626 The Marketing Book
supply. Black markets exist to exploit such a
market imbalance at a high price for the
consumer, but since it is also an illegal activity,
there is no redress for the consumer in terms of
the quality of goods provided. All the risks are
borne by the consumer. The existence of a black
market also indicates a market opportunity,
often for a legitimate business operation.
3 Grey markets exist where the incidence of
parallel exports/imports referred to above is
ever increasing, and is threatening
manufacturers, but still is being championed by
the EU in the name of free trade. This is
increasing in pharmaceuticals because of the
high value added involved.
4 Freeports now account for more than 9 per
cent of world trade. Those freeports of the
Pacific Basin which encourage manufacture,
assembly and transhipment of goods for
export are particularly important, and are now
actively competing with each other. However,
the costs of building port cargo handling
facilities such as those found in Singapore are
very high, but Malaysia is or was actively doing
so until the advent of the ‘Asian ‘flu’, which
curtailed many of the more ambitious
infrastructure projects. Freeports are located
mainly within the NICs or the Third World and
it is difficult to compete with these freeports
on price, as their governments have in many
cases exempted the freeports not only from
taxes and duties which would otherwise be
payable, but also from minimum wage controls
and health and safety at work legislation which
might apply outside the freeport area. This
creates a cost advantage but also a legislative
anomaly within a jurisdiction. Freeports now
exist in all parts of the world, but their
operating regulations vary widely. To be
successful, they need to have a locational
advantage as well as a cost advantage.
Promotion
There are a number of questions here, starting
with the degree of similarity with the domestic
market and the availability and regulation of
suitable types of promotion (Koudelova and
Whitelock, 2001), including personal selling as
well as availability, regulation and relative cost
of suitable advertising media, such as: sales
promotion, direct mail (Iyer and Hill, 1996;
McDonald, 1999), trade shows and exhibitions,
sampling, contest and competitions, merchan-
dising displays and public relations or pub-
licity. There are other sources within this book,
such as Crosier, who discuss these aspects.
Where similar market conditions and media are
found, then the question arises as to whether a
successful domestic advertising campaign can
be transferred abroad, thus eliminating origina-
tion costs. Gruber (1995) is one of the key
sources in international campaign transfer-
ability. Further possibilities arise with the use of
collaborative joint advertising with distribu-
tors, wholesalers or major retailers.
Essentially, markets are unlike because the
forces that drive them are different or function
to a lesser or greater degree compared to home.
Most commonly, per capita income is sought as
a guide to personal disposable income available
for product purchases. This is simply naive in
that a company requires a market to have size,
measurability, plus the ability and willingness
to buy, before it has a market. What is required
therefore is knowledge, for, with knowledge, it
is possible to plan for products which build
upon similarities across countries and therefore
maximize the opportunities for standardization
and economies of scale. However, it also has to
be said that there may also be mandatory
requirements for advertising as well as product
modification. Beliefs derive from religion,
which may not countenance advertising and
promotion, seeing in it a force which makes
society consume more and more and be less
respectful towards the world’s finite resources.
Religion may find itself at odds with products
and services being promoted for sale as well as
promotional themes, which may include partial
nudity of the female form. Nevertheless, Vardar
(1995), an advertising practitioner herself, has
explored the uses and practice of advertising
within a Muslim economy, namely Turkey.