2. DEVELOPING INTERNATIONAL MARKETING STRATEGIES Lecture 3:
International Marketing Research
International Segmentation and Positioning
Dr. Stefan Worm
Copyright: Stephan Worm

3. Why Do We Need to Conduct International Marketing Research?
Copyright: Stephan Worm

4. Example: BI Going International

5. Customer-Perceived Value
Importance of International Market Research - Back to Marketing Basics…
Customer-Perceived Value
Benefits (+)
Sacrifices (-)
Monetary Cost
Time Cost
Energy Cost
Psychic Cost
Product Benefits
Service Benefits
Personnel Benefits
Image Value
Customers differ internationally in:
The benefits and sacrifices they perceive
The weights/importance placed on individual benefits

6. Goal of International Market Research
Developing international marketing strategies using Segmentation-Targeting-Positioning (STP)
Take better decisions and avoid failure
Goal: Target…
…the right customer
…with the right product
…and the right message.
Copyright: Stephan Worm

7. Challenges in International Market Research
Complexity of International Market Research
Complexity of research design due to environmental differences
Complexity from multiple cultures, Languages, segments, competitors
Multiple Data sources, data collection waves, field service providers
Coordination of multicountry research efforts
Lack and inaccuracy of secondary data
Time and cost requirements to collect primary data
Difficulty in establishing comparability across multi-country studies
Copyright: Stephan Worm

8. Which Questions Are We Asking in International Marketing Research?
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9. Copyright: Stephan Worm
Task: Which Questions does BI need to ask when it comes to attracting international students/?
3 minutes
Work in teams of 2 with the person seated next to you
Write down 3 important information needs that BI would have to answer to formulate a marketing strategy for international students.
Copyright: Stephan Worm

10. Analysis of the Strategic Situation
Which relevant present and potential developments in society, macroeconomics, politics, law and technology must we take into account?
Buyers in Market
Competitors
3. Company Situation
2. Market (=Microenvironment)
1. Global Environmental Factors (=Macroenvironment)
Who are the (potential) buyers in the market?
What are their needs?
How do they behave?
What are their evaluations of competing brands?
Copyright: Stephan Worm

11. Analysis of the Strategic Situation
Who are the relevant competitors?
What are their market positions and strategies?
How are they perceived by buyers?
Buyers in Market
Competitors
3. Company Situation
2. Market (=Microenvironment)
1. Global Environmental Factors (=Macroenvironment)
What is our market position?
Which are our strengths and weaknesses?
How do customers view us?
Copyright: Stephan Worm

12. Analyzing Environmental Factors
Developments in society
Macro-economic developments
Political developments
Which factors
apply globally, which nationally?
Legal developments
Technological developments
Copyright: Stephan Worm

13. Analyzing Buyers/Customers in the Market
Who are the customers in the market? What are the different customer segments in the market?
What are the basic requirements of the customers? How will the basic customer requirements change?
What changes in customer behavior can be expected?
Copyright: Stephan Worm

14. Segmentation: Identify Similar Groups of Customers
Copyright: Stephan Worm

15. Analyzing Competitors
Who are the competitors?
How strong are the market positions of the individual competitors?
What particular strengths and weaknesses characterize the individual competitors?
What strategies do the individual competitors pursue?
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16. Strengths and Weaknesses of Competitors
Customer Evaluation of Competitors on Key Criteria (Hypothetical)
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17. Analyzing the General Market
Market Characteristics
How large is the market volume, the current market growth and the estimated future market growth?
What is the current profit situation of the companies in the market and how will it develop in the future?
Copyright: Stephan Worm

18. How Do We Carry Out an International Marketing Research Project?
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19. Six Steps in Conducting Global Market Research
Define the research problem(s)
Develop a research design
Determine information needs
Collect the Data (secondary and primary)
Analyze the data and interpret the results
Report and present the findings of the study
Copyright: Stephan Worm

20. 1) Defining the Research Problem
Precise definition of the research problem(s).
Difficulty in an international context: Self-reference criterion (SRC).
Further difficulty: Lacking familiarity with the foreign environment.
Omnibus surveys for inexpensive exploration.
Stating management’s information needs.
Copyright: Stephan Worm

21. 2) Develop Research Design
Sequential
Simultaneous
Multicounty research
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22. 2) Develop Research Design cont’d
Secondary Data: Data which is already available
Problems:
Accuracy of Data
Age of data
Reliability over Time
Comparability of Data
Triangulate
Functional or Conceptual Equivalence
Lumping of Data
Primary Data: When the secondary data are not useful, or simply do not exist
Types
Focus Groups
Quantitative (e.g. survey)
Copyright: Stephan Worm

23. 4) Collect the Data: Secondary Data Sources for Developed Markets
Firm and Industry Reports
Panel Providers
Financial Databases
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24. When Estimating Market Size from Secondary Sources…
Use several different methods.
Do a sensitivity analysis
Look for interval estimates with a lower and upper limit.
Approaches:
Method of Analogy
Longitudinal method of analogy
Trade Audit
Chain Ratio Method
Cross-Sectional Regression Analysis
Copyright: Stephan Worm

25. Primary Data Collection Strategies
Sampling Plan:
Sampling unit
Sample size
Sampling procedure
Contact Method
Mail
Telephone
Person-to-person interviews
Online Survey Methods:
surveys
Random Web site surveys
Panel Web site surveys
Copyright: Stephan Worm

26. International Questionnaire Design
Conceptual and Functional Equivalence
Translation
Back Translation and Parallel Translation
Scalar Equivalence
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27. Biases in International Surveys
Issues of nonresponse (e.g. Taboo subjects)
Courtesy bias
Yea- and Nay-saying
Social desirability bias
Extreme response styles (avoid and favor scale endpoints)
Anchor contraction effect (report more intense emotions in a foreign language)
Interviewer bias (training level, cheating)
Copyright: Stephan Worm

28. Cross-Country Comparisons of Survey Response Biases

29. Extreme Response Styles as a Function of Individualism

30. How Should I Go About Segmenting Customers in International Markets?
Copyright: Stephan Worm

31. Who are the Customers and Customer Segments in the Market?
Goal of segmentation: Group customers based on their likely reaction to the product offering
Copyright: Stephan Worm

32. Task: Selecting Suitable Segmentation Bases
You intern with Nespresso where you conduct an international market segmentation study to identify relevant segments in the coffee market. As segmentation bases you pick…
Mix of demographics and socioeconomics.
Buying behavior-based criteria.
Benefit criteria.
Personality characteristics.
Combination of buying behavior-based, benefit, and personality criteria.
3 minutes
Copyright: Stephan Worm

33. International Segmentation Types
Country-segmentation or aggregate segmentation
(Unit of analysis = country)
Two-stage international segmentation
Macro-segmentation
Micro-segmentation
Disaggregate international consumer segmentation
(Unit of analysis = individual)
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34. International Consumer Segmentation
A: Global segment; B: Regional segment; C, D, E, F: Unique national segments
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35. Copyright: Stephan Worm
National Segments in The Australian Mosaic Consumer Lifestyle Segmentation
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36. Seven Global Clusters in the Hakuhodo Lifestyle Segmentation
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37. Copyright: Stephan Worm
How Can we Position our Product Relative to Competitors in a Global Market?
Copyright: Stephan Worm

38. Elements of a Positioning Strategy
Managers need to decide on:
Frame of reference: Against which competitors should customers compare your brand?
Points of difference: Which differences should customers perceive for your brand?
Points of parity: Which attributes of competitors’ should your brand match?
Copyright: Stephan Worm

39. International Positioning and Segmentation Strategies
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40. Positioning on Global vs. Local Culture
Global consumer culture positioning: Brand as a symbol of a given global consumer culture
Local consumer culture positioning: Brand as an intrinsic part of the local culture.
Foreign consumer culture positioning. Brand mystique built around a specific foreign culture.
Copyright: Stephan Worm

41. A Successful International Marketing Strategy Requires…
Targeting…
the right customer
with the right product
and the right message.