6. Global Marketing Research

Chapter Overview 1.Research Problem Formulation 2.Secondary Global Marketing Research 3.Primary Global Marketing Research 4.Leveraging the Internet for Global 5.Market Research 6.Market Size Assessment 7.New Market Information Technologies 8.Managing Global Marketing Research 2

Introduction Given the complexity of the global marketplace, solid marketing research is critical for a host of global marketing decisions. Most of the cultural blunders in global marketing stem from inadequate marketing research. Six steps in conducting global market research: – 1. Define the research problem(s) – 2. Develop a research design – 3. Determine information needs – 4. Collect the Data (secondary and primary) – 5. Analyze the data and interpret the results – 6. Report and present the findings of the study 3

Introduction Major challenges faced by global marketing researchers: 1.Complexity of research design due to environmental differences 2.Lack and inaccuracy of secondary data 3.Time and cost requirements to collect primary data 4.Coordination of multicountry research efforts 5.Difficulty in establishing comparability across multi- country studies 4

1. Research Problem Formulation Any research starts off with a precise definition of the research problem(s). In an international context, the marketing research problem formulation is hindered by the self-reference criterion (SRC). A major difficulty in formulating the research problem is unfamiliarity with the foreign environment. Omnibus surveys are regularly conducted by research agencies. Once the research issues have been stated, management needs to determine the information needs. 5

Exhibit 6-2: Scope of International Marketing Research 6

Exhibit 6-3: A Multicountry Marketing Research Project at Eli Lilly 7

2. Secondary Global Marketing Research Secondary Data: Data/information which is already available. Primary Data: When the secondary data are not useful, or simply does not exist. Selected Secondary Data Sources: See Exhibit

Exhibit 6-4: Nielsen Global Omnibus Survey (2011) 9

2. Secondary Global Marketing Research Problems with Secondary Data Research: – Accuracy of Data – Age of data – Reliability over Time – Comparability of Data Triangulate Functional or Conceptual Equivalence – Lumping of Data 10

3. Primary Global Marketing Research Focus Groups Survey Methods for Cross-Cultural Marketing Research: – Questionnaire Design Conceptual and Functional Equivalence Translation and Scalar Equivalence Back Translation and Parallel Translation Scalar Equivalence 11

Exhibit 6-5: Resources for Secondary Data 12

3. Primary Global Marketing Research – Sampling: A sampling plan consists of: Sampling unit Sample size Sampling procedure – Contact Method Mail Telephone Person-to-person interviews Online Survey Methods (Exhibit 6-7): – surveys – Random Web site surveys – Panel Web site surveys 13

Exhibit 6-6: Funny Faces Scale 14

Exhibit 6-7: ESOMAR 2007 Market Research Price Study 15

3. Primary Global Marketing Research – Collecting the Information Issues of nonresponse Courtesy bias Social desirability bias Redundancy (asking the same question in different ways) Issues of ethnographic research 16

Exhibit 6-8: Cross-Country Comparisons of Survey Response Bias 17

4. Leveraging the Internet for Global Market Research Advantages – Large samples quickly assembled – Global access – Lower costs – Anonymity for sensitive topics – Direct data load for swift analysis – Short response times 18

4. Leveraging the Internet for Global Market Research Online surveys Bulletin boards and chat groups Web visitor tracking Virtual panels Focus groups 19

4. Leveraging the Internet for Global Market Research Disadvantages – Limited Internet access in many countries – Samples are not representative – Download times hinder access – Incorrect addresses or poor connections – Low response rates – Multiple responses from the same person 20

Exhibit 6-11: Research Methodology behind the Durex “Sexual Wellbeing” Survey 21

5. Market Size Assessment When using market size estimates, keep the following rules in mind: – Use several different methods. – Don’t be misled by numbers. – Don’t be misled by fancy methods. – Do a sensitivity analysis by asking what-if questions. – Look for interval estimates with a lower and upper limit rather than for point estimates. 22

Exhibit 6-9: Individualism and Extreme Response Style 23

5. Market Size Assessment Method of Analogy – Longitudinal method of analogy (See Exhibit 6-12.) Trade Audit Chain Ratio Method Cross-Sectional Regression Analysis 24

Exhibit 6-12: Market Potential Estimates for McDonald’s 25

6. New Market Information Technologies Major developments/innovations: – Point of sale (POS) store scanner data – Consumer panel data – Single source data – Shift from mass to micro marketing – Continuous monitoring of brand sales/market share movements – Scanning data are used by manufacturers to support marketing decisions. 26

6. New Market Information Technologies – Scanning data provide merchandising support to retailers. – Market research tools to track the effectiveness of newer marketing mix vehicles such as the Internet with the goal of establishing a “Nielsen rating” for websites similar to those for TV programming. – CATI (Computer-Assisted Telephone Interviewing) – CAPI (Computer-Assisted Personal Interviewing) CATI/CAPI benefits include speed, accuracy, and the ability to steer data collection based on the response. 27

7. Managing Global Marketing Research Selecting a Research Agency: The following considerations should be taken into account while choosing agency: – Level of expertise – Qualifications – Track record – Credibility and experience – Client record Coordination of Multi-Country Research: – Emic versus Etic dilemma 28

7. Managing Global Marketing Research – The emic school focuses on the peculiarities of each country. – The etic approach emphasizes universal behavioral and attitudinal traits. – Cross-cultural market research favors the etic paradigm, emphasizing cross-border similarities and parallels. – Several approaches may be used to balance these conflicting demands. 29