I n t e r n a t i o n a l M a r k e t i n g I n t e r n a t i o n a l M a r k e t i n g Developing a Global Vision Through Marketing Research Chapter 8

8-2 What Should You Learn? The importance of problem definition in international research The problems of availability and use of secondary data Quantitative and qualitative research methods Multicultural sampling and its problems in less developed countries Sources of secondary data How to analyze and use research information

8-3 Global Perspective Japan – Test Market for the World Enterprises with international scope of operations – Need for current, accurate information magnified Marketing research –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

8-4 Breadth and Scope of International Marketing Research Types of information needed by research –General information about the country, area, and/or market –Information to forecast future marketing requirements ► By anticipating social, economic, consumer, and industry trends within specific markets or countries –Specific market information used to make and develop marketing plans ► Product ► Promotion ► Distribution ► Price decisions

8-5 Breadth and Scope of International Marketing Research Unisys Corporation’s planning steps for collecting and assessing the following types of information 1.Economic 2.Cultural, sociological; and political climate 3.Overview of market conditions 4.Summary of the technological environment 5.Competitive situation

8-6 Top 20 Countries for Marketing Research Expenditures (millions of dollars) Exhibit 8.1

8-7 The Research Process Research process steps 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 relevant data from secondary or primary sources, or both 5.Analyze, interpret, and summarize the results 6.Effectively communicate the results to decision makers Research steps are similar for all countries –Variations and problems can occur in implementation ► Differences in cultural and economic development

8-8 Defining the Problem and Establishing Research Objectives The major difficulty is converting a series of often ambiguous business problems into tightly drawn and achievable research objectives The first, most crucial step in research is more critical in foreign markets because an unfamiliar environment tends to could problems definition Other difficulties in foreign research stem from failures to establish problem limits broad enough to include all relevant variables

8-9 Problems of Availability and Use of Secondary Data U.S. government provides comprehensive statistics for United States Marketing data not matched in other countries –Quality –Quantity –Exceptions are Japan and several European countries Continuing efforts to improve data collection –United Nations –Organization for Economic Cooperation and Development (OECD)

8-10 Availability and Reliability of Data Most countries simply do not have governmental agencies that collect on a regular basis the kinds of secondary data readily available in the U.S. Researchers’ language skills impede access to information –Requires native speaker of language Official statistics are sometimes too optimistic, reflecting national pride rather than practical reality, while tax structures and fear of the tax collector often adversely affect data –Less-developed countries prone to optimism –Willful errors –“Adjusted reporting”

8-11 Comparability of Data Issues with data (especially in less developed, countries) –Data can be many years out of date –Data collected on an infrequent and unpredictable schedule Too frequently, data are reported in different categories or in categories much too broad to be of specific value

8-12 Validating Secondary Data Questions to judge the reliability of secondary data sources –Who collected the data? –Would there be any reason for purposely misrepresenting the facts? –For what purposes was the data collected? –How was the data collected? –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 of known validity –An effective and often-used way of judging validity The availability and accuracy of recorded secondary data increase with level of economic development

8-13 Gathering Primary Data – Quantitative and Qualitative Research Primary data –Data collected specifically for the particular research project Quantitative research –Usually a large number of respondents –Respondents answer structured oral or written questions using a specific response format (such as yes/no) or to select a response from a set of choices –Responses can be summarized in percentages, averages, or other statistics ► Toto – a Japanese firm with the premiers quantitative research on bathroom and toilet technology

8-14 Qualitative research –If questions are asked, they are almost always open-ended or in- depth –Seeks unstructured responses that reflect the person’s thoughts and feelings on the subject Qualitative research interprets people in the sample Qualitative research is helpful in revealing the impact of sociocultural factors on behavior patterns and in developing research hypotheses Gathering Primary Data – Quantitative and Qualitative Research

8-15 Problems of Gathering Primary Data Hinges on the ability of the researcher to get correct and truthful information that addresses research objectives Problems in international marketing research –Stem from differences among countries –Range from inability or unwillingness of respondents to communicate their opinions –Inadequacies in questionnaire translation

8-16 Ability to Communicate Opinions Formulating opinions about a product or concept –Depends on the respondent’s ability to recognize the usefulness of such a product of concept –Product or concept must be understood and used in community The more complex the concept, the more difficult it is to design research that will help the respondent communicate meaningful opinions and reactions –Gerber has more experience in trying to understand consumers with limitations ► Babies can neither answer questions or fill out questionnaires

8-17 Willingness to Respond Cultural differences provide best explanation for unwillingness or inability of many to respond to research surveys The role of the male, the suitability of personal gender-based inquiries, and other gender- related issues can affect willingness to respond Less direct measurement techniques and nontraditional data analysis methods may also be more appropriate

8-18 Sampling in Field surveys Problems in sampling stem from the lack of adequate demographic data and available lists from which to draw meaningful samples Affected by a lack of detailed social and economic information –No officially recognized census information –No other listings that can serve as sampling frames –Incomplete and out-of-date telephone directories –No accurate maps of population centers

8-19 Language and Comprehension The most universal survey research problem in foreign countries is the language barrier Literacy poses yet another problem Marketers use three different techniques to help ferret out translation errors ahead of time –Back translation –Parallel translation –Decentering

8-20 Multicultural Research – a Special Problem As companies become global marketers and seek to standardize various parts of the marketing mix across several countries, multicultural studies become more important 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

8-21 Research on the Internet – a Growing Opportunity One billion users in more than 200 countries –One-sixth in U.S. International Internet use is growing almost twice as fast as American use Uses for Internet in international research –Online surveys and buyer panels –Online focus groups –Web visitor tracking –Advertising measurement –Customer identification systems – marketing lists –Embedded research –Observational research

8-22 Estimating Market Demand To assess current product demand and forecast future demand –Requires reliable historical data When the desired statistics are not available, a close approximation can be made –Using local production figures plus imports, with adjustments for exports and current inventory levels Two methods of forecasting demand –Expert opinion ► The key in using expert opinion to help in forecasting demand is triangulation –Analogy ► Assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country

8-23 Personal Computer and Mobile Phone Diffusion Rate (per 1,000 people) Exhibit 8.2 Personal ComputerMobil Phone

8-24 Problems in Analyzing and Interpreting Research Information Accepting information at face value in foreign markets is imprudent The foreign market researcher must posses three talents to generate meaningful marketing information 1.The researcher must posses a high degree of cultural understanding of the market in which research is being conducted 2.A creative talent for adapting research methods is necessary 3.A skeptical attitude in handling both primary and secondary data is helpful

8-25 Responsibility for Conducting Marketing Research A company in need of foreign market research can rely on an outside foreign-based agency or domestic company with a branch in that country A trend toward decentralization of the research function is apparent –Local analysts appear to be able to provide information more rapidly and accurately ► Control rests in hands closer to the market –Disadvantage lies in ineffective communications with home- office executives ► Unwarranted dominance of large-market studies in decisions about global standardization

8-26 Responsibility for Conducting Marketing Research A comprehensive review of the different approaches to multicountry research suggests – Ideal approach is to have local researchers in each country, –Close coordination between the client company and the local research companies Two stages of analysis are necessary –Individual-country level –Multi-country level

8-27 Communicating with Decision Makers Gathered information must be given to decision makers in a timely manner Decision makers should be directly involved not only in problem definition and questions formulation, but also in the fieldwork Even when both managers and customers speak the same language and are from the same culture, communication can become garbled in either direction

8-28 Managing the Cultural Barrier in International Marketing Research Exhibit 8.3

8-29 Summary The basis objective of the market research function is providing management with information for more accurate decision making Customer attitudes about providing information to a researcher are culturally conditioned Foreign market information surveys must be carefully designed to elicit the desired data and at the same time not offend the respondent’s sense of privacy

8-30 Summary Many foreign markets have inadequate or unreliable bases of secondary information Three keys to successful international marketing research –The inclusion of natives of the foreign culture on research teams –The use of multiple methods and triangulation –The inclusion of decision makers, even top executives, who must on occasion talk directly to or directly observe customers in foreign markets