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Marketing and Economic Development.

December 4, 2011

Why is it that even the most shrewd businessmen and the companies will find it impossible to market their products in a poor country like Ethiopia or Namibia where the economic growth is almost negligible. Why is it that despite the present economic turmoil in the western countries all the market savvy companies still compete with each other to market their products there . Why is that all the companies are now focusing on China  and India  for the Investment and marketing where the economic growth rate is the highest in the world.

Does it mean that the marketing and business development of a company is dependent on the economic development of a country and the Marketing contributes to the economic development of a country. How do we measure the contribution of the marketing  to the economic development of a country.

First we have to look at the economic history of a country. All the countries since when they were formed were mainly agricultural economy where the main products were food grains and animal products and the market was also dominated by the agricultural products.The corporates were mainly in the form of small and large farmers , landowners, money lenders . The towns and cities had small shopkeepers, merchants , and wholesalers.

As the Business grew these small business owners expanded as they had now more and more capital and wealth. Yet they were mostly family owned business with narrow vision.The management was unheard of. The growth of capital in the form of money, gold , silver and land grew more and more for these small business but was unsecured from petty thieves and robbers in the house. The moneylenders only were lenders and there was no secured ware house to keep all these wealth and insure its safety.

The creation of the banks was the watershed in the history of the capitalism as they they created a mechanism of not only safeguarding the businessmen’s wealth at a marginal return but also became the most important tools of investment for the businesses  through bank borrowing at a small interest rate. As the banking size grew rapidly both in terms of size and numbers the business grew even more rapidly both in private as well as in government sector.

As the years passed the business transformed into sophisticated capitalism ,the industrial houses especially in the free market economies of the west . The advance management and marketing tools developed it into an intelligent chess game where the most intelligent capitalist makes the highest profit while others have to satisfy with the lower profits.Competition among the capitalists both in small and large scale has been the mainstay of capitalism and has been the life support of the Marketing. Development in marketing is only possible if there is competition in the market as it helps us to develop more and more tools to attack and defend our interests in the market.

The fact is that Marketing is another positive development of economic growth like we see so many developments taking place around us as the result of the economic growth. The economic growth of a country is a result of agricultural and mainly the Industrial growth . The rise of the capitalist class  and companies in the free world led to the fair and free competition resulting in the increased production of goods and services . The rise in the employment as a result of the industrial growth led to the rise in the income which resulted in the increase in the consumption  of these goods and services. The rise of the Capital led to the increased investments by the business class in all sectors of the economy creating a multiplier effect to the industrial  growth and infrastructure. This defines the economic growth of a country where the economy grows as a result of the growth rate in all sectors.This is what the countries like China and  India are experiencing.presently. On the other hand countries of the west is experiencing a recession that is the negative economic growth or  reduced economic growth in all sectors of their economy leading to high unemployment and inflation.

Competition breeds marketing . In fact I can say that competition is the mother of all marketing taking place in the market. Competition requires more than one company in the market. As the number of the companies grow in the market the birth of Industry takes place. We have telecom industry, Computer industry, Infrastructure industry, electronic industry to name a few where there are large number of competitors armed with niche marketing tools to safeguard their interests.As the marketing segment grows in the industry  , it induces the consumers to buy more and more as well as attract more prospects. This creates a spread effect leading to the rise in the consumption of goods and services leading to increased production of goods and services to satisfy the increase in the demand. The industrial growth takes place due to capital enlargement  and increased investments leading higher economic growth.

There fore  marketing accompanied with finance is the major instrument in the hands of the present industry to facilitate economic growth not only in its sector but also in other industry as well .The economic growth taking place right now and that took place in the west few years back was the result of the marketing .This science of the creation of the demand of product and services has helped the developed economies to reach their present stage and is sure to be the panacea to the present recession which they are experiencing now.


One Comment leave one →
  1. December 8, 2011 7 p12

    Brings out an excellent relationship between Marketing and Economic Development.

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