- Published: November 25, 2021
- Updated: November 25, 2021
- Language: English
- Downloads: 42
Marketing entails positioning products and services in the market through different strategies that focus on the marketing elements; mainly the product, pricing, promotion and place elements. However, the elements are determined by several factors which are in-turn dependent on the economic, social, political, cultural, legal and technological factors as well as the development stage of an economy. On the other hand, a less developed country is marked by persistent low economic growth as well as relatively low social welfare and life standards compared to the developed countries that have high economic growth, high life standards as well as significant aggregate demand. In that respect, this analysis seeks to demonstrate how the factors and the development stage of an economy influences marketing operations and strategies. To achieve the objective, the analysis uses Mali which is classified as a less developed country and analyzes marketing operations in the country in reference to the market environment factors and issues. Thus, the analysis begins by providing an overview of the country’s history and factors including economic, demographics, language, government, and attitudes towards foreign investments, religion, business practices as well as value systems. In addition, the analysis explains the marketing issues in the country including the consumer behavior and the application of the marketing mix as well as the necessary considerations.
– Country history and overview
Mali is a low income level Sub-Saharan African country that gained independence on 22 September 1960 from France and can be classified as a developing country with a population of 14. 85 million people and a GDP of $10. 31 billion by the year 2012. The country has been on the process of eradicating poverty as its democratic government seeks to improve the quality of life for its citizens. Further, the country’s economy is highly dependent on agriculture which accounts for 80% of its workforce while 10% of its population is nomadic. In addition, mining is a key economic activity hence the country experiences business cycles and fluctuations that are based on seasonal output and commodity prices. In that respect and considering the low income level, the country highly relies on foreign aid for its economic development. However, the foreign aid has been decreasing with increased conflict that has marked the economy in the recent past with an increase of insurgent groups’ operations. Finally, the country has experienced significant decrease in foreign investments with investors fearing for their investments given the unstable political environment and the civil war. (World Bank, 2011)
– Business and marketing environment factors
The country’s marketing and business environment can be defined by several factors that determine the marketing operations as discussed below.
Demographic factors refers to those aspects that relates to a country’s occupants ranging from the population size and its composition, their characteristics like age, language, religion among others. In that respect, Mali is defined by a number of demographics as below. (Kotler, 2004)
– Population: The country has a population size of 14, 853, 572 people which provides a significant market for products and services.
– Ethnic composition: The country is dominated by Mande ethnic group that accounts for 50% of the population while the rest include Peul, Songhai, Volaic, Moor and Tuareg. Thus, the Mande culture is the dominant consumer behavior determining culture in the country.
– Languages: The country uses French as the official language while the other key languages include the Bambar which accounts for 46% of the population followed by Peul 9. 4% and Sonike being 6% while the rest accounts for the remaining percentage. In that respect, marketing information should be delivered in the official and dominant local languages.
– Religion: Mali’s dominant religion is the Islam with Muslims accounting for 94. 8% while Christians account for 2. 4% and Animist being 0. 5%. That means that Islamic preferences in terms of products and services are dominant in the market.
– Age structure: The country is marked by a young generation with those aged below 14 years being 47% of the population, those aged 15 to 24 years being 19%, those aged 25 to 54 being 26. 6% while those aged between 55 and 64 are 3. 7%. Finally, the old aged above 65 years were 3% of the population as at the 2013 statistics. This presents an opportunity for marketing that are products targeted at the young generation which provides a significant market.
– Literacy level: The country has a literacy level of 33. 4% with males’ literacy level being 43. 1% while females’ level is 24. 6%. Thus, males are more likely to influence buying behavior in the market compared to the less literate females. (CIA, 2013)
Mali’s government is marked by an administrative division of the country into eight divisions namely Kayes, Gao, Kidal, Mopti, Koulikoro, Sikasso, Timbuktu and Segou all governed by a constitution that was adapted in 1992 with laws guiding the political, economic and business operations. In that respect, business and marketing operations in all regions are subject to the same regulation and authority. In addition, the government has policies that seek to promote free trade hence an opportunity for international businesses to market and sell their products in the country. (IFC, 2013)
The country is marked by rampant corruption that hampers business development and growth as well as acting as deterrent to foreign investors as local officials solicits for bribes in order to complete business procedures for investors. In addition, the high population in the country has resulted to the business world being marked by low unions’ representation for employees and poor pay as a result of the high unskilled labor supply that leaves the businesses with a growing supply of labor hence denying employees their bargaining power. Thus, businesses seeking to operate in Mali face the corruption problem which imposes unnecessary costs and on the other hand have access to high supply of labor to choose from. (World Bank, 2011)
Attitude towards foreign investments
Mali has an open attitude towards foreign investments and its government has established initiatives that seek to promote the investments. Such initiatives allowing foreign businesses owned 100% by foreigners to operate in the country which led the foreign direct investments to grow from the 2010’s value when they equaled 1. 6% of the country’s GDP to 1. 7% in 2011. In that respect, an international business can easily establish its operations and carry out its marketing activities within the country without many limitations from the authorities. (World Bank, 2011)
– Marketing issues
Marketing operations in a given market is dependent on several issues that relate to among other aspects; the consumer behavior that acts as a guide to the marketing planning in respect to suitable strategies that relate to product positioning, pricing, distribution and promotion. (Kotler, 2004) In that respect, the Mali’s people as potential consumer market are defined by certain consumer behaviors that are dependent on several factors which inturn influences the marketing operations as discussed below.
– Consumer behavior
Consumers behavior is reflected by their decision making process that follows the path of problem recognition, information search, alternatives evaluation and purchase decision to the post purchase behavior. Thus, the development level of a country has a great effect on the consumer behavior through its effects on external factors that influence such behavior with the external factors including social, culture and economic factors. Thus, being a less developed country, Mali’s market is marked by specific characteristics that are in line with the country’s development stage and which affects the consumers’ behavior as discussed below. (Kotler, 2004)
With a budget deficit of 1. 2% of the GDP and a growing public debt that rose to 25. 7% of the GDP in 2011 from the 2010’s 25. 4%, the country’s economy is deteriorating hence a need for suitable marketing strategies that cater for low income. The country can also be classified as a low income economy with a $660 GNI per capita by 2012. In addition the country had an annual economic growth of 5% between the years 1996 and 2010 after which the effects of a coup and the global recession negatively affected economic growth which even led the government to cut its spending. Further, the current GDP growth rate is -1. 2% which is a decline from the 2. 75 in 2011 and 5. 8% in 2010. (World Bank, 2013) In that respect, the economy experiences hardships that are reflected in the declining consumers’ purchasing power as the disposable income decreases. With that, the majority of consumers are increasingly seeking low priced products that suit their purchasing power. (Kelly, 2012)
Further, the GDP composition for 2012 included 67% household consumption, 27% exports and 12. 8% government consumption. In terms of the sectors, the GDP composition included 36. 9% for agriculture, 23. 4% for industry and 39. 7% for services. In that respect, the economy is shown as having more household consumption as compared to any other consumption like the industrial and government consumption. In addition, services and agricultural products mark a significant consumption of the Mali market where the lowest 10% of household income level accounted for 3. 5% consumption while the highest 10% accounted for 25. 8% by the year 2010. (World Bank, 2013) In light of that consumption pattern, it is clear that consumption is driven by the upper income class that has a significant income to buy in face of deteriorating economic conditions. (Keller, 2012)
The country has also been experiencing an increasing annual inflation rate from the 2010’s 1. 1% to the 2011’s 2. 9%. In that respect, the consumers increasingly seek for alternative products that have a pricing which considers their eroded purchasing power. Therefore, those economic factors affect Mali’s consumers behavior in respect to the alternatives choice as they seek to choose products that reflect value to them depending on their purchasing power. (World Bank, 2011)
The country is marked by low technological advance with some key technological features like internet access being limited. This was marked by only 2% of the population having access to the internet in 2011 as the economy has poor support infrastructure for technological development. However, the country is experiencing an increase in mobile phones use marked by an increase from 48 per 100 people in 2010 to 68 per 100 people in 2011. Thus, the two factors; mobile and internet accessibility affects the search for information in that lack of advanced technological means like the internet and mobile devises leaves the consumers to rely on traditional media as the source of products and services’ information. (World Bank, 2011)
With the economy being marked by low income and low standards of living, the country has a significant low class that have preferences that suit their class hence a prevalence of a social class that features demand for less expensive products which reflect their lifestyle. This determines the customers’ needs identification and the alternatives they choose for their buying hence a need for marketing strategies that target the class needs and ability to buy. (Kotler, 2004)
As a country that is dominated by Islamic religion and Mande ethnic group, customer behavior is heavily determined by the Islamic believes and practices as well as the Mande’s cultural preferences. Such preferences reflect a choice for products that Muslims considers acceptable for their religion and which identifies with the Mande people’s cultures. (CIA, 2013)
– Marketing mix
In light of the country specific factors that are in line with its development stage, marketing operations focuses on delivering goods and services to customers in a manner that suits their needs and conditions. Thus, marketing is geared towards delivering value to the target market through suitable product positioning, pricing, distribution and promotion. (Keller, 2012) In that respect, the marketing operations on the four marketing elements suitable for Mali are as summarized below.
The product positioning strategies in terms of suitable features should focus on the consumer behavior that is guided by several factors as discussed. In that respect, the products should seek to deliver value to customers depending on their preferences that are defined by their cultural and social preferences. Some of those considerations include a focus on delivering products that reflect more of Islamic preferences as well as Mande culture and preferences rather than western lifestyles and culture that has not been much inculcated in the Mali people. Further, the low technological advance in the economy leaves the businesses to rely on the traditional methods of products development hence an introduction of innovation by exporting technological innovations would result to new products features that would attract the market. (Keller, 2012)
Considering that the economy is experiencing challenges including declining economic growth, growing debt and high inflation all which negatively impacts on the disposable income level and consumers purchasing power as well as the aggregate demand, the pricing strategy applied should seek to deliver products to consumers at an affordable price. However, the economy is also represented by a significant consumption by the top 10% income group hence a need to also deliver value to them in terms of products that have advanced features that can be charged a premium price. In that respect, pricing should feature both low cost and premium pricing targeting the low and high income segments. (Kotler, 2004)
With the economy experiencing poor infrastructure development as well as low technological advance, there is a challenge in the manner by which businesses reach their customers either through the traditional distribution channels of retail outlets or through online platforms. Thus, businesses needs to consider more effective ways of delivering products to customers like establishing traditional distribution channels including retail outlets in the urban centers. On the other hand, as the community increasingly get access to mobile phone devises and the internet, the business can develop online platforms that consumers can use to access and order for products. (Keller, 2012)
With promotion having the objectives of informing, persuading and reminding customers of the availability of products, their features suitability to their needs as well as their accessibility; the promotion strategies should take into consideration several factors that mark the Mali market and address them as below.
Advertising should focus on using the traditional media like the Radio and Television as a result of low internet and technology advance that limits use of online advertising. On the other hand, the adverts messages should be focused on informing the consumers of the products features that suits their cultural believes and social preferences. Further, the messages should be in the official French language as well as the Bambar language that is mostly used by the largely illiterate population. (Kotler, 2004)
Sales promotion should be done as a way of introducing the western culture and lifestyles products to the Mali market which embraces more of traditional African culture. This can be done by organizing sales promotion events as well as through coupons and discounts offers that would attract customers to try the new products. In addition packaging should have products information presented in languages that the market can easily understand which Include French and the Bambar languages. Further, the packaging should be done to appeal to the cultural and religion preferences with a focus on the Mandes’ culture as well as Islamic appeal. (Keller, 2012)
In light of the country’s analysis, it has been clearly demonstrated that Mali is a less developed country with low income level, high population and declining economic growth in addition to being less technologically advanced. In that respect, marketing in the country needs to be focused on meeting the low income class needs as well as other needs that are defined by the country’s social, cultural and technological factors. With that consideration, the marketing mix strategies have been identified as product positioning that suits the more African culture and lifestyles in addition to pricing strategies that suit the low purchasing power and the few high income class. Further, marketing in the country requires distribution strategies that meet the needs of the geographically dispersed population as well as establishing distribution outlets considering the less developed distribution channels in the market. Finally, promotion has been identified as being in need to use traditional media that is suitable for the less technologically advanced market in addition to using messages that suit the consumers culture and religious preferences.
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IFC. Business Environment Snapshots: Mali. Web 27 November 2013.
http://rru. worldbank. org/BESnapshots/Mali/default. aspx
Keller, K. Strategic Brand Management: Global Edition. 4th ed. New York:
Pearson Publishers, 2012, Print.
Kotler, P. and Armstrong, G. Principles of Marketing. London: Prentice Hall, 2004. Print.
World Bank. Country at a Glance: Mali. Web. 26 November 2013.
http://www. worldbank. org/en/country/mali