MKTG7506: International Marketing Management

29 March 2010

International Marketing Research

Read: C & G Chapter 8 Craig & Douglas (2001) Malhotra et al. (1996)

Dr Ravi Pappu Office: Room 416 Colin Clark Building Phone: 3346 8089 Email: r.pappu@business.uq.edu.au Consultation: Monday 3-4 PM; Room 416 Colin Clark

Learning Objectives
Understand the changing nature and importance of international marketing research. Discuss various steps in the international marketing research process. Discuss the importance of internet in international marketing research.

Why Marketing Research?

External marketing environment making better decisions scanning wont be adequate. To identify and develop strategies for internationalisation involves the identification, evaluation, and comparison of potential foreign market opportunities subsequent market selection. To develop a marketing plan to determine the requirements for successful market entry and penetration. To design an appropriate marketing mix.

Week 5: International Marketing Research

MKTG7506: International Marketing Management

29 March 2010

International Marketing Research Errors

Ignoring the need for market research: Australian tomato sauce exported to Japan, where the local preference is for Soya sauce. Inadequate market research: KFC in Brazil research does not identify street vendors as possible competition. Misdirected market research: Australian soft drink manufacturer in Indonesia - research in urban areas but not rural.

Definition
Traditional definition - The systematic gathering, recording and analysing of data to provide information useful in marketing decision making (Cateora and Graham, 2007). Two additional dimensions (a) Information must be communicated across cultural boundaries. (b) The environments within which the research tools are applied are often different in foreign markets. Marketing research is project specific, differs from MIS.
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Breadth and Scope of International Marketing Research

Three types of information needs General information about the country, culture, area and market. Information necessary to forecast future marketing requirements by anticipating trends. Specific market information used to make product, promotion, distribution and price decisions (mostly emphasised in domestic marketing).

Week 5: International Marketing Research

MKTG7506: International Marketing Management

29 March 2010

Changing Global Environment

Evolution of international marketing research 1960s Single market/country focus. 1990s - Focus on conducting studies that cover multiple countries. Heterogeneity of research contexts Majority of research in Triad countries in the 1990s. Increased amount of research in emerging market economies poses new challenges. Global market place in transition Technology, increased discretionary expenditures, worldwide expansion of retailers acting as facilitators.
Craig & Douglas (2001) 7

Implications For International Marketers

Need to broaden capabilities to accommodate technological advances. Focus on markets with future growth potential. Understanding and sensitivity to differences in the environment. Low levels of literacy. Absence of well-developed market research infrastructure. Interpretation of results (e.g. SRC and ethnocentrism). Constructs and definitions used in one context may not necessarily be appropriate in others.
Craig & Douglas (2001) 8

Ways of Conducting Marketing Research

(1) Design and implement with in-house staff. (2) Use an outside firm specializing in marketing research Growth of specialized firms and outsourcing.

Week 5: International Marketing Research

MKTG7506: International Marketing Management

29 March 2010

The Research Process

(1) Define the research problem and establish research objectives (2) Determine the sources of information to fulfil the research objectives (3) Consider the costs and benefits of the research effort (4) Collect data from secondary or primary sources (5) Primary data collection research design issues (6) Analyse, interpret, and summarise the results (7) Effectively communicate the results to decision-makers
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(1) Define the Research Problem

The most crucial step - involves converting a series of ambiguous business problems into tightly drawn research objectives. Unfamiliar environment tends to cloud the problem (a) influenced by SRC, and (b) can lead to false assumptions and poorly defined research problems. Can be overcome by (a) preliminary research (b) defining the problem from domestic market perspective (c) defining from overseas market perspective (d) isolating SRC Malhotra, Agarwal & Peterson (1996)
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(2) Determine the Sources of Information

Two major sources (a) secondary data (b) primary data cost-benefit considerations Secondary data Cost considerations readily available collected for other purposes - high cost and time involved in collecting primary data. No research is undertaken without studying secondary data. However where no data are available, or secondary data are inadequate, collect primary data.
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Week 5: International Marketing Research

MKTG7506: International Marketing Management

29 March 2010

Problems of Availability and Use of Secondary Data

Availability of data
Most countries simply do not have governmental agencies that collect on a regular basis the kinds of secondary data readily available in Australia. Researchers language skills

Reliability of data
Official statistics are sometimes too optimistic, reflecting national pride rather than practical reality, while tax structures and fear of the tax collector often adversely affect data.

Comparability of data
In less developed countries, data can be many years out of date as well as having been collected on an infrequent and unpredictable schedule. Too frequently, data are reported in different categories or in categories much too broad to be of specific value. 13

Problems of Availability and Use of Secondary Data

Validating secondary data
Questions should be asked to effectively judge the reliability of secondary data sources:
Who collected the data? Would there be any reason for purposely misrepresenting the facts? For what purposes were the data collected? How were the data collected? Are the data internally consistent and logical in light of known data sources or market factors?

Checking the consistency of one set of secondary data with other data of known validity is an effective and oftenused way of judging validity. The availability and accuracy of recorded secondary data increase as the level of economic development increases.
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(4) Primary Data Collection

Forms of primary data collection - formal and informal ways questioning sales reps, distributors or large-scale questionnaire surveys Two basic types of marketing research: (a) quantitative (b) qualitative Quantitative (a) survey research (b) consumer panels (c) experiments Qualitative (a) observation (b) focus groups (c) participation in trade missions, trade shows ---widely practiced by Aussie firms
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Week 5: International Marketing Research

MKTG7506: International Marketing Management

29 March 2010

Quantitative Research
Quantitative : A large number of respondents are asked to reply either verbally or in writing to a structured questionnaire. Survey mail, telephone surveys, online Advantages and disadvantages - data with precise estimations structured responses can be summarised in percentages, averages and other statistics.

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Quantitative Research
Problems with mail and field surveys Developed countries - mobility of people Poor response rates Less developed countries Availability of mailing lists, maps and telephone facilities Problem of literacy Language and equivalence issues Lack of familiarity with mail surveys Poor postal service in rural areas

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Qualitative Research
Open-ended or in-depth questions aimed at generating a persons thoughts and feelings on the subject. Used to formulate a problem more clearly and to determine the relevant questions to be included in subsequent research - also to develop research hypotheses for quantitative research Also used to gain an understanding of market, rather than quantifying relevant aspects SRC and context issues Often qualitative and quantitative techniques are jointly used.
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Week 5: International Marketing Research

MKTG7506: International Marketing Management

29 March 2010

Qualitative Research
In-depth interviews Language issues - number of languages and body language. Telephone interviews Special challenge to international marketing research Availability of phones - long waiting lists - quality of service. Reluctance give information over the phone telephone conversation habits vastly different.
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Qualitative Research
Observation techniques - ideal for situations that involve sensitive, personal or controversial issues. The degree of openness issue e.g. obtaining income and purchase information. Observer selection issues - local vs. marketers observer -familiarity issue.

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Qualitative Research
Focus groups of potential customers - a popular form of exploratory research - a free-ranging discussion around pre-determined topics - Cross-cultural issues: non-verbal communication Consumer panels Often used to track television viewership: e.g. A C Nielsen in USA and Japan.

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Week 5: International Marketing Research

MKTG7506: International Marketing Management

29 March 2010

Combined Use of Qualitative and Quantitative Research

Qualitative research to formulate and define research problem more clearly. Also useful in gaining some understanding (not quantifying market. Helpful in revealing the impact of socio-cultural factors on behaviour patterns. Directional rather than conclusive. Developing hypothesis that can be tested in quantitative research.
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Gathering Primary Data - Problems

(1) Ability to communicate opinions Respondents ability to recognise the usefulness and value of a product - language issues. (2) Willingness to respond Cultural differences explain unwillingness to respond e.g. for gender-based inquiries The role of the male in spending Tax questions will be offending Use of locally prominent people or students to overcome this difficulty
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Gathering Primary Data - Problems

(3) Sampling in field surveys lack of demographic data or detailed social and economic data inadequate mail listings and poor postal services. (4) Language and comprehension differences in idiom and difficulty in exact translation literacy and suitability of written questionnaires.

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Week 5: International Marketing Research

MKTG7506: International Marketing Management

29 March 2010

The Issue of Equivalence

Reliability and validity issues in international survey questionnaires misinterpretation, misunderstanding and administration variation. Equivalence (a) Construct equivalence (b) Measurement equivalence (c) Sampling equivalence

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Construct Equivalence
The meaning of universally accepted concepts can vary (e.g. beauty, youth, wealth). Problems arise due to social, cultural, economic or political differences Functional equivalence: differing interpretations on function/activity e.g. bicycles Conceptual equivalence: different interpretations on concepts - e.g. Reliability of a car Definitional equivalence: e.g. Occupational categories Temporal equivalence: e.g. Gift giving seasons Market structure equivalence: Differences in the nature of distribution channels, product availability
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Measurement Equivalence
Gradation equivalence: equivalence in the unit of measurement e.g. Colour, money Translation equivalence: Applies to verbal and non-verbal language. High and low context cultures idiomatic and experiential meanings may differ. Techniques used to overcome the problems of translation equivalence (a) back translation (b) parallel blind translation

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Week 5: International Marketing Research

MKTG7506: International Marketing Management

29 March 2010

Sampling Equivalence
Difficulties in identifying equivalent population samples. A population defined in terms of externally imposed criteria (e.g. Location, income, age or education) comparison and equivalence will be affected by internally generated criteria (e.g. Psychological, life style characteristics).

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Internet A Growing Opportunity

As a strong source of secondary data Online surveys and focus groups Web visitor tracking Customer identification systems Email marketing lists

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Pros and Cons of Internet marketing Research

Pros (a) Large samples in small amount of time (b) Global access (c) Cost (d) Data analysis accuracy Cons (a) Infrastructure (b) Sampling representativeness (c) Technological problems

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Week 5: International Marketing Research

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