Evolution of Ethnodominated Marketing Channels: Evidence from Oman and Sudan

Abstract

Ethnic domination of marketing channels is very common throughout the developing work. The phenomenon often has become closely associated with volatile political issues, such as unequal distribution of wealth or perceived foreign domination of the national economy. Ethnodomination arises when an external commercially oriented economy penetrates a subsistence agricultural economy. Historical records on Oman show in detail how such a system functioned before the era of modern economic development. A cultural boundary separates market-oriented outsiders who operate wholesale and retail firms from the subsistence farmers who are brought into the market economy as petty producers and consumers. Such trade contact starts a process of cultural assimilation.

Fieldwork and historical records from Sudan show how such systems can evolve under development. When the cultural boundary has shifted downward in the marketing channel, local people begin to acquire commercially oriented values which allow them to participate more fully in economic activities. However, actually moving into marketing channel activities requires capital, most of which is still controlled by the ethnic group dominating the channels. Modern development brings infusions of capital from outside the marketing system, and local people can begin moving into lower level channel activities easily. Once that happens, successful small retailers accumulate capital to move into wholesaling, and so on. The ethnic group which traditionally had controlled channels shifts investments from marketing into industrial production, and eventually ethnodomination of marketing will decline.