Archive for September, 2009
ECONOMIC FACTORS IN MARKETS
Some companies may discover that some markets cannot afford the products that they sell and they should refrain from entering those markets, whereas there may be some markets which would readily accept a slightly different version of their existing product. Companies should be aware that terms like ‘middle class’ have different meaning in developed world and developing countries. Company need to deliberate about the real economic potential of a market before they decide to commit resources.
Howsoever expensive or sophisticated a company’s product may be, there will always be some customers in every country that will want such products, and can afford to pay for it. But it would not be viable to market to such small country markets. A company can explore the possibility of creating an infrastructure to serve a region constituting of such small country markets. Most western multinational corporations will realize that the huge markets of the developing countries are not for the products that they are selling at home, buy for a far less sophisticated version at far less a price.
An entirely new set-up of marketing and manufacturing may have to be established to serve such markets. This can be risky but it would be better than serving third world country markets with old products from their portfolio. A company should not be content with studying national induces like gross national product and per capital income. It should delve deep into the data to find the number of people who can afford to buy its products.
A company looking for a viable market should let its economists and marketers stay in the prospective markets for a long time. They will understand if enough people have enough disposable income to buy the product the company proposes to sell. Besides looking at the ability of customers to pay for the product, the company also has to assess the economic conditions and economic stability of the country where it plans to run its operation.
