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Step 1: Considering exporting

You are here:Step 1: Considering exporting >The various environments you will encounter abroad >The economic environment > Industrialised vs developing countries


 

 

Industialised vs developing countries

 

A company's export marketing strategy will depend to a large extent on whether the target market is to be found in an industrialised or a developing country.

Industrialised countries

The terms industrialised or developed countries generally refer to the member countries of the Organization for Economic co-operation and Development (OECD) - they are also often referred to as the First World (perhaps unfairly so) They include the United States, Canada, the western European countries, Japan, Australia and New Zealand. They tend on the whole to be wealthy (i.e. they have a higher per capita income than most other countries) and they are oriented towards a free market economy. Population growth is often stagnant and the population tends to be an ageing one. Industrialised countries offer markets for a wide range of products in the luxury and high-tech categories.

Developing countries

Developing countries on the other hand refer to the more than 150 African, Asian and Latin American countries which are economically less advanced than the First World. Some of the characteristics of developing countries are:

  • A low average real per capita income
  • A high proportion of the labour force being involved in agriculture and other primary activities
  • Low life expectancy
  • A high rate of illiteracy
  • A high rate of population growth
  • In contrast to developed countries, third world countries tend:
  • To have serious shortages of foreign exchange
  • To be more protectionist about their economies and industries than industrialised countries. (i.e. Trade is restricted in order to protect local producers against competition from foreign produces of the same product(s), as well as to stimulate employment).

Developing countries have a burgeoning youthful population and a great need for necessities at low prices. They often provide lucrative markets for services and products associated with infrastructure upgrading, particularly where development aid is available to fund certain projects.

Economies in transition

Since the fall of the Berlin Wall, a new category, Economies in Transition, has come about. These include most of the former Soviet Union countries and often include South Africa. Conditions are not as bad as in developing countries but neither are they developed. The potential in these markets is great, as are the risks.

Where does South Africa fall?

South Africa is generally acknowledged as having a dual economy. This is because South Africa, while in many respects a developing country (characterised by a large rural population growth rate, relatively low GDP per capita, etc.), nevertheless displays several attributes of a developed country (evidenced by, for example, a relatively sophisticated industrial sector, high living standards amongst certain sectors of the population, an excellent banking sector, good roads, a sophisticated telecommunications infrastructure, etc.).

 
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Step 1: more information

Step 1: Considering exporting
      The various benefits of exporting
      The various drawbacks to exporting
      The difference between domestic and export marketing
      The various environments you may encounter
            The sociocultural environment
            The legal environment
            The economic environment
                  Gross Domestic Product (GDP)
                  Disposable income
                  Demographic factors
                  Competitive and complementary products
                  Industrialised vs developing countries
                  Degree of government intervention
                  Trading blocs
                  International trade agreements
            The political environment
            The technological environment
            The physical environment
      The various barriers you may face

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Learning to export...
The export process in 21 easy steps
Step 1: Considering exporting
Step 2:Current business viability
Step 3:Export readiness
Step 4:Broad mission statement and initial budget
Step 5:Confirming management's commitment to exports
Step 6: Undertaking an initial SWOT analysis of the firm
Step 7:Selecting and researching potential countries abroad
Step 8: Preparing and implementing your export plan
Step 9: Obtaining financing for your exports
Step 10: Managing your export risk
Step 11: Promoting the firm and its products abroad
Step 12: Negotiating and quoting in exports
Step 13: Revising your export costings and price
Step 14: Obtaining the export order
Step 15: Producing the goods
Step 16: Handling the export logistics
Step 17: Export documentation
Step 18: Providing follow-up support
Step 19: Getting paid
Step 20: Reviewing and improving the export process
Step 21: Export Management
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