Selling to Newly Emerging Markets

Citation

Clarke, I. (2000), "Selling to Newly Emerging Markets", Journal of Consumer Marketing, Vol. 17 No. 3, pp. 263-272. https://doi.org/10.1108/jcm.2000.17.3.263.1

This book, of primary interest to businesspersons concerned with entry into the fast‐changing markets of Eastern Europe, Russia, and the Newly Industrialized States (NIS), provides a much needed overview of the country characteristics and risk assessments of the countries in the region. The author is able to convey in a very succinct form a depth of understanding, in emerging markets that once fell under the influence of the former Soviet Union. The book draws upon the author’s experience and wealth of knowledge of the markets of this region.

The book is divided into six sections. The first three sections explain the vast potential and unique risks of entering Newly Emerging Markets (NEMs) such as intellectual property rights, payment considerations and political instability. Important ideas, such as the emerging market transition phases and corresponding changes in consumptive behavior, are presented.

Section I discusses Emerging Market Development. The author builds the argument that these areas have the greatest potential for economic growth in the next decade, based upon current developments in communications, transportation, socio‐political considerations and the predominant paradigm‐shift toward free‐market economies. Market demand conditions will evolve, with a corresponding change in the demand for consumer goods and services, as these countries progress in economic development. The author highlights the theoretical foundation of this premise with a series of germane examples. For instance, the Mars Candy Company targeted candy bars in the newly independent former Soviet states through street vendors, since distribution channels were unavailable, to pre‐empt foreign competition.

Section II might be characterized as a somewhat eclectic grouping of ideas, with the overall focus on Risk Management. With the threats of political instability, collapsing capital markets and ongoing currency crises in the region, this section could offer a very practical look at the differing payment options and financial assistance in this region. However, with the exception of the introduction, section II abandons the theme of NEMs. For example, Chapter 9 offers a terse, generic discussion of the preparation of an international business plan, which can be found in any basic international business text. While the overall strength of the book lies in its discussion of the NEMs, Chapter 7 “Intellectual Property Rights” and Chapter 8 “Political Risk” fail to provide new ideas to marketers familiar with international issues. This book does differ from traditional discussions on payment by expanding on Soviet‐style accounting problems, reliance upon cash‐in‐advance, and Western banks’ reluctance to engage in letters‐of‐credit with banks in the NIS.

In Section III, the author returns to the core value of the book. Section III develops the alternative Entry Strategies available in NEMs. The author compares the risk/reward ratios of the use of independent distributers, foreign agents, in‐country field sales, licensing, turn‐key projects and strategic alliances in these markets. At first glance these topics may appear to be the same old tired‐out topics from any international marketing textbook, but the author is able to add unique examples directly relevant to marketing in NEMS. Special emphasis is placed on the unique aspects of selection and motivation of personnel in NEMs and the risk of technology transfers. The author shows how companies such as IBM, RCA, G.E. and Westinghouse have been able to successfully reduce the level of market risk through technology licensing.

The second half of the book is devoted to assessments of market potential and appropriate entry strategies for the specific countries. It is in these sections that the book begins to take on special value. Here the author evaluates each country’s characteristics relative to entry strategies to obtain an overall risk assessment. Section IV looks at Russia and the Newly Independent States of Belarus and Ukraine. Section V is devoted to the Central Asian Republic of Kazakhstan. Section VI looks at the Eastern European countries of Hungary, Czech Republic and Slovakia. A timely assessment of the current market considerations, with information relevant to the daily functioning of marketing activities within the region, makes these sections excellent tools for anyone considering marketing operations here.

Overall, this book offers a wealth of information, presented in a very interesting, easy to read format. Although the book does sometimes lose focus, its specific market assessments make it worthwhile reading for marketing managers interested in acquiring an introduction to the opportunities of business in the NEMs of Eastern Europe.