QUESTION ONE [40]

Read the following case study and answer the questions that follow: Winning Emerging Market Consumers Western Europe, Japan and the United States have been the engines powering the world's economy since World War II. That is no longer the case. Emerging and developing economies, on a purchasing parity basis, now total 44 percent of the world's economy, and in the last decade, emerging nations were responsible for two-thirds of the world's economic growth. The consumer base in these economies already measures in the hundreds of millions, is young and is growing three times as rapidly as in the developed world. As recent events have demonstrated, what happens in these economies affects us all. Given these trends, multinational corporations face profound changes in the economic landscape. Over the next 10 to 15 years, most of the total world growth in consumption of consumer goods will likely be concentrated in the largest of the developing economies. In that time span, these strategic emerging markets will grow to be comparable in aggregate size to the Group of Seven leading industrial nations (the United States, Japan, Britain, France, Germany, Canada and Italy). The future scale and growth of global consumer businesses is dependent on their success in building strong positions in these new, challenging markets. There are a handful of consumer goods companies that have already demonstrated the potential contained within the big, emerging markets. Companies such as Unilever, Coca- Cola, Gillette, Nestl and Colgate- Palmolive all now capture one-third or more of their revenue from these markets, with profitability equal to, or higher than, what they achieve in developed economies. For example, the Coca-Cola Company now derives 37 percent of its revenue from Latin America, Africa and Asia, and these markets contribute a stunning 49 percent of its operating profits. Similarly, the Colgate-Palmolive Company receives 45 percent of its revenue from these same markets and nearly half of its operating income. These pioneers have been committed to the emerging world for several generations, establishing leadership positions and brands in nearly every important emerging market. Today, in countries such as Thailand, Argentina and Indonesia, these players are identified more often as local enterprises than as foreign multinationals by their consumers. Unilever, for instance, controls nearly half of the Indian detergent market; Nestl, 80 percent of the Chinese coffee market, and Colgate-Palmolive, 75 percent of the Brazilian toothpaste market. Emerging market leaders are poised to ride the growth of these economies for years to come. Coca-Cola, for example, is growing at 30 percent per year in China, and its business there is fast approaching 10 percent of its total United States volume. Nevertheless, per capita consumption in China remains only about 2 percent of that in the United States, pointing to one of the reasons that Wall Street has pushed Coca-Cola's stock price to 45 times its earnings. The success enjoyed by these pioneers, however, is not the norm. The largest group of multinationals has followed a flag-planting strategy: transplanting existing "first-world" products with minimal investment into a wide variety of new markets, without achieving significant market share in any of them. While multinationals are quick to cite the extent of their worldwide footprint, the global portfolio of most multinationals remains dominated by United States and Western European economies. The emerging markets combined in the portfolio of flag-planters are typically limited to less than 10 percent of their worldwide sales. Given their timid positions and weak understandings of these countries, the returns of those who have followed the "flag-planting" route are generally poor. While there is a natural tendency for multinationals to build upon what made them successful in their core markets in Western Europe and the United States, it is this practice that routinely gets them into trouble. In reality, consumer goods companies cannot export their business models, products and marketing formulas wholesale from their core developed markets and expect them to work in places such as India, Turkey or Mexico. Emerging markets differ in their governmental policies, regulations and macroeconomic behaviors; in the structure of their consumer markets, distribution systems and competitive sets; in the needs and behaviors of their consumers. Even the most experienced are not immune from making this mistake, as Coca-Cola recently found in India. When Coca-Cola went back into the market in 1993, it invested heavily behind the Coke brand, using its typical global positioning, and watched its market leadership slip to Pepsi. Recognising its mistake, Coke re-emphasised a popular local cola brand (Thums Up) and refocused its Coke brand advertising to be more relevant to the local Indian consumer. Questions: 1.1 With the use of examples form the article examine the importance of emerging markets in contrast to traditional established markets. (15) 1.2 Traditional marketing strategies are not always successful in emerging markets as evidenced from the examples provided in the article. With regards to the above statement elaborate on whether the 4 P marketing model (Product, Price, Place and Promotion) is still relevant compared to the 4 A marketing model (Affordability, Accessibility, Acceptability and Awareness). (25) QUESTION TWO [30]

Connecting with customers is critical to the success of marketing management. It involves a focus on creating long term loyalty relationships with customers, the analysis of consumer markets and business markets, as well as the identification of market segments and targets. With regards to the above information elaborate on the strategies that organisations can utilise to connect with customers to build long term relationships, value, satisfaction and loyalty.

QUESTION THREE [30]

The Holistic Marketing Concept is driving organisations approaches to marketing in the twenty-first century. The concept recognises the scope and complexities of marketing activities and acknowledges that a broad integrated perspective is necessary. With regards to the above information elaborate on the necessity of organisations adopting a holistic marketing concept and the role of internal and integrated marketing initiatives in achieving a holistic marketing campaign.