A comparative analysis of environmental effects on marketing activity in developing countries

Multinational Business Review, Fall 1997 by Ojah, Kalu, Han, Dongchul

To provide some insight that would permit the streamlining of a multinational marketer's strategies as well as offer some knowledge of a typical African market via knowledge of the widely studied Asian markets, a set of intercountry analyses was conducted (Table 4). For this comparative analysis between countries, it is appropriate to first investigate effects of environments on marketing activity per country (similar to panels A-D of Table 3 above). At the 0.05 level of significance, only political, sociocultural, and technological environments were found statistically acceptable for the intercountry test. To conserve space this result is not reported, but it is available upon request. Therefore, only the three acceptable environmental factors are used for the comparative analysis. The Mann-Whitney U-test was employed for this analysis. As a nonparametric analysis, the U-test is an equivalence of the t-test in a parametric analysis. Unlike the t-test, however, it is specifically employable to tests of ordinally scaled data (Malhotra, 1993). The result from the U-test indicates that expectations about market environmental effects (that are due to government policy) in Malawi relative to those in the Philippines, Kenya, and Hong Kong are significantly different with respect to the political, socio-cultural, and technological environments. The difference between Kenyan managers' and the Philippinian managers' expectations is significant with respect to only the socio-cultural environment. These outcomes suggest that the marketing strategies deployed in Malawi should be different from those deployed in Kenya or the Philippines. However, similar strategies can be employed in both the Philippines and Kenya, with modification needed, for instance, in the contingency plans designed to handle potential changes in the socio-cultural environments of both countries. In other words, the wealth of knowledge gathered so far on the Asian market of the Philippines can be used to harness the unfamiliar African market of Kenya, with a contingency plan that focuses essentially on possible future changes in the socio-cultural environments of Kenya's market.

SUMMARY AND CONCLUSION

In this study we used a survey of Hong Kong, the Philippines, Kenya, and Malawi to highlight the point that though developing countries are not always homogenous, they can however, be segmented into groups of similar target product markets. For instance, our comparative analyses of the surveyed countries suggest that geographic proximity or socio-cultural similarity does not make developing countries identical target product markets. Specifically, Kenya and Malawi, both in Sub-Saharan Africa, were found to be dissimilar with respect to some characteristics that usually define product markets (e.g., purchasing power and communication channels). The Philippines, on the other hand, was more comparable with Kenya than with Hong Kong despite the fact that Hong Kong and the Philippines are both Asian and Oriental in culture. Instead, we found that relative similarity in the level of economic development is likely to segment developing countries into homogenous groups of potential product markets. Consequently, we stress the point that proper screening of business environments is a prerequisite to entering a distant and unfamiliar market such as those in Sub-Saharan Africa. More importantly, we make the point that an anticipation of potential changes in the screened environments is vital for sustainable marketing success. Therefore, to strengthen international marketing both in practice and theory (such as in the organizationenvironment approach to marketing), we recommend that expectationally (ex ante) determined market environments be substituted for historically (ex post) determined market environments. In this vein, we showed how marketing managers' expectations of environmental impacts that are due to government policies or other external forces (in both familiar and unfamiliar markets) can be gauged and used to gain insight into unfamiliar potential target markets via a comparative analysis. Thus, our preliminary finding is that similar marketing strategies can be employed in both Kenya and the Philippines, with a contingency plan focused mainly on sociocultural environmental changes in either market (country).