CHAPTER 3: GEOGRAPHY AND HISTORY- THE FOUNDATIONS OF CULTURAL

UNDERSTANDING

Geography and International Markets

Geography, the study of the earth’s surface, climate, continents, countries, peoples,
industries and resources, is an element of the uncontrollable environment that con- fronts
every marketer but that receives inadequate attention A brief look at the earth’s resources
and population – the building blocks of world markets – and world trade routes completes
the presentation on geography and global markets.
 Climate and topography
As elements of geography, the physical terrain and climate of a country are
important environmental considerations when appraising a market. The effect of
these geographical features on marketing ranges from the obvious influences on
product adaptation to more profound influences on the development of marketing
systems. Products that perform well in temperate zones may deteriorate rapidly or
require special cooling or lubrication to function adequately in tropical zones. The
economic and social systems there can be explained, in part, in terms of the
geographical characteristics of the area The effect of natural barriers on market
development is also important. Consequently, natural barriers rather than actual
distance may dictate distribution points.

Geography, Nature and International Trade

As countries prosper and expand their economies, natural barriers are overcome. Man has
been reasonably successful in overcoming or minimising the effects of geographical barriers
and natural disasters except in the developing countries of the world. Most rich countries
have constant economic growth while growth in emerging countries can be much higher.
Always on the slim margin between subsistence and disaster, some developing countries
suffer disproportionately from natural and human-assisted catastrophes. Climate and
topography coupled with civil wars, poor environmental policies and natural disasters push
these countries further into eco- nomic ruin Countries that suffer the most from major
calamities are among the poorest in the world. Many have neither the capital nor the
technical ability to minimise the effects of natural phenomena; they are at the mercy of
nature
 Social responsibility and environmental management
in the early 2000s the environment was considered the most important issue
(century of the environment). The self-styled Green activists, and governments,
media and businesses are focusing on ways to stem the tide of pollution and to clean
up their decades of neglect. Many view the problem as a global issue rather than a
national one, and one that poses com- mon threats to humankind and thus cannot
be addressed by nations in isolation The export of hazardous waste by developed
countries to developing nations has ethical implications and environmental
consequences. Countries finding it more difficult to dispose of such waste at home
are seeking countries willing to assume the burden of disposal. Some waste disposal
in developing countries is illegal and some is perfectly legal because of governments
that are directly involved in the business of hazardous waste. Governments,
organisations and businesses are becoming increasingly concerned with the social
 responsibility and ethical issues surrounding the problem of generating and
disposing of waste. Their influence and leadership are reflected in a broader
awareness of pollution problems by businesses and people in general.
 Resources
Energy is necessary to power the machinery of modern production, and to extract
and process the resources necessary to produce the goods reflecting economic
prosperity. In much of the underdeveloped world, human labour provides the
preponderance of energy. As an environmental consideration in world marketing,
the location, quality and availability of resources will affect the pattern of world
economic development and trade for at least the remainder of the century. This
factor must be weighed carefully by astute international marketers in making
worldwide international investment decisions. In addition to the raw materials of
industrialisation, there must be an available and economically feasible energy supply
to successfully transform resources into usable products. Aside from the
geographical unevenness in which most resources occur, there is no immediate
cause for concern about the availability of supply of most resources. These estimates
of reserves are based on current rates of consumption and will change as new
reserves are discovered, as greater pro- portions are obtained by recycling, as
substitutes are introduced, and as rates of consumption increase or abate.
Substitutions are already being used to replace many of the minerals.
 World population trends
While not the only determinant, the existence of sheer numbers of people is
significant in appraising potential consumer demand. Changes in the composition
and distribution of population among the world’s countries during the next 40 years
will profoundly affect future demand. The majority of the people will reside in less-
developed countries least able to support such population increases. World Bank
predicts that over four-fifths of the world’s population will be concentrated in
developing countries. Most governments are trying to control the explosive birth
rates by encouraging birth control
o Rural/urban shifts : A relatively recent phenomenon is a pronounced shift of
the world’s population from rural to urban areas Today, more than 40 per
cent of the world’s people are urbanites and this trend is accelerating
Migration from rural to urban areas is largely a result of a desire for greater
access to sources of education, health care and improved job opportunities.
At some point, the disadvantages of unregulated urban growth begin to
outweigh the advantages for all concerned. Although migrants experience
some relative improvement in their living standards, intense urban growth
without commensurate investment in services eventually leads to profound
problems. Slums populated with unskilled workers living hand to mouth put
excessive pressure on sanitation systems, water supplies and other social
services. Prospects for improvement are not encouraging because most of
the growth will take place in developing countries already economically
strained. Further, there is little progress in controlling birth rates in most
populous countries.
o Increasing Unemployment: Rapid population increases without
commensurate economic development create other difficulties. Among the
most pressing are the number of new jobs needed to accommodate the flood
 of people entering the labour pool. The mismatch between population
growth and economic growth is another major problem to be faced in the
next century. The ability to create enough jobs to keep pace with population
growth is one problem of uncontrolled growth; another is providing enough
to eat.
o World food production: Having enough food to eat depends on a country’s
ability to produce sufficient quantities, the ability to buy food from other
sources when not self-sufficient, and the physical ability to distribute food
when the need arises. Long-term drought, economic weakness, inefficient
distribution and civil unrest have created conditions that have led to tens of
thousands of people starving.
o Controlling Population Growth: Faced with the ominous consequences of the
population explosion, it would seem logical for countries to take appropriate
steps to reduce growth to manageable rates, but procreation is one of the
most culturally sensitive uncontrollables. The prerequisites for population
control are adequate incomes, higher literacy levels, education for women,
better hygiene, universal access to health care, improved nutrition and,
perhaps most important, a change in basic cultural beliefs about the
importance of large families. Unfortunately, progress in providing improved
conditions and changing beliefs is hampered by the increasingly heavy
demand placed on institutions responsible for change and improvement.
o Developed world population decline: While the developing world faces a
rapidly growing population, it is estimated that the industrialised world’s
population will decline. All this will have a profound impact on companies,
their segmentation and marketing strategies. The economic fallout of a
declining population has many ramifications. Businesses find their domestic
market shrinking for items such as maternity and infant goods, school
equipment and selected durables. This leads to reduced production and
worker layoffs that affect living standards. The elderly require higher
government outlays for health care and hospitals, special housing and
nursing homes, and pension and welfare assistance, but the workforce that
supports these costs is dwindling. In addition, a shortage of skilled workers is
anticipated in these countries because of the decreasing population.
World Trade Routes
Major world trade routes have developed among the most industrialised countries of the
world. It may be said that trade routes bind the world together, minimising distance, natural
barriers, lack of resources, and the fundamental differences between peoples and
economies. Trade routes represent the attempts of countries to overcome economic and
social imbalances created in part by the influence of geography. The more economically
developed a country, the better developed the surface transportation infrastructure is to
support trade.
History Perspective in International Trade
An aware- ness of the history of a country is particularly effective for understanding
attitudes about the role of government and business, the relations between managers and
the managed, the sources of management authority, and attitudes towards foreign
multinational corporations. History helps define a nation’s ‘mission’, how it perceives its
neighbours, and how it sees its place in the world.
 History is subjective
Historical events are always viewed from one’s own perspective, and thus what is
recorded by one historian may not be what another records, especially if the
historians are from different cultures. Historians are traditionally objective, but few
can help filtering events through their own self-reference criteria. Not only is history
sometimes subjective, but there are other subtle influences on our perspective.