Exports of Manufactured Goods from Developing Countries: Marketing Factors and the Role of Foreign Enterprise
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Only rarely does one find consensus among economists, businessmen, and government officials on any issue. This is particularly true when the debate revolves around alternative approaches to economic growth and involves proponents from both sides of that imaginary demarcation line separating the rich from the poor nations. There is, however, general agreement on the issue that high priority must be given to the development of manufactured exports if the growth aspirations of developing countries are to be fulfilled. The factors which affect the feasibility of viable export industries in developing countries are numerous and varied. They range from the economic to the behavioral and differ substantially from one country to the next. However, some of these factors are common to many developing countries and the problems they pose justify efforts to search for common solutions. The central theme of this paper is that the marketing characteristics of a product are major determinants of its export potential for developing countries; particularly as these characteristics affect how, by whom, to what extent, and under what conditions successful export efforts are undertaken. Neo-classical economic theory supports an argument that developing nations should enjoy a comparative advantage in goods whose manufacture makes extensive utilization of labor. A new body of theory has recently emerged in the literature in an attempt to fill obvious voids in the neoclassical model by explaining world trade patterns in manufactured goods on the basis of stages in the product's life.1 The product life cycle (PLC) theory seems to suggest that mature products possess a series of characteristics which make them suitable for * The author wishes to acknowledge the generous assistance of Professors Rayrnond Vernon (Chairman), Dwight S. Brothers, and Louis T. Wells, Jr., at the Harvard Business School, under whose guidance this research was conducted. The financial support of the Inter-American Development Bank and the Latin American Teaching Fellowship Program is also gratefully acknowledged. The article is an adaptation of a paper delivered at the December, 1970 meetings of the Association for Education in International Business. 1. The birth, growth, and development of this theory is thoroughly traced by Louis T. Wells, Jr., in the introductory article to his forthcoming book of readings, tentatively titled The Product Life Cycle and International Trade, to be published by the Division of Research, Harvard University, Graduate School of Business Administration. An excellent treatment of the theory at an earlier stage of development is found in Raymond Vernon, "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, May, 1966.
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