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The modern concept of marketing evolved during and after the industrial revolution in the 1 9th and 20th centuries which was characterized by proliferation of goods and services, increased worker specialization, technological advances in transportation, refrigeration and other factors that enhanced the rangers of goods over long distances created the need for more advanced market mechanisms and selling techniques.
This research seeks to review marketing practice In Mongolia from the historical and current marketing practice perspective In one hand and analysis of market opportunities available to domestic and transnational companies’ perspective In the other hand. 1. 0 Historical and current marketing practice in Mongolia Marketing practice entails the activity, set of institutions and processes for creating, communicating, delivering and exchanging offerings that have value for customers, clients, partners, and the society at large.
Proper marketing practices emphasize the quality, service, and competitive features of products and services to educate customers to make informed decisions. Cookouts pointed out that in Mongolia, the marketing practice revolves around two connectional frameworks: pre-1921 Mongolia and post-1 921 revolution (Cookouts, 2004). The pre-1921 Mongolia marketing practice was characterized by primitive domestic trade and services. Limited number of commodities was exchanged; primary products Like agricultural produce were exchanged by barter.
Majority of the traders were resigned- mainly Chinese and Russians, except for Mongolia’s who conducted trade and provided services at various monasteries in the country. That primitive marketing practice that existed earlier has a sharp contrast with the post-1921 revolution marketing practice in Mongolia. The post -1921 Mongolia revolution opened up a new chapter for the traditional primitive marketing practice with significant involvement of the government.
After the 1921 revolution, the government began to seize control of the internal trade and transformed it into a socialist distribution network with the assistance of the Soviet Union government. In 1921 the Mongolia Central Cooperative was established and later in that decade, Soviet trade organizations such as Storming Company and Sheers Company began to displace all other foreign traders In Mongolia.
Precisely In 1929 the Mongolia Central Cooperative was expanded and Chinese traders were expelled from the reorganized into Consumer Cooperative Union and a Joint-stock MARKETING PRACTICE IN MONGOLIA wholesale trading company; Misgoverned was formed by the Mongolia and the Soviet government which took over the wholesale operations of the Mongolia Central Cooperative. The Misgoverned was transformed into Mongolia State Trading Office when the Soviet government handed over its shares of Misgoverned to Mongolia government in 1934.
The expropriation of properties belonging to monasteries in early 1930,s ended monasteries from participating in trade and this as a matter of fact placed about 90% of retail trade in the hands of the government and trade organizations. During the Second World War, government procurement from respective households was instituted by means of taxes and obligatory delivery of goods. The wartime taxation measures provided the platform or establishment of the Mongolia’s Procurement and Distribution System leading to the acclimatization of the economy in the sass’s.
The Three-year-Plan (1958-1960), compelled the Mongolia government to abolish the Consumers Cooperative Union and consolidate its components with state owned trading organization under the newly established Ministry of Trade and Procurement. I must point out here that in 1983 the state trade network under the Ministry of Trade and Procurement controlled 95% of retail trade while the remain 5% was controlled by the agricultural cooperative organizations.
The ministry continued to run the trade and procurement till the democratic revolution and the introduction of new constitution in 1992 that broke down the trade barriers and opened up a free market regime in Mongolia. The economic activity in Mongolia has been based on traditional herding and peasant agriculture but the extensive mineral deposits, however, have attracted foreign direct investment which has caused a shift to more modern free market economy. The political transformation from socialist ideology to institutional democracy opened up Mongolia economy beyond China and Russia to the entire global economic community.
This did not come about without some sacrifices as pointed out by CIA sources “that Soviet assistance, at its height one-third of GAP, disappeared almost overnight in 1990 and 1991 at time of dismantlement of USSR. The following decade saw Mongolia endure both deep recession, because of political inaction and natural disasters, as well as economic growth, because of reform- embracing, free-market economy and extensive appropriation of the formerly state- run economy’ (Central Intelligence Agency (CIA), 2012).
Mongolia’s economy has continued to be influenced by its principal neighbors; China and Russia. Mongolia purchase 95% of its petroleum products and substantial amount of electric power from Russia, making its economy vulnerable to price increases. Trade with China accounts for more than half of Mongolia’s total external trade by implication China receives more than 75% of Mongolia’s export. The Joining of World Trade Organization (WTFO) in 1997 helped to scale up Mongolia’s participation in regional and international trade.