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Global Marketing Research

Information

Information is the key component in developing successful marketing strategies and avoiding major marketing blunders.

Information needs range from the general data required to assess market opportunities to specific market information for decisions about the 4Ps (product, promotion, place [distribution], and price).

Information

A marketer must find the most accurate and reliable data possible within the limits imposed by time, cost, and the present state of art.

The measure of a competent researcher is twofold:

The ability to utilize the most sophisticated and adequate techniques and methods available within these limits, and

The effective communication of insights to the decision makers in the firm.

International Marketing Research

International marketing research is the systematic design, collection, recording, analysis, interpretation, and reporting of information pertinent to a particular marketing decision facing a company operating internationally.

Marketing Research

Marketing Research is traditionally defined as the systematic gathering, recording, and analyzing of data to provide information useful in marketing decision making.

International marketing research involves two complications:

Information must be communicated across cultural boundaries

The environments within which the research tools are applied are often different in foreign markets.

Breadth and Scope of International Marketing Research

The basic difference between domestic and foreign market research is the broader scope needed for foreign research, necessitated by

higher levels of uncertainty.

In domestic operations, most emphasis is placed on the third type, gathering specific market information, because the other data are often available from secondary sources.

Three Types of Research

General information about the country, area, and/or market

Information necessary to forecast future marketing requirements by anticipating social, economic, consumer, and industry trends within specific markets or countries

Specific market information used to make product, promotion, distribution (place), and price decisions and to develop marketing plans.

Broader Scope of Intl Marketing Research

EconomicCultural, sociological and political climateOverview of market conditionsSummary of the technological environmentCompetitive situation

What is different about International Marketing Research?

The process of IMR is not totally different from domestic marketing research. However, they differ in the following ways:

• IMR involves national differences between counties arising out of political, legal, economic, social and cultural differences

• The problem of comparability of research results that arise due to these differences

What is different about International Marketing Research? (contd.)

International researchers have to deal with a number of counties that may differ considerably in a number of important ways. Some of these differences are:

Culture differences: Culture refers to widely shared norms or patterns of behavior within a large group of people. Cultural differences shape attitudes that consumers have towards products.

Racial differences: Differences in cultures mean difference in physical features as well. Products must be modified to meet the needs of different races.

What is different about International Marketing Research? (contd)

• Economic differences: Levels of wealth and taxation affect consumer behavior in different countries. Eg: Norwegians consume very little alcohol due to high taxation

• Religious differences: Certain religions have laid down specific behavioral patterns. Eg: Middle Eastern countries prohibit alcohol consumption

• Historical differences: Slowly evolved differences that have profound effects on consumer behavior. Eg; Scotch whisky is considered prestigious and trendy in Italy but old-fashioned in Scotland

• Climatic difference: Differences in climate accounts for difference in cultures


• Differences in consumption patterns: There are vast differences in consumption patterns between regions. For Eg: The French prefer wine, the Germans like beer and the Spanish drink operatives.

• Differences in marketing conditions: For Eg: Japanese do not like being contacted over the telephone for interviews, while in Hong Kong interviews are conducted through the grill in front door.

• Differences in actual and potential target groups: Eg: It is easier to collect national samples in countries like England and Germany than in Spain.

International Marketing Researchers may also have to deal with:

• Language differences

• Differences in market research facilities

• Differences in the criteria for assessing products

or services

• Differences in product usage


Culture

• Values, attitudes, beliefs, artifacts and other meaningful symbols represented in the pattern of life adopted to help interpret, evaluate and communicate as members of a society.

• Mistakes result when cultural differences not recognized• Examples of blunders include Pepsodent, Branff Airlines,

U.S. food manufacturers doing business in United Kingdom


Culture: (Contd)Dimensions of Culture:

1. Power Distance

2. Individualism vs. Collectivism

3. Masculinity vs. Femininity

4. Uncertainty Avoidance

5. Long-term Orientation


Culture (Contd)Power Distance The extent to which less powerful

members of a society accept and expect that power is distributed unequally.

Example: Japan has a high power distance index and the US has low power index.


Culture (Contd)Individualism Vs. Collectivism Defined as people looking after themselves and

their immediate family only, versus peoplebelonging to in-groups that look after

them in exchange for loyalty (Hofstede). Example: Japanese are collectevistic

where as the Americans are individualistic.


Culture (Contd)Masculinity Vs. Femininity The dominant values in a masculine society

are achievement and success, the dominant values in a feminine society are caring for others and quality of life.

Example: Japan is masculine, while the Scandinavian countries are feminine.


Culture (Contd)Uncertainty AvoidanceThe extent to which people feel threatened by

uncertainty and ambiguity and try to avoid these situations.

Example: High on uncertainty avoidance are Germany and Japan, low ones are Sweden and Denmark.


Culture (Contd)Long-term OrientationThe extent to which a society exhibits a pragmatic

future-oriented perspective than a conventional historic or short-term point of view.

Example: Most Asian countries, China in particular score high on this dimension. Many western countries have short-term orientation.


Culture (Contd) Culture Classification Model: Assumptions regarding the use of

time, the approach to talk at hand, and the role of relationships in making business decisions vary throughout the world. Countries have been classified into:• North Western/ Central European • North American• Mediterranean European• Latin American• Traditional ( developing countries, centrally planned and former

centrally planned countries)• Middle Eastern


Alternative Types of Marketing Research

Descriptive ResearchResearcher examines in-depth the attitudes

and behavior of consumers in another country or culture.

Comparative Research Involves comparing attitudes and behaviors in

two or more countries or cultural contexts, with a view to identifying similarities and differences between them.

Alternative Types of Marketing Research

Theoretical Research

The researcher has a predetermined theory or model and it is possible to examine cross-cultural generalizability of those theories or models.

Importance of Comparability

Account for differences in:a) resources and expertise

b) working habits and corporate culture c) organizational aspects

Distinguish betweena) comparability at data collection stage

b) comparability at interpretation stage

Classification of International Marketing Research:

a) Single-country researchb) Multi-country research

c) Independent Multi-country research

d) Sequential Multi-country research

e) Simultaneous Multi-country research

The Research Process

1. Define the research problem and establish research objectives

2. Determine the sources of information to fulfill the research objectives

3. Consider the costs and benefits of the research effort

4. Gather the relevant data from secondary or primary sources, or both.

5. Analyze, interpret, and summarize the results6. Effectively communicate the results to

decision makers

Differences

Although the steps in a research program are similar for all countries, variations and

problems in implementation occur because of differences in cultural and economic

development.

Defining the Problem and Establishing Research Objectives

The first, most crucial step in the research process

It is more critical in foreign markets because an unfamiliar environment tends to cloud problem definition.

Researchers either fail to anticipate the influence of the local culture on the problem or fail to identify the self-reference criterion (SRC)

Defining the Problem and Establishing Research Objectives

The market researcher must be certain the problem definition is sufficiently broad to cover the whole range of response possibilities and not be clouded by his or her self-reference criterion.

Once the problem is adequately defined and research objectives established, the researcher must determine the availability of the information needed.

If the data are available – that is, if they have been collected already by some other agency – the researcher should then consult these secondary data sources.

Problems of Availability and Use of Secondary Data

I.Availability

Much of the secondary data that a marketer is accustomed to having about local markets is just not available for many countries.

Another problem relating to the availability of data is researchers’ language skills.


II.ReliabilityAlthough not unique to them, less-developed

countries are particular prone to being both overly optimistic and unreliable in reporting relevant economic data about their countries.

For example, China’s National Statistics Enforcement Office recently acknowledged that it had uncovered about 60,000 instances of false statistical reports since beginning a crack-down on false data reporting several months earlier.

Willful errors in the reporting of marketing data are not uncommon in the most industrialized countries, either. Often print media circulation figures are purposely overestimated even in OECD countries.


III.Comparability

Comparability of available data is the third shortcoming faced by foreign marketers.

A related problem is the manner in which data are collected and reported. Too frequently, data are reported in different categories or in categories much too broad to be of specific value.


IV.Validating Secondary DataThe following questions should be asked to

effectively judge the reliability of secondary data:Who collected the data? Would there be any

reason for purposely misrepresenting the facts?For what purposes were the data collected?How were the data collected? (methodology)Are the data internally consistent and logical

in light of known data sources or market factors?


Checking the consistency of one set of secondary data with other data known validity is an effective and often-used way of judging validity.

The availability and accuracy of recorded secondary data increase as the level of economic development increases.

Interest in collecting quality statistical data rises as countries realize the value of extensive and accurate national statistics for orderly economic growth.


Gathering Primary Data: Quantitative and Qualitative

Primary Data – data collected specifically for the particular research project at hand. To get appropriate market information, the researcher questions the firm’s sales representatives, distributors, middlemen, and/or customers. The researcher questions the respondents to determine what they think about some topic or how they might behave under certain conditions.

Marketing research methods

Marketing research methods can be grouped into two basic types: quantitative and qualitative research.

In quantitative research, usually a large number of respondents are asked to reply either verbally or in writing to structured questions using a specific response format or to select a response from a set of choices.

It provides the marketer with responses that can be presented with precise estimations (in percentages, averages, etc.).

Marketing research methods

In qualitative research, if questions are asked they are almost always open-ended or in-depth, and unstructured responses that reflect the person’s thoughts and feelings on the subject are sought.

Direct observation of consumers in choice or product usage situations is another important qualitative approach to marketing research.

The most often used form of qualitative questionnaire is the focus group interview. However, in-depth interview is used for the sake of consuming fewer resources.

Problems of Gathering Primary Data

Most problems in collecting primary data in international marketing research stem from cultural differenced among countries, and range from the inability of respondents to communicate their opinions to inadequacies in questionnaire translation.

Problems: Ability to Communicate Opinions Willingness to Respond Sampling Field Surveys Language and Comprehension

Problems of Gathering Primary Data

Multicultural Research: A Special Problem

Multicultural research involves dealing with countries that have different languages, economies, social structures, behavior, and attitude patterns.

In some cases the entire research design may have to be different between countries to maximize the comparability of the results.

Research on the Internet: A Growing Opportunity

For many companies the Internet provides a new and increasingly important medium for conducting a variety of international marketing research.

Uses for the Internet in international research:Online surveys and buyer panelsOnline focus groupsWeb visitor trackingAdvertising measurementCustomer identification systemsE-mail marketing listsEmbedded researchObservational research

Estimating Market Demand

In assessing current product demand and forecasting future demand, reliable historical data are required.

Despite limitations, there are approaches to demand estimation that are usable with minimum information. The success of these approaches relies on the ability of the researcher to find meaningful substitutes of approximations for the needed economic, geographic, and demographic relationships.

Estimating Market Demand

Given the greater uncertainties and data limitations associated with foreign markets, two methods of forecasting demand are particularly suitable for international markets:

Expert opinionAnalogy

Problems in Analyzing and Interpreting Research Information

Once data have been collected, the final steps in the research process are the analysis and interpretation of findings in light of the stated marketing problem. Both secondary and primary data collected by the market researcher are subject to the many limitations.

Problems in Analyzing and Interpreting Research Information

To cope with such disparities, the foreign market researcher must possess three talents to generate meaningful marketing information:

The researcher must possess a high degree of cultural understanding of the market in which research is being conducted.

A creative talent for adapting research findings is necessary.

A skeptical attitude in handling both primary and secondary is helpful.

Responsibility for Conducting Marketing Research

Depending on the size and degree of involvement in foreign marketing, a company in need of foreign market research can rely on an outside foreign-based agency or on a domestic company with a branch within the country in question. It can conduct research using its own facilities or employ a combination of its own research force with the assistance of an outside agency.

Communicating with Decision Makers

Decision makers should be directly involved not only in problem definition and question formulation, but also in the field work of seeing the market and hearing the voice of the customers in the most direct ways when the occasion warrants it.

Top managers should have a feel for their markets that even the best marketing reports cannot provide.

Research of Industry, Market Characteristics, and Trends

Acquisition analysesDiversification

analysesMarket-share analysesExport research

International Buyer Behavior Research

Brand preferencesBrand attitudesBrands awareness

studiesPurchase behavior

studiesConsumer

segmentation studies

International Product Research

Concept development and testing studies

Brand name generation and testing

Product testing Competitive product

studies Packaging design studies Test marketing

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International Distribution Research

Import/export analysesChannel performance and coveragePlant/warehouse location studies

International Promotion Research

Studies of premiums, coupons, and dealsAdvertising effectiveness research Local media research Studies pertaining to personal selling

activities Sales Force Compensation Quota Territory

International Pricing Research

Studies projecting demandCurrency and counter trade studiesStudies of inflation rates and pricingStudies of negotiation tactics

Challenge to Research

1. Too much emphasis on statistical techniques

2. Data becoming unduly important

3. Not enough data interpretation

4. Too much reliance on computers and scanner data

5. Lack of understanding among users

6. Researchers see themselves as data collectors rather than data interpreters

Marketing Researcher of the 21st Century

Requirements include:• Speed• Use of Internet• Globalization• Ability to add value to numbers and data

Ethics in Research

Researchers should consider Respondents’ rights -

Should be allowed to participate voluntarily and there should be no coercion.

Sponsors’ rights -

Researcher is morally bound to conduct research in the manner that has been agreed upon with the sponsor.

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