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International Marketing Management
By Nagendra RCIT, Gubbi
Developing a Global Vision through
Marketing ResearchBy Nagendra R
CIT, Gubbi
3
International marketing research
• Marketing research is traditionally defined as the systematic gathering,
recording, analyzing and reporting of data to provide information
useful in marketing decision making
How about in International Marketing?
International Marketing Research is the systematic design,
gathering, recording, analyzing and reporting of data to provide
information useful in international marketing decision making
• Info. Must be communicated across cultural boundaries
• The environments within which the research tools applied are often
different in foreign Markets.
4
Importance of Marketing Research
• Information is a necessary component to making good
marketing decisions.
• International Marketing Research is the systematic
collection, recording and analysis of data that can be used to
make marketing decisions in International scenario & to
Spot current and upcoming problems in the current market
• Reduce business risks
• Identify sales opportunities
• Develop plans of action
5
• Keeping up with competitors' market strategies also is
important.
• Marketing research is not a perfect science. It deals with people
and their constantly changing feelings and behaviors, which are
influenced by countless subjective factors.
• To conduct marketing research, researcher must gather facts and
opinions in an orderly, objective way to find out what people
want to buy, not just what you want to sell them.
Importance of Marketing Research
6
• Market research will identify trends that affect sales and
profitability.
• Population shifts
• Legal developments
• The local economic situation should be monitored to quickly
identify problems and opportunities
Importance of Marketing Research
7
Classification of research
• Basically 3 types –
– 1. Country Specific Research
( General information about the country)
– 2. Fortune Specific Research
(Information for future forecasting)
– 3.Strategy Specific Research
(Specific information for making 4p’s )
8
Classification of researchBased on questioning
• Qualitative marketing research - generally used for exploratory
purposes — small number of respondents — not generalizable to the
whole population — statistical significance and confidence not
calculated — examples : focus groups, in-depth interviews,
and projective techniques
• Quantitative marketing research - generally used to draw
conclusions — tests a specific hypothesis - uses
random sampling techniques so as to infer from the sample to the
population — involves a large number of respondents —
examples : surveys and questionnaires. Techniques include choice
modeling, maximum difference preference scaling, and covariance
analysis.
9
Classification of research
Based on observations
• Ethnographic studies — by nature qualitative, the researcher observes
social phenomena in their natural setting — observations can occur cross-
sectionally (observations made at one time) or longitudinally
(observations occur over several time-periods) - examples include
product-use analysis and computer cookie traces.
• Experimental techniques - by nature quantitative, the researcher creates
a quasi-artificial environment to try to control spurious factors, then
manipulates at least one of the variables — examples include purchase
laboratories and test markets
10
Complications In International Marketing Research
• Information must be gathered and understood across cultural
boundaries.
• The research tools can be sensitive to the environment you are
collecting information in.
• Problems with
• fixing the source of data Availability of data
• Reliability of data Validating secondary data
• Methodology
11
The Research Process
• Define the research problem and define objectives
• Determine potential sources of information to fulfill
objectives
• Do a cost-benefit analysis on different research options
• Gather data from secondary and/or primary sources
• Analyze, interpret, and summarize the results
• Communicate results to decision makers
Step 1: Define Marketing Problems and Opportunities
• You are trying to launch a new product or service. (Opportunity)
• Awareness of your company and its products or services is low.(Problem)
• The market is familiar with your company, but still is not doing business with you. (Problem)
• Your company has a poor image and reputation. (Problem)
• Your goods and services are not reaching the buying public in a timely manner. (Problem)
Step 2: Set Objectives, Budget and Timetables
Objectives• Explore the nature of a problem so as to define it in detail.
• Determine how many people will buy your product packaged
in a certain way and offered at a certain price.
• Test possible cause- and effect- relationships.
– For example, if you lower your price by 10 percent, what
increased sales volume should you expect?
– What impact will this strategy have on your profit?
Budget
• Market research budget is a portion of your overall marketing
budget.
• Allocate a small percentage of gross sales for the most recent
year to use on market research.
– It’s usually about 2 percent for an existing business.
– You may want to increase your budget to as much as 10
percent of your expected gross sales.
• Other methods include analyzing and estimating the
competition's budget and calculating your cost of marketing per
sale.
Timetables
• Prepare a detailed timeline to complete all steps of the
market research process.
• Establish target dates that will allow the best accessibility to
your market.
– For example, a holiday greeting card business may want
to conduct research before or around the holiday season
buying period, when its customers are most likely to be
thinking about their purchases.
Step 3: Select Research Types, Methods and Techniques
• Two types of research are available:
– Primary research is original information gathered
for a specific purpose.
– Secondary research is information that already
exists somewhere.
Secondary Research
• Secondary research is faster and less expensive
than primary research.
• Gathering secondary research may be as simple
as making a trip to your local library or business
information center or browsing the Internet.
• It utilizes information already published.
– Surveys, books, magazines, etc.
Example of Secondary Research
• An article may show how much working mothers
spent on convenience foods last year.
• If you were thinking about selling a convenience
food, this information would show you what kind
of market there is for convenience foods.
– It doesn’t show you how much they are willing to
spend on your particular product.
Primary Research • Primary research can be as simple as asking customers or
suppliers how they feel about a business, or as complex as
surveys conducted by professional marketing research firms. • Examples of primary research are:
– Direct-mail questionnaires– On-line or telephone surveys– Experiments– Panel studies– Test marketing– Behavior observation
Primary Research• Primary research is divided into reactive and
nonreactive research.• Nonreactive
– Observes how real people behave in real market situations without influencing that behavior
• Reactive research– Includes surveys, interviews and questionnaires– This research is best left to marketing professionals,
as they usually can get more objective and sophisticated results.
Step 4: Design Research Instruments • The most common research instrument is the
questionnaire.
Step 5: Collect Data
• To obtain clear, unbiased and reliable results,
collect the data under the direction of experienced
researchers.
Step 6: Organize & Analyze the Data • Once data has been collected, it needs to be cleaned.
• Cleaning research data involves editing, coding and tabulating results. .
• Look for data focusing on immediate market needs.
• Rely on subjective information only as support for more general findings
of objective research.
• Analyze for consistency; compare the results of different methods of your
data collection.
• Look for common opinions that may be counted together.
• Read between the lines. For example, combine U.S. Census Bureau
statistics on median income levels for a given location and the number of
homeowners vs. renters in the area.
Step 7: Present and Use Market Research Findings
• Once marketing information is collected and analyzed, present it in an
organized manner to the decision makers of the business.
– Report findings in the market analysis section of business plan.
– Familiarize sales and marketing departments with the data or
conduct a companywide informational training seminar using the
information.
24
Problems while research• Problems while establishing objectives
• Problems with fixing the source of data
• Availability of data
• Reliability of data
• Comparability of data (out of date data)
• Validating secondary data
– Who collected?
– For what purpose?
– methodology?
– consistency?
25
Defining the Problem and Objectives
• It is essential to appropriately define the problem you
are researching and establishing clear cut goals that
will help shed light on the problem.
– This can be very difficult when the problem is
complex.
• Due to the complexity of the problem in IM, it may
be difficult to establish the research boundaries.
26
Problems with fixing the source of data
• Primary Data Collection
• Secondary Data Collection
• Data Collection in Multicultural Settings
Primary Data• Primary data research is when you go out and collect
the data first hand.• Usually primary data collection is needed when
adequate secondary data does not exist.• Primary data research can be broken up into two
areas:– Quantitative Research– Qualitative Research
27
Gathering primary dataQuantitative Research
• This data is collected by asking verbally or in writing structured questions that have specified or formatted responses.
• This research tends to ask close-ended questions.• Data is gathered usually using surveys or interviews.
Qualitative Research• Qualitative research focuses more on open-ended questions,
which tend to be highly unstructured.– It tends to solicit a person’s thoughts and feelings on a
subject.• Qualitative research can come in the form of direct
observation.
Nagendra R 28
Problems in primary research• Ability to communicate opinions• Willingness to respond• Sampling in field surveys
– Sample– Language – Comprehension
• Translation problems after collecting data.
Nagendra R 29
Sampling in Field Surveys• When dealing with different countries it can be difficult
to gather a sample base that is representative of the
population.
– This is primarily due to a lack of good demographic
information.
• Methods for collecting information can be severely
limited.
• It can be difficult to verify if the sample is
representative.
Nagendra R 30
Problems Encountered When Drawing a Random Sample
• No officially recognized census of the
population.
• No listings that can serve as a sampling frame.
• Incomplete and/or out-of-date telephone
directories.
• No accurate maps of population centers.
Nagendra R 31
Language and Comprehension
• The language barrier and literacy pose a major
problem when doing a survey abroad.
– It may be that exact translations do not exist for
some survey questions.
– The population may not have a high enough
literacy rate to understand the survey.
Nagendra R 32
Secondary Data Collection
• Secondary data is data that has already been
collected by someone else that will answer the
research question you are trying to answer.
• The biggest issue to deal with secondary data is
that there can be a large quantity of it to wade
through and you are uncertain of its quality.
Nagendra R 33
Problems with Secondary Data• Availability of the Data
• Reliability of the Data
• Who collected the data?
• Is there a reason someone would want to misrepresent the data?
• Why were the data collected?
• How were the data collected?
• Is the data internally consistent and logical to known facts?)
• Comparability of the Data
• Validating Secondary Data
• Multicultural research
Nagendra R 34
Using the Internet for Research• The internet can be a useful tool for conducting marketing research.
• It can reach a multitude a people in a short amount of time.
• While it can be an effective tool, it also has a few large drawbacks.
• Online surveys and buyer panels• Online focus groups• Web visitor tracking• Advertising measurement• Customer identification system• E-mail marketing lists• Embedded research
Nagendra R 35
Drawbacks to Internet Research
• There can be a large bias as to who fills out the survey, i.e., it
may not be representative of the typical consumer.
• Currently, there is not a large population of foreigners on the
internet.
• It may generate too much costly data to analyze.
Other Issues with Research
• Problems with Analyzing and Interpreting Research Information
• Responsibility for Conducting Marketing Research• Estimating Market Demand
Nagendra R 36
Problems in analyzing & interpreting research info
• Meaning of words, the consumer’s attitude
towards a product, the interviewer’s attitude,
interview situation
• Culture
• Traditional influence
Nagendra R 37
Estimating mkt demand
• Use Secondary data for assessing current mkt demand &
forecasting future demand
• Ability of researcher to estimate the demand, with min.
information
• Methods for estimating:
• Expert opinion-company own, outside experts, govt. officials
• Analogy. Assumes demand for a pdt develops in the same way
in all other countries having comparable economic
development
Nagendra R 38
Communicating with decision makers
• Info must be communicated to decision makers
timely..
• Top executives-not only have to identify the
problem,generate objectives but also ‘hear the voice
of customers’ and see the market
• Problems
– customers can misunderstand the questions
– managers can misunderstand the answers.
Nagendra R 39
Identifying foreign markets
Segmenting & TargetingSegmenting: Represents an
effort to identify and categorize
groups of customers and
countries according to common
characteristics
Targeting: The process of
evaluating segments and
focusing marketing efforts on
a country, region, or group of
people that has significant
potential to respond
Nagendra R 40
Global Market Segmentation
• Defined as the process of identifying specific
segments—whether they be country groups or
individual consumer groups—of potential
customers with homogeneous attributes who
are likely to exhibit similar responses to a
company’s marketing mix.
Nagendra R 41
Contrasting views of global segmentation
• Conventional Wisdom– Assumes heterogeneity
between countries– Assumes homogeneity within
a country– Focuses on macro level
cultural differences– Relies on clustering of
national markets– Less emphasis on within-
country segments
• Unconventional Wisdom– Assumes emergence of
segments that transcend national boundaries
– Recognizes existence of within-country differences
– Emphasizes micro-level differences
– Segments micro markets within and between countries
Nagendra R 42
Global Market Segmentation
• Stage of Development• Demand Characteristics• Demographics• Psychographics• Behavioral Characteristics• Benefits sought
Nagendra R 43
Stages of Economic Development1. The Traditional Society
2. The Pre Conditions for Take-off
3. The Take-Off
4. The Drive to Maturity
5. The Age of High Mass Consumption
United Nations Economic Development System
1.More-Developed Countries (MDC)
2.Less-Developed Countries (LDC)
3.Least-Developed Countries (LLDC)
Nagendra R 44
Assessing Market Demand• Be mindful of the pitfalls
– Tendency to overstate the size and short-term attractiveness of individual country markets
– The company doesn’t want to ‘miss-out’ on a strategic opportunity
– Management’s network of contacts will emerge as a primary criterion for targeting
Three basic criteria• Current size of the segment and anticipated growth potential• Competition• Compatibility with the company’s overall objectives/feasibility
of reaching a designated target
Nagendra R 45
Demographic Segmentation
• Income• Populations• Age distribution• Gender• Education• Occupation
Nagendra R 46
Psychographic Segmentation• Grouping people according to attitudes, value, and
lifestyles – SRI International and VALS 2
Nagendra R 47
Behavior Segmentation
• How much they use it• How often they use it• User status• Law of disproportionality/Pareto’s Law – 80%
of a company’s revenues are accounted for by 20% of the customers
Nagendra R 48
Benefit Segmentation• Benefit segmentation focuses on the value
equation Value = Benefits / Price
• Based on understanding the problem a product solves, the benefit it offers, or the issue it addresses
Nagendra R 49
Social and CulturalEnvironment
Nagendra R 50
Culture Defined• A continuously changing totality of learned and shared
meanings, rituals, norms, and traditions among the
members of an organization or society.
– Ecology
– Social Structure
– Ideology
Nagendra R 51
Elements of Culture Material Culture
Technology Economics
� Social Institutions
Family Political Structure
Education The Media
� Humans and The Universe
Belief Systems
� Aesthetics
Graphics and Plastic Arts Music, Drama, and Dance
Folklore
Language
Nagendra R 52
Cultural Factors
Never touch the head of a Thai or pass an object over it
The head is considered sacred in Thailand.
Avoid using triangular shapes in Hong Kong,
Korea and Taiwan. It is considered a negative shape.
The number 7 is considered bad luck in Kenya, good luck in the Czech
Republic and has a magical connotation in Benin.
The number 10 is bad luck in Korea.
The number 4 means death in Japan.
Red represents witchcraft and death in many African countries.
Red is a positive color in Denmark.
Nagendra R 53
Understanding Culture
• Culture is learned. Passed on from generation to generation. Relatively enduring.
• Members of a culture share a system of meaning.
• All facets of culture are interrelated • Macroculture • Microculture
Nagendra R 54
The Importance of Understanding
• Many companies find that their new foreign firm is about to collapse because they have failed to learn that country’s customs, cultures, and laws
• Two out of every three U.S. executives sent to Saudi Arabia are promptly repatriated due to difficulties in adapting to the local culture
• The costs associated with premature returns (repatriation) negatively affects the bottom-line of international companies
Nagendra R 55
Elements of Culture
• Protestant Religion – stresses hard work and frugality
• Judaism – stresses education and development• Islam – focus on rules for social interaction • Hinduism – encourages family orientation and
dictates strict dietary constraints• Buddhism – stresses sufferance and avoidance
of worldly desires
Nagendra R 56
Cultural Norms• Norms are derived from values and defined as
rules that dictate what is right or wrong, acceptable or unacceptable – Imperative
• What an outsider must or must not do
– Exclusive• What locals may do but an outsider cannot
– Adiaphora• What an outsider may or may not do
Nagendra R 57
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