1. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, International Marketing Research: Practices and Challenges Dana-Nicoleta Lascu Chapter 6

2. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Chapter Objectives Define international marketing research and provide a description of its immense scope; offer examples of each type of research conducted in international marketing. Describe the steps involved in the international marketing research process while addressing the international constraints involved in each step. Introduce the concept of decision support systems for international marketing and the sales forecasting process.

3. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 International Marketing Research International marketing managers need to constantly monitor the different forces affecting their international operations. International marketing research is the systematic design, collection, recording, analysis, interpretation, and reporting of information pertinent to a particular marketing decision facing a company operating internationally.

4. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Research of Industry, Market Characteristics, and Trends Conducted by marketing research suppliers and shared with subscribers. Research techniques range from formal to informal methods. Examples:  Acquisition analyses  Diversification analyses  Market-share analyses  Export research

5. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 International Buyer Behavior Research Brand preferences Brand attitudes Brands awareness studies Purchase behavior studies Consumer segmentation studies Purchase behavior research will reveal that Eastern European consumers prefer to purchase sweets in elegant small bakeries such as the one in the photograph.

6. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 International Product Research Concept development and testing studies:  Typically performed in developed countries by the firms' research and development departments.  Evaluates the product/service offering in light of the divergent needs of different target markets. Brand name generation and testing:  Ensures that the brand name has appropriate meaning in the different languages of the target markets. Product testing:  Identifies the extent to which the product conforms to local tastes and performs as expected in the local environment.

7. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 International Product Research (contd.) Product packaging design studies:  Evaluate: -Consumers' reaction to the package -The extent to which the package adequately communicates information to the consumer -The distribution implications of the packaging decisions. Test marketing:  Involves testing the product’s performance in a limited area to project its performance in the entire target market.

8. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 International Distribution Research Import/export analyses:  Analyses that aid firms in identifying the logistics companies most able to handle paperwork and to move the products through customs in a timely and cost-effective manner; can be crucial to the success of the firm in a particular market. Channel performance and coverage:  Used to identify which channels need to be used or further developed by the company, or which types of channels are predominant in a particular industry or region. Plant/warehouse location studies:  Evaluate the transportation and warehousing infrastructure in a particular target country.

9. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 International Promotion Research Allows the firm to evaluate the extent to which the promotional mix effectively targets the market. Examples:  Studies of premiums, coupons, and deals: -Identify practices in each country and determine the legality of using promotions and consumers’ response.  Advertising effectiveness research: -Examine the effectiveness of ads aimed at individual markets.  Media research: -Determines media availability and which communication channels are the most effective.  Sales force compensation, quota, and territory studies: -Help determine the appropriate strategies for different markets.

10. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 International Pricing Research Studies projecting demand Currency and countertrade studies Studies of inflation rates and pricing Studies of negotiation tactics

11. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Types of Research  Exploratory Research: -Research conducted early in the research process that helps further define a problem or identify additional problems that need to be investigated.  Descriptive Research -All research methods observing or describing phenomena.  Causal Research -Research that examines cause-and-effect relationships.

12. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 The International Marketing Research Process STEP 1 Define the international marketing research problem and research objectives  International marketers must define a specific research problem and set specific research objectives, such as deciding on whether to use exploratory, descriptive, or causal research. STEP 2 Develop the international research plan  Blueprint of the study.  Indicates all the decisions to be made with regard to information sources, research methods, data collection instruments, sampling procedures, data collection methods, and data analysis.  Determines the projected cost of the research.

13. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 The International Marketing Research Process, continued STEP 3 Decide on the information sources: Secondary Data:  Collected to address a problem other than the specific international marketing problem that the company is currently facing.  Collected before the primary data. Primary Data:  Collected to address the specific international marketing problem.

14. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Secondary Data Constraints Conceptual Equivalence -Concepts have different meanings in different cultural environments. A mall in many European countries is a covered shopping street in the center of downtown

15. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Secondary Data Constraints, continued Functional Equivalence -Products themselves may be used for different purposes in different country environments. Shopping bags are discarded in the United States; in other countries they are used to signal style and/or personal wealth, travel experiences, etc.

16. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Secondary Data Availability, Reliability, and Validity -Published statistics may be unavailable – in many markets, relevant market data has not been collected; the most accurate secondary data is available on industrialized countries. -Data may not be reliable and valid – data may be underreported or exaggerated.

17. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Top 10 Global Marketing Research Firms RankCompanyHomeResearch CountryRevenues (US$ millions) 1VNU NVNetherlands3,537.90 2Taylor Nelson Sofres plcU.K.1,802.73 3IMS Health Inc. U.S.1,754.84 4GfK AGGermany1,311.35 5The Kantar GroupU.K.1,237.26 6Ipsos Group SAFrance 964.67 7Information Resources Inc.U.S. 624.80 8SynovateU.K. 602.99 9Westat Inc.U.S. 420.41 10Arbitron Inc.U.S. 310.00 Source: Adapted from “Top 25 Global Research Organizations,” Marketing News, Vol. 40, No. 10, August 15, 2006, p. H4.

18. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Primary Data Used in international marketing research far less than it should be: temptation is to use secondary data to serve all research functions. Expensive: The costs of collecting primary data in international markets are likely to be much higher, especially if an adequate marketing research infrastructure is lacking. Time consuming.

19. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Qualitative Research Qualitative research has been particularly useful as a first step in studying international marketing phenomena.  Examples: -Focus Groups. -Observation.  Constraints: -Responses can be affected by culture. -Individuals may act differently if they know they are being observed.

20. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Quantitative Research Quantitative research are more structured, involving either descriptive research approaches, such as survey research, or causal research approaches, such as experiments.  Examples: -Content Analysis -Survey Research -Experimental Research  Constraints: -Respondent factors -Infrastructure factors

21. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 The International Marketing Research Process, continued STEP 5 Design Data Collection Instrument  Emic instruments -measure phenomena specific to each culture.  Etic instruments -measure the same phenomenon in different cultures.  Constraints: -Translation costs and accuracy -Instrument reliability -Reluctance to answer certain questions

22. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 The International Marketing Research Process, continued STEP 6 Decide on the Sampling Plan  The sampling plan involves deciding: -The sampling unit (who will be included in the study). -The sample size (how many individuals or groups, such as households, will be surveyed). -The sampling procedure (how the sampling units will be selected). STEP 7 Collect, Analyze, and Interpret Data  Consists of collecting the primary data, evaluating and interpreting the results, and writing the report.

23. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Decision Support Systems for Global Marketing A coordinated collection of data, systems, tools, and techniques, complemented by supporting software and hardware designed for the gathering and interpretation of business and environmental data.

24. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Sales Forecasting Sales Force Composite Estimates  Personal observations and expectations of the local sales force and the international sales manager. Jury of Expert Opinion  Opinions of different experts about future demand. The Delphi Method  Experts to estimate market performance; findings are aggregated, and experts are queried again with the purpose of arriving at consensus.

25. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Sales Forecasting (contd.) Time Series and Econometric Models  Use data of past performance to predict future market demand. Analogy Methods  Estimation method that relies on developments and findings in markets… -with similar levels of economic development, or -where the product is in the same market development stage, or -in markets which share similar cultural characteristics

26. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Point of Sale Projections  Made with the help of store scanners or retail reports, in markets where scanners are not available. -Weekly or biweekly store audits are needed in order to reveal the movement of goods within the store and from warehouses. -Involve comprehensive store audits. Sales Forecasting, continued

27. Copyright Atomic Dog Publishing, 2008Copyright Atomic Dog Publishing, 2 Chapter Summary Defined international marketing research. Described steps involved in the international marketing research process and related international constraints. Discussed marketing decision support systems and international sales forecasting.