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Week11-InternationalMarketResearch-FeasibilityStudy7-Steps2.pptx

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FIGURE 2.1

Feasibility Study Research Project: The Research Process

Define Research Objectives

Create Research Brief

Screen Potential International Markets

Select Research and Data Sources

Design Data Collection Tools and Collect Primary Data

Organize and Analyze the Data

Present Conclusion and Applying the Research

Define Research Objectives

Identify Problems

Develop Questions

Identify Opportunities

STAGE

Starting with a Problem or Opportunity

Possible Questions When Addressing Specific Business Problems

Problem: Our export sales are dropping.

Question: Why are our export sales too low? How can we increase sales to international markets?

Problem: We are suffering from bad press regarding our international business practices.

Question: What is causing this negative image? How can we improve our international reputation?

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2 |

Starting with a Problem or Opportunity, continued

Questions might also be based on the desire to exploit new opportunities

Opportunity: Restrictions have been lifted on exporting meat products to the European Union.

Question: Should we export to the EU now that trading conditions have changed?

Opportunity: We have received emails from potential purchasers overseas.

Question: Is there enough demand for our product in international markets to justify exporting?

1 |

2 |

Starting with a Problem or Opportunity, continued

Dividing the Problem

What is the background to this problem or opportunity?

How does this problem or opportunity relate to the competitive environment?

Is the required research possible?

Examples of Good International Trade Research Objectives

Identify three international markets for the new software

Define the U.S. government requirements for electronic imports

Monitor the trends in downloaded music in India over the next 12 months

Situational Analysis

Key Research Issues for Exporters

When exploring feasibility for a new venture, research objectives should answer the following questions:

Which international opportunities meet or do not meet the organization’s strategic objectives?

What are the characteristics, pressures, trends and requirements in the target countries that meet the strategic objectives?

What are the preliminary priorities and risks associated with export trade opportunities?

Key Research Issues for Exporters, continued

Macroeconomic Data

Gross national product

(GNP)

Gross domestic product

(GDP)

Purchasing power parity

(PPP)

Household disposable income

Market size

Market potential

Market resources

Market sectors

Infrastructure

Urbanization

TABLE 2.2

Macroeconomic Research Objectives

GNP	Identify the country’s annual GNP for the last 5 to 10 years Identify the criteria used for measuring GNP, to verify accuracy and comparability
GDP and PPP	Identify GDP per capita for the last 5 to 10 years Estimate the PPP for the market compared to the domestic currency
Household disposable income	Identify national and regional household disposable incomes
Market size	Identify the country’s population, age distribution, population density and population distribution
Market potential	Identify country’s average income and income-distribution figures Examine patterns of consumption spending Examine patterns of industrial spending

Continued…

TABLE 2.2

Macroeconomic Research Objectives, continued

Market resources	Provide detailed information about topography, climate and natural resources of target country
Market sectors	Evaluate the degree of economic activity occurring in major economic sectors Track rate of change in market activity in major economic sectors
Infrastructure	Identify the safest and most reliable routes and modes Determine travel times from urban centres Assess reliability, costs and accessibility of business communications
Urbanization	Determine population density and demographics of major urban areas Identify average income and income-distribution figures for city workers

Cultural and Lifestyle Information

Involves several areas of research:

Material culture

Cultural preferences

Languages

Education

Religion

Ethics and values

Social organization

Material culture	Identify the percentage of the population that owns a car Identify the percentage of the population with access to Internet and wireless communication Determine affordability and availability of natural gas and electricity for households
Cultural preferences	Determine cultural taste preferences Identify common associations related to symbols and colours Identify cultural sensitivities that may impact product or service sales Describe societal roles and expectations
Language	Identify the national languages Identify the official languages Identify the rates of multilingualism

TABLE 2.3

Cultural and Lifestyle Research Objectives

Continued…

Education	Describe the level of technical education Identify the percentage of the population that attains a higher education Identify the percentage of women who attain higher education
Religion	Identify the main religions and the official religion Describe any influence or control religion has on behaviour that may affect sales of product or service
Ethics and values	Explore whether dealing with foreign traders is considered a suspect activity Identify the human rights record Describe environmental concerns
Social organization	Describe role of women in society Identify attitudes towards minority groups within the population Describe the extent of militarization

TABLE 2.3

Cultural and Lifestyle Research Objectives, continued

Situational Analysis

Political and Legal Information

Political risks that can be identified and evaluated through research:

Political instability

Discrimination against foreigners, foreign trade or foreign investment

Control over commerce

Weak legal protection for property and Intellectual Property rights

Legal business structures

Tax regimes

Situational Analysis

TABLE 2.4

Political Research Objectives

Political instability	Identify the stability of the current government and how frequently anti-government protests occur Identify popular support for existing regime Describe the strength and nature of any political opposition
Discrimination against foreigners, foreign trade or investment	Identify the general attitude and discriminatory policies in the market that hinder, or create barriers for, foreigners, foreign trade and foreign investment Identify key decision makers and their attitudes and preferences towards foreigners and foreign trade
Control over commerce	Describe any potential ethical issues that may arise because of business practices in the foreign market, e.g. corruption, bribery

Continued…

Situational Analysis

TABLE 2.4

Political Research Objectives, Continued

Weak or legal protection for property and intellectual rights	Identify if and how property rights and intellectual property rights are protected
Legal business structures	Describe the available forms of legal business structure in the target market Identify any effect of an organization’s legal structure on liabilities and taxes
Tax regime	Identify tax rates and reporting requirements Describe how taxes are calculated Describe how tax issues are adjudicated

Situational Analysis

Product or Service Potential

See Table 2.5 – Product or Service Potential Research Objectives

Research should consider:

Regulations and prohibitions

Sizes, weights and measures

Packaging preferences

Labelling

Pricing

Logos, design and colour

Quality

Preferred purchasing method

Warranties and service

Distribution considerations

Adapted from TABLE 2.6

Competitor Research Objectives

Describe the competitor in terms of

Location and structure

Key employees and their skill sets

Existing strategic partners

Main product or service offerings

Identify competitor’s typical and key customers

Describe competitor’s marketing strategies and activities

Identify competitor’s market share

Identify competitor’s suppliers

Identify if modifications are required to products or services

Key Research Issues for Importers

See Table 2.7 – Key Research Objectives for Importing

The main focus of the research objectives is on assessing operational issues related to the suitability of the supplier or partner, as well as the impact on the supplier’s or partner’s country on the business relationship.

Political and legal environment	State whether the export of the desired product, technology or service is restricted from the source country and whether import into the home country is prohibited or permitted Identify the safety standards that apply in the source country and state whether these are adequate for the importing country Describe issues with the political situation that could affect the security of the supply and access to it Identify whether counter-trade arrangements are required
Technological environment	Describe how the infrastructure in the country will affect communication with the supplier Determine whether data protection or cyber-security will be an issue when using the supplier
Marketing benefits	Explore the image and reputation the source country has in the organization’s home country: positive or negative? What impact will this have on your own corporate image?

TABLE 2.7

Key Research Objectives for Importing

Continued…

Macro-Level Source Country Attractiveness

Financial environment	Identify financial circumstances that could make it difficult for the importing organization to make payments Circumstances might include monetary policy or the banking infrastructure
Labour environment	Describe the current and expected labour market conditions in the source country Is there adequate transparency and accountability to ensure shareholders will be appeased and public perception will be positive?

TABLE 2.7

Key Research Objectives for Importing, Continued

Continued…

Macro-Level Source Country Attractiveness

Key Research Objectives for Importing, Continued

Domestic market conditions	Identify whether there are tariffs or non-tariff barriers Assess whether the product technology is compatible with required standards
Supplier selection	Identify all suppliers that possess the product, process or service that the organization can use Assess reliability Assess skills gap Describe supplier’s previous experience
Physical selection	Describe how distribution and transportation facilities will affect delivery capacity and delivery times

Market Potential and Supplier Attractiveness

TABLE 2.7

Continued…

Key Research Objectives for Importing, Continued

Management of the business operation on an ongoing basis

Identify product or service adaptations that must be met to meet rules and requirements of the importing country Identify labelling standards Describe training procedures that must be in place for the employees

Internal Suitability

TABLE 2.7

Key Research Issues for Importers, continued

Macro-Level Source Country Attractiveness

Organizations require a rapid evaluation of how the environment in the source country will affect the trading opportunity.

Political and legal environment

Technological environment

Marketing benefits

Sociocultural environment

Financial environment

Labour environment

When trade is possible with a country, organizations must gather information that can be used to find suitable suppliers

Domestic market considerations

Supplier selection

Physical infrastructure

Key Research Issues for Importers, continued

Market Potential and Supplier Attractiveness

Once a supplier is selected, the organization needs to understand the implications of the activity for its business before a final trade strategy can be developed

Import directly from supplier or hire a foreign agent?

Key Research Issues for Importers, continued

Internal Stability

Research Issues for Foreign Direct Investment

Ownership-Based Investments

Greenfield

Brownfield

Acquisition

Joint venture

Merger

Investments Based on Strategic Alliances

Supplier alliances

Research consortium

Co-marketing alliance

Co-production alliance

Bidding consortium

Types of Research Requirements

See Table 2.8 – Location-Oriented Research Considerations

Geographic considerations

Legal considerations

Financial considerations

Regulatory considerations

Employment considerations

Relocation considerations

Partner-Based Research Requirements

Researchers must gather information that includes:

Size

Financial stability

Product and service orientation

Market orientation

Intellectual Property

Relationships

Management and personnel

Reputation

Strategic direction

Corporate culture

Create Research Brief

STAGE

Background Information

Timelines

Estimated Budget

ELEMENTS IN A

RESEARCH BRIEF

Organizational background information

Business problem or opportunity background

The reason for research

The actions to be taken with research information

The deadline

The budget

Estimating Budgets

Determine your overall project budget

Review what’s already available

Know what you are in for

Set realistic expectations

Important Considerations in

International Trade Research

Multiple markets need to be researched

Many small markets

Methodological challenges

Infrastructure challenges

Cultural differences

Security challenges

UNIT 3

Situational Analysis: Determining Current State and Opportunity for Growth

Screening Potential International Markets: Narrowing the Focus

STAGE 3: Screen Potential International Markets

Secondary and Primary Research

Screen Potential International Markets

STAGE

Market Size and Growth

Market Accessibility

Business and Political Environment

Market Size and Growth

Situational Analysis

Market Accessibility

Situational Analysis

Business and Political Environment

Situational Analysis

Secondary and Primary Research

Examples:

An organization’s own publications

Government publications

Competitor’s websites and publications

Newspapers, journals, magazine articles

Online Resources for:

Market and business conditions

Country reports

Organizational information

Directories

Judging the Accuracy of Online Information

GUIDELINES

Situational Analysis

Prioritizing Markets for Further Investigation

Largest number of potential customers

Fewest potential barriers (legal, political, financial)

Fewest competitors

Most stable political environment

Highest growth economy

UNIT 4

Situational Analysis: Determining Current State and Opportunity for Growth

Selecting Research Design and Conducting Secondary Research

STAGE 4: Select the Research Design and Data Sources

Types of Research

Data Sources

About Secondary and Primary Research

Conducting Secondary Research

Select the Research Design

and Data Sources

STAGE

Primary Sources

Qualitative (Exploratory)

Secondary Sources

Quantitative (Causal)

RESEARCH DESIGN WILL

DEPEND ON THE:

Secondary information available/ need for primary research

Type of data required

Quantitative

Qualitative

Type of research needed to address objectives

Budget and timelines allotted for the research

Types of Research

Types of Research, Continued

Quantitative and Qualitative Research

Quantitative: information that can be analyzed numerically

Qualitative: descriptive information

Exploratory, Descriptive and Causal Research

Exploratory: collecting information informally to gain insights

Descriptive: semi-structured research involving collection of data to explain current market condition, demographics or current business problem

Causal: attempting to determine whether one market variable impacts another

Continuous / Ad Hoc Research

Data Sources

Reliability of the sources

Comprehensiveness of the sources

Comparability of the sources

Cost of obtaining data from the sources

TABLE 4.1

How Required Information Can Influence Research Design

Types of Information Required	Research Required
The number of units of a product sold in a potential new market over the past five years. (Quantitative data that is likely to be available in some form.)	Secondary research. For example, a market research report on a trade report obtained online.
Number of customers in a new target market who are dissatisfied with a service the company is considering replacing. (Quantitative data that is unlikely to be available.)	Primary research. For example, a survey asking a sample selection of customers if they are satisfied or dissatisfied.
The features of a care that are most appealing to consumers in a new international market. (Qualitative data that might be available in some form.)	Secondary research into the characteristics of the best-selling cars in the market if available, followed or enhanced by primary research to determine customer preferences.
The regulations for selling pharmaceutical products in a potential new market. (Quantitative data that might be available in some form.)	Secondary research. For example, government regulations posted online.

About Secondary and Primary Research

Advantages and Disadvantages

of Secondary Data

Time scales

Definitions

Classifications

Privacy issues

Measurement error

Source bias

Reliability

Advantages and Disadvantages

of Primary Data

Current

Specific research objectives

Information is confidential

Slower collection timeline

Can generate results quickly

Difficult to collect

Can be expensive

Conducting Secondary Research

Secondary data should be investigated when:

Cheaper and faster to collect than primary data

Fulfills the market research objectives without the need for primary research

Its collection can help improve a researcher’s understanding of a marketing problem and lead to better design for the primary research

Adapted from TABLE 4.2

Secondary Data Sources

Internal Records and Information from Internal Expert
Source	Sample Data
Sales and accounting records	Baseline comparisons of trends, costs and target customers
Distributors and customers	Buyer expectations and purchase patterns
Employees with experience in the target market	Opinions about general conditions, cultural impact and business methods

Adapted from TABLE 4.2

Secondary Data Sources, Continued

External Sources and Experts
Source	Sample Data	Source	Sample Data
Trade or industry associations	Practices, trends and conditions related to the organization’s expertise	Various websites	Fast access to publications, directories, yearbooks, statistics and market research reports
Non-government associations (NGOs), universities and trade-related businesses	Comparative market, population and demographic statistics, competitor information and credit information	Government departments and agencies	Market assessment publications, trade statistics, trade regulations and export and import controls
Publications, directors and yearbooks	Market statistics, general information about trends, interests, demands and regulations, sources of information and advice	Representatives of the target country	Trade and market conditions specific to the country and cultural considerations

Internal Sources

Online Search

Public Documents

Semi-Private Sources

Private Sources

Adapted from FIGURE 4.1

Tips for Conducting Secondary Research

UNIT 5

Situational Analysis: Determining Current State and Opportunity for Growth

Collecting Data for

Primary Research

STAGE 5: Design Data Collection Tools and Collect Primary Data

Deciding Who Will Collect the Primary Data

Collecting Primary Data Through Focus Groups

Collecting Primary Data Through Questionnaires and Surveys

Collecting Primary Data Through Interviews

Collecting Primary Data Through Observation

Visiting the Target Market

Sampling Plans for Primary Research

Design Data Collection Tools

and Collect Primary Data

STAGE

Surveys

Questionnaires

Focus Groups

Observation

Deciding Who Will Collect Primary Data

Internal Researchers

Deep understanding of organization

Accessible

Knowledge gained through research will add to company’s knowledge base

Costs as part of worker’s responsibility

Understand organization’s research preferences

External Researchers

Can select qualified agency (e.g. right skills, expertise, knowledge)

Can negotiate time frames

No inherent bias

FIGURE 5.1

Finding a Research Agency

Collecting Primary Data

Through Focus Groups

Recruiting Focus Groups

Running the Focus Group

Focus Group Techniques

Virtual Focus Groups

Focus Groups in International Trade

Collecting Primary Data

Through Questionnaires and Surveys

Designing Structured Questionnaires

Designing Unstructured Questionnaires

Designing Semi-Structured Questionnaires

Adapted FIGURE 5.2

Process for Designing a Questionnaire

Identify needs and

delivery method

Translate into rough

questionnaire draft

Check suitability of questions

Revise draft questionnaire

Pretest rough draft

Make suggested changes

Prepare final questionnaire

Do questions match

data needs?

Is the wording clear

and unbiased?

Is the sequence logical

and objective?

Is the layout clear and

encouraging to response?

Does the delivery method

match research needs?

Another pre-test: Are

there any last questions?

TABLE 5.1

Questionnaire Administration

TABLE 5.2

Comparison of Survey Delivery Methods

Method	Cost / Time	Data Collected	Comments
Face to Face	Most expensive method Can involve substantial travel Researchers can control time taken to collect data	Researchers can collect large amounts of data Researchers can ask complex questions Researchers can clarify answers and use non-verbal cues	Method requires well-trained interviewers fluent in local language, and understand local customs High cost can limit sample size and geographic coverage
Telephone	Moderate cost Enables shortest elapsed time for each interview	Researchers can clarify answers Researchers collect smaller amounts of data Researchers must limit complexity of questions	Sample is limited to those with current and listed telephone number Much easier for respondent to end interview than with a survey taken in person

Method	Cost / Time	Data Collected	Comments
Paper Mail	Low to moderate cost Involves the longest wait for results Researchers often need a second survey to follow up	Researchers have less ability to ask long or complex questions Researchers cannot clarify unclear responses	Method requires simple, clear and brief questions Respondents can easily choose not to answer the survey Response to mail surveys is extremely low Researchers can cover a wide geographic area and a large sample
Email and Internet	Very low cost Response times are often rapid	Researchers have less ability to ask long or complex questions Researchers cannot clarify unclear responses, but can use an e-interviewer	Questions must be written in short format In some markets, Internet access might be limited Can cover very large global area

TABLE 5.2

Comparison of Survey Delivery Methods, Continued

Improving Response Rates

Notify respondents in advance

If sent by mail:

Send first class

Include postage paid envelope

Cover letter should ‘ask for help’ and indicate confidentiality

Make it easy to read and complete

Make it as concise as possible

Offer incentives

Send reminders

Adapted from TABLE 5.3

Factors to Consider in International Markets

Language	Literacy	Culture	Infrastructure
Care must be taken not to assume that culture and language are the same throughout the country Costs of translating a questionnaire and interpreting data must be factored into research design	Literacy levels of a country influence the response to surveys High literacy = higher confidence that respondent understands and will complete survey Varied literacy levels may affect return rates	In some countries, privacy is closely guarded There might be reluctance to respond to questions in writing, especially in countries with history of censorship or other restrictions	Supporting infrastructure can affect efficiency and validity of studies, e.g. Telephones restricted by social or income class lead to biased results Irregular mail delivery can affect response time Contact information (e.g. addresses, phone numbers) may be unavailable or outdated In virtual setting, participants must have familiarity with hardware and software used and have necessary infrastructure

Situational Analysis

Collecting Primary Data

Through Interviews

Preparation for Interviews

Interviews in International Trade Research

Language and pronunciation issues

Cultural differences

Communication issues

Body language

Collecting Primary Data

Through Observation

Unobtrusive

Well suited for quantitative and qualitative data

Useful for:

Recording acceptable behavior

Testing distribution methods

Testing acceptance of product or packaging

Many forms, e.g.:

‘Silent shopper’ (act as a member of the public who is buying or inquiring about a product or service)

Use of video cameras

Online observation

Visiting the Target Market

Virtual Trade Show Options

Preparing for an In-Person Market Visit

Standard business hours and dates, public holidays

Means of transport

Materials required for meetings

Business and social etiquette

During the Visit

Possible distribution channels

Pricing, product or service characteristics

Typical consumer behaviour in the market

Competitor’s promotional activities

Standard packaging

Industry standards and regulations

Costs of applications and testing

Industry statistics

INFORMATION TO KNOW

Sampling Plans for Primary Research

Who Will be Researched?

Identifying the population for the study or overall group

Determining the specific characteristics of the sample group

Selecting the tool or method to be used

What Method will be Used?

Probability based method

Non-probability based method

Adapted from TABLE 5.4

Source: Tull, Donald and D Hawkins, “Marketing Research: Measurement and Method”

Use of Sampling Methods

Criteria	Non-probability	Probability
What kind of information is needed?	Average use or proportion who prefer option 1 over option 2	Totals that can be projected to the entire population, such as market share
What kind of accuracy is needed?	Trends and general figures	Highly accurate estimates with little tolerance for error
How large are non-sampling errors to be?	Large prospects for errors in respondent selection and non-responses due to limited access	Little prospect, meaning errors due to poor sample selection can have large impact
How much variation is there in characteristics of the population?	Little variation, so unlikely to select a highly non-representative sample	High variation (e.g. a country with many religions)
What is the expected cost of the sampling errors?	Low cost if the data has high or low accuracy	High cost for low accuracy

UNIT 6

Situational Analysis: Determining Current State and Opportunity for Growth

Organizing Data and Presenting Conclusions

STAGE 6: Organize and Analyze the Data

Assess the Quality and Reliability of the Data

Sort and Classify the Data

Perform Statistical Tests and Analyze the Results

STAGE 7: Present Conclusions and Apply the Research

Ongoing Research and Global Market Information Management Systems

Organize and Analyze the Data

STAGE

Assess the quality and reliability of the data

Sort and classify the data

Perform statistical tests and analyze the results

Assess the Quality and Reliability of the Data

Consider if data source is:

Thorough in coverage

Detailed enough

Relevant

Up to date

Restrictive, e.g. confidentiality issues

Collected using appropriate methodologies

Accurate

Internally consistent

Sort and Classify the Data

Sort data to eliminate material that is not needed and to classify similar types of data into meaningful categories

Identify trends and formulate preliminary conclusions

Perform Statistical Tests and Analyze the Results

Analyze collated data using someone experienced in statistical analysis

Draw conclusions about what the research means

FIGURE 6.1

Sample Questionnaire

TABLE 6.1

Sample Frequency Tabulation

Perform Statistical Tests and Analyze the Results, Continued

Coding Qualitative Data

Transcribe notes, interviews, recordings

Organize/sort out

Convert into coded numerical figures

Enter data into database

Identifying Types of Data

Nominal: categorized by name

Ordinal: data in which numbers have a meaning

Interval: rating items on a scale

Ratio: shows how respondents’ answers compare statistically with other respondents’ responses

Adapted from TABLE 6.2

Comparison of Measures to Calculate Central Tendency

Measure	How to Calculate	Uses and Comments
Mean	Add the value of each response and divide by the total number of responses	The mathematical mean is the average of a group of numbers. Most data provided by secondary sources is in the form of a mean or average figure. Typically used to draw conclusions about the actions of a group When calculated in units, multiply the mean by the total population size to estimate a total number of units (e.g. market size) Mean can be skewed if some responses are much higher or lower than majority
Median, or the value of the middle term	Arrange responses from lowest to highest and find the value in the middle, with one half of responses above and one half of responses below	If extreme values exist, median can be a better measure
Mode, or the most frequent response	Certain values might appear repeatedly in a data series; the mode identified the value or values that occur most often	Mode is most useful to identify the most frequent amount, purchase or demand Also useful where two definite categories of majority response

Situational Analysis

Perform Statistical Tests and Analyze the Results, Continued

Sampling Error

Depends on the size of the population being studied

Depends on the variability of the characteristics

Usually gets smaller as the sample size increases

Can be accounted for and reduced using a sample gain

Statistical Significance

Significance testing indicates whether the difference between figures from different samples or sub-samples is a true difference or can be explained by chance fluctuations

INTERPRETING DATA

Identify key findings and relate them to research objectives

Group data against objectives; identify patterns

Confirm accuracy and completeness of work

Check for bias

Present Conclusions and

Apply the Research

STAGE

How research objectives relate to the business problem or question

Whether the findings were to be expected or whether they were surprising

Typical Written Report

Title page

Table of contents

Executive summary

Introduction

Identification of research objectives and methodology

Identification of strategic and tactical issues

Findings

Recommendations and action plan

Appendices

Bibliography

FIGURE 6.2

Presenting Numerical Data

PIE CHART Displaying Search Engine Market Breakdown in China by Revenue

FIGURE 6.3

Presenting Numerical Data, Continued

SPIDER or TARGET CHART Showing Satisfaction with Online Supplier

FIGURE 6.4

Presenting Numerical Data, Continued

BAR CHART Comparing Product Satisfaction by Country

FIGURE 6.5

Presenting Qualitative Data

FLOW DIAGRAM Showing a Manufacturing and

Distribution Process

Conducting the Presentation

Objectives

Key findings

Method

Recommendations

Critical success factors

Ongoing Research and Global Market

Information Management Systems

To be truly useful, market research should be ongoing: systematic gathering of information informs decision making

Information management systems (IMS) help monitor external environment for emerging trends or events

Key factors affecting international marketing decisions:

Economic factors

Political-legal dimensions