International Marketing 10th Edition by Michael Czinkota, Michael Brumbach, Ilkka Ronkainen

Exercise 1

Africa's Growing Middle Class
Over the past decade, the number of middle-class consumers in Africa has expanded more than 60 percent to 313 million, according to the African Development Bank Group. Two-thirds of that supposed new middle class have just $2 to $4 to spend per day. They may be able to buy a telephone or washing machine or television, but often not all three.

SOURCE: The Economist, "Pleased to be Bourgeois, © The Economist Newspaper Limited, London (May 14, 2011). Reprinted with permission.
Sharp geographical variations persist. North Africans top the rankings. In sub-Saharan Africa, the better the governance, the bigger a country's middle-income bulge. In Botswana, Namibia, Ghana, Kenya, and South Africa, almost half the populations earn more than $2 per day, whereas in the worst-governed countries, less than a fifth have managed to cross that barrier. About 100,000 of the richest
Africans had a collective net worth totaling 60 percent of the continent's gross domestic product.
The continent's prospects have proved alluring for Walmart Stores, Inc., which has agreed to pay roughly $2.4 billion to buy 51 percent of South Africa's Massmart Holdings Ltd., with plans to use the discount retailer as a foothold for continental expansion. Yum Brands, Inc., recently said it wants to double its KFC outlets in the next few years to 1,200. In South Africa, Google and Microsoft Corp. are behind efforts to fund entrepreneurs, with the hope that seeding African technology firms will help grow their own businesses.
Many Africans are joining the ranks of the world's consumers. Rising consumption will create more demand for local products, sparking a cycle of increasing domestic growth.
The African Development Bank says a third of Africans are now "middle-class," defined as having between $2 and $20 to spend a day. Does $2 a day really mean middle-class?