Student

17/02/2011

Chapter 2
The economic environment

The world economic pyramid

1500–1750

SOURCE: U.N. World Development Reports

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The world economic pyramid
Ian Goldin: Navigating our global future
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Major industrialised countries

Market characteristics: Population
• The world’s population exceeded 6.5 billion in 2009 • The EU has 27 member counties • Asia holds over half the world’s population world s

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Market characteristics: Population
• Population can be broken down by: – age distribution – life expectancies – household size – urbanisation

Market characteristics: Income
• Income is useful for the initial screening of markets • Per capita GDP is the primary indicator of purchasing power power. • The top 20 countries account for 81 per cent of the world’s GDP

Market characteristics: Income
• Monetary figures are a less reliable measure of income in developing economies • Purchasing power parities (PPP) – shows h h how many units of one currency are it f needed to buy a good or service in the currency of another country

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Market characteristics: Consumption patterns
• Income spent on necessities gives an indication of market development • Diffusion • Engel’s Laws

Market characteristics: Consumption patterns
Chinese consumers have a new wish list

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Market characteristics: Consumption patterns
• Not necessarily uniform across regions • National debt burden (repayments) impacts buying habits • Inflation impacts buying habits

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Market characteristics: Infrastructure
• International marketers investigate: – rail traffic networks for distribution capabilities biliti – communication systems for marketing – energy (electrical and fuel) consumption

Market characteristics: Infrastructure
Connectivity in ASEAN

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Market characteristics: Infrastructure
• The diffusion of Internet technology –