International Marketing Research

Learning Objectives To gain an understanding of the need for research. To explore the differences between domestic and international research. To learn where to find and how to use sources of secondary information. To gain insight into the gathering of primary data. To examine the need for international management information systems.

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

Example : Proctor & Gamble- (A Multinational) How to connect to consumer? Connecting trivial, day to day products with consumers.

International and Domestic Research The tools and techniques of international research are the same as those of domestic research. The difference is in the environment to which the tools are applied.

International and Domestic Research cont.) The three primary reasons for the differences between international and domestic research are: New Parameters International Research New Environmental Factors A Broader Definition of Competition

New Parameters In crossing international borders, a firm encounters parameters/constraints not found in domestic business. Examples include: Duties Foreign currencies and changes in their value Different modes of transportation International documentation Differing modes of operating internationally

New Environmental Factors Many of the domestic assumptions on which the firm and its activities were founded may not hold true internationally. Management needs to: Learn the culture of the host country Understand its political systems and level of stability Comprehend the existing differences in societal structures and language Understand pertinent legal issues

Broader Definition of Competition The international market exposes the firm to much greater variety of competition than that found in the home market. Firms must: Determine the breadth of the competition, Track competitive activities, Evaluate their actual and potential impact on company operations on an ongoing basis.

Lack of International Research International research is often less rigorous, less formal, and less quantitative than domestic research. The four reasons why managers are reluctant to engage in international research are: Their lack of sensitivity to differences in culture, consumer tastes, and market demands. Limited appreciation for different environments abroad. Lack of familiarity with national and international data sources. Firms build international business activities gradually, frequently based on unsolicited orders.

The Importance of International Research Firms must learn where the opportunities are, what customers want, why they want it, and how they satisfy their needs and wants. Research allows management to identify and develop international strategies. Firms must identify, evaluate, and compare potential foreign business opportunities and the subsequent target market selection. Research is necessary for the development of a business plan.

Domain of International Marketing Research

Research of Industry and Market Trends (Usually Strategic in Nature) Acquisition analyses Diversification analyses Market-share analyses Export research

International Buyer Behavior Research Brand preferences Brands awareness studies Purchase behavior studies Consumer segmentation studies

International Promotion Research Studies of premiums, coupons, and deals Advertising effectiveness research Local media research Studies pertaining to personal selling activities e.g Sales Force Compensation

International Pricing Research Currency studies Studies of inflation rates and pricing

International Distribution Research Import/export analyses Channel performance and coverage Plant/warehouse location studies

Determining Research Objectives As a starting point, research objectives must be determined for a firm. These objectives will depend on the views of management, the corporate mission of the firm, the firm’s level of internationalization, and its competitive situation.

The International Marketing Research Process STEP 1 Define the international research problem and agree on the research objectives Exploratory Research Descriptive Research Causal Research STEP 2 Set specific objectives

The International Marketing Research Process STEP 3 Develop the International Research Plan STEP 4 Define Information Sources Secondary Data Researchers must determine if the information is available, and, if so, how reliable it is Internal data is useful only if company has collected similar info from relevant respondents in a country with similar environment

Secondary Data Constraints Conceptual Equivalence Concepts have different meanings in different cultural environments Functional Equivalence Products themselves may be used for different purposes in different country environments e.g WD 40 etc.

Secondary Data Constraints, continued Availability, Reliability, and Validity Accuracy of secondary data can be questionable: Published statistics may be unreliable Sources of reliable data: World Bank United Nations Development Program Organization of Economic Cooperation and Development (OECD) Euromonitor

Other Sources of Secondary Data Other Firms Directories Governments International Institutions Service Organizations Trade Associations

Conducting Primary Research Primary data are obtained by a firm to fill specific information needs. The researcher must decide whether research is to be conducted in the consumer or the industrial product are Cost can be quite high

Primary Data Research Approaches Qualitative research has been particularly useful as a first step in studying international marketing phenomena. Focus Groups Observation Interviews Constraints: Responses can be affected by culture and interpretation. individuals may act differently if they know they are being observed.

Primary Data Research Approaches, continued Quantitative research are more structured, involving either descriptive research approaches, such as survey research, or causal research approaches, such as experiments. Content Analysis Survey Research Experimental Research Constraints: Respondent factors, infrastructure factors

Data Collection STEP 5 Design Data Collection Instrument Constraints: Translation; Instrument Reliability; Reluctance to answer certain questions

Data Collection, continued STEP 6 Decide on the Sampling Plan Sample Size Sampling Procedure STEP 7 Collect, Analyze, and Interpret Data

The International Information System An information system is the systematic and continuous gathering, analysis, and reporting of data for decision-making purposes. (aslo called ,Decision Support System, D.S.S To be useful, the information system must be: Relevant Timely Flexible Accurate Exhaustive Consistent Convenient

Export and Import Issues

Going International-Exporting A frequent objective of international research is that of foreign market opportunity analysis. The aim is to utilize a broad-brush approach. Steps to this approach include: A cursory analysis of general variables of a country. A preliminary evaluation of each individual country. Selection of appropriate markets for in-depth evaluation. Finally, a competitive assessment must be made.

Process of Researching Foreign Market Potentials Stage One Preliminary Screening for Attractive Country Markets Key Question to be answered: Which foreign markets permit detailed information? Stage Two Assessment of Industry Market Potential Key Question to be answered: What is the aggregate demand in each of the selected markets? Stage Three Company Sales and Promotion Analysis Key Question to be answered: How attractive is the potential demand for our products and services?

Going International-Importing When importing, the major focus shifts from supplying to sourcing. Management must identify markets that produce suppliers or materials desired. The importer needs to know: The reliability of a foreign supplier, The consistency of its product or service quality, The length of delivery time, Government rules and restrictions of the exporting country

Export Complaint Systems An export complaint system allows customers to contact the original supplier of a product in order to inquire about products, make suggestions, or to present complaints. A firm must be able to aggregate and analyze complaints and to make use of them internally. Increasingly, the Internet enables customers to provide feedback on their experiences with a firm.

The Mechanisms of Export Complaint Systems Environmental Scanning Delphi Studies Scenario Building

Environmental Scanning Environmental scanning activities provide continuous information on: Political, social, and economic affairs internationally Changes of attitudes of public institutions and private citizens Possible upcoming alterations Two significant methods of environmental scanning are obtaining factual input and content analysis.

Delphi Studies Delphi studies are a means for aggregating the judgements of a number of experts who cannot come together physically. The Delphi technique is particularly valuable because it uses mail, fax, or electronic communication to bridge large distances and therefore makes experts accessible at a reasonable cost.

Scenario Building Scenario building involves the identification of crucial variables and the degree of variation. The possibility of joint occurrences must be recognized. For scenarios to be useful, managers must analyze and respond to them by formulating contingency plans. Through the anticipation of possible problems, managers hone their response capability and in turn shorten response times to actual problems.