Book | The Marketing of Nations

The Marketing of Nations by Phillip Kotler, is a guide book, to help the readers understand, formulate and develop the bases for leading a nation to development. The book explains how to asses and build up the nation´s strategic visons and postures, in different situations. For all that, The Marketing of Nations, is a book that gathers lots of important issues that are related to the current situation in Cambodia. I founded specially interesting the chapter about subsistence economies, and how to break the vicious circle.

Most subsistent economies are trapped, as Professosrs Reitsma and Kleinpenning argue, in a complex web of interlocking vicious circles. Without assistance from the outside world, it is believed that these countries will not be able to free themselves from the vicious circles. Low productivity is one of the major bottlenecks holding back economic development.

Improving productivity requires improving the "Eight M´s": Management (goverment leadership); manpower (human capital); machines (production system and equipment); money (capital); materials (natural resources); methods (approperiate technology); message (gathering critical information) and market (accesing the world market). For subsistent economies, foreign aid (financial, technical and managerial) would allow these countries to increase their productivity. Then earnigs would rise, the domestic market would expand, and agricultural and industrial producers could sell more, make more profit, an be able to make investments to raise productivity and output further. In this way, the countries would break out of their vicious circles and become sufficiently dynamic.

Another strategy to create wealth among this group, was proposed by Irma Adelman in 1984. The strategy is known as agricultural-demand-led industrialization (ADLI). This strategy consists of building a domestic massconsumption market by improving the productivity of small and medium scale agriculture. Irma claims, that small and medium scale agriculture has a larger linkage effects with domestic industry than larger scale agriculture, while having at least as high productivity level. Smaller farms are labor intensive side and use domestic implements and machinery. Small farmers have a larger marginal porpensity to consume, and a larger marginal share of their consumption is devoted lto ocally produced textiles, clothing, footwear and simple consumer durables such as refrigerators bicicles, sewing machines and simple electronics. Also they tend to invest heavily in building up human capital, devoting a large share of their incremental income to education.