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    Assignment #4.: MKT 4468 Group Assignment Solutions

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    Solution for economic case study

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    Assignment #4.: MKT 4468 Group Assignment Solutions

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    Anh Music
    44 views4 pages
    Solution for economic case study

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    Four Solution

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    Solution for economic case study

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    Download as pdf or txt
    44 views4 pages

    Assignment #4.: MKT 4468 Group Assignment Solutions

    Uploaded by

    Anh Music
    Solution for economic case study

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    © All Rights Reserved
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    MKT 4468 GROUP ASSIGNMENT SOLUTIONS

    Assignment #4.

    Introduction

    We start with a definition of consumer goods to guide our analysis. The output of

    production and manufacturing available on a store shelf such as clothing, food, and jewelry

    (Investopedia, 2018). The type of demand for consumer goods in a country with a low per capita

    nominal GDP are basic, such as clothing or housing needs. The three countries with the lowest

    nominal per capita GDP in 2017 are all located in sub-Sahara Africa; Burundi at $292, Malawi at

    $338, and Niger at $378 (World Bank, 2019). For comparison, the 2017 per capita income for

    the U.S is $59,531 (World Bank, 2019).

    Low per capita Nominal GDP Nation Consumption

    According to Banerjee and Duflo (2007), people earning $1/day spend from 56% to 78%

    of their money on food (in rural and urban households), 4.1% on tobacco and alcohol, and 10%

    on festivals (wedding, a funeral, or a religious festival). The world’s poorest may not have the

    necessary purchasing power to buy Western produced goods, though goods tailored for the sub-

    Saharan markets may fare better. The emphasis should shift to indirect export of goods to various

    middlemen with funding such as Non-Governmental Organizations (NGOs) such as the Red

    Cross, United Nations Development Program, or government agencies such as United States

    Agency for International Development.

    Consumer Goods Consumption. A report by Brookings (2018, p.6) suggests the highest

    African consumer expenditures are in food, beverages and tobacco. Deloitte (2016, pp.11-12)

    reports that of the 50 top companies in Africa, none are in our three countries with the lowest per

    capita GDP that points to low competition opportunities. A PwC report (2016) identifies online

    Copyright © 2019 Dr. M. Elbeck 1


    retailing as a major growth opportunity. The proliferation of smart phones such that “subscriber

    numbers are expected to account for half the population in 2023” (ZDnet, 2018) suggests major

    opportunity in mobile sales. In conclusion, online and mobile sales of food, beverages and

    tobacco might offer strategic opportunity.

    Country Analysis: Burundi

    Let us select Burundi with the lowest per capita nominal GDP. Our analysis will cover

    the following three areas.

    Imports. A country’s imports inform us of goods and services that are valued and cannot

    be produced domestically. The top three imports in 2017 were refined petroleum products (17%

    to 20%), medicines (8.2% to 6.2%) and cereals (7.6%) such as rice, corn, malt and wheat

    (Observatory of Economic Complexity, 2019; Trading Economics, 2019). We conclude that

    demand for consumer goods in Burundi include medicines and cereals.

    Literature on Burundi Food Consumption. Common foods are beans, corn, peas,

    millet, sorghum, cassava, sweet potatoes, and bananas. Beer is consumed at all important

    occasions (Everyculture, 2007). Another source points to beer, soft drinks, soap, textiles, and

    cigarettes (Groelsema, 2007).

    Images. A neat approach to solve this low per capita GDP question is to focus on Google

    images of Burundi. If pictures are worth a thousand words, then the diversity of images may

    provide clues as to what the citizens consume and perhaps imply demand for consumer goods.

    Images point to a poor rural nation with armed conflict, poor infrastructure, subsistence living

    with a strong support for tribal/national celebrations. Remarkably, the variety and vibrance of

    clothing suggests an opportunity for fabrics and finished clothing. The following table

    consolidates our analysis for Burundi.

    Copyright © 2019 Dr. M. Elbeck 2


    Table 1

    Demand for Consumer Goods in Burundi

    Source Consumer Goods Opportunity

    Literature on Poor Nations Online and mobile sales of food, beverages and tobacco

    Imports Medicines and cereals

    Beer, tobacco, beans, corn, peas, millet, sorghum, cassava,


    Literature on Burundi Food
    sweet potatoes, and bananas, soft drinks, soap, textiles,
    Consumption
    and cigarettes

    Images Fabrics and finished clothing

    Conclusions

    Sub-Sahara Africa’s poorest economies’ consumer goods are generally food, beverages

    and tobacco consumer products. For the case of Burundi, Table 1 draws on four sources

    suggesting consumer goods in demand are of the nondurable type such as medicines, food

    (cereals, beans, corn, peas, millet, sorghum, cassava, sweet potatoes, and bananas), beverages

    (beer, soft drinks) fabrics (textiles and clothing), tobacco (cigarettes) and medicines.

    References

    Banerjee, A. V., & Duflo, E. (2007). The Economic Lives of the Poor. The Journal of Economic

    Perspectives: a journal of the American Economic Association, 21(1), 141-167.

    Brookings. (2018). Africa's consumer market potential Trends, drivers, opportunities, and

    strategies. Brookings, retrieved from https://www.brookings.edu/wp-

    content/uploads/2018/12/Africas-consumer-market-potential.pdf.

    Copyright © 2019 Dr. M. Elbeck 3


    Deloitte. (2016). African Powers of Consumer Products 2016, Deloitte, retrieved from

    https://www2.deloitte.com/content/dam/Deloitte/za/Documents/Consumer_Industrial_Pro

    ducts/za_APCP_Brochure_Digital.pdf.

    Everyculture. (2007). Burundi, Everyculture, retrieved from https://www.everyculture.com/Bo-

    Co/Burundi.html.

    Groelsema, R. (2007). Burundi. Worldmark Encyclopedia of Nations, retrieved from

    https://www.encyclopedia.com/places/africa/burundian-political-

    geography/burundi#DOMESTIC_TRADE.

    Investopedia. (2018). Consumer Goods. Investopedia, retrieved from

    https://www.investopedia.com/terms/c/consumer-goods.asp.

    Observatory of Economic Complexity. (2019). Burundi Imports, OEC, retrieved from

    https://atlas.media.mit.edu/en/profile/country/bdi/.

    PwC. (2016). Eight trends shaping the retail and consumer sector in sub-Saharan Africa, Africa

    Business Insight, retrieved from https://www.howwemadeitinafrica.com/eight-trends-

    shaping-retail-consumer-sector-sub-saharan-africa/53872/.

    Trading Economics. (2019). Burundi Imports By Category, Trading Economics, retrieved from

    https://tradingeconomics.com/burundi/imports-by-category.

    World Bank. (2019). GDP per capita (current US$), World Bank, retrieved from

    https://data.worldbank.org/indicator/NY.GDP.PCAP.CD.

    ZDnet. (2018). Mobile in Sub-Saharan Africa: Can world's fastest-growing mobile region keep it

    up? ZDnet, retrieved from https://www.zdnet.com/article/mobile-in-sub-saharan-africa-

    can-worlds-fastest-growing-mobile-region-keep-it-up/.

    Copyright © 2019 Dr. M. Elbeck 4

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