Customer orientation in emerging markets: concepts and empitical tests
Customer orientation (CO) is a basic marketing concept that has been discussed within the marketing discourse since the 1950s. It suggests that a company should identify and satisfy customers’ needs to maximize customer equity, thus extending business objectives from profit generation to non-financial goals. It can be described as a strategic orientation with focus on developing relationship building and customer awareness capabilities in order to achieve higher business performance. In this chapter we review the CO concept in general, provide insights on its implications in emerging markets and develop propositions for framing future research on CO in emerging markets.
The case discusses the marketing dilemma faced by the Russian social enterprise, Snegi. Snegi promotes traditional Russian boots called Valenki-s, now produced with new age design and in a socially responsible way. The brand has received good response since its inception in 2015. While some customers like the product for its resemblance to Valenki and use it for daily use or gifting, others find it as a fashion statement. The company now faces a dilemma about choosing its target segment and positioning its brand in a way that can retain its social mission while being a successful enterprise.
The transformation of emerging markets in recent decades has generated a new, growing, and very large middle class market, also known as the middle of the pyramid. This market segment, which is middle by the standards of emerging markets yet low by the standards of advanced economies, is extremely attractive for firms, but still understood and underserved. This volume presents detailed analyses of exemplary firms that have innovated products, services, and business models to fulfil the needs and desires of these new middle classes. It provides useful insights for managers, consultants, researchers, and students interested in emerging economies, and actionable lessons on how to innovate for a new and expanding market segment.
This article evaluates the peculiarities of current corporate ratings systems and addresses specific issues of the development of econometrical rating models for emerging market enterprises. Financial indicators, market-value appraisals, industrial as well as macroeconomic factors of different countries were used as explanatory variables. Ratings of the Standard & Poor's, Moody's Investors Service and Fitch Ratings agencies were considered and used for modelling. The predictive power of the econometrical models was examined. A comparison of the methodologies of the three leading agencies was discussed.
As there is still no substantial research evidence on the mediating effect of innovativeness on market orientation – performance link in emerging economies, our study aims to close this gap. Following existing theory, direct and indirect effects of market orientation on firm performance are being tested. The model includes moderating effect of product innovativeness. The paper aims at adding to existing theory on the role of firm innovativeness in driving firm performance with the focus on product innovation. Product innovation is in center of attention for emerging economies, while Russia is rather loosing positions in producing innovative offerings in comparison to other BRIC economies. The study is based on empirical survey of 204 Russian innovative firms with multiple respondents approach, resulting in 331 qualified respondents. The results confirm existing differences, depending on the level of product innovativeness, as well as illustrate variation in the role of market orientation subdimensions and dimensions of product innovation on firm performance.
The capacity for transformation and advancement of the world economy itself by a group of countries belonging to the emerging economies has been a topic of intense discussion in world forums. Even as news of the losing shimmer of the emerging economies is being spilled to the world, this is where 80% of the world consumers reside, and, therefore, too important to divert attention from. The theme of the 2014 Annual Conference of the Emerging Marketing Conference Board hosted by Centre for Marketing in Emerging Economies of IIM Lucknow, supported by the Academy of Indian Marketing – Listening to Consumers of Emerging Markets is an eminent testimony to this important fact.
JAGDISH N SHETH, PHD
Emory University Founder, Academy of Indian Marketing
This paper reviews the theory of Credit Default Swaps (CDS), the main characteristics of the CDS market, and how to estimate the non-default component of the yield spreads as the basis between the actual CDS premium and the hypothetical CDS premium implied by bond yields. We then analyze the most liquid CDS on Russian companies and compute the relative CDS-Bond basis from 2005 till 2010, paying particular attention to the period when a short selling ban was into effect in Russian financial markets from September 18, 2008 till June 15, 2009. We found that, while the basis was mainly negative before the ban, it then became largely positive during the period the ban was enforced. After the ban was lifted, the basis has started to decrease but still remains positive for all companies examined. This evidence therefore seems to support the hypothesis that a positive basis can be justified by the difficulty of arbitrage caused by short selling costs
The chapter describes the current state of corporate governance in Russia and the dynamics of recent years. Important features of the environment that affect corporate governance include weak legal institutions that lead to high private benefits to control, underdeveloped capital markets, high levels of ownership concentration and significant state involvement in business. In this situation, the main conflict of interest is not between a manager and a large number of dispersed shareholders, but between large and small shareholders, between different large shareholders, and between minority shareholders and managers/board members in state-owned companies. Many of these features are very similar to other emerging markets, but substantially different from conditions faced by firms in developed countries. Despite substantial improvement during the 2000s, the quality of corporate governance in Russia is still much lower than in developed countries, primarily because of the low quality of Russian institutions.
This paper provides empirical analysis of macroeconomic effects of state ownership of banks. The aim is to test one of the key findings of theoretical and empirical literature of 1990s and early 2000s, namely that sizeable state ownership of commercial banks hinders financial development and economic growth. We focus on several large emerging markets including BRIC countries (Brazil, Russia, India and China) and test several specific hypotheses for the period from 1995 through 2009. Our results suggest that positive or negative sign of the government ownership impact on financial intermediation and economic growth is not constant for all times but varies depending on the type of national economy (mature market or emerging market) and, within the emerging markets category, on the level of economic development. The impact is therefore heterogeneous and not homogeneous. This finding is in contrast with the established theory but in line with the most recent empirical literature.