Muhammad Adnan 1635-112251

Role Of International Marketing In Economic Development

Table of Contents
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Contents
Introduction to Marketing International Marketing Economic Development Economic Growth Difference between economic development and economic Growth Key Indicators of Economic development Role of International Marketing in Economic Development Per Capita Income National Income

Page No. 3 3 4 4 6 7 8 8 9 9 10

Physical quality of life index

Human Development Index

Muhammad Adnan 1635-112251

Marketing
Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. The Chartered Institute of Marketing define marketing as The management process responsible for identifying, anticipating and satisfying customer requirements profitably

International Marketing
"At its simplest level, international marketing involves the firm in making one or more marketing mix decisions across national boundaries. At its most complex level, it involves the firm in establishing manufacturing facilities overseas and coordinating marketing strategies across the globe." Doole and Lowe.

"International marketing is the application of marketing orientation and marketing capabilities to international business. Muhlbacher, Helmuth, and Dahringer

Muhammad Adnan 1635-112251

Economic Development
The definition of economic development given by Michael Todaro is An increase in living standards, improvement in self-esteem needs and freedom from oppression as well as a greater choice The most accurate method of measuring development is the Human Development Index which takes into account the literacy rates & life expectancy which affects productivity and could lead to Economic Growth. It also leads to the creation of more opportunities in the sectors of education, healthcare, employment and the conservation of the environment. It implies an increase in the per capita income of every citizen.

Economic Growth
An increase in a country's real level of national output which can be caused by an increase in the quality of resources (by education etc.), increase in the quantity of resources & improvements in technology or in another way an increase in the value of goods and services produced by every sector of the economy Economic Growth can be measured by an increase in a country's GDP (gross domestic product).

Muhammad Adnan 1635-112251

Comparison chart

Economic Development
Concept: Normative concept

Economic Growth
Narrower concept than economic development Growth is concerned with increases in the economy's output Growth relates to a gradual increase in one of the components of Gross Domestic Product: consumption, government spending, investment, net exports It refers to an increase in the real output of goods and services in the country like increase the income in savings, in investment etc.

Scope:

Concerned with structural changes in the economy Development relates to growth of human capital indexes, a decrease in inequality figures, and structural changes that improve the general population's quality of life

Growth:

Implication:

It implies changes in income, saving and investment along with progressive changes in socio-economic structure of country(institutional and technological changes) Qualitative.HDI (Human Development Index), genderrelated index (GDI), Human poverty index (HPI), infant mortality, literacy rate etc. Brings qualitative and quantitative changes in the economy

Measurement:

Quantitative. Increase in real GDP.

Effect:

Brings quantitative changes in the economy

Muhammad Adnan 1635-112251

Indicators OF Economic Growth

There is misunderstanding among the economists over the indicators of economic development. Some of the economists have taken national product as the indicator of economic development. Some other economists have taken per capita income as the indicator of economic development. Likewise some other economists have taken economic welfare as the indicator of economic development. Various economists have taken material living standard index as the indicator of economic development. Economists of this thought have taken life-span, death rate, literacy rate as the bases. Similarly United Nations Development Program (UNDP) has developed Human Development Index (HDI) as the indicator of economic development. The indicators are income, literacy and life expectancy. The pointed of indicators lies between 0 and 1. The position up to 0.5 is the lower class of human development. From 0.5 to 0.8 is the middle class and above 0.8 is the upper class. The base of economic development indicators are as follows. 1234Per Capita Income Criteria National income criteria Physical quality of life index PQLI Human development index HDI

Muhammad Adnan 1635-112251

Role of International Marketing in Economic Development

There are several economic sectors which get affected from international marketing and they are efficiency enhanced through international marketing. Here are some key sectors those are affected from international marketing. Per Capita Income National Income Physical quality of life index PQLI Human development index HDI

Per Capita Income

Income per person in a population Per capita income is often used to measure a country's standard of living.

Per capita income or average income or income per person is a measure of mean income within an economic aggregate, such as a country or city. It is calculated by taking a measure of all sources of income in the aggregate (such as GDP or Gross National Income) and dividing it by the total population. It does not attempt to reflect the distribution of income or wealth.

Muhammad Adnan 1635-112251

International marketing is key tool to increase per capita income. Direct foreign investment increase the employment opportunities that leads to increase in GDP and GNP that is divided to total no. of peoples and result in increased per capita income. Per capita income of Seven Rich Countries of the world. Country Per-capital income (in US dollar) 1. Norway 76,450 2. Switzerland 59,880 3. Denmark 54,910 4. Ireland 48,140 5. Sweden 46,060 6. United States of America 46,040 7. Netherlands 45,820 (Source: World Development Report 2009) Likewise per-capital income of south Asian countries is as follows: South Asian Countries and their Per-Capita Income Country Per-capital income (in US dollar) 1. Bangladesh 470 2. India 950 3. Nepal 340 4. Pakistan 870 5. Sri Lanka 1540 (Source : World development report 2009)

Muhammad Adnan 1635-112251

National Income
National income is related with the final goods and services produced in a country. If a marketer makes investment to some other country to produce goods and services which he may produce at low cost. Then national income of that country will be increased and country may be rated as increasing trend of economic development.

Physical quality of life index - PQLI

This is non-income indicator of economic development because this uses physical quality of life as the indicator. This method of measuring economic development is based on the following three things. They are: (a) Life expectancy (b) Infant mortality (c) Literacy. The scale of all these things measured is between zero (0) and hundred (100) shows the lowest level and 100 shows the highest level. If in any country life expectancy measured is maximum, ie. 100 and the other two indicators are measured minimum i.e., zero then giving equal weight age to each indicator a competitive index is prepared from the average of all three. Likewise index of a country with high literacy rate Muhammad Adnan 1635-112251

will be 100. Countries having low life expectancy, low literacy rate and high infant mortality will have low index (ie. 0). If in any country PQLI is increasing then it indicates the increase in the physical quality of the life of people: Increase in per-capita income does not necessarily indicate the increase in the facilities like healthy food, health, situation, education, etc. International marketing gives sense of ethics, high moral values, sense of living and liberty to choice. This is all because of competition in international firms conducting business in a particular country.

Human development index - HDI

Human development index is new and modern indicator of economic development. This indicator was for the first time developed by United Nations Development Program (UNDP) in the year 1990 AD. This indicator is based on three things; They are as follows: (a) Income for decent living (b) Education (e) Life expectancy. As PQLI, HDI also divides all nations of the world in the scale of 0 to 1 on the basis of three objectives of development. In this method minimum of 0 and maximum of 1 value is given. This method has classified all nations of the world in three different classes. Low human development in from 0 to 0.50, Medium human development in from 0.51 to 0.79 and Muhammad Adnan 1635-112251

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high human development is from 0.80 to 1.0. Since this method measures the relative level of human development, this focuses on life expectancy, education and physical choice. This takes per-capita income as an indicator the change in monetary value is adjusted in GNP. This is measured on the basis of the unofficial education and middle age of school going population. In this method on the basis of the development of skill of all the adults and infant mortality and the nutritious food they get. When all three indicators are included an important indicator of human HDI is measured development will be obtained. On the basis of this, human development index (HDI) of different countries is obtained. When MNCs enter in other countries then they provide quality product and services, they introduce modern technology, advanced finished goods, hygienic food items, medicine of international standard. These directly increase the life expectancy with the help of hygienic food items and medicines. Modern and advanced equipment and machinery improvise local citizens to get higher and quality education to get familiar with this new equipment. Direct foreign investment leads to increases production plant and services. Which open the employment opportunities that provide citizens with the high income level and buying power.

Besides from all these major indicators of economic development, there are large number of indicators those are also improved with the help of international marketing, which are as follows :(a) Equality improvement. (b) Poverty alleviation (c) Quality of life (d) Capital formation (e) Fulfillment of basic needs.

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(f) Population growth rate (g) Increase in employment opportunities. (h) Decrease in dependence on agriculture (i) Increase in entrepreneurship (j) Utilization of natural resources (k) Increase in export of finished goods. (l) Trade diversification (m) Extension of infrastructures (n) Extension of markets. (o) Improvement in technology (p) Urbanization, Gender equality, Human rights, etc.

Muhammad Adnan 1635-112251

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