International Marketing Management Essay
Emerging markets offer a compelling investment opportunity. The term “emerging markets” was coined by the World Bank’s International Finance Corporation in the early 1980s. Typically, emerging markets are in countries that are in the process of industrialization, with lower gross national product (GNP) per capita than more developed countries. Emerging markets became the new frontier of global investing in the late 1980s and saw spectacular returns in the early 1990s, only to be followed by an exceptionally long span of volatile and disappointing returns.
These markets seemed to lurch from one period of intense crisis to another with only intermittent spells of relief. (Ronald D. FRASHURE and Charles H. WANG) International trading is big business. During the ‘70s and early ‘80s, big trading companies such as Mark-Ritz, Getz Brothers and Phillip Brothers of the western world seemed to dominate the Southeast Asian region in terms of trading bulk commodities. Bulk commodities comprise a range of selected products that can be massed produced, shipped in bulk carrier ships of 12,500 metric tons (MT) or 25,000 metric tons (MT) cargo tonnage.
Some of the most common bulk commodities traded are: ammonia fertilizer, crude oil and oil products, copra, coal, corn, coffee, rice, sugar, wheat
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If the commission were computed in terms of kilograms, this would translate to U. S. $ 0. 001 per kilogram. This has become practice for big trading companies. Usually a sole trader is appointed as representative in any country where these companies have trading activities. The operations of the sole trader representative is low profile, low administrative overhead costs but has access to plenty of information and preference is given to those individuals who have a lot of clout.
With the emergence of the big new players in the consumer market, knowledge about these markets must be gathered for traders to become successful. China, after the turn over of Hong Kong in 1997, has emerged as the biggest consumer market and traders naturally would want to penetrate this market of approximately 2 billion people. India has a market for cross-boarder investors. In the recent years, a lot of Indian investors have been buying into foreign companies in mergers and acquisitions probably an off-shoot of what US-led companies have been doing.
Vietnam is an emerging exporter of agricultural products and has a large potential market for agricultural inputs. 2. Basic Necessities for Trade To open the doors to suppliers of consumer goods and even foreign technology on a grand scale to these emerging markets, the main rationale is: what can be consumed but cannot be manufactured in that country is imported. With modern western influence creeping into these cultures, many of them have become uplifted with disposable income.
Their propensity to consume other than locally produced goods is in the upturn. Some countries like China seem to have prepared for the influx of imported goods in order not to incur a huge trade deficit. China has become one of the largest manufacturing machines. An example is clearly seen in their export of lychees, oranges and apples, which was estimated to be about US$ 2. 0 BB in 2005.
In terms of export apparel and, because of its numerous population labor in China comes cheap, this is why shopping in the U. S. for clothes and shoes usually have the Made in China label. China’s policy towards the influx of imported consumer goods and commodities have literally rocked the trading world. Any trader positioned to offer China must be ready for a contract to supply and not just a “one time” shipment. Chinese buyer-agents have also positioned themselves in the ASEAN countries looking for opportunities that can spur trading between the country where they are positioned and China mainland.