international marketing researches stefano pelle october 2013 october 2013

International Marketing International Marketing Researches Researches

Stefano PelleStefano Pelle October 2013October 2013

ContentsContents

Marketing Researches: an indispensable Marketing Researches: an indispensable tooltool

The most common mistakesThe most common mistakes Global Marketing Research Process and Global Marketing Research Process and

PhasesPhases Why and Where Marketing researches: a Why and Where Marketing researches: a

practitioner perspectivepractitioner perspective Some ExamplesSome Examples

What is Marketing?What is Marketing?

““Marketing is the process of planning and Marketing is the process of planning and executing the conception, pricing, executing the conception, pricing, promotion and distribution of ideas, goods promotion and distribution of ideas, goods and services to create exchanges that and services to create exchanges that satisfy individual (customer)satisfy individual (customer) and and organizational objectivesorganizational objectives””. .

Marketing Researches and Marketing Researches and Marketing Marketing

As per the above definition marketing As per the above definition marketing researches are imperative for a company to researches are imperative for a company to know what type of products or services would know what type of products or services would be profitable to introduce in the marketbe profitable to introduce in the market

Also with respect to its existing products in Also with respect to its existing products in the market, a good market research enables the market, a good market research enables a company to know if it has been able to a company to know if it has been able to satisfy customer needs and whether any satisfy customer needs and whether any changes need to be made in the marketing changes need to be made in the marketing mixmix

Marketing ResearchesMarketing Researches

An Indispensable tool to compete in the An Indispensable tool to compete in the market placemarket place

Is this true?Is this true?


The most used decision making tools The most used decision making tools

Rules of thumbRules of thumb Back of the envelope calculationsBack of the envelope calculations Gut feelingGut feeling


The most effective decision making tools The most effective decision making tools

Common senseCommon sense


Though what mentioned earlier is often Though what mentioned earlier is often the reality of facts, marketing researches the reality of facts, marketing researches are indeed extremely useful tools to help are indeed extremely useful tools to help decide in a more accurate waydecide in a more accurate way

At times the empirical tools can be At times the empirical tools can be deceptive and bring unpleasant surprises deceptive and bring unpleasant surprises and waste of resourcesand waste of resources

The Most Common The Most Common MistakesMistakes

An American company learned that tomato ketchup An American company learned that tomato ketchup was not available in Japanwas not available in Japan

In order to gain first mover advantages, the company In order to gain first mover advantages, the company immediately shipped without first hesitation (and immediately shipped without first hesitation (and researches) a large quantity of its ketchup to Japanresearches) a large quantity of its ketchup to Japan

The products remained longtime on the shelves The products remained longtime on the shelves before being withdrawn and disposed ofbefore being withdrawn and disposed of

Successive researches showed that Japanese Successive researches showed that Japanese consumers preferred soy to tomato-based consumers preferred soy to tomato-based condiments. condiments.

From Ricks, David (1983) Big Business Blunders. Dow Jones-Irwin, Homewood, Illinois

Ignoring the Need for Ignoring the Need for Marketing ResearchesMarketing Researches

In China Toyota was forced to withdraw an ad In China Toyota was forced to withdraw an ad showing some stone lions bowing to a Toyota showing some stone lions bowing to a Toyota PradoPrado

The Ad struck an historic nerve since the lions The Ad struck an historic nerve since the lions resembled those flanking the Marco Polo bridge resembled those flanking the Marco Polo bridge in Beijing, site of the opening battle of the 1937 in Beijing, site of the opening battle of the 1937 Japan’s invasion of ChinaJapan’s invasion of China

From Cultural pitfalls tarnish some Ads in China, Asian Wall Street Journal, January 19 th, 2004

Ignoring the Need for Ignoring the Need for Marketing ResearchesMarketing Researches

Kentucky Fried Chicken (KFC) learned through secondary Kentucky Fried Chicken (KFC) learned through secondary data about Brazilian loving the chicken and decided to enter data about Brazilian loving the chicken and decided to enter the Brazilian, market planning to open 100 storesthe Brazilian, market planning to open 100 stores

However the Initial reactions in Sao Paulo were disappointingHowever the Initial reactions in Sao Paulo were disappointing

In Brazil Street corner vendors sell low-priced charcoal-In Brazil Street corner vendors sell low-priced charcoal-broiled chicken virtually everywherebroiled chicken virtually everywhere

Successive researches revealed that local consumers Successive researches revealed that local consumers preferred the taste of charcoal broiled to deep fried chickenpreferred the taste of charcoal broiled to deep fried chicken

Insufficient Marketing Insufficient Marketing ResearchResearch


A U.S. soft drink company conducted research in A U.S. soft drink company conducted research in Indonesia to determine market potential Indonesia to determine market potential

The research focused on the major urban areas: the The research focused on the major urban areas: the results obtained were extrapolated to the whole results obtained were extrapolated to the whole countrycountry

The company established large bottling and The company established large bottling and distribution facilitiesdistribution facilities

Sales were disappointing: rural and urban Sales were disappointing: rural and urban consumers have very different behaviors. Only consumers have very different behaviors. Only foreign visitors and tourists purchased the product.foreign visitors and tourists purchased the product.

Misleading ResearchMisleading Research


Global Marketing Global Marketing ResearchResearch

M.R. : A Necessary ToolM.R. : A Necessary Tool

Given the complexity of the global Given the complexity of the global marketplace, solid marketing research is marketplace, solid marketing research is critical for a host of global marketing critical for a host of global marketing decisionsdecisions

Most of the cultural blunders in global Most of the cultural blunders in global marketing stem from inadequate marketing marketing stem from inadequate marketing researchresearch

Conducting Global M.R.Conducting Global M.R.

Six steps in conducting global market researchSix steps in conducting global market research

1. Define the research problem(s)1. Define the research problem(s)

2. Develop a research design2. Develop a research design

3. Determine information needs3. Determine information needs

4. Collect the Data (secondary and primary)4. Collect the Data (secondary and primary)

5. Analyze the data and interpret the results5. Analyze the data and interpret the results

6. Report and present the findings of the study6. Report and present the findings of the study

Research Problem DefinitionResearch Problem Definition

A well defined problem is often a half solved oneA well defined problem is often a half solved one

Once the nature of the research problem becomes Once the nature of the research problem becomes clear it needs to be translated into specific research clear it needs to be translated into specific research questions: questions: – e.g. What does the target consumer want from a e.g. What does the target consumer want from a

similar product? What is he getting from the similar product? What is he getting from the existing competitors?existing competitors?

In an international context the marketing research In an international context the marketing research problem formulation may be hindered by the problem formulation may be hindered by the self self reference criterionreference criterion

Self Reference CriterionSelf Reference Criterion

Refers to the unconscious tendency to resort to Refers to the unconscious tendency to resort to their own cultural experience and value systems their own cultural experience and value systems to interpret a business situationto interpret a business situation

A four step correction mechanism for this:A four step correction mechanism for this:– Define the business problem (BP) as per own Define the business problem (BP) as per own

cultureculture– Define the same as per the host cultureDefine the same as per the host culture– Isolate the SRC and understand how it Isolate the SRC and understand how it

interferes with the BPsinterferes with the BPs– Redefine the BP with the SRC influenceRedefine the BP with the SRC influence


Even more dangerous than the SRC is the Even more dangerous than the SRC is the trap of trap of ethnocentrismethnocentrism, the belief that , the belief that one’s own culture is superior to othersone’s own culture is superior to others

This leads to major mistakes not only in the This leads to major mistakes not only in the researches but often also in products researches but often also in products formulationsformulations

Many MNCs have seen failures in their Many MNCs have seen failures in their launches due to thislaunches due to this


A major difficulty in formulating the research A major difficulty in formulating the research problem is the lack of familiarity with the problem is the lack of familiarity with the foreign environmentforeign environment

This may lead to false assumptions hence This may lead to false assumptions hence eventually implying misleading research resultseventually implying misleading research results

Some preliminary and exploratory researches Some preliminary and exploratory researches can reduce part of the uncertainty: a useful can reduce part of the uncertainty: a useful tool for this are Omnibus Surveystool for this are Omnibus Surveys

Conducting Global M.R.Conducting Global M.R.

Six steps in conducting global market researchSix steps in conducting global market research

1. Define the research problem(s)1. Define the research problem(s)

2. Develop a research design2. Develop a research design

3. Determine information needs3. Determine information needs

4. Collect the Data (secondary and primary)4. Collect the Data (secondary and primary)

5. Analyze the data and interpret the results5. Analyze the data and interpret the results

6. Report and present the findings of the 6. Report and present the findings of the studystudy

Research Design and Research Design and InformationInformation

Depending on the problems, several kinds Depending on the problems, several kinds of research designs could be envisaged. It of research designs could be envisaged. It could even be possible to go through could even be possible to go through several round of researches, but this would several round of researches, but this would also depend on the budget available also depend on the budget available

Once the research issues have been stated, Once the research issues have been stated, the management needs to determine the the management needs to determine the information needs: this will also help fine information needs: this will also help fine tune the most adequate research designtune the most adequate research design

From: Young, R.B. and Javalgi, R.G. (2007). International marketing research: A global project management perspective. Business Horizon 50: 113-122

The Marketing Research The Marketing Research ProcessProcess

Secondary DataSecondary Data

Collected by Collected by persons persons other than other than the the researcher researcher for general for general purposespurposes

Primary DataPrimary Data

Collected by Collected by the the researcher researcher ad hoc for ad hoc for the specific the specific researchresearch

Data CollectionData Collection

Sources of Sources of Secondary DataSecondary Data

Data Sources

Primary data sources

Secondary data sources

Internal records

External sources

Published data

Standardized sources of

marketing data

•Sales results (outcomes)

•Marketing activity (inputs)

•Cost information

•Distributor reports and feedback

•Customer feedback

•Consumer Attitudes and Opinion Polls

•Market Segment Definition

•Market Tracking

•Media Usage and Promotion Effectiveness Monitoring

Printed

Electronic

•Indexes

•Dictionaries and Encyclopedias

•Directories

•Statistical Sources

Secondary DataSecondary Data

Selected Secondary Data Sources:Selected Secondary Data Sources: National Trade Data Bank, U.S. National Trade Data Bank, U.S. Department of Commerce, CIA Factbook, Department of Commerce, CIA Factbook, Japan External Trade Organization (JETRO), Japan External Trade Organization (JETRO), OECD, IMF, The Economist Intelligence OECD, IMF, The Economist Intelligence Unit (E.I.U.), ACNielsen Co, Taylor Nelsen Unit (E.I.U.), ACNielsen Co, Taylor Nelsen Sofres, etc.Sofres, etc.

Secondary Global Marketing Secondary Global Marketing ResearchResearch

Problems with Secondary Data ResearchProblems with Secondary Data Research::

– Accuracy of DataAccuracy of Data: definition of certain indicators : definition of certain indicators differ across countries (e.g. procedures to assemble differ across countries (e.g. procedures to assemble data in developed or emerging markets)data in developed or emerging markets)

– Age of dataAge of data: countries collect information at : countries collect information at different moments (e.g. frequency of Census) different moments (e.g. frequency of Census)

– Reliability over TimeReliability over Time: definitions of indicators can : definitions of indicators can be changed (e.g. basket of goods to measure be changed (e.g. basket of goods to measure inflation)inflation)

Secondary Global Marketing Secondary Global Marketing ResearchResearch

Problems with Secondary Data ResearchProblems with Secondary Data Research::

– Comparability of DataComparability of Data: comparing indicators across : comparing indicators across countries can be misleading, since data could have countries can be misleading, since data could have come from different sources. This could be partly come from different sources. This could be partly handled by triangulation. i.e. obtaining of data for handled by triangulation. i.e. obtaining of data for the same item from at least three different sources the same item from at least three different sources and analyze the reasons behind the differences. and analyze the reasons behind the differences. Comparability also depends on Comparability also depends on Functional Functional and and Conceptual EquivalenceConceptual Equivalence

Developing a Research Plan for Developing a Research Plan for Primary Data CollectionPrimary Data Collection

Do we need quantitative or Do we need quantitative or qualitative data?qualitative data?

What is the information worth What is the information worth (versus what will it cost to collect)?(versus what will it cost to collect)?

What will it cost if we donWhat will it cost if we don’’t get the t get the information?information?

What can be gained from the What can be gained from the information?information?

Primary Global Marketing Primary Global Marketing ResearchResearch

Focus Groups (Qualitative)Focus Groups (Qualitative)

Survey Methods for Cross-Cultural Marketing Survey Methods for Cross-Cultural Marketing Research:Research:– Questionnaire DesignQuestionnaire Design

Conceptual and Functional EquivalenceConceptual and Functional Equivalence Translation issues (parallel, back Translation issues (parallel, back

translation) translation) Scalar Equivalence: scores from subjects Scalar Equivalence: scores from subjects

of different countries should have same of different countries should have same meaning and interpretationmeaning and interpretation


– Sampling - A sampling plan consists of:Sampling - A sampling plan consists of: Sampling unit –what is the target population?Sampling unit –what is the target population? Sample size – how many people should be Sample size – how many people should be

surveyed?surveyed? Sampling procedure – how should respondents be Sampling procedure – how should respondents be

chosen?chosen?

– Contact Method Contact Method MailMail TelephoneTelephone Person-to-person interviewsPerson-to-person interviews Online Survey Methods :Online Survey Methods :

– E-mail surveysE-mail surveys– Random Web site surveysRandom Web site surveys– Panel Web site surveysPanel Web site surveys


Some of the issues encountered in Some of the issues encountered in collecting primary data are the followingcollecting primary data are the following

Issues of non responseIssues of non response Courtesy biasCourtesy bias Social desirability biasSocial desirability bias Redundancy (asking the same Redundancy (asking the same

question in different ways)question in different ways) Issues of ethnographic researchIssues of ethnographic research

Issues in Primary Global Issues in Primary Global ResearchesResearches

Non response:Non response:– mainly for reluctance to talk to strangers, mainly for reluctance to talk to strangers,

confidentiality, cultural biasconfidentiality, cultural bias Courtesy bias: Courtesy bias:

– respondents feel obliged to please the interviewerrespondents feel obliged to please the interviewer Social desirability: Social desirability:

– attempting to reflect a certain social status in attempting to reflect a certain social status in their answertheir answer

Redundancy:Redundancy:– helpful to ask the same questions in different helpful to ask the same questions in different

ways ways

Challenges In Global Marketing Challenges In Global Marketing ResearchesResearches

Structuring a research in several markets together Structuring a research in several markets together implies different problems vs. a one country implies different problems vs. a one country researchresearch

1. Complexity of research design due to 1. Complexity of research design due to environmental differencesenvironmental differences

2. Lack and inaccuracy of secondary data2. Lack and inaccuracy of secondary data

3. Time and cost requirements to collect primary 3. Time and cost requirements to collect primary datadata

4. Coordination of multi-country research efforts4. Coordination of multi-country research efforts

5. Difficulty in establishing comparability across 5. Difficulty in establishing comparability across multi-country studiesmulti-country studies

Example: choice of a Country to Example: choice of a Country to Expand the International Expand the International

presencepresence

The Country Selection

Leads the process of formulating the international marketing marketing startegy: influences the entry in the country and the

budget allocation

Wrong (or sub-optimal) choices imply a number of negative consequences, in terms of

actual costs as well as opportunity-costs

The Country AnalysisUniverse of countries to be considerd for the analysis

First screenin

g

Potentially attractive countriesSecond

screening

Countries attractive for the specific Industry

Third screenin

g

Countries attractive for the Company

Competitive Pressure

Market Size AssessmentMarket Size Assessment

When using market size estimates, keep When using market size estimates, keep the following rules in mind:the following rules in mind:– Use several different methodsUse several different methods– DonDon’’t be misled by numberst be misled by numbers– Do a sensitivity analysis by asking what-Do a sensitivity analysis by asking what-

if questionsif questions– Look for interval estimates with a lower Look for interval estimates with a lower

and upper limit rather than for point and upper limit rather than for point estimatesestimates

Understanding the Actual Understanding the Actual Market PotentialMarket Potential

Bangladesh has over 160 million people: Bangladesh has over 160 million people: its market potential is almost 3 times that its market potential is almost 3 times that of Italyof Italy

The per-capita Income in 2005 was The per-capita Income in 2005 was 21.000 US$ in Italia, 420 US$ in 21.000 US$ in Italia, 420 US$ in Bangladesh Bangladesh

Understanding the Actual Market Understanding the Actual Market PotentialPotential

The price of sugar in Holland is almost The price of sugar in Holland is almost double than the corresponding one in double than the corresponding one in India: there is a major opportunity in India: there is a major opportunity in importing sugar from India importing sugar from India

In India sugar export is bannedIn India sugar export is banned

Management of Global Marketing Management of Global Marketing ResearchResearch

Selecting a Research AgencySelecting a Research Agency: The : The following considerations should be taken following considerations should be taken into account while choosing agency:into account while choosing agency:– Level of expertiseLevel of expertise– QualificationsQualifications– Track recordTrack record– Credibility and experienceCredibility and experience– Client recordClient record

Coordination of Multi-Country ResearchCoordination of Multi-Country Research::– Emic versus Etic dilemmaEmic versus Etic dilemma

Designing Questionnaires to be Designing Questionnaires to be Administered GloballyAdministered Globally

Emic instruments Etic instruments

Management of Global Marketing Management of Global Marketing ResearchResearch

– The emic schoolThe emic school focuses on the focuses on the peculiarities of each countrypeculiarities of each country

– The etic approachThe etic approach emphasizes universal emphasizes universal behavioral and attitudinal traitsbehavioral and attitudinal traits

– In cross-cultural market research, the In cross-cultural market research, the need for comparability favors the etic need for comparability favors the etic paradigm with an emphasis on the paradigm with an emphasis on the cross-border similarities and parallelscross-border similarities and parallels

– Several approaches may be used to Several approaches may be used to balance these conflicting demandsbalance these conflicting demands

Enhancing Comparability of Enhancing Comparability of DataData

Emic analysisEmic analysis Ethnographic in Ethnographic in

naturenature Studies culture from Studies culture from

withinwithin Uses culturesUses cultures’’ own own

meanings and meanings and valuesvalues

Etic analysisEtic analysis From the outsideFrom the outside Detached Detached

perspective that is perspective that is used in multi-used in multi-country studiescountry studies

Enhances Enhances comparability but comparability but minimizes precisionminimizes precision

International Research StagesInternational Research Stages

Preliminary assessmentPreliminary assessment

Macro AnalysisMacro Analysis

Micro AnalysisMicro Analysis

Preliminary AssessmentPreliminary Assessment

Prescriptive Information: Laws, regulations, Prescriptive Information: Laws, regulations, rulings concerning taxes, earnings, dividends rulings concerning taxes, earnings, dividends in both host and home countriesin both host and home countries

General Environment: Overall review of socio-General Environment: Overall review of socio-cultural, political, and technological cultural, political, and technological environmentsenvironments

Economic Environment: GDP Growth trend, Economic Environment: GDP Growth trend, Balance of payments, interest rates, Balance of payments, interest rates, attractiveness of country currencyattractiveness of country currency

Research Stage 1: MacroResearch Stage 1: Macro

Preliminary OpportunitiesPreliminary Opportunities

Macro-level ResearchMacro-level Research (Estimation of General Market Potential) (Estimation of General Market Potential)

• Growth Trends for Similar ProductsGrowth Trends for Similar Products• Cultural Acceptance of Such ProductsCultural Acceptance of Such Products• Availability of Market DataAvailability of Market Data• Target Market SizeTarget Market Size• Stage of Market DevelopmentStage of Market Development• Taxes & Duties, LawsTaxes & Duties, Laws• Regulations concerning earnings/dividends in both host and Regulations concerning earnings/dividends in both host and

home countrieshome countries

Possible OpportunitiesPossible Opportunities

Research Stage 2: MicroResearch Stage 2: Micro

Micro-level ResearchMicro-level Research (Specific Factors Affecting the Product) (Specific Factors Affecting the Product)• Existing and Potential CompetitionExisting and Potential Competition• Entry BarriersEntry Barriers• Reliability of DatabasesReliability of Databases• Cost of EntryCost of Entry• Sales ProjectionSales Projection• Probable Product Acceptance (Demand estimates, Probable Product Acceptance (Demand estimates,

consumer behavior, review of marketing mix)consumer behavior, review of marketing mix)• Profit PotentialProfit Potential

Probable OpportunitiesProbable Opportunities

Target MarketsTarget Markets• Corporate Factors Influencing ImplementationCorporate Factors Influencing Implementation

Country Priority ListingCountry Priority Listing

Practical ExamplePractical Example

A Confectionery Company wants A Confectionery Company wants to enter one priority market to enter one priority market through a direct investment through a direct investment


Prescriptive InformationPrescriptive Information

Possibility of FDI in the confectionery Possibility of FDI in the confectionery sectorsector

Possibility of fully owned subsidiaryPossibility of fully owned subsidiary Food LawsFood Laws Fiscal LawsFiscal Laws Possibility of profit repatriationPossibility of profit repatriation Labor LawsLabor Laws


General InformationGeneral Information

Political stabilityPolitical stability Economic environment (GDP, Exchange,..)Economic environment (GDP, Exchange,..) Income distributionIncome distribution Structure of populationStructure of population Percentage of food expenses Percentage of food expenses Labor CostLabor Cost Cultural restrictionsCultural restrictions

Research Stage 1: MacroResearch Stage 1: Macro

General Industry InformationGeneral Industry Information

Market size and trendMarket size and trend Presence of Competitors and general dataPresence of Competitors and general data Distribution networkDistribution network Trade typologies and marginsTrade typologies and margins Availability and prices of main materials Availability and prices of main materials

(e.g. sugar, glucose, flavors, wrappers,…) (e.g. sugar, glucose, flavors, wrappers,…) Consumer profile Consumer profile Consumption Patterns Consumption Patterns

Research Stage 2: MicroResearch Stage 2: Micro

Business related InformationBusiness related Information

Business planBusiness plan Definition of Marketing Mix variablesDefinition of Marketing Mix variables Market and Competitors details Market and Competitors details Sales projectionsSales projections

international marketing researches stefano pelle october 2013 october 2013

Documents

contents marketing researches

marketing mix slide

successive researches

empirical tools

useful tools

market place

good market research

gut feeling slide