Developing A Global Vision Through Marketing Research

8 - 2 Learning Objectives 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 As an enterprise broadens its scope of operations to include international markets, the need for current, accurate information is magnified. 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

8 - 4 Breadth and Scope of International Marketing Research Research can be divided into three types based on information needs: -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, and price decisions and to develop marketing plans. Unisys Corporation’s planning steps for collecting and assessing the following types of information: 1.Economic 2.Cultural, sociologist, and political climate 3.Overview of market conditions 4.Summary of the technological environment 5.Competitive situation

8 - 5 Top 20 Countries for Marketing Research Expenditures (millions of dollars) Insert Exhibit 8.1

8 - 6 The Research Process Careful Planning is Required to Avoid Colliding with Mountains

8 - 7 The Research Process The research process should follow these 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 the relevant data from secondary or primary sources, or both 5.Analyze, interpret, and summarize the results 6.Effectively communicate the results to decision makers 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.

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 Availability 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 Reliability of data -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. Comparability of data -In other countries, especially those less developed, data can be many years out of date as well as having been 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.

Problems of Availability and Use of Secondary Data (cont’d) Validating secondary data -Questions should be asked to effectively judge the reliability of secondary data sources: 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? 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 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.

Gathering Primary Data: Quantitative and Qualitative Research Primary data – Data collected specifically for the particular research project at hand. 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 (such as yes/no) or to select a response from a set of choices. -Toto in Japan 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. Qualitative research seeks to interpret what the people in the sample are like. Qualitative research is helpful in revealing the impact of sociocultural factors on behavior patterns and in developing research hypotheses.

Problems of Gathering Primary Data Ability to communicate opinions -It is difficult for a person to formulate needs, attitudes, and opinions about goods whose use may not be understood, that are not in common use within the community. Gerber Willingness to respond -Cultural differences -The role of the male, the suitability of personal gender-based inquiries, and other gender-related issues can affect willingness to respond. Sampling in field surveys -The greatest problem in sampling stems from the lack of adequate demographic data and available lists from which to draw meaningful samples.

Problems of Gathering Primary Data Language Complexities – Indian 20- Rupee Note (13 languages + English)

Problems of Gathering Primary Data Japanese Students learning one of the 15,000 kanji characters

Problems of Gathering Primary Data (cont’d) The kinds of problems encountered in drawing a random sample include the following: -No officially recognized census of population -No other listings that can serve as sampling frames -Incomplete and out-of-date telephone directories -No accurate maps of population centers 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

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.

Research on the Internet: A Growing Opportunity One billion users in more than 200 countries International Internet use is growing almost twice as fast as American use. Eight different uses for the 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

Estimating Market Demand In assessing current product demand and forecasting future demand, reliable historical data are required. 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 This assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country.

Personal Computer Diffusion Rate (per 1,000 people)

Personal Mobile Phone Diffusion Rate (per 1,000 people)

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. -First, the researcher must posses a high degree of cultural understanding of the market in which research is being conducted. -Second, a creative talent for adapting research methods is necessary. -Third, a skeptical attitude in handling both primary and secondary data is helpful.

Responsibility for Conducting Marketing Research 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. A trend toward decentralization of the research function is apparent. A comprehensive review of the different approaches to multicountry research suggests that the ideal approach is to have local researchers in each country, with close coordination between the client company and the local research companies. Two stages of analysis are necessary: -Individual-country level -Multi-country level

Responsibility for Conducting Marketing Research Independent Foreign Firms, Branches of a Domestic Company or Internal Resources

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.

Managing the Cultural Barrier in International Marketing Research Insert Exhibit 8.3

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 sense of privacy.

Summary (continued) 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