International Marketing Management

By Nagendra RCIT, Gubbi

Developing a Global Vision through

Marketing ResearchBy Nagendra R

CIT, Gubbi

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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.

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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

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• 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

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• 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

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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 )

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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.

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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

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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

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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.

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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?

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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.

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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

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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.

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Problems in primary research• Ability to communicate opinions• Willingness to respond• Sampling in field surveys

– Sample– Language – Comprehension

• Translation problems after collecting data.

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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.

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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.

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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.

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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.

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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

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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

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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

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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

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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

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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.

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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

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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.

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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

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Global Market Segmentation

• Stage of Development• Demand Characteristics• Demographics• Psychographics• Behavioral Characteristics• Benefits sought

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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)

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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

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Demographic Segmentation

• Income• Populations• Age distribution• Gender• Education• Occupation

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Psychographic Segmentation• Grouping people according to attitudes, value, and

lifestyles – SRI International and VALS 2

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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

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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

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Social and CulturalEnvironment

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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

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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

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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.

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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

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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

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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

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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

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