International Marketing REPORT
ibrhim4
week_6_-_international_marketing_research.pptxWeek 6: International marketing research
Prepared by Alistair Hodgson & Robin Roberts
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Key Themes
After studying this chapter you should be able to:
Understand how to formulate a high-quality research problem definition
Identify secondary international marketing research sources
Identify the need for primary international marketing research
Key Themes
Perform a market size assessment
Use new market information technologies
Understand the issues involved in managing international marketing research
This week’s topic is very unlike any of the other topics in the course – focus is more practical
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Scene Setter: Gauging the market at a distance
Sources such as the CIA World Factbook and World Bank can be incredibly useful for key factual data and information.
However, raw data doesn’t always reflect the reality in a country. How can data be used to develop marketing strategies?
Statistics often differ – even for basic information, such as population. Can be based on different measures for a particular area. Those responsible for collection can also make mistakes.
Overview
There is a six step approach to international marketing research
Follows a similar pattern to domestic market research
but the international context gives rise to six problems specific to international marketing research
Refer to section: Overview
Given the complexity of the international marketplace, solid marketing research is critical for making many international marketing decisions.
Skipping the research phase in the international marketing decision process can often prove to be a costly mistake.
Most cultural blunders, for example, stem from inadequate marketing research.
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International marketing research process
Define the research problem(s)
Develop a research design
Determine information needs
Collect the data (secondary and primary)
Analyse the data and interpret the results
Report and present the findings of the study
How different is this process compared to domestic market research?
Refer to section: International marketing research process
International marketing research is needed for different reason at different stages of the internationalisation process.
Initially, companies require information to assess the market entry, opportunities and risks.
Once these decisions are made, marketers can then look at their marketing mix and decide whether to make any changes to any marketing mix element for the new country.
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International marketing research process
Major challenges
Complexity of research design
Due to environmental & cultural differences
Lack and inaccuracy of secondary data
As already discussed
Time and cost requirements to collect primary data
Refer to section: International marketing research process
The major challenges that international marketing researchers need to confront are:
Complexity of research design due to environmental and cultural differences
Lack and inaccuracy of secondary data
Time and cost requirements to collect primary data
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International marketing research process
Coordination of multi-country research efforts and data collection efforts
Difficulty in establishing comparability across multi-country studies
Secondary data often has different measurements
Primary research questions might not translate effectively
Different practical considerations
Legal aspects of research; cultural norms guiding the sharing of information with strangers
Refer to section: International marketing research process
(continued) The major challenges that international marketing researchers need to confront are:
Coordination of multi-country research and data collection efforts
Difficulty in establishing comparability and equivalence across multi-country studies
Different practical considerations (such as legal aspects of conducting research and the culture’s norms about sharing opinions with strangers)
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International marketing research process
Figure 6.1
Refer to section: International marketing research process
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Research problem formulation
Start with a precise definition of the research problem
The foundation of a good market research study
Difficulties arise due to lack of familiarity of the foreign environment & SRC (self-reference criterion)
Preliminary research often conducted to more-effectively define your problem (research agencies, i.e. Nielsen, often engaged to do this)
Refer to section: Research problem formulation
Any research starts off with a precise definition of the research problem(s) to be addressed.
The cliché of a well-defined problem being a half-solved problem definitely applies in an international setting.
Elaborate data analysis tools will not compensate for incorrect problem definitions.
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Secondary marketing research
Definition
Data that have already been collected for some other purpose
A range of sources includes:
the internet
government sources
e.g. Austrade www.austrade.gov.au
corporate
directories both online and offline (we’ll look at some of these in today’s tutorial)
Refer to section: Secondary marketing research
Assessing information needs is the next step after defining the research problem and developing a research design.
Some pieces of information will already be available from existing courses.
That sort of information is referred to as secondary data.
If the information does not exist, the organisation will need to collect the data.
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Secondary marketing research
Problems with secondary data sources
accuracy of data
age of data
A country with a ten-year schedule for census data will ultimately have an out-of-date record of the nation
reliability of data over time
Refer to section: Secondary marketing research
In the international market scene, some of the information sought by market researchers does not exist.
When data are missing, the researcher needs to infer the data by using proxy variables or values from previous periods.
Even if the datasets are complete, the researcher will usually encounter many problems.
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Secondary marketing research
comparability of data (triangulation can be used in response – use of multiple data sources)
Conceptual/functional equivalence problems (China vs. Australia and use of bicycles). This changes over time though.
lumping data
Statistics often group together in broad categories
Refer to section: Secondary marketing research
In the international market scene, some of the information sought by market researchers does not exist.
When data are missing, the researcher needs to infer the data by using proxy variables or values from previous periods.
Even if the datasets are complete, the researcher will usually encounter many problems.
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Primary marketing research
Quantitative data
data that represents an attitude or opinion by assigning a number that can be statistically analysed
i.e. Likert scale provides scaled responses
Qualitative data
data that describes attitudes, opinions and motivations in the words of each respondent
Refer to section: Primary marketing research
Secondary data will rarely prove satisfactory for market research studies, and it will be necessary to collect primary data specifically for the purpose of the research project.
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Collecting primary data
Primary data can be collected in three ways:
Focus groups
Survey methods
marketing research
questionnaire design
construct equivalence
measure equivalence
sampling
Refer to section: Primary marketing research
Focus group – before embarking on large-scale quantitative market research projects, most organisations will conduct exploratory research. One of the most popular tools at this stage is the focus group.
Survey research - Questionnaires are the most common vehicle for gathering quantitative data in market research.
Survey research begins with the design of a questionnaire. The next step is to develop a sampling plan to collect the data. Once these two tasks have been accomplished, the researcher moves to the next phase, the physical collection of the information through the questionnaires. However conducting new marketing research internationally has many challenges from a researchers point of view.
Note that the third method – test markets – is explored further in Chapter 9 on new product development.
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Primary marketing research
Focus groups
exploratory
loosely structured free flowing discussion among a group of target customers facilitated by a moderator
helps with new product development
testing new product concepts
precursor to quantitative research
Refer to section: Primary marketing research
The rules for designing and running focus groups in a domestic marketing setting also apply for international market research projects.
Hiring well trained moderators is critical in conducting focus groups for international market research.
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International issues for focus groups
Cultural sensitivity
Nature of group dynamics
individual versus collective
Japanese and Chinese more collective while NZ and Australia more individualistic
How would this affect the outcome of a focus group?
Non-verbal cues are even more important than in domestic market research
Refer to section: Primary marketing research
To stimulate group dynamics in an Asian setting, the following steps should be taken:
Be precise in recruitment to ensure group homogeneity and ease of bonding.
Hire moderators who are able to develop group dynamics quickly through warm-up activities, humour, group-playing
When analysing and interpreting focus group findings, concentrate on the nonverbal cues, e.g. gestures and voice intonations.
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Primary market research
Survey methods for cross-cultural marketing research
questionnaire design
most popular form of gathering data in quantitative market research
cross cultural research does present problems
comparability of survey results across borders could be an issue
Refer to section: Primary marketing research
By far the most popular instrument to gather primary data is the questionnaire. Preparing questionnaires for international market research poses tremendous challenges.
Just as in domestic marketing, care should be exercised with the wording and sequencing of the questions.
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Primary market research
Survey methods for cross-cultural marketing research
construct equivalence
the degree to which marketing constructs have the same meaning and significance across cultures
e.g. bicycles mean different things in different countries and this needs to be reflected in the construction of the research device
recreation in Australia
transportation in China
Refer to section: Primary marketing research
Construct equivalence consists of three aspects: functional, conceptual and category equivalence.
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Primary market research
Survey methods for cross-cultural marketing research
measure equivalence
calibration equivalence
US is imperial (pounds, inches)
Thailand is metric (metres, litres)
translation equivalence
translation from one language to another
embarrassing mistakes can occur…
Refer to section: Primary marketing research
Three aspects of the way in which a concept is measured are important: calibration equivalence, translation equivalence and metric (scalar) equivalence.
Calibration equivalence the equivalence of measurement units between countries.
Translation equivalence the degree to which the translation of the instrument from one language into another retains the meaning of the questions asked and concepts used.
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Primary market research
A couple of examples:
Refer to section: Primary marketing research
Three aspects of the way in which a concept is measured are important: calibration equivalence, translation equivalence and metric (scalar) equivalence.
Calibration equivalence the equivalence of measurement units between countries.
Translation equivalence the degree to which the translation of the instrument from one language into another retains the meaning of the questions asked and concepts used.
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Primary market research
Survey methods for cross-cultural marketing research
measure equivalence (cont’d)
parallel translation
a process in which a document is translated independently by a number of translators and the translations compared to reconcile differences
scalar (metric) equivalence
the degree to which scores from subjects of different countries have the same meaning and interpretation
Likert scale relevant here again
Refer to section: Primary marketing research
Parallel translation – a process in which a document is translated in dependently by a number of translators and the translations compared to reconcile differences.
Scalar or metric equivalence – the degree to which scores of difference countries have the same meaning and interpretation.
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Primary market research
Survey methods for cross-cultural marketing research
Sampling (think back to the video focused on Columbis, Ohio)
who should be surveyed?
how many people should be surveyed?
how should prospective respondents be chosen?
not all countries are homogenous
What is ‘Chinese’?
China has more than a dozen ethnic minorities
Some countries have very distinct demographics
Refer to section: Primary marketing research
To collect data, the researcher has to draw a sample from the target population.
A sampling plan basically centers around 3 issues:
Who should be surveyed? What is the target population (sampling unit)?
How many people should be surveyed (sample size?)
How should prospective respondents be chosen from the target population (sampling procedure)?
Decisions on each of these issues will be driven by budget constraints, desired reliability and time requirements.
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Primary market research
Torbay (UK) London
Refer to section: Primary marketing research
To collect data, the researcher has to draw a sample from the target population.
A sampling plan basically centers around 3 issues:
Who should be surveyed? What is the target population (sampling unit)?
How many people should be surveyed (sample size?)
How should prospective respondents be chosen from the target population (sampling procedure)?
Decisions on each of these issues will be driven by budget constraints, desired reliability and time requirements.
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Primary market research
Survey methods for cross-cultural marketing research
collecting the information
there are a number of biases
courtesy bias
desire to be overly polite (common in Asia & the Middle East)
social desirability bias
subjects attempt to reflect a certain social status in their response
Refer to section: Primary marketing research
Once the questionnaire design and sample plan are completed, the data needs to be collected in the field.
This field will be covered with landmines, some of them fairly visible, others invisible.
Primary data collection may be hindered by respondent and/or interviewer related biases.
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Primary market research
Survey methods for cross-cultural marketing research
collecting the information (cont’d)
redundancy
repetition of survey questions in different ways to allow for robustness and cross-checking
This is actually beneficial
ethnographic research
researchers embed themselves in the community they are studying
Usually more accurate but involves personal dedication & sacrifices
Refer to section: Primary marketing research
Redundancy repetition of survey questions in different ways to allow for robustness and cross checking.
Ethnographic research a research process where the investigator, usually an anthropologist, embeds themselves in the community they are studying.
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Market size assessment
Determining the potential of a market is one of the key drivers of international market research
There are several methods:
analogy method (picking a market at the same stage of economic development as the country of interest)
the trade audit
the chain ratio method
cross-sectional regression analysis
All are useful when there is very little data available or the quality of data is questionable
Refer to section: Market size assessment
When deciding whether to enter a particular country, one of the key drivers is market potential.
In most developed countries, a fairly accurate estimate of the market size for any particular good is easily obtainable.
For many frequently purchased consumer goods, information suppliers such as Nielsen are able to give an up to date estimate of category volume and market shares based on scanning technology.
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Market size assessment
Analogy method
comparison of a similar product in a similar environment/country
Example in the textbook of estimating Blu-ray player market size in a country where this is not known.
Looking for an estimate for Ukraine, data on Poland is used. This is determined by looking at the relationship between Plasma/LCD Tv sales in Poland in comparison with Blu-ray player sales. The relationship between these two figures in Poland can be extrapolated for use in Ukraine (where this figure isn’t known)
Poland selected on the basis of similar economic and demographic characteristics
Refer to section: Market size assessment
Analogy method – a market size estimate based on the comparison of a similar product in a similar environment.
Trade audit – a market size estimate based on comparison between locally produced products and imports and exports.
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Market size assessment
Trade audits
estimate based on local production and imports/exports
Market size in country A = Local production + imports – exports
Inventory levels need to be considered, though acquiring data on these is difficult
Refer to section: Market size assessment
Analogy method – a market size estimate based on the comparison of a similar product in a similar environment.
Trade audit – a market size estimate based on comparison between locally produced products and imports and exports.
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Market size assessment
Chain ratio method
estimating market size based on fine-tuning broad estimates
i.e. looking at the potential market for nicotine substitute products
General Population > Population of 15-64 year olds > Percentage of smokers in this group > possible additional chains?
Cross-sectional regression analysis
relating the issue you are interested in to a set of ‘predictor variables’ > can determine which predictor is most significant
Refer to section: Market size assessment
Chain ratio method – a method of estimating market size based on a series of percentages to fine tune an exceptionally broad estimate into a more meaningful number.
Cross sectional regression analysis – can be used to produce market size estimates. With regression analysis, the variable of interest is related to a set of predictor variable.
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New market information technologies
Point-of-sale store scanner data
the Swiss supermarket chain Metro can monitor shopper trends in their Hanoi store
Data is communicated easily and quickly
Consumer panel data
collecting data from a range of consumers on a continuous basis
what to do when Japanese supermarket chains are not very cooperative?
ask consumers to collect it in their homes
Refer to section: New market information technologies
Point of sale (POS) store scanner data - Organisations such as Nielsen, obtain sales movement data from the check out scanner tapes of retail outlets.
Consumer panel data – Marketing research organisation such as Nielsen have consumer panels who record their purchases.
There are two approaches to collecting household level data.
Under the first approach, panel members present an id card when checking out at the case register.
The other, occurs through scanning the shopping items ‘at home’. The home scanning method is favoured in Japan.
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New market information technologies
Figure 6.5
Refer to section: New market information technologies
ACV = All Commodity Volume
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Managing international marketing research
There are a number of issues the international marketer needs to consider:
selecting a research agency
global or home grown?
coordination of multi-country research
who is responsible?
head office or each of the regional offices
ethical research considerations
accidentally misrepresenting the nature of the study
Refer to section: Managing international marketing research
International marketing research projects have to cater to the needs of various interest groups: the client, the research organisation, the research subject and the general public.
Different requirements will lead to tension among the stakeholders.
Two important issues in managing international marketing research are :
Who should conduct the research project
Coordination of international marketing research projects
The role of ethics in the research process should be taken into consideration.
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Summary
You should now have an understanding of:
How to formulate a high-quality research problem definition
How to identify secondary international marketing research sources
Identifying the need for primary international marketing research
Refer to header: Summary
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Summary
How to perform a market size assessment
New market information technologies
The issues involved in managing international marketing research
Refer to header: Summary
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