Muhammad Adnan 1635-112251 1
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Muhammad Adnan 1635-112251 2
Table of Contents
Sr. No. Contents
Page No.
1 Introduction to Marketing 3
2 International Marketing 3
3 Economic Development 4
4 Economic Growth 4
5 Difference between economic development and economic Growth 6
6 Key Indicators of Economic development 7
7 Role of International Marketing in Economic Development 8
8 Per Capita Income 8
9 National Income 9
10 Physical quality of life index 9
11 Human Development Index 10
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Marketing
“Marketing is the activity, set of institutions, and
processes for creating, communicating, delivering,
and exchanging offerings that have value for
customers, clients, partners, and society at large.”
The Chartered Institute of Marketing define marketing as
“The management process responsible for identifying, anticipating and
satisfying customer requirements profitably”
International Marketing
"At its simplest level, international marketing
involves the firm in making one or more
marketing mix decisions across national
boundaries. At its most complex level, it
involves the firm in establishing
manufacturing facilities overseas and
coordinating marketing strategies across the
globe." Doole and Lowe.
"International marketing is the application of marketing orientation and
marketing capabilities to international business.”
Muhlbacher, Helmuth, and Dahringer
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Economic Development
The definition of economic development given by Michael Todaro is
“An increase in living standards, improvement in self-esteem needs and
freedom from oppression as well as a greater choice”
The most accurate method
of measuring development
is the Human Development
Index which takes into
account the literacy rates &
life expectancy which
affects productivity and
could lead to Economic
Growth. It also leads to the
creation of more
opportunities in the sectors
of education, healthcare,
employment and the
conservation of the environment. It implies an increase in the per capita
income of every citizen.
Economic Growth
“An increase in a country's real level of national output which can be caused by
an increase in the quality of resources (by
education etc.), increase in the quantity of
resources & improvements in technology or in
another way an increase in the value of goods
and services produced by every sector of the
economy”
Economic Growth can be measured by an
increase in a country's GDP (gross domestic
product).
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Comparison chart
Economic
Development
Economic
Growth
Concept: Normative concept Narrower concept than
economic development
Scope: Concerned
with structural changes in
the economy
Growth is concerned with
increases in the economy's
output
Growth: Development relates to growth
of human capital indexes, a
decrease in inequality figures,
and structural changes that
improve the general
population's quality of life
Growth relates to a gradual
increase in one of the
components of Gross
Domestic Product:
consumption, government
spending, investment, net
exports
Implication: It implies changes in income,
saving and investment along
with progressive changes in
socio-economic structure of
country(institutional and
technological changes)
It refers to an increase in the
real output of goods and
services in the country like
increase the income in savings,
in investment etc.
Measurement: Qualitative.HDI (Human
Development Index), gender-
related index (GDI), Human
poverty index (HPI), infant
mortality, literacy rate etc.
Quantitative. Increase in real
GDP.
Effect: Brings qualitative and
quantitative changes in
the economy
Brings quantitative changes in
the economy
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Indicators OF Economic Growth
There is misunderstanding among the economists over the indicators of
economic development. Some of the economists have taken national product
as the indicator of economic development. Some other economists have taken
per capita income as the indicator of economic development. Likewise some
other economists have taken economic welfare as the indicator of economic
development. Various economists have taken material living standard index as
the indicator of economic development. Economists of this thought have taken
life-span, death rate, literacy rate as the bases. Similarly United Nations
Development Program (UNDP) has developed Human Development Index
(HDI) as the indicator of economic development. The indicators are income,
literacy and life expectancy. The pointed of indicators lies between 0 and 1.
The position up to 0.5 is the lower class of human development. From 0.5 to
0.8 is the middle class and above 0.8 is the upper class. The base of economic
development indicators are as follows.
1- Per Capita Income Criteria
2- National income criteria
3- Physical quality of life index – PQLI
4- Human development index – HDI
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Role of International Marketing in Economic
Development There are several economic sectors which get affected from
international marketing and they are efficiency enhanced through
international marketing.
Here are some key sectors those are affected from international
marketing.
Per Capita Income
National Income
Physical quality of life index – PQLI
Human development index – HDI
Per Capita Income
“Income per person in a population” Per capita income is often used to
measure a country's standard
of living.
Per capita income or average income
or income per person is a measure of
mean income within an economic
aggregate, such as a country or city.
It is calculated by taking a measure of
all sources of income in the aggregate
(such as GDP or Gross National
Income) and dividing it by the total
population. It does not attempt to
reflect the distribution of income or
wealth.
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International marketing is key tool to increase per capita income. Direct
foreign investment increase the employment opportunities that leads to
increase in GDP and GNP that is divided to total no. of peoples and result
in increased per capita income.
Per capita income of Seven Rich Countries of the world.
Country Per-capital income (in US dollar)
1. Norway 76,450
2. Switzerland 59,880
3. Denmark 54,910
4. Ireland 48,140
5. Sweden 46,060
6. United States of America 46,040
7. Netherlands 45,820
(Source: World Development Report 2009)
Likewise per-capital income of south Asian countries is as follows:
South Asian Countries and their Per-Capita Income
Country Per-capital income (in US dollar)
1. Bangladesh 470
2. India 950
3. Nepal 340
4. Pakistan 870
5. Sri Lanka 1540
(Source : World development report 2009)
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National Income
National income is related with
the final goods and services
produced in a country.
If a marketer makes investment
to some other country to
produce goods and services
which he may produce at low
cost. Then national income of that country will be increased and country
may be rated as increasing trend of economic development.
Physical quality of life index - PQLI
This is non-income indicator of economic development because this uses
physical quality of life as the indicator. This method of measuring
economic development is based on the following three things. They
are:–
(a) Life expectancy
(b) Infant mortality
(c) Literacy.
The scale of all these things
measured is between zero
(0) and hundred (100)
shows the lowest level and
100 shows the highest level.
If in any country life
expectancy measured is
maximum, ie. 100 and the
other two indicators are
measured minimum i.e.,
zero then giving equal
weight age to each indicator a competitive index is prepared from the
average of all three. Likewise index of a country with high literacy rate
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will be 100. Countries having low life expectancy, low literacy rate and
high infant mortality will have low index (ie. 0). If in any country PQLI is
increasing then it indicates the increase in the physical quality of the life
of people:
Increase in per-capita income does not necessarily indicate the increase
in the facilities like healthy food, health, situation, education, etc.
International marketing gives sense of ethics, high moral values, sense of
living and liberty to choice. This is all because of competition in
international firms conducting business in a particular country.
Human development index - HDI
Human development index is new and modern indicator of economic
development. This indicator was for the first time developed by United
Nations Development Program (UNDP) in the year 1990 AD. This
indicator is based on three things; They are as follows:
(a) Income for decent living
(b) Education
(e) Life expectancy.
As PQLI, HDI also divides all nations of the world in the scale of 0 to 1 on
the basis of three
objectives of
development. In
this method
minimum of 0 and
maximum of 1
value is given. This
method has
classified all
nations of the
world in three
different classes.
Low human
development in
from 0 to 0.50, Medium human development in from 0.51 to 0.79 and
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high human development is from 0.80 to 1.0. Since this method
measures the relative level of human development, this focuses on life
expectancy, education and physical choice. This takes per-capita income
as an indicator the change in monetary value is adjusted in GNP. This is
measured on the basis of the unofficial education and middle age of
school going population. In this method on the basis of the development
of skill of all the adults and infant mortality and the nutritious food they
get. When all three indicators are included an important indicator of
human HDI is measured development will be obtained. On the basis of
this, human development index (HDI) of different countries is obtained.
When MNCs enter in other countries then they provide quality product
and services, they introduce modern technology, advanced finished
goods, hygienic food items, medicine of international standard.
These directly increase the life expectancy with the help of hygienic food
items and medicines.
Modern and advanced equipment and machinery improvise local
citizens to get higher and quality education to get familiar with this new
equipment.
Direct foreign investment leads to increases production plant and
services. Which open the employment opportunities that provide
citizens with the high income level and buying power.
Besides from all these major indicators of economic development, there are
large number of indicators those are also improved with the help of
international marketing, which are as follows :-
(a) Equality improvement.
(b) Poverty alleviation
(c) Quality of life
(d) Capital formation
(e) Fulfillment of basic needs.
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(f) Population growth rate
(g) Increase in employment opportunities.
(h) Decrease in dependence on agriculture
(i) Increase in entrepreneurship
(j) Utilization of natural resources
(k) Increase in export of finished goods.
(l) Trade diversification
(m) Extension of infrastructures
(n) Extension of markets.
(o) Improvement in technology
(p) Urbanization, Gender equality, Human rights, etc.