Académique Documents
Professionnel Documents
Culture Documents
The Asia
Pacific
Region
Learning Objectives
LO1 The dynamic growth in the region
LO2 The importance and slow growth of
Japan
LO3 The importance of the Bottom-of-thePyramid Markets
LO4 The diversity across the region
LO5 The interrelationships among countries
in the region
LO6 The diversity within China
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of McGraw-Hill Education.
John Graham
10
Japan (1 of 4)
Japans fast growth in the 1970s and 1980s
amazed the world.
Japans economy slowed abruptly in the
1990s.
Four reasons for this may be:
11
Japan (2 of 4)
Faulty Economic Policies:
A wealth of facts describe Japans economic pain during
the 1990s, but none more so than its stock market
collapse.
But the peculiar feature of Japans 1990s version was its
decade-long persistence.
12
Japan (3 of 4)
Global Circumstances Have Hurt:
The deep decline in Japanese consumers
purchasing power in 2009 is exceptional over
the 30-year period shown.
The economic impacts of the 2011
earthquake/tsunami disaster.
The demand for greater oil imports, resulting
from the destruction of energy infrastructure
and its nuclear power plants, have pushed
Japan into an unprecedented trade deficit.
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of McGraw-Hill Education.
13
Japan (4 of 4)
The Cultural Explanation:
After World War II, a shattered Japan arrived at
a consensus goal for national recovery.
The Japanese have an affinity for united effort.
Then with the advent of globalized
competition, this inflexible structure became a
hindrance.
14
Exhibit 11.1
Japans GNI per Capita
Current international $,
000
Source: World Bank,
2015
15
India (1 of 4)
Since its independence in 1950, the worlds largest
democracy had set a poor example as a model for
economic growth.
It was among the last of the economically
important developing nations to throw off
traditional insular policies.
Indias growth had been constrained and shaped
by policies of import substitution and an aversion
to free markets.
Now, however, times have changed, and India has
embarked on the most profound transformation.
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India (2 of 4)
India has taken the following steps:
Privatizing state-owned companies as opposed
to merely selling shares in them
The government is now willing to reduce its take
below 51 percent and to give management
control to so-called strategic investors
Recasting the telecom sectors regulatory
authority and demolishing the monopolies
enjoyed by SOEs
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17
India (3 of 4)
Signing a trade agreement with the United
States to lift all quantitative restrictions on
imports
Maintaining momentum in the reform of the
petroleum sector
Planning the opening of domestic long-distance
phone services, housing, and real estate and
retail trading sectors to foreign direct
investment
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of McGraw-Hill Education.
18
India (4 of 4)
The anti-business attitudes of Indias federal and
state bureaucracies continue to hinder potential
investors and plague their routine operations.
India is now enjoying an information technology
boom.
After establishing a reputation among foreign
corporations, Indian companies now supply
everything from animation work to the browsers
used on new-generation wireless phones to ecommerce websites.
Large Indian companies are now expanding their
own operations abroad, often through major
acquisitions
in developed countries.
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of McGraw-Hill Education.
19
Sherwin Crasto/AP
Images
20
21
Vietnam (1 of 2)
Vietnams economy and infrastructure
were in shambles after 20 years of
socialism and war.
However, this country of more than 91
million people is poised for significant
growth.
A bilateral trade agreement between the
United States and Vietnam led to NTR
status for Vietnam.
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of McGraw-Hill Education.
22
Vietnam (2 of 2)
This will lower tariffs on Vietnamese exports
to the United States from an average of 40
percent to less than 3 percent.
If Vietnam follows the same pattern of
development as other Southeast Asian
countries, it could become another Asian
Tiger.
The population is educated and highly
motivated, and the government is
committed to economic growth.
Copyright 2016 McGraw-Hill Education. All rights reserved.
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of McGraw-Hill Education.
23
John Graham
Vietnam has very few cars; motorbikes deliver almost everything, including moon
cakes, in Hanoi.
Copyright 2016 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent
of McGraw-Hill Education.
24
Bottom-of-the-Pyramid Markets
(BOPMs)
C. K. Prahalad and his associates introduced a
new concept into the discussion of developing
countries and marketsbottom-of-the
pyramid markets (BOPMs)consisting of
the 4 billion people across the globe with
annual incomes of less than $1,200.
These markets are not necessarily defined by
national borders but rather by the pockets of
poverty across countries.
These 4 billion consumers are, of course,
concentrated in the LDCs and LLDCs.
Copyright 2016 McGraw-Hill Education. All rights reserved.
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of McGraw-Hill Education.
25
John Graham
26
Exhibit 11.2
Dynamic Transformation of BOPM
Cluster
Market Metrics
Exhibits 11.3, 11.4, and 11.5 display the
fundamental market metrics for the eight
most populous countries of the Asia Pacific
region.
Exhibit 11.5 briefly enumerates
consumption patterns.
Japan stands out and there is a noticeable
difference between the Chinese and Indian
emphases on education.
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of McGraw-Hill Education.
28
Exhibit 11.3
Standard of Living in the Eight Most Populous
Countries in the Asia Pacific Region
Medical
Resources
per 1000
Persons
Populat
ion
(million
s)
GNI
per
Capit
a*
China
1354
India
Household Ownership
%
Doct
ors
Hospit
al
Beds
Col
or
TV
Refriger
ator
Washi
ng
Machin
e
6748
1.6
0.4
97
86
86
1246
1426
0.8
15.4
65
23
Indonesia
247
3405
0.2
0.5
74
42
31
Pakistan
211
1123
0.8
0.5
71
45
49
Banglade
sh
157
934
0.4
0.5
Country
Japan
back
Philippine
s
127
39912
2.3
12.3
97
99
*Current US
Source: Euromonitor
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$. 98or distribution
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0.0prior written
1.1consent 74
44
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without the
of McGraw-Hill Education.
100
3429
Exhibit 11.4
Infrastructures of the Eight Most
Populous Countries of the Asia/Pacific
Region
Energy
Travel
by Rail
(passen
Country
ger-km
per
capita)
Passen
ger
Cars/10
00
Consumpt
ion
(tonnes
oil
equivalen
t)
Mobile
Phones
in Use
per
1000
People
Univers
Litera
ity
cy
Student
Rate
s per
(%)
1000
People
China
806
78
2.1
908
India
925
19
0.5
711
63
25
81
47
0.7
1229
93
32
Pakistan
124
10
0.3
607
55
10
Banglade
sh
63
0.2
671
60
13
3125
312
3.7
1150
100
61
Indonesia
Japan
96
27
Jeremy Woodhouse/Getty
Images
Amit Bhargava/Bloomberg
News/Getty Images
Infrastructure in India
31
Exhibit 11.5
Consumption Patterns in the Eight Most
Populous Countries in the Asia/Pacific
Region
back
32
34
Asia-Pacific Economic
Cooperation
(APEC) (1 of 2)
36
Asia-Pacific Economic
Cooperation
(APEC) (2 of 2)
APEC has as its common goals a
commitment to:
open trade
increase economic collaboration
sustain regional growth and development
strengthen the multilateral trading system
reduce barriers to investment and trade
without detriment to other economies
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37
Exhibit 11.8
Map of Greater China
38
39
Northeast China:
Longtime Industrial
Heartland
40
BeijingTianjin
Central planning has made this region of
35 million not only the political center of
the country but the R&D center as well.
The 75-mile corridor between Beijing and
its coastal cousin Tianjin hosts some 5,000
Chinese high-tech companies, among
them Lenovo, and more than 1,000
international IT companies.
Perhaps the key to this region is the
quality of its higher education.
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41
42
43
44
Relaxation of restriction on
religion in China
45
Differences in Business
Negotiation Styles Within
The Greater China
Northeastern Negotiators
Beijing Area
Shanghai Area
The Pearl River Delta
Hong Kong
Taiwan
46
Marketing Opportunities in
The Greater China
There are extreme differences in economic well-being,
cultures, and political structures.
The rich municipalities like Beijing and Shanghai are
quite comparable to Paris, New York, or Tokyo in terms
of the availability of luxury products.
In terms of the stages of economic development, they
are large and rich enough to be thought of as moredeveloped countries.
As in the United States, luxury cars sell better on the
coast, and trucks sell better in rural areas of the west.
Unlike in the United States, in China you cannot sell
the same lines of cosmetics or shampoos nationwide.
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Summary
The Asia Pacific region is the most dynamic of the
three regions.
In particular, China and India both grew at
double-digit rates during the last five years.
The mix of stages of economic development
present a variety of opportunities for international
marketers: infrastructure development, new
industrial markets, and huge consumer markets.
The countries of the Asia Pacific region are
cooperating in two major trade associations,
ASEAN+3 and APEC.
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48