Economic development in the modern world often proceeds in nation-states which are multi-ethnic and multicultural. A common problem which many of these states face is that the general improvement of economic conditions which comes with development may differ across the various groups within their societies. Some ethnic, cultural, or racial groups may not benefit as much as others, a problem which can easily turn into a major political issue. Even civil wars have broken out over the issue, although these are more the exception than the rule.
The phenomenon of ethnic domination of marketing channels is one of the key factors in this question of unequal access to the benefits of economic development. It is also a critical issue to foreign businesses which market in a country where channels are dominated by particular ethnic groups. However, there are relatively few marketing scientists who have looked at the issue. Marketing textbooks occasionally point out that the phenomenon is fairly common in the Third World (Rosenbloom 1987), but Norvell and Morey (1983) are practically the only marketers to examine ethnic domination (ethnodomination, in their terminology) of marketing channels in any detail.
Even the discussion in Norvell and Morey (1983) is largely descriptive. The authors show that ethnodomination by groups which originate outside of local areas is fairly common in marketing. Their examples indicate that the ethnic groups involved are usually Chinese, Indians, or Arabs, in various parts of the world. They also note that in some countries, domination of marketing by particular ethnic groups has become a political issue which has led to government intervention. In extreme cases, governments simply expropriate firms of certain ethnic groups. This solution usually causes severe economic disruption, because it suddenly eliminates the accumulated business experience in the marketing channels before the skills have been learned by the ethnic groups which will replace the ousted one. However, it is quite popular politically.
Despite evidence that ethnodominated channels may be at fairly high