International Marketing

14th Edition P h i l i p R. C a t e o r a M a r y C. G i l l y John L. Graham

Developing a Global Vision Through Marketing Research

Chapter 8
McGraw-Hill/Irwin International Marketing 14/e

Copyright 2009 by The McGraw-Hill Companies, Inc. All rights reserved.

What Should You Learn?

The importance of problem definition in international research The problems of availability and use of secondary data Quantitative and qualitative research methods Multicultural sampling and its problems in less developed countries Sources of secondary data How to analyze and use research information
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Global Perspective Japan Test Market for the World

Enterprises with international scope of operations
Need for current, accurate information magnified

Marketing research
The systematic gathering, recording, and analyzing of data to provide information useful in marketing decision making

International marketing research involves two complications

Information must be communicated across cultural boundaries The environments within which the research tools are applied are often different in foreign markets

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Breadth and Scope of International Marketing Research

Unisys Corporations planning steps for collecting and assessing the following types of information
1. 2. 3. 4. 5. Economic Cultural, sociological; and political climate Overview of market conditions Summary of the technological environment Competitive situation

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Breadth and Scope of International Marketing Research

Types of information needed by research
General information about the country, area, and/or market Information to forecast future marketing requirements
By anticipating social, economic, consumer, and industry trends within specific markets or countries

Specific market information used to make and develop marketing plans

Product Promotion Distribution Price decisions

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Top 20 Countries for Marketing Research Expenditures (millions of dollars)

Exhibit 8.1

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The Research Process

Research process steps
1. Define the research problem and establish research objectives 2. Determine the sources of information to fulfill the research objectives 3. Consider the costs and benefits of the research effort 4. Gather relevant data from secondary or primary sources, or both 5. Analyze, interpret, and summarize the results 6. Effectively communicate the results to decision makers

Research steps are similar for all countries

Variations and problems can occur in implementation
Differences in cultural and economic development

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Defining the Problem and Establishing Research Objectives

The major difficulty is converting a series of often ambiguous business problems into tightly drawn and achievable research objectives The first, most crucial step in research is more critical in foreign markets because an unfamiliar environment tends to could problems definition Other difficulties in foreign research stem from failures to establish problem limits broad enough to include all relevant variables

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Problems of Availability and Use of Secondary Data

U.S. government provides comprehensive statistics for United States Marketing data not matched in other countries
Quality Quantity Exceptions are Japan and several European countries

Continuing efforts to improve data collection

United Nations Organization for Economic Cooperation and Development (OECD)

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Availability and Reliability of Data

Most countries simply do not have governmental agencies that collect on a regular basis the kinds of secondary data readily available in the U.S. Researchers language skills impede access to information
Requires native speaker of language

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
Less-developed countries prone to optimism Willful errors Adjusted reporting

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Comparability of Data
Issues with data (especially in less developed, countries)
Data can be many years out of date Data 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

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Validating Secondary Data

Questions to judge the reliability of secondary data sources
Who collected the data? Would there be any reason for purposely misrepresenting the facts? For what purposes was the data collected? How was 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
An effective and often-used way of judging validity

The availability and accuracy of recorded secondary data increase with level of economic development
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Gathering Primary Data Quantitative and Qualitative Research

Primary data
Data collected specifically for the particular research project

Quantitative research
Usually a large number of respondents Respondents answer structured oral or written questions using a specific response format (such as yes/no) or to select a response from a set of choices Responses can be summarized in percentages, averages, or other statistics
Toto a Japanese firm with the premiers quantitative research on bathroom and toilet technology

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Gathering Primary Data Quantitative and Qualitative Research

Qualitative research
If questions are asked, they are almost always open-ended or indepth Seeks unstructured responses that reflect the persons thoughts and feelings on the subject

Qualitative research interprets people in the sample Qualitative research is helpful in revealing the impact of sociocultural factors on behavior patterns and in developing research hypotheses
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Problems of Gathering Primary Data

Hinges on the ability of the researcher to get correct and truthful information that addresses research objectives Problems in international marketing research
Stem from differences among countries Range from inability or unwillingness of respondents to communicate their opinions Inadequacies in questionnaire translation

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Ability to Communicate Opinions

Formulating opinions about a product or concept
Depends on the respondents ability to recognize the usefulness of such a product of concept Product or concept must be understood and used in community

The more complex the concept, the more difficult it is to design research that will help the respondent communicate meaningful opinions and reactions
Gerber has more experience in trying to understand consumers with limitations
Babies can neither answer questions or fill out questionnaires

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Willingness to Respond
Cultural differences provide best explanation for unwillingness or inability of many to respond to research surveys The role of the male, the suitability of personal gender-based inquiries, and other genderrelated issues can affect willingness to respond Less direct measurement techniques and nontraditional data analysis methods may also be more appropriate

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Sampling in Field surveys

Problems in sampling stem from the lack of adequate demographic data and available lists from which to draw meaningful samples Affected by a lack of detailed social and economic information
No officially recognized census information No other listings that can serve as sampling frames Incomplete and out-of-date telephone directories No accurate maps of population centers

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Language and Comprehension

The most universal survey research problem in foreign countries is the language barrier Literacy poses yet another problem Marketers use three different techniques to help ferret out translation errors ahead of time
Back translation Parallel translation Decentering

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Multicultural Research a Special Problem

As companies become global marketers and seek to standardize various parts of the marketing mix across several countries, multicultural studies become more important Multicultural research involves dealing with countries that have different languages, economies, social structures, behavior, and attitude patterns In some cases the entire research design may have to be different between countries to maximize the comparability of the results
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Research on the Internet a Growing Opportunity

One billion users in more than 200 countries
One-sixth in U.S.

International Internet use is growing almost twice as fast as American use Uses for Internet in international research
Online surveys and buyer panels Online focus groups Web visitor tracking Advertising measurement Customer identification systems E-mail marketing lists Embedded research Observational research
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Estimating Market Demand

To assess current product demand and forecast future demand
Requires reliable historical data

When the desired statistics are not available, a close approximation can be made
Using local production figures plus imports, with adjustments for exports and current inventory levels

Two methods of forecasting demand

Expert opinion
The key in using expert opinion to help in forecasting demand is triangulation

Analogy
Assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country

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Personal Computer and Mobile Phone Diffusion Rate (per 1,000 people)
Exhibit 8.2
Personal Computer Mobil Phone

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Problems in Analyzing and Interpreting Research Information

Accepting information at face value in foreign markets is imprudent The foreign market researcher must posses three talents to generate meaningful marketing information
1. The researcher must posses a high degree of cultural understanding of the market in which research is being conducted 2. A creative talent for adapting research methods is necessary 3. A skeptical attitude in handling both primary and secondary data is helpful

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Responsibility for Conducting Marketing Research

A company in need of foreign market research can rely on an outside foreign-based agency or domestic company with a branch in that country A trend toward decentralization of the research function is apparent
Local analysts appear to be able to provide information more rapidly and accurately
Control rests in hands closer to the market

Disadvantage lies in ineffective communications with homeoffice executives

Unwarranted dominance of large-market studies in decisions about global standardization

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Responsibility for Conducting Marketing Research

A comprehensive review of the different approaches to multicountry research suggests
Ideal approach is to have local researchers in each country, Close coordination between the client company and the local research companies

Two stages of analysis are necessary

Individual-country level Multi-country level

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Communicating with Decision Makers

Gathered information must be given to decision makers in a timely manner Decision makers should be directly involved not only in problem definition and questions formulation, but also in the fieldwork Even when both managers and customers speak the same language and are from the same culture, communication can become garbled in either direction

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Managing the Cultural Barrier in International Marketing Research

Exhibit 8.3

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Summary
The basis objective of the market research function is providing management with information for more accurate decision making Customer attitudes about providing information to a researcher are culturally conditioned Foreign market information surveys must be carefully designed to elicit the desired data and at the same time not offend the respondents sense of privacy

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Summary
Many foreign markets have inadequate or unreliable bases of secondary information Three keys to successful international marketing research
The inclusion of natives of the foreign culture on research teams The use of multiple methods and triangulation The inclusion of decision makers, even top executives, who must on occasion talk directly to or directly observe customers in foreign markets

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