A business and a human opportunity

It’s important to keep in mind that much of the world’s population lives in extreme poverty. Even among the countries with the largest overall GNPs you see some sign of this. In India, for example, GNP per person is only $ 354 a year. Many countries are in the early stages of economic development. Most of their people work on farms and live barely within the money economy. At the extreme, in Ethiopia GNP per person per year is only about $ 132 (in U.S. dollars).

These people, however, have needs. And many are eager to improve them­selves. But they may not be able to raise their living standards without outside help. This presents a challenge and an opportunity to the developed nations and to their firms.

Some companies including Canadian firms, are trying to help the people of less-developed countries. Corporations such as Pillsbury, Corn Products, Monsanto, and Coca-Cola have developed nutritious foods that can be sold cheaply but still profitably in poorer countries. One firm sells a milk-based drink (Samson) with 10 grams of protein per serving to the Middle East and Caribbean areas. Such a drink can make an important addition to diets. Poor people in less-developed lands usually get only 8 to 12 grams of protein per day in their normal diet, while 60 to 75 grams per day are considered necessary for an adult.

The ability of a country’s people to read and write has a direct influence on the development of the economy and on marketing strategy planning. The degree of literacy affects the way information is delivered, which in marketing means promotion. Unfortunately, only about two thirds of the world’s population can read and write.

Low literacy sometimes causes difficulties with product labels and instructions for which we normally use words. In highly illiterate countries, some producers found that placing a baby’s picture on food packages is unwise. Natives believed that the product was just that: a ground-up baby! Singer Sewing Machine Com­pany met this lack of literacy with an instruction book that used pictures instead of words.

Even in Latin America, which has generally higher literacy rates than Africa or Asia, a large number of people can’t read and write. Marketers have to use symbols, colors, and other nonverbal means of communication if they want to reach the masses.

Organizing for international marketing

Until a firm develops a truly worldwide view of its operations, it should have someone in charge of international matters. The basic concern should be to see that the firm transfers its domestic know-how into international operations.

As a firm moves beyond just a few international locations, its managers might want to develop regional groupings, clustering similar countries into groups. This smooths the transfer of know-how among operations in similar environments. Regional groupings may also reduce the cost of supervision.

But regional groups may be less useful than groups based on other relevant dimensions such as the stage of economic development or language. The important thing is to develop an organization that enables local managers to control matters that require «local feel» and, at the same time, to share their accumulating experience with colleagues who face similar problems.

Each national market should be thought of as a separate market. And if they’re really different from each other, top management should delegate a great deal of responsibility for strategy planning to local managers. In extreme cases, local managers may not even be able to fully explain some parts of their plans because they’re based on subtle cultural differences. Then plans must be judged only by their results. The organizational setup should be such that these managers are given a great deal of freedom in their planning but are tightly controlled against their own plans. Top management can simply insist that managers stick to their budgets and meet the plans that they themselves create. When a firm reaches this stage, it’s being managed like a well-organized domestic corporation, which insists that its managers (of divisions and territories) meet their own plans so that the whole company’s program works as intended.