A less developed country is that country with a Gross Domestic Product (GDP) of less than 2% of global trade in goods relative to other countries. Less developed countries are characterized by little industry and sometimes a comparatively high dependence on foreign aid. These countries are grouped as the poorest and weakest market economies and consist of more than 880 million people. They rely heavily on exports of agricultural products whose prices keep on fluctuating fetching low price in the international market while they import most of the industrial and manufactured goods from developed countries a reason for continued balance of payment deficits, resulting into high debt burdens which have kept them as beggars' in the international community thus a continuous vicious cycle of poverty (UN-OHRLLS, 2011).
Less developed countries are also characterized by low level of socio-economic development with weak human and institutional capacities, low income disparities and inequalities and more often than not suffer from bad governance, political instabilities, internal and external conflicts. To name just but a few, the less developed countries include; Angola, Madagascar, Malawi, Togo, Cambodia, Bangladesh, Yemen, Solomon Islands, and Haiti.
The essay looks at the various intricacies that are involved in the marketing that companies marketing their products in LDCs have to go through. These challenges involve cross-border trade terms and the tariffs as well as trade conditions, market feasibility study and the strategic planning that is totally different from the developed world, the scramble for the market in these regions by the multinationals and what the MNCs do not do to sufficiently tape the potential of the LDCs.
On the other hand, the paper divulges the significance and the centrality of the market in the LDC as a new economic force with potential for the investments due to the population available and the political stability that is becoming stronger with each passing day, the extent of technological changes and how this influences the market trends.
Marketing in LDCs
In the 21st century, the term marketing has developed to a new meaning and understanding especially in the modern times where there is great awakening of business extending their operations beyond their geographical borders to international borders. Marketing can be taken to mean, anticipation and identification of customer needs and requirements so as to be able to meet them profitably or achieve the intended organizational goals and objectives (The times 100, 2011).
Marketing today seeks to find out what the customers really want. Thus the marketing department will align the necessary resources required for research to ensure that production of goods and services are closely linked to the needs and expectations of customers in a defined market.
The less developed countries (LDCs) or the emerging markets have become a key market area for multinationals aiming to stem competition in their home countries. The LDCs market is of concern to these multinationals unlike before because population in the LDCs has plummeted like never before, leaving a large opening of goods and services. Currently, the estimated world population is 6,991,318,084 according to the United Nations Population Fund. This has triggered rapid growth in less developed regions as a result of low mortality rates, longer life expectancy and a larger segment of youth population (UNFP, 2011).
According to the fund, it is estimated that the world population will hit 10.1 billion by 2100 and 9.3 billion by the middle of this century. This growth will come from LDCs and therefore the market for LDCs has started experiencing a new dynamic of scramble almost similar like the one experienced during the colonial era.
Since this change has occurred in virtually all aspects of business and personal life, marketing researchers are faced with the challenge of conducting research that is of highest possible quality that will aid organizations in the their decision making processes while laying out strategies of market penetration in order to seize the opportunities of the rapidly growing population of the LDCs (Craig & Douglas, 1999).
The dramatic changes in the global market place, coupled with technological advances in data collection, analysis and dissemination market information is necessary so as to design, implement and interpret research giving the first priority to markets in LDCs if an organization will stay afloat or ahead of global competition, since success and profitability will belong to those businesses whose markets are in LDCs as these LDCs has high growth prospects and high potential.
The attractiveness of the markets in LDCs is reflected in the current size of the market, and future trends or projections of the size and varying needs of that population. For example, countries with the highest growth potential are in Asia, Latin America, Eastern Europe and the former Soviet Union (Craig & Douglas, 1999).
In reference to the UN Human development report (1999), the difference between developed and the developing world lies in the development of the human population at large. In its categorization, only 45 countries are recorded to have high human development, 94 as medium human development, and 35 as low human development. Over 80% of the world population live in countries categorized either as medium or low human development a critical factor to consider in marketing of goods and services even though high levels of illiteracy may hinder a successful market campaign in comparison to developed market countries.
Even though advanced technology is useful tool in international marketing, it's subject to numerous limitations due to telephone and computer penetration especially in LDCs. Technology use in marketing is very essential as it be used as competitive strategy in LDCs to analyze demographics, market trends and consumption patterns and strategize carefully to gain the most out of the market.
One of trade issues that ail the economies of LDCs is that most multinationals has shunned the LDCs markets, but the smaller emerging firms that have adopted strategic business plans, are continuously searching for a global outlook in new growing markets especially in Africa, Asia and Latin America. The market of these nations are many in the sense that they are the fastest growing market economies of the world, secondly, LDCs markets are characterized by less intensive competition, employs incentives to attract capital and technology, investment opportunities and tax incentives not found in developed countries (Dawson, 2011).
One of the failures of multinationals (MNCs) is that they devote less than a quarter of their direct investment to LDCs markets and this portrays a negative image to small growing firms that LDCs are not lucrative enough to meet the cost of operations reap the rewards of investment from such markets, and therefore small firms shy away from such risks leaving a large proportion of unexploited market potentials.
The marketing philosophies and practices in LDCs differ much from that of more developed countries (MDCs). MNCs employ marketing tactics like standardization, formalized decision making processes, and rigid control while a small enterprise will most likely employ tactics like, personal attention, focus on market niches, quality rather than standardized mass production, team work with other firms. Such a small enterprise, create more favorable opportunities to sell profitably in LDCs (Dawson, 2011).
The prevailing conditions in LDCs markets like culture and cultural beliefs require special marketing approaches if risks are to be minimized while enhancing high probabilities of success. This is only possible through designing of marketing programs that would enable such a firm to capitalize on every benefit that comes along. One of the ways of drawing up effective marketing programs is by categorizing the target markets on the basis of their approach to particular market needs rather than classifying them on the basis of their level of development.
In some instances, market opportunities may arise due to natural disasters often referred to as "Act of God." For example, the great drought that hit…