countries where consumer markets are slowly emerging. Global Perspective 20-1 discusses the opportunities that these markets present as well as the challenges of marketing to them.
Belch: Advertising and VII. Special Topics and 20. International © The McGraw-Hill
Promotion, Sixth Edition Perspectives Advertising and Promotion Companies, 2003
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