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© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole.

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Presentation on theme: "© 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole."— Presentation transcript:

1 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Chapter 8 Research Principles of International Marketing 9th Edition

2 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Defining the Issue The American Marketing Association defines market research as the function that links the consumer, customer, and public to the marketer through information. Information is used to: –Identify marketing opportunities and problems. –Generate, refine and evaluate marketing actions. –Monitor marketing performance and improve understanding of marketing as a process.

3 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. International and Domestic Research International and domestic research vary in the following areas: –New parameters like duties, foreign currencies, modes of transportation, international documentation and port facilities are encountered by the firm as it crosses national borders. –New environment which involves understanding the culture of the host country and its demographics, political system, stability, differences in societal structures and language, legal issues, technological level, and the economic environment.

4 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. International and Domestic Research International and domestic research vary in the following areas: –Internationalization exposes a firm to more than one market, each market having a number of varying dimensions. –Increased competition requires the firm to determine the breadth of the competition, track the competitive activities, and evaluate the actual and potential impact on its own operations.

5 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Recognizing the Need for Research Entering a market without conducting marketing research places firms, their assets, and their entire operation at risk. Marketing research is important because it: –Permits management to identify and develop strategies for internationalization. –Helps to develop a marketing plan. –Determines the appropriate marketing mix for each international market. –Provides management with foreign market intelligence.

6 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Recognizing the Need for Research Firms are reluctant to engage in international marketing activities due to : –Lack of sensitivity to differences in consumer tastes and preferences. –Limited appreciation for the different marketing environments abroad. –Lack of familiarity with national and international data sources and the inability to use them. –Actual business experience in a country or with a specific firm may be used as a substitute for organized research.

7 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Benefits of Research The value of research in making a particular decision may be determined by applying the following equation: V(dr) – V(d) > C(r); where –V(dr) is the value of the decision with the benefit of research, –V(d) is the value of the decision without the benefit of research, and –C(r) is the cost of research.

8 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Research Objectives Research objectives vary from firm to firm because of the views of management, the corporate mission, and the marketing situation. Information needs are linked closely with the level of international expertise in the firm. The three objectives for conducting international market research are: –Exporting –Importing –Market expansion

9 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Research Objectives Exporting - Foreign market opportunity analysis –Broad-brush approach to narrow down international marketing activities; the two approaches being country ranking and clustering. –Cursory analysis of general market variables such as total and per capita GNP, mortality rates, and population data. –Information on individual market data to identify fastest-growing markets, largest markets for a particular product, market trends, and restrictions.

10 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Research Objectives Exporting - Foreign market opportunity analysis –Consideration of governmental restrictions. –Competitive assessment needs to match markets with corporate strengths and provide an analysis of the best market potential for specific products. Market expansion –Obtaining detailed information for penetrating a market. –Monitoring the political climate of a country.

11 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Research Objectives Importing –Firms shift their focus from supplying to sourcing. –Importer needs to be aware of: Reliability of a foreign supplier. Consistency of its product or service quality. Length of delivery time. Government rules in the exporting (source) country. Domestic restrictions and legislation. Risks of disruption and terrorism.

12 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Secondary Information Requirements Secondary data for international marketing research can be procured from: –Governments –International organizations –Service organizations –Trade associations –Directories and Newsletters –Electronic information services –Other firms

13 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Secondary Information Requirements Evaluating data –Consider the quality of the data source, with primary focus on the purpose and method of original data collection. –Assess the quality of actual data in terms of accuracy, reliability, and recency. –Assess the comparability and compatibility of the data.

14 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Determining Secondary Information Requirements Analyzing and interpreting secondary data –Requires combination and cross tabulation of various sets of data or the use of proxy information to arrive at conclusions which address the research objectives. –Proxy variable - A substitute for a variable that cannot be measured directly. Data privacy –The international marketer must pay careful attention to the privacy laws and expectations in different nations and to possible consumer reactions to the use of data in the marketing effort.

15 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Primary research is conducted to fill specific information needs. It is essential for the formulation of strategic marketing plans. It is also useful in international market segmentation.

16 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Determining information requirements –Formulate specific research questions to determine precise information on a subject. Industrial versus consumer research –The researcher selects either consumers or industrial users for conducting research. –This choice in part determines the size of the universe and respondent accessibility.

17 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Determining research administration approaches: –Centralized - The research specifications are designed by the home office and forwarded to the local country operations for implementation. –Coordinated - An intermediary such as an outside research agency brings headquarters and country operations together. –Decentralized - Corporate headquarters establishes the broad thrust of research and delegates design and implementation to the specific countries.

18 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Outside research services –Appropriate for large-scale international marketing research or when highly specialized research skills are required. –The selection process should emphasize the quality of information rather than the cost.

19 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Selection of the research technique depends on a variety of factors. –The objectivity of the data sought. –The prevailing conditions in the country and segments to be studied. –Whether the research is to collect historical facts or gather information about future developments. –Cultural and individual preferences. Research instruments are useful for gathering qualitative and quantitative data.

20 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Qualitative research techniques –Interviews – Intent is to obtain in-depth information instead of a wide variety of information. –Focus groups Interaction within a group, ideally seven to ten participants, about a specific topic. Are highly efficient in terms of rapidly accumulating a substantial amount of information.

21 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Determining the research techniques –Observation Requires the researcher to play the role of a nonparticipating observer of activity and behavior. Can be personal, impersonal, obtrusive or inobtrusive. Can be extremely useful in shedding light on practices not previously encountered or understood. The degree to which the observer has to be familiarized or introduced to other participants may vary. The complexity of the task may differ due to the use of multiple languages.

22 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Quantitative research technique –Surveys Useful in providing the opportunity to quantify concepts. Usually conducted via questionnaires that are administered personally, by mail, or by telephone. Can be hampered by social and cultural constraints. Allows the researcher to rapidly accumulate a large quantity of data amenable to statistical analysis.

23 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Designing the survey questionnaire - Question format –Structured questions allow the respondents only limited choice options. –Unstructured or open-ended questions capture in- depth information; however, it increases the potential for interviewer bias. –Direct or indirect questions, the choice of which depends on different degrees of sensitivity to certain questions. –The question format should ensure data equivalence, which involves comparatively structuring categories used in questionnaires.

24 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Designing the survey questionnaire –Question content Consider the ability and willingness of respondents to supply answers. Adapt questions to societal constraints. –Question wording Use simple unambiguous words and questions. Omit leading questions or asking questions in specific terms to avoid generalizations and estimates. Check for errors using the translation-re-translation approach and use alternative wording for questions. Pretest the survey.

25 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Developing the sampling plan - Data collection –Check the quality of the data collection process. –Conduct spot checks and realism checks on the administration procedure to ensure reasonable data quality. –Collected data should be compared with secondary and analogous information from a similar market to obtain a preliminary understanding of data quality.

26 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Developing the sampling plan - Analyzing and interpreting primary data –Use the most appropriate and best available tool for proper interpretation and analysis of accumulated information. –Avoid over sophisticated tools for unsophisticated data.

27 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Developing the sampling plan - Presenting research results –The primary focus of the presentation must be communication. –Present results clearly and concisely. –Lengthy data and analytical demonstrations should be avoided. –The availability of data and techniques used should be mentioned. –Possibilities for analogous application should be highlighted.

28 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Developing the sampling plan - Follow-up and review –Without proper follow-up, the role of research tends to become a mere “staff ” function, increasingly isolated from corporate “line” activity and lacking major impact on corporate activity.

29 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The Primary Research Process Developing the sampling plan - Research on the web –The Internet serves as a portal to reach out to consumers in a low-cost fashion. –In the Web 1.0 online research model, surveys can be administered either through e-mail or via a website. –Another trend in the Web 1.0 world is the use of social networks to access particular consumer groups. –In the Web 2.0 model, users generate the content of the data collected. –The limitations of Web 2.0 market research efforts are reliability, sampling, and the methodology.

30 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The International Information System The system serves as a mechanism to coordinate the flow of information to corporate managers for decision-making purposes. The system should have the following attributes: –Relevant –Timely –Flexible –Accurate –Exhaustive –Convenient

31 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The International Information System Environmental scanning –Is useful for receiving information on: Political, social, and economic affairs internationally; Changes of attitudes held by public institutions and private citizens; Possible upcoming alterations in international markets.

32 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The International Information System Environmental scanning –Can be performed by Obtaining factual input regarding many variables. Use of content analysis to investigate the content of communication in a society, monitor the social, economic, cultural, and technological environment, pinpoint upcoming changes and new opportunities. –Is conducted by a variety of groups within and outside the corporation.

33 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The International Information System Delphi studies –A creative and highly qualitative data gathering method used for obtaining factual data. –Carried out with groups of about 30 well-chosen participants who possess particular in-depth expertise in an area of concern. –Uses the mail or facsimile method of communication technique to bridge large distances and therefore makes individuals quite accessible at a reasonable cost. –Requires several steps, and therefore months may elapse before the information is obtained.

34 © 2010 South-Western/Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. The International Information System Scenario building –Looks at different configurations of key variables in the international market to envision new environmental conditions and understand the potential domestic and international impact on corporate strategy. –Identifies crucial trend variables and degree of their variation. –Recognize nonlinearity of factors and the possibilities of joint occurrences. –For scenarios to be useful, management must analyze and respond to them by formulating contingency plans.


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