Spotlight on key developing markets
Study guide, definitions & notes
Brazil
By far most individuals in Latin America have pretty much nothing to spend. As indicated by the World
Bank, 25% live on under €1.40 every day, and a large number more acquire a couple hu offered euros
every month. In Brazil, the locale's greatest market and the twelfth biggest economy on the planet, low-
pay bunches make up 87% of the populace, however, acquire just 53% of the pay. Advertisers in the
locale are viewing inventive ways of offering items and administrations to these poor and low-pay
occupants.
Nestlé Brazil saw sales of Bono cookies jump 40 percent after it shrank the package from 200 grams to
140 grams while lowering the price. Recog using that illiteracy is a problem, Unilever launched a brand
of soap in north-east Brazil with the simple name, ‘Ala’. Brazilian firms that have succeeded
internationally include brewer and beverage producer AmBev, which merged with Interbrew to form
Imbev; aircraft manufacturer Embraer; national airline Varig and sandal maker Havaianas. The world-
famous Rio Carnival and world champion football team have helped create an image of fun and physical
fitness for Brazil.
Brazil has already experienced some ‘go-go’ growth years in the 1960s and 1970s when it was the
world’s second-fastest-growing large economy. It also differs from other emerging markets in being a
full-blown democracy, unlike Russia and China, and has no serious disputes with neighbors, unlike India.
But Brazil’s growth in recent years has been slower, and several obstacles exist that are popularly called
custo Brasil (the coast of Brazil). For example, the cost of transporting products eats up nearly 13
percent of Brazil’s GDP, five percentage points more than in the United States. Most observers see
Brazil’s economic, social and political transformation as still a work in progress.
Russia
Russia has seen a recent rise in foreign investment and, importantly, not just in its traditionally strong
markets in natural resources such as oil and gas. Dutch brewer Heineken, Swedish retailer IKEA, US
banker Citibank and more than a dozen car manufacturers have ramped up operations in Russia. Their
target is Russia’s growing middle class, which expanded from 8 million in 2000 to 55 million in 2006 and
now accounts for over one-third of the population. The mood in the country has become more upbeat
too – the share of Russians who think life is ‘not bad’ has risen to 23 percent in 2006 from just 7 percent
in 1999. Salaries are rising fast, savings are comparatively low, and consumer credit is increasingly
available even for small purchases.
But not everyone has participated in this increased prosperity. The average Russian earns €208 a month,
about 10 percent of the European average, and only third own cars. Many elderly feel they have been
left behind, as do those who live far from Moscow, the capital. Concerns about the business climate
remain. Although the economy has produced a 7 percent annual growth in GDP, the Organisation for
Economic Cooperation and Development (OECD) cautions that economic reforms have been stagnant,
and ranks Russia as one of the most corrupt countries in the world. Many feel the government has been
unpredictable and sometimes difficult to work with.
Motorola’s experience in Russia is instructive. In 2006, 167,500 Motorola handsets were seized on
arrival at Moscow airport, alleged to be smuggled and counterfeit, violate a Russian patent, and be a
danger to public health. Around 50,000 were supposedly destroyed by the interior ministry, though
some were later said to have turned up on the black market. Eventually, most of the handsets were
returned, perhaps more telling was Motorola’s reaction. With Russia being the company’s third-biggest
Study guide, definitions & notes
Brazil
By far most individuals in Latin America have pretty much nothing to spend. As indicated by the World
Bank, 25% live on under €1.40 every day, and a large number more acquire a couple hu offered euros
every month. In Brazil, the locale's greatest market and the twelfth biggest economy on the planet, low-
pay bunches make up 87% of the populace, however, acquire just 53% of the pay. Advertisers in the
locale are viewing inventive ways of offering items and administrations to these poor and low-pay
occupants.
Nestlé Brazil saw sales of Bono cookies jump 40 percent after it shrank the package from 200 grams to
140 grams while lowering the price. Recog using that illiteracy is a problem, Unilever launched a brand
of soap in north-east Brazil with the simple name, ‘Ala’. Brazilian firms that have succeeded
internationally include brewer and beverage producer AmBev, which merged with Interbrew to form
Imbev; aircraft manufacturer Embraer; national airline Varig and sandal maker Havaianas. The world-
famous Rio Carnival and world champion football team have helped create an image of fun and physical
fitness for Brazil.
Brazil has already experienced some ‘go-go’ growth years in the 1960s and 1970s when it was the
world’s second-fastest-growing large economy. It also differs from other emerging markets in being a
full-blown democracy, unlike Russia and China, and has no serious disputes with neighbors, unlike India.
But Brazil’s growth in recent years has been slower, and several obstacles exist that are popularly called
custo Brasil (the coast of Brazil). For example, the cost of transporting products eats up nearly 13
percent of Brazil’s GDP, five percentage points more than in the United States. Most observers see
Brazil’s economic, social and political transformation as still a work in progress.
Russia
Russia has seen a recent rise in foreign investment and, importantly, not just in its traditionally strong
markets in natural resources such as oil and gas. Dutch brewer Heineken, Swedish retailer IKEA, US
banker Citibank and more than a dozen car manufacturers have ramped up operations in Russia. Their
target is Russia’s growing middle class, which expanded from 8 million in 2000 to 55 million in 2006 and
now accounts for over one-third of the population. The mood in the country has become more upbeat
too – the share of Russians who think life is ‘not bad’ has risen to 23 percent in 2006 from just 7 percent
in 1999. Salaries are rising fast, savings are comparatively low, and consumer credit is increasingly
available even for small purchases.
But not everyone has participated in this increased prosperity. The average Russian earns €208 a month,
about 10 percent of the European average, and only third own cars. Many elderly feel they have been
left behind, as do those who live far from Moscow, the capital. Concerns about the business climate
remain. Although the economy has produced a 7 percent annual growth in GDP, the Organisation for
Economic Cooperation and Development (OECD) cautions that economic reforms have been stagnant,
and ranks Russia as one of the most corrupt countries in the world. Many feel the government has been
unpredictable and sometimes difficult to work with.
Motorola’s experience in Russia is instructive. In 2006, 167,500 Motorola handsets were seized on
arrival at Moscow airport, alleged to be smuggled and counterfeit, violate a Russian patent, and be a
danger to public health. Around 50,000 were supposedly destroyed by the interior ministry, though
some were later said to have turned up on the black market. Eventually, most of the handsets were
returned, perhaps more telling was Motorola’s reaction. With Russia being the company’s third-biggest
