Problems of Marketing in Developing Economies - Contemporary Issues, Marketing Management | Marketing Management - B Com PDF Download

Problems of Marketing in Developing Economies 

There are series of constraints that hinder the performance of marketing in most developing countries. The experience of Nigeria and other Africa countries is worthy of note. These problems include the following; 

1) Low Marketing Education: A well informed and educated people tend to be prosperous investors and consumers. This is because they will imbibe the culture and tenets of marketing. But marketing education is still generally low in developing countries. Many policy makers and managers of large organizations still do not know what marketing is all about. Even when some people acquire higher degrees in the field of marketing and business administration, they come out doing the contrary, instead of practicing the true marketing concept or relationship marketing for the benefit of the society as a whole. In situations like that, marketing cannot contribute meaningfully to the development of these economies. Nigeria is an example of one of those countries suffering this fate. Most of the people, though educated, yet often compromise ethical marketing practices for worst alternatives such as sharp practices, unwholesome behaviour and smuggling that contribute less to gross total earnings of any country. For example a report on the survey of management training needs in Nigeria carried out in 1975 revealed that marketing was one of the problem areas where remedial management development effort should be intensified. 

2) Preferences for Foreign Products: Because of the development process of most African countries and their inability to produce most goods (especially technologically sophisticated products), they tend to prefer buying from the more industrialized countries. This makes the development process of local industries and commercial life of the people more impoverished. Developing countries constitute 71% of the world’s population, but only contribute about 12% of the world’s industrial production that often boost marketing in these economies. Why should this be the case, and who is to be blamed for the structural discrepancy and imbalance? What actions could these countries adopt to accelerate the pace of industrialization and development in order to boost the tempo of marketing (Mkpakan, 2004). It is generally felt that locally-made goods are only for the poor, uneducated, and those who are not fashionable, while the consumption of imported goods and services is taken as a status symbol for the elite and affluent in developing countries. Even when some countries products are of less quality when compared to similar local brands. This situation makes the growth of marketing and satisfaction of consumers locally difficult . 

3) Low Patronage for Non-essential Products and Services: The majority of the people in developing countries are poor, and their per capita income is below average. This makes it imperatively difficult for them to buy much of luxury goods. Rather their purchases and expenditure are directed towards satisfying the basic needs for food, clothing, and accommodation. Non essential goods and services receive low patronage. Therefore low patronage for certain category of goods do not present attractive marketing opportunities that will ginger investment overture. 

4) High cost of production: Marketing has suffered dearly in most developing countries because virtually all production techniques are imported from the developed world. The cost of acquiring equipment and other inputs used for production locally to boost marketing is sometimes extremely exhaubitant for the poor developing countries to buy and finance. To worsen matters, the bulk of African’s production is mainly in agricultural products that contribute less to GNP or Net National income of their various economies. This is because these products are sold at lesser prices in the world market. The income generated from them can only buy little from all that is needed to encourage domestic production, in order to enhance marketing. Where it is possible to import the equipment, the production techniques and skillful manpower requirement is sometimes too expensive to bear, hence the high cost of some local products when compared to the same foreign brands. This reason strengthens consumer’s preference for imported products and results to low demand for locally made goods. This affects the marketing potentials of the home industries and equally has an adverse effect on macro- marketing of developing countries. 

5) Inadequate Infrastructures: Most developing countries are very poor, such that some of them depend on aids from abroad. There are cases of debt accrual and debt burden hugging on some of the African countries that are yet to be paid. It invariable becomes difficult for some of them to provide the necessary infrastructures that would engender and propel smooth marketing scenario. Ethiopia, Somalia, Rwanda and a few other third world countries rely on aids from abroad to revamp their economies. The present situation where Power Holdings or National Electricity Power Authority (NEPA) is fond of giving epileptic and erratic power supply has made it difficult for businesses to function in Nigeria. Coupled with the poor road network and transport facilities, poor communication, distressed banks, malfunctioning ports and trade zones, among others. Apart from the deliberate embezzlement by some top government officials, the government is yet to provide these infrastructures, and this has made it difficult for marketing activities to be performed effectively and efficiently. Moreover, the inadequacy and poor state of these infrastructures contribute to high cost of doing business in developing countries. From table 3, it can be observed that amongst the six developing countries (Nigeria, Ghana, South Africa, Kenya, Egypt and Malaysia) described, Nigeria is the most starved in terms of availability of infrastructural facilities and usage. The electricity consumption per capita is 85; telephone per 1000 persons is 4 and internet users (‘000) to 100 persons. South Africa tops the list in terms of provisions of these facilities. With such poor level of infrastructural facilities the cost of marketing is always too high in developing countries, especially in Nigeria. Foreign investors will also not be attracted to do business or invest in Nigeria and thus they will be more interested in countries where the state of low cost infrastructure generates competitive advantages. The inability or unwillingness of some developing countries to provide these necessary infrastructural facilities that will facilitate the performance of marketing in these economies is in itself a major problem worthy of note. 

6) Few Competitive Opportunities: Lucrative competitive businesses are not much in developing countries. What are commonly found within African continent are peasant farmers, petty traders and negligible number of investors that are not engaged in multimillion dollars businesses. In Nigeria one can find competitive businesses mostly in the service industry, which contribute less than two percent of GDP. But in the manufacturing sector nothing can be said of it, because there is no competition. In most developed societies economic policies have long assumed that competition among businesses is the most efficient method of producing and marketing goods and services. Proponents of this philosophy contend that it results in maximum productivity and forces inefficient organizations and businesses to terminate their operations. It gives the consumer or buyer an opportunity to choose from several competing companies rather than buy from a monopolist, and stimulates creativity in seeking solutions to marketing problems especially in developing countries where such problems are more . But marketing in the true sense is usually at its best where and when there is real competition. Unfortunately, competition is at the lower ebb in developing countries, this might not be unconnected with the level of poverty and underdevelopment in the continent. But developed countries like USA, UK, Japan and emerging economies in Asia are competing amongst themselves in the manufacturing and supply of different types of products to newly found markets in sub-Saharan Africa. This is because they have the technology and financial backing. 

7) Over- Regulation of Business by Government: Another major problem that has be-deviled the performance of marketing especially in Nigeria has been the issue of government regulations and interferences in the activities of businesses and corporate firms. For instance, the over regulation of the Nigeria economy especially between 1970-1985, including the enactment of the indigenization decree, which excludes foreign interest from certain investment activities as well as the existence of a complex bureaucratic requirements for direct and portfolio investment were among the major constraints that hindered the development of marketing climate and foreign investment inflow (Balogun, 2003). Sometimes in 2004 the then administration of Olusegun Obasanjo banned the importation of certain items into Nigeria, but this is contrary to the tenets of free enterprises. Locally, state governors reserve special areas where businesses are not supposed to operate and if structures, housing corporate firms are erected there, they are bound to be demolished. In developing countries, it is usual to find governments promulgating laws to regulate the prices of consumables, fuel (as in the case of Nigeria), transport fares, exchange values of national currencies, accommodation etc. Nigeria is one of those countries that have passed through one form of regulation or deregulation to another depending on the political class that is in power. Instead of allowing the market forces of demand and supply to operate and determine how much consumers are to pay for the consumption of the goods and services. The haste to get their economies developed and quickly catch up with advanced Nations often lead developing countries to over- regulate business activities and restrict the activities of free enterprise. This makes marketing difficult, since decisions cannot be taken from a purely economic perspective. 

8) Political Instability and Civil Unrest: Rapid economic growth and development of marketing techniques cannot be achieved or attained in an environment of political and social instability or political hostility. Political stability implies an orderly system for a positive change in governance and peaceful co- existence amongst the citizenry that, poses a great challenge to marketing. Therefore, marketing does not thrive where there is political instability and insecurity or civil disturbances. The experience of most African countries like Liberia, Sudan, Rwanda, and Nigeria are typical examples of where the political climate and business environment had been in perpetual turbulence over the seat of power and who controls the resources (petroleum product) in the Niger Delta region. For Nigeria the issue in the Niger Delta gives cause to worry because most of the foreign investors and multi-nationals are thinking of relocating based on the continuous molestation and threat by militants, if nothing is done to salvage the situation. Table 4 shows the conflict rating of Nigeria, Ghana, South Africa, Kenya and Egypt. Amongst the five countries Nigeria has the highest figures especially after 1998. The above Situation reinforces uncertainty, instability, and increases the risk of doing business in Nigeria. Thus investment overtures become difficult in such localities or geographical areas and this undermines the performance of marketing.