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PR.I.MA. Socrates European Commission Education and Culture European Postgraduate Programme in International Marketing INTERNATIONAL MARKETING RESEARCH Marcel van Birgelen and Alain De Beuckelaer Nijmegen School of Management, The Netherlands This book has been funded by the European Union under the Socrates Programme (Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1) PR.I.MA. PARTNERSHIP Coordinating Institution: Athens University of Economics & Business, Greece Project Coordinator: Prof. George J. Avlonitis Project Manager: Dr. Paulina Papastathopoulou Project Secretariat: Ms Eirini Mavromara Participating Institutions & Contact Persons: Corvinus University of Budapest, Hungary Prof. András Bauer Radboud University Nijmegen, The Netherlands Dr. Marcel van Birgelen University of Leicester, U.K. Prof. Michael Saren University of Minho, Portugal Dr. Ana Maria Santos Costa Soares External Evaluator Prof. Gabriele Troilo, Bocconi University, Italy Critical Reader Dr. José Carlos Pinho, University of Minho, Portugal All rights are reserved. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise – without the written permission of the PR.I.MA. partnership. Foreword Why studying international marketing research? In general, conducting marketing research is a crucial activity for profit- and non-profit organizations trying to deal with the uncertainties and rapid changes to be found in the modern business arena these days. When expanding (business) operations from the home country toward other countries, the uncertainties become even more prominent and stronger. This may be due to for instance cultural, political, and legal differences. Of particular interest may be how such differences in turn translate into different consumer habits, preferences, and behavior. As a consequence, international marketing research becomes essential for effective decision making when organizations start to internationalize toward foreign markets. The same differences addressed above make international marketing research quite different from conducting domestic marketing research. A thorough understanding of this difference is of utmost importance for marketing researchers as well as managers. It is such understanding that this textbook, the various articles that are presented and discussed, as well as the International Marketing Research course aim to develop. More specifically, this will done by explicitly addressing the specific issues, opportunities, but certainly also the problems to be associated with international marketing research. A brief overview of the topics to be discussed follows next. Chapter Structure Chapter 1 further introduces international marketing research as a crucial activity in modern business practice. Chapter 2 addresses how the international character of international marketing research influences the design of research to be conducted. Next, Chapters 3 and 4 focus on the specifics of two types of data to be collected and used in international marketing research (as in domestic marketing research): secondary and primary data. Subsequently, Chapter 5 deals with a crucial issue when conducting research across multiple countries: data comparability, also referred to as equivalence. In the context of collecting primary data, Chapter 6 then deals with survey instrument design and sampling issues in international marketing research. Chapter 7 extends this knowledge by focusing on cross-national scale development and the use of scales in international marketing research. Chapter 8 provides in-depth insight into another important issue in international business: cross-national consumer segmentation and how marketing research can be used to do so effectively. Finally, Chapter 9 discusses the future of international marketing research by presenting some interesting developments and challenges in the field. TABLE OF CONTENTS Chapter 1: Introducing International Marketing Research _______________________ 1 1.1 The field of international marketing research introduced____________________ 2 1.2 Marketing research in a global environment _______________________________ 3 1.3 International marketing research: Setting the stage _________________________ 6 1.3.1 1.3.2 1.3.3 1.3.4 1.4 Conducting international marketing research in the twenty-first century ____________ “Foreseeing” marketing_______________________________________________________ The myth of global strategy ___________________________________________________ Foreign market entry modes: A sequentially embedded decision approach___________ 6 7 7 8 Summary ______________________________________________________________ 8 Questions ____________________________________________________________________ 9 References____________________________________________________________________ 9 Chapter 2: International Marketing Research Design __________________________ 11 2.1 Designing international marketing research activities______________________ 11 2.2 The international marketing research plan________________________________ 12 2.3 Issues in administering international marketing research __________________ 13 2.4 Relevant questions in designing international marketing research __________ 14 2.5 Progress and promise: The last decade of international marketing research___ 14 2.6 Summary _____________________________________________________________ 15 Questions ___________________________________________________________________ 15 References___________________________________________________________________ 16 Chapter 3: Secondary Data in International Marketing Research________________ 17 3.1 Secondary data in international marketing research: Usefulness, advantages, and disadvantages________________________________________________________________ 18 3.2 External sources of secondary data _______________________________________ 19 3.3 Uses of secondary data _________________________________________________ 20 3.4 International marketing information: UK small and medium-sized enterprises’ perceptions of different sources and types ______________________________________ 21 3.5 Gathering and using information for the selection of trading partners _______ 22 3.6 Summary _____________________________________________________________ 22 Questions ___________________________________________________________________ 23 References___________________________________________________________________ 23 Chapter 4: Collecting Primary Data in International Marketing Research _______ 24 4.1 Structuring primary data collection ______________________________________ 24 4.2 Pros and cons of various survey types ____________________________________ 26 4.3 Assessing the equivalence between online and mail surveys in service research 27 4.4 Mode of data collection can have serious effects on data quality ____________ 28 4.5 What is a survey? ______________________________________________________ 28 4.6 Summary _____________________________________________________________ 29 Questions ___________________________________________________________________ 29 References___________________________________________________________________ 30 Chapter 5: Comparability of Data From Multiple Nations _____________________ 31 5.1 The Emic and Etic perspective___________________________________________ 32 5.2 Concepts, constructs, and causal theory __________________________________ 37 5.3 Improving the conceptual foundations of international marketing research __ 38 5.4 Towards a theory of bias and equivalence ________________________________ 39 5.5 The issue of equivalence _______________________________________________ 40 5.6 Equivalence of survey data: Relevance for international marketing __________ 40 5.7 Assessing measurement invariance in cross-national consumer research _____ 40 5.8 Response biases in marketing research ___________________________________ 41 5.9 Summary _____________________________________________________________ 41 Questions ___________________________________________________________________ 41 References___________________________________________________________________ 42 Chapter 6: Survey Instrument Design and Sampling in International Marketing Research _________________________________________________________________ 45 6.1 Why it is easy to write bad questions_____________________________________ 46 6.2 Assessing the difficulty of questions used in the ISSP-questionnaires, the clarity of their wording and the comparability of responses _____________________________ 46 6.3 Sampling and weighting _______________________________________________ 47 6.4 Theoretical justification of sampling choices in international marketing research: Key issues and guidelines for researchers ______________________________ 47 6.5 Summary _____________________________________________________________ 48 Questions ___________________________________________________________________ 48 References___________________________________________________________________ 48 Chapter 7: Cross-national Scale Development and Use in International Marketing Research _________________________________________________________________ 50 7.1 Measuring export market orientation: Scale development and cross-cultural validation ___________________________________________________________________ 50 7.2 Cross-cultural similarities and differences in shopping for food ____________ 51 7.3 Cross-cultural invariance of measures of satisfaction and service quality_____ 51 7.4 Using ‘borrowed’ scales in cross-national research: A cautionary note________ 52 7.5 Summary _____________________________________________________________ 52 Questions ___________________________________________________________________ 52 References___________________________________________________________________ 53 Chapter 8: Cross-national Consumer Segmentation Studies ____________________ 54 8.1 Introducing international consumer segmentation_________________________ 55 8.2 International market segmentation: Issues and perspectives ________________ 55 8.3 International market segmentation based on consumer-product relations ____ 56 8.4 Country and consumer segmentation: Multi-level latent class analysis of financial product ownership___________________________________________________ 57 8.5 Summary _____________________________________________________________ 57 Questions ___________________________________________________________________ 58 References___________________________________________________________________ 58 Chapter 9: Challenges and Future Directions in International Marketing Research: Capita Selecta ____________________________________________________________ 59 9.1 Challenges in international marketing research ___________________________ 60 9.2 Future directions in international marketing research ______________________ 61 9.3 Creating local brands in multilingual international markets ________________ 62 9.4 Summary _____________________________________________________________ 62 Questions ___________________________________________________________________ 62 References___________________________________________________________________ 63 Marketing Research For Market Entry Decisions______________________________ 64 A Cross-National Evaluation of Services Marketing Efforts by Conducting International Marketing Research in Practice ________________________________ 67 LIST OF TABLES Table 5.1: Major strengths and shortcomings of the Emic and Etic approach__________________ 34 LIST OF FIGURES Figure 5.1: Berry’s five-step process (Berry, 1989) ______________________________________ 36 International Marketing Research Chapter 1 Chapter 1 1 Introducing International Marketing Research T his introductory chapter, combined with the additional literature presented and the lectures/classroom sessions, provides insight into the general complexity of international marketing, mainly caused by the diversity and change of the international environment, and the importance of conducting research in order to generate information for decisionmaking in an international marketing context. Such information may include information for international market entry, information for local market planning, and information for global rationalization. When conducting international marketing research it is important to acknowledge the complexity of research designs, difficulties in establishing data comparability and equivalence, coordinate research and data collection across nations, and to be aware of the intra-functional nature of international marketing decisions. Learning Objectives After reading this chapter, you should: • Better understand the complexity of conducting marketing research in the global environment; • Be aware of key issues that the international marketing researcher needs to deal with. Keywords International marketing research defined, differences between domestic and international marketing research, reasons for conducting international marketing research, issues and challenges in international marketing research, international EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 1 International Marketing Research Chapter 1 marketing research in the twenty-first century, international marketing research and foreign entry modes 1.1 The field of international marketing research introduced International marketing research can be defined in several ways. Kumar (2000) provided two useful definitions: 1. International marketing research = Market research conducted either simultaneously or sequentially to facilitate marketing decisions in more than one nation; 2. International marketing research = Comparative marketing research, with its principle focus being the systematic detection, identification, classification, measurement and interpretation of similarities and differences among entire national systems. No matter which of these two definitions is used, international marketing research is a valid concept insofar as market surveys are carried out that affect decisions concerning more than one nation. International marketing research is NOT totally different from domestic marketing research. All the same principles that apply to domestic marketing research apply to international marketing research also. The major differences between international marketing research and domestic marketing (single nation) research are that: a) international marketing research involves differences between nations arising out of political, economic, social, cultural, and legal differences; b) the problem of comparability of research results arises due to these differences. According to Kumar (2000), the main factors that affect the way in which people (consumers) from different cultures behave are: • Cultural differences (e.g. people in Flanders (B) consuming margarine, people in Wallonia (B) consuming butter; Japanese giving more frequently ‘neutral’ answers)! Also think about national differences on G. Hofstede’s 5 dimensions EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 2 International Marketing Research Chapter 1 (power distance; individualism/ collectivism; masculinity/ femininity; uncertainty avoidance; long-term orientation]; • Racial differences (e.g. hair type); • Climatic differences (e.g. the French drink more wine, the British drink more beer); • Economic differences (e.g. low alcohol consumption in Norway due to high taxes); • Religious differences (e.g. alcohol prohibited in Middle Eastern countries); • Historical differences (e.g. cricket is popular in England; game of boules in France); • Differences in consumption patterns (e.g. in England one drinks port after a meal; in Portugal it is consumed before the meal); • Differences in marketing conditions (e.g. the Japanese are not keen on being contacted over the telephone; people in Hong Kong do not allow strangers into the house); • Differences in actual and potential target groups (e.g. people in small villages cannot be given reached given budget constraints). In addition, the international marketing researcher will have to deal with (Kumar, 2000): 1.2 • Language differences; • Differences in the way products or services are used; • Differences in the criteria for assessing products or services; • Differences in marketing research facilities; • Differences in market research capabilities. Marketing research in a global environment According to Craig and Douglas (2005), conducting marketing research in a global environment can occur for a wide variety of different issues. Among others these include the correct positioning of new products, avoidance of product formulation errors, assessing sensitivity to geographical differences, understanding EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 3 International Marketing Research Chapter 1 cultural change, identifying appropriate advertising appeals, assessing translation errors, etcetera (Craig & Douglas, 2005). Despite its obvious usefulness, conducting international marketing research goes not without difficulties, which international marketing researchers need to be fully aware of. In this respect, Craig and Douglas (2005) also mention the great diversity of the international environment and the continuous change of the international market environment. In turn, these developments make conducting research for international marketing decision-making very important. When operating in the international arena, firms will be facing different information needs, especially when moving from one phase of internationalization to another (e.g. market entry, exporting, local market operations, etc.). The nature of the firm’s operation in a national market depends on its choice of mode of entry (Kumar, 2000). A mode of entry is an institutional arrangement chosen by the firm to operate in a foreign market. Examples are: exporting, licensing, joint ventures, and wholly owned subsidiaries. This decision is one of the most critical strategic decisions of the firm. It affects all of the future decisions and operations of the firm in that national market. Because each mode of entry entails a concomitant level of resource commitment, it is difficult to change from one entry mode to another without considerable loss of time and money. Kumar (2000) models the decision process using a model called the “contingency model of mode of entry decision”. The model consists of five consecutive steps: 1. Recognition of the need to operate in foreign markets (e.g. true need?) 2. Evaluation of time, resources, and quality of information available Crucial questions to ask: - What factors affecting the modes of entry have to be considered? - Where can information on these factors be obtained? 3. Selection of a decision strategy 4. Data collection and information processing 5. Selection of a mode of entry EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 4 International Marketing Research Chapter 1 In general, the international marketing researcher should be clear about the motives of the company before designing the study (Kumar, 2000). It is crucial to isolate the main issue that needs to be tackled and decide on the information needed to solve the problem. The main issue could be, for example, to evaluate whether or not there is a financially viable market for disposable diapers in India. Many companies have failed in international marketing research because they have been sidetracked by small issues and ignored the one main problem. Failure to pin down the root problem can be very costly in international marketing research! The information that is required to underpin marketing decisions can be at three different levels, reflecting three different orientations (Kumar, 2000): 1. Market orientation (e.g. questions as: Is there a financially viable market for product X in market Y?); 2. Strategic orientation (e.g. what mode of entry would be optimal given the company’s needs?); 3. Problem orientation (e.g. pricing policy, product positioning, promotions, production and logistics, etc.) An illustrative example of which market information may be required for the main issue of whether or not there will be a market for disposable diapers in India could results in the following research questions (Kumar, 2000): • What is the main alternative to disposable diapers used by parents currently? • Are parents familiar with the cost of disposable diapers? • Are there any other brands of disposable diapers sold in India currently? • What is the estimated market size? • What price are consumers willing to pay for a disposable diaper? Specific issues that need to be addressed in international marketing research include the complexity of research designs, difficulties in establishing comparability and equivalence in the information and data obtained internationally, the coordination of research efforts and data collection across nations, the intrafunctional character of international marketing decisions, as well as the economics of international investment and marketing decisions (Craig & Douglas, 2005). EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 5 International Marketing Research Chapter 1 Kumar (2000) also identifies five main challenges in planning international marketing research. These include: • Understanding similarities across nations so as to define a target market; • A lack of accurate secondary information; • The high cost of conducting research, especially when primary data is desired; • Coordinating research efforts across nations, which involves loosing control of not only the research process but translations as well; • Establishing comparability and equivalence in marketing research instruments. 1.3 International marketing research: Setting the stage As a starting point for studying international marketing research various insights to be obtained from several authors and studies seem worthwhile to consider (see Section 1.7 for full reference details). These will be shortly presented in the remainder of this chapter and will be further discussed during the course. 1.3.1 Conducting international marketing research in the twenty-first century According to Craig and Douglas (2001), as businesses expand further and further in international markets, the role of timely and accurate marketing research to guide decision-making becomes increasingly critical. Research to support international marketing decisions has evolved over the past four decades and must change even more to support firms in the twenty-first century. There are four key areas where progress must be made. First, international marketing research efforts need to be more closely aligned with market growth opportunities outside the industrialized nations. Second, researchers must develop the capability to conduct and coordinate research that spans diverse research environments. Third, international marketing researchers need to develop new creative approaches to probe the cultural underpinnings of behavior. Finally, technological advances need to be incorporated into the research process in order to facilitate and expedite research across the globe. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 6 International Marketing Research Chapter 1 1.3.2 “Foreseeing” marketing Based on a reflection of other authors’ contributions to a special issue of the Journal of Marketing, Deshpandé (1999) formulates an agenda for increasing marketing knowledge use in the future. Such agenda will also be of relevance to international marketing researchers since they will be generating the knowledge to be used by international marketers in the future. Specifically, Deshpandé (1999) identifies four main foci. First, marketing should clearly follow a cross-disciplinary focus. “Marketers [and marketing researchers as well] must cast their nets wider to consider more disciplines as sources of rich constructs, models, and technologies.” (p. 166). Second, a cross-cultural focus in marketing must become more prominent since “many of the most interesting marketing problems are global, not local.” (p. 166). Third, it should be acknowledged that “firms increasingly have developed cross-functional processes, decision-making mechanisms, and organizational structures.” (p. 166). Marketers as well as marketing researchers need to be quite aware of these. Finally, marketers should become customercentric or enhance the customercentric focus if already present. As Desphandé (1999, p. 167) puts it nicely: “Whether marketers [and marketing researchers as well] are dealing with for-profit or not-for-profit organizations, examining marketing science or consumer behavior issues, concerned with companies or competitions, they are, in the final analysis, engaged in a conversation about the centrality of the customer.” Clearly, all four foci should be reflected when conducting international marketing research as well. 1.3.3 The myth of global strategy Rugman (2001) suggests that globalization is a myth and does not exist in terms of a single world market with free trade. He states that, instead business is triad-based, with companies operating on a regional level rather than global. The main conclusion is that due to government regulation of the service sectors, which limits free market movement, businesses need to think local and act regional and forget globalization. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 7 International Marketing Research Chapter 1 The main take-aways from Rugman’s paper for managers as well as researchers are: • Globalization is misunderstood – it does not, and has never, existed in terms of a single world market with free trade; • Triad-based business is the past, current and future reality; • Multinational enterprises operate within triad markets and access other triad markets; they have regional, not global, strategies; • National governments strongly regulate most service sectors, thereby limiting free market forces; the extent of regulation is not decreasing; • Businesses need to think local and act regional; they should forget global. 1.3.4 Foreign market entry modes: A sequentially embedded decision approach One of the most fundamental questions for organizations which aim at internationalizing their operations is which foreign market entry mode to use. Genctürk (2003, p. 149) states that “in order for the research on foreign market entry choice to progress both in theory development and in attempts to synthesize disparate research findings, there is a need to understand the context within which entry mode decision is made, and above all to recognize explicitly the complex nature of this decision.” The author argues that this decision is a complex phenomenon that should be addressed in a structured way. Having adequate information available for doing so seems crucial then. Specifically, a four-level analytical framework reflecting the sequentially embedded foreign market entry mode decision is developed. Depending on the level in the framework, different factors need to be considered by the organization. These include decisions to be made, dominant theoretical explanations, and, very importantly, key drivers that should be taken into account. Obviously, the framework provides a useful starting point for determining which international marketing information may be useful or even necessary for organizations to effectively base their decision on. 1.4 Summary Issues that have been discussed in this chapter and corresponding additional literature include the general complexity of international marketing, mainly caused EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 8 International Marketing Research Chapter 1 by the diversity and change of the international environment, and the importance of conducting research in order to generate information for decision-making in an international marketing context. Types of information may include information for international market entry, information for local market planning, and information for global rationalization. Furthermore, when conducting international marketing research it is crucial to acknowledge the complexity of research designs, make sure that the data collected adequately reflects the domestic and global market situation, coordinate research and data collection across nations, and to be aware of the intrafunctional nature of international marketing decisions. Questions 1. According to the literature, what are key challenges to be addressed and dealt with when conducting international marketing research? 2. Why exactly is market research in an international market much more complex than in a domestic market? 3. What are the specific informational needs of marketing decision-makers in the following situations: a) Deciding whether or not to enter international markets through exporting. b) Planning local operations in one or more foreign nations. c) Going global with ones business operations. 4. Could you think of any truly global market? Which one? Justify your answer! References Craig, C.S., & Douglas, S.P. (2001). Conducting international marketing research in the twenty-first century. International Marketing Review, 18, 80-90. Craig, C.S., & Douglas, S.P. (2005). International marketing research (3rd ed.). Chichester, UK: John Wiley and Sons: Chapter 1 Deshpande, R. (1999). Foreseeing marketing. Journal of Marketing, 63, 164-167. Genctürk, F.E. (2003). Foreign market entry modes: A sequentially embedded decision approach. In S.C. Jain (Ed.), Handbook of research in international marketing (pp. 148-171). Cheltenham, UK: Edward Elgar. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 9 International Marketing Research Chapter 1 Kumar, V. (2000). International marketing research. New Jersey: Prentice Hall. Rugman, A.M. (2001). The myth of global strategy. International Marketing Review, 18, 583-588. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 10 International Marketing Research Chapter 2 Chapter 2 2 International Marketing Research Design I ssues that will be discussed in this chapter, as well as the corresponding additional literature and lectures/classroom sessions include designrelated issues pertaining to the international marketing research plan and process as well as developments in conducting academic international marketing research. Specific attention will be paid to determining information requirements, the selection of sources of information, choosing a general research methodology (e.g. survey research, observational studies, simulated test markets, etc), the practical organization and design of international marketing research, and the identification of the right unit(s) of analysis. Learning Objectives After reading this chapter, you should: • Better understand issues associated with the design of international marketing research. Keywords Design of international marketing research, international marketing research plan, academic international marketing research, commercial international marketing research, the last decade of international marketing research 2.1 Designing international marketing research activities Craig and Douglas (2005) identify two broad types of international marketing research: academic research and commercial research. The first “includes research conducted by individuals at academic institutions with the objective of further understanding the behavior of consumers and organizations in other nations or in EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 11 International Marketing Research Chapter 2 relation to their activities in other nations, or testing the applicability of concepts and theories in a range of nations and cultural contexts. Commercial research, on the other hand, is conducted for a profit by an organization, and is concerned with collecting information to aid management in making decisions relative to international markets.” (Craig & Douglas, 2005, p. 23) The research purpose, the research questions, as well as the role of theory may differ between both types of international marketing research. Nevertheless, it is quite likely that the same problems arise with respect to research design and organization, as well as the implementation of the international marketing research plan. The specificities in designing international marketing research will be presented shortly in the remainder of this chapter. 2.2 The international marketing research plan In order to be able to effectively conduct international marketing research a multistage approach is crucial (Craig & Douglas, 2005). First, some preliminary steps may be necessary, especially when the research involves issues such as a new product category, new consumption situation, or new market segment. The preliminary phase may involve conducting desk research using secondary data. Furthermore, qualitative research using depth interviews, focus groups, or observational research may be useful as well for determining relevant research questions. Also organizational and administrative issues should be considered at an early stage in the international marketing research process. Among others, relevant questions that need to be answered are whether or not the research can be conducted in-house or not and against what costs. When all preliminary considerations have been paid attention to the international marketing research plan can be designed. This is considered to be a complex process, certainly when compared against conducting domestic marketing research. Craig and Douglas (2005) discuss an extensive international marketing research process (see Figure 2.1 on p. 28 of their textbook). The international marketing research process involves various steps. First, information requirements and key research questions need to be determined, which may be different for commercial versus academic research. For commercial research it is essential to EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 12 International Marketing Research Chapter 2 determine whether the research problem occurs at the corporate, the regional, or the local level. Furthermore, one should decide if the problem pertains to a strategic or a tactical decision. With respect to academic international marketing research one should decide if the problem involves descriptive research, comparative research or theory testing. Second, information or data needs to be collected. This step involves a multitude of different activities. Existing databanks may be consulted and previous research findings as well as existing theories may be examined. Furthermore, it may be worthwhile to collect and analyze secondary data that already has been collected for other research purposes. When having to collect primary data, the research needs to be designed very carefully. Issues to consider include the problem formulation, the variable specifications, the determination of the research technique, and the design of the research instrument. Furthermore, a sampling plan needs to be developed and the data analysis procedure needs to be designed. Next, the research administration procedure should be determined, after which the actual research can be conducted. Third, when having obtained all necessary data, it should be extensively analyzed. For this, a variety of different analysis techniques can be used. No matter what technique is used, it is essential that the information obtained and the conclusions drawn are used to update existing databanks and are being added to existing theories and knowledge bases. 2.3 Issues in administering international marketing research Craig and Douglas (2005) also discuss a number of organizational and administrative issues that “need to be resolved to carry out the [international marketing research] plan” (Craig & Douglas, 2005, p. 44). Among others, these issues involve the organization and coordination of the research, the choice of a research supplier, as well as the cost of international marketing research. Concerning the first, firms can make use of a centralized organization for conducting international marketing research, where management at corporate headquarters or a global of regional development unit determines the specifics of the research. The other option will be a decentralized organization, where corporate headquarters establish research objectives in broad terms, but leave the specifications EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 13 International Marketing Research Chapter 2 of the research design and the management of the research process to the local operating units at national level or may even outsource this activity to external parties. Next, international marketing research can come from several suppliers. Firms can make use of global marketing research firms or make use of in-house research expertise. Lastly, firms should be aware of the costs involved in conducting international marketing research, which are “often higher related to expected market size as compared with the domestic market” (Craig & Douglas, 2005, p. 54). 2.4 Relevant questions in designing international marketing research In his chapter of ‘The Handbook of Marketing Research’, edited by Grover and Vriens (2006), Kumar addresses several interesting questions related to design aspects of international marketing research. These pertain to questions such as: • Who is needed in international marketing research? Specialists or generalists? • Should international marketing research be conducted in a centralized or decentralized way? 2.5 • How to conduct research across nations? • How can one reduce cross-cultural response bias? • How can one enhance data comparability across nations? • How to design scales in cross-national research? • What equivalence issues should be addressed in primary data collection? Progress and promise: The last decade of international marketing research In light of the rapid growth of international marketing studies, Nakata and Huang (2005) thought it was timely to investigate recent patterns and developments in the literature. The authors performed a content analysis of nearly 600 papers published from 1990 to 2000 in the leading academic journals. It became clear that major progress has been made in terms of a broadened research agenda and greater technical rigor. However, opportunities were identified to address overlooked research topics, increase cross-national collaboration, strengthen the complexity and EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 14 International Marketing Research Chapter 2 comprehensiveness of theories, as well as diversify research methods beyond surveys. Based on these findings, the authors outlined several directions for advancement of international marketing knowledge. Nakata and Huang’s (2005) paper will be further discussed during the course. The question as presented at the end of this chapter may a useful starting point for doing so. 2.6 Summary Issues that have been discussed in this chapter and corresponding additional literature include design-related issues pertaining to the international marketing research plan and process as well as developments in conducting academic international marketing research. Specific attention was paid to determining information requirements, the selection of sources of information, choosing a general research methodology (e.g. survey research, observational studies, simulated test markets, etc), the practical organization and design of international marketing research, the identification of the right unit(s) of analysis, etc. Questions 1. In their paper, Nakata and Huang (2005) obviously focus on academic international marketing research. It is interesting to read the paper with this chapter’s topic, international marketing research design, in mind. The main challenge here lies in considering the design-related issues as presented by Craig and Douglas (2005) and as discussed previously in this chapter in the light of the opportunities that Nakata and Huang (2005) identify by their extensive literature review. Among others, some questions that may be worthwhile to consider include: a) Which future problem formulation(s) and research question(s) seem(s) most worthwhile to consider? b) What information may be needed to address these problems and research questions? EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 15 International Marketing Research Chapter 2 c) How to obtain the necessary information? Which research techniques may be used? From whom should the information/data be collected? d) What would be appropriate ways to analyze the data collected? e) How does the knowledge generated through conducting this international marketing research contribute to existing knowledge in field of international marketing? 2. Imagine yourself to be the marketing manager of a Dutch company that is producing packaging material to be used for protecting shipped goods. You wonder whether or not there are opportunities for your company to internationalize business operations. How would you go about? Among others, you may need to consider the following issues: a) What type(s) of information would you be particularly interested in? b) Where would this/these type(s) of information be available? c) What main criteria would you use for selecting sources of information? d) What would be the unit of analysis in your study? References Craig, C.S., & Douglas, S.P. (2005). International marketing research (3rd ed.). Chichester, UK: John Wiley and Sons: Chapter 2. Kumar, V. (2006). International marketing research. In R. Grover & M. Vriens (Eds.), The handbook of marketing research: Uses, misuses, and future advances (pp. 628-645). Thousand Oaks, CA: Sage Publications. Nakata, C., & Huang, Y. (2005). Progress and promise: The last decade of international marketing research. Journal of Business Research, 58, 611-618. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 16 International Marketing Research Chapter 3 Chapter 3 3 Secondary Data in International Marketing Research T his chapter, combined with the corresponding additional literature and lectures/classroom sessions, focuses on locating the appropriate secondary information, commercial and non-commercial information sources, information quality (e.g. reliability, validity, and timeliness), comparability of secondary data (across nations), and the requirements with respect to different types of secondary information given specific modes of operation in a given nation. Various types of secondary data are typically used when selecting foreign markets for market entry (e.g. estimating market risk and potential profitability of foreign markets) and making an assessment of the interconnectedness between the home-market and a number of foreign markets. Learning objectives After reading this chapter, you should: • Identify the various sources and types of secondary data that exist and that can be used by international marketing decision-makers; • Better understand the potential use (and perhaps misuse) of secondary data in international marketing research. Keywords Secondary data in international marketing research, utilization of secondary data, advantages and disadvantages of secondary data, sources of secondary data EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 17 International Marketing Research 3.1 Chapter 3 Secondary data in international marketing research: Usefulness, advantages, and disadvantages Secondary data are data collected by persons or agencies for purposes other than solving the problem at hand (Kumar, 2000). The three major uses of secondary data in international marketing research can be summarized as follows: • Selecting nations or markets that merit in-depth investigation • Making an initial estimate of demand potential in the target market • Monitoring environmental change Secondary data may be useful as (Kumar, 2000): • A valuable source of new ideas that can be explored later through primary research • To help define the core problem and formulate hypotheses about its solution • To help setting up new research (how did others tackle similar research problems?) • To help define a (target) population, and define parameters in primary research • To act as a reference base against which to compare the validity or accuracy of primary data There are some big advantages of working with secondary data (Kumar, 2000): • It saves costs • It saves time as secondary data are easily accessible (e.g. via Internet!) • It may tell you that the project is not feasible before any significant investments are made • It may be the only source of consumer behavior in the past • Governmental data sources may be more reliable than information obtained from competitors There are also some problems associated with the use of secondary data: • The data can be outdated • The data can be inaccurate (or not accurate enough, given the problem) • The data may not be comparable across nations EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 18 International Marketing Research Chapter 3 • The data is most often incomplete (given the information needs) • The data may simply be not available (e.g. third world countries) • There is a lot of variation in data collection methods, and sampling frames used in various nations 3.2 External sources of secondary data With respect to external - that is, publicly available - secondary data sources, several considerations seem important (Craig & Douglas, 2005). First, secondary data may come in various formats, which all have their specific advantages and disadvantages. The most common formats include print forms, CD-ROMs, and via the Internet. Second, a crucial issue refers to where the secondary data can be obtained from. In this respect, “the increasing volume of information available in different regions, nations and markets throughout the world has led to the establishment of data locators.” (Craig & Douglas, 2005, p. 65). Most of time, these are available via the Internet. Examples of some global data locators include: • The MSU-CIBER Web Site (ciber.msu.edu) • The University of Kansas International Business Resource Center Web Site (www.ibrc.business.ku.edu) • VIBES: Virtual International Business and Economics Sources Web Site (www.libweb.uncc.edu/ref-bus/vibehome.htm) • Business Information in the Internet (www.rba.co.uk/sources/index.htm) • UNSTAT (data locator of the United Nations) • Stat-USA Other useful sources of secondary (often macroeconomic) data are: • United Nations (www.un.org) • World Bank (www.worldbank.org) • OECD (www.oecd.org) • The European Commission (www.europa.eu.int) • Nation-level government sources (e.g. www.cbs.nl/en for the Netherlands) EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 19 International Marketing Research Chapter 3 The examples mentioned above mainly pertain to non-commercially available data. However, one may also retrieve secondary data from commercial sources (Craig & Douglas, 2005). Examples are: • The Economist Intelligence Unit (www.eiu.com) • Euromonitor (www.euromonitor.com) • National and regional guides • Periodicals, newsletters, indexing and abstracting services No matter where secondary data is obtained from, two crucial issues that need to be taken into consideration are data accuracy and data equivalence (Craig & Douglas, 2005). Data discrepancies in terms of accuracy or equivalence may have their origin in things such as the way a measurement unit is defined, the frequency with which data is updated, the level of national industrialization, taxation structures, etc. Craig and Douglas (2005) identify and discuss four main types of information requirements that may be relevant in international marketing decision-making: • Political, financial, and legal data (e.g. political factors, financial and foreign exchange data, legal and regulatory data) • General market data (e.g. demographic characteristics, economic characteristics, geographical characteristics, technological characteristics, sociocultural characteristics) • Infrastructure data (e.g. physical transportation structure, retail distribution network, communication infrastructure, availability of physical, human, and capital resources) • 3.3 Product-specific data (e.g. industrial products, commodity products, services) Uses of secondary data According to Craig and Douglas (2005), secondary data may be used for three key decision-making areas: • Selecting different markets to evaluate for initial entry • Estimating demand for a company’s products or services in international markets EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 20 International Marketing Research • Chapter 3 Assessing market interconnectedness to guide resource deployment across national markets or between and within regions Concerning the first type of usage, secondary data “can be used to develop general procedures to categorize nations based on overall attractiveness or risk to suggest which nations should be eliminated from further consideration, and which should be investigated in more depth. Alternatively, secondary data can be incorporated into customized screening procedures that are geared to company objectives and specific industries.” (Craig & Douglas, 2005, p. 110) With respect to demand estimation, the first step is to identify appropriate nations and markets for a more in-depth investigation. After that demand estimation can take place. Secondary data may be used in several ways for doing so. Possible techniques include lead-lag analysis, shift-share analysis, surrogate indicators, barometric analysis, analytical models, or a combination of several methods (Craig & Douglas, 2005). Finally, in order to assess market interconnectedness it is essential to use secondary data for evaluating macroeconomic linkages, product-market linkages, macroeconomic similarity, and product-market similarity (Craig & Douglas, 2005). 3.4 International marketing information: UK small and medium-sized enterprises’ perceptions of different sources and types Studies have shown that lack of information can provide an obstacle in firms’ endeavour to be competitive in overseas markets. A study conducted by Crick (2005) provides empirical data that examines how managers of internationalizing UK firms perceive the usefulness of overseas market information sources, their level of utilization, plus perceptions of the types of data required. Findings are primarily based on a postal survey of 446 firms. Also reported are selected findings from 20 indepth interviews. Results establish that a high percentage of firms actively utilize internal staff, agents, social contacts and the Internet in comparison with other data sources in finding various types of information. Furthermore, the interviews found that firms’ EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 21 International Marketing Research Chapter 3 own websites provide reference points for other businesses and this has resulted in many enquiries and orders for a relatively large percentage of firms. 3.5 Gathering and using information for the selection of trading partners Nijssen, Douglas, and Calis (1999) examine the nature of the search process used by international firms in identifying trading partners in emerging markets, and to what extent systematic information collection on potential partners is likely to enhance the choice of satisfactory partners. The results, based on 46 Dutch companies, suggest that only a few companies have formal procedures to find trading partners and that they tend to depend on informal and personal contacts for information. A company’s involvement in export/import activities and entry strategy was found to have a positive influence on the actual selection of satisfactory partners. This was also true for formalization of the search process, company size, a more extensive partner-evaluation and prior research experience with finding trading partners. Proactiveness/breadth of search was not found to have a significant positive effect, and depth of search even happened to be negatively correlated with successful partner selection. Finally, the results did not support modeling searching for importing and exporting relationships separately. 3.6 Summary In this chapter and the corresponding literature, particular attention has been paid to locating the appropriate secondary information, commercial and noncommercial information sources, information quality (e.g. reliability, validity, and timeliness), comparability of secondary data (across nations), and the requirements with respect to different types of secondary information given specific modes of operation in a given nation. Various types of secondary data are typically used when selecting foreign markets for market entry (e.g. estimating market risk and potential profitability of foreign markets) and assessing the interconnectedness between the home-market and a number of foreign markets. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 22 International Marketing Research Chapter 3 Questions 1. For the following decision-making problems, briefly illustrate how secondary data can be of use to a marketing decision-maker: a) Deciding whether or not to enter a foreign market. b) Estimating the potential demand for an existing product in a foreign market. c) Assessing the interconnectedness between the home-market and a foreign market. 2. What are the major advantages and disadvantages of secondary data when compared to primary data? 3. On what quality criteria should secondary data be judged? 4. Collect data on beer and wine consumption in your country for the latest available year (and previous years, if available). Calculate per capita consumption for your country and compare it with other countries where data is available. What accounts for possible differences? What national markets seem to be ‘beer markets’? What markets are wine markets? Could you also say something about the relative market position of beer versus wine over time? References Craig, C.S., & Douglas, S.P. (2005). International marketing research (3rd ed.). Chichester, UK: John Wiley and Sons: Chapters 3 and 4. Crick, D. (2005). International marketing information: UK small and medium-sized enterprises’ perceptions of different sources and types. Business Information Review, 22, 114-122. Kumar, V. (2000). International marketing research. New Jersey: Prentice Hall. Nijssen, E.J., Douglas, S.P., & Calis, G. (1999). Gathering and using information for the selection of trading partners. European Journal of Marketing, 33, 143-162. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 23 International Marketing Research Chapter 4 Chapter 4 4 Collecting Primary Data in International Marketing Research C rucial issues in collecting primary survey data in international marketing research that will be presented in this chapter, as well the additional literature and lectures/classroom sessions include: the definition and selection of the units of analysis, structuring the survey-based research design so that the impact of different sociocultural settings and economic contexts is identified and contamination of findings avoided, and the acknowledgement of possible culturally-determined biases in survey-based research design, communication, and interpretation. Furthermore, attention will be paid to possible biases when collecting primary data due to differences in data collections modes. Learning Objectives After reading this chapter, you should: • Better understand the conceptual foundations for primary data collection (mainly through surveys) in international marketing research. Keywords Primary data collection, unit of analysis, research design structure, surveys, cultural bias in international marketing research, data collection modes 4.1 Structuring primary data collection When collecting primary data in international marketing research, “a first priority in the research design is to define the unit of analysis” (Craig & Douglas, 2005, p. 154). For instance, the basic unit of analysis may be the country. In this case, when selecting the unit of analysis, it is important to explicitly consider the relevance EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 24 International Marketing Research Chapter 4 as a unit, the independence of the unit, the comparability of countries, and the heterogeneity within countries. After having selected the basic unit of analysis, it may be necessary to further refine it. In general, when defining the unit of analysis, three components should be paid attention to: • What is the geographical scope? • What are the membership criteria? • What is the situational context? After having defined the unit of analysis, the relevant units need to be selected. According to Craig and Douglas (2005, p. 161), “an important consideration in selecting units of analysis is that they should be purposively selected relevant to the characteristics or variables, and at the same time be comparable relative to other factors. The range of units selected should therefore reflect variation on the factor of interest.” Furthermore, selected units should be independent and free from contamination by other factors possibly influencing the behavior of interest. A next issue for international marketing researchers collecting primary data pertains to the structuring of the research design. Craig and Douglas (2005) discuss four types of research design structures: • Single-site study: Study conducted at a single site or foreign location • Multiple-site study: A static comparison of units located at different geographical sites and different situational or macro contexts • External influence study: Investigating the impact of exposure to direct or indirect influences from other cultures on attitudes or behavior patterns associated with a given culture or subculture • Transitional study: Examination of how attitudes, interest and behavior change as a respondent or group moves from one culture to another When designing international marketing research, the composition of the research team should be considered as well (Craig & Douglas, 2005). The most important objective of doing so is minimizing the cultural bias. In particular, when researchers and/or units of analysis from different cultural backgrounds interact with each other, cultural bias in research design, communication and interpretation EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 25 International Marketing Research Chapter 4 may arise. In this respect, Craig and Douglas (2005) refer to the so-called self-referent cultural bias and possible ways to deal with it. The self-referent cultural bias is the “tendency for a researcher to perceive and interpret phenomena or behavior observed in other countries and cultures in terms of his or her own cultural referents” (Craig & Douglas, 2005, p. 170). 4.2 Pros and cons of various survey types In the context of primary data collection, Kumar (2000) discusses the advantages and disadvantages of various data collection techniques and survey types. Specifically, he differentiates between personal interviewing, telephone interviewing, mail surveys, and e-surveys. Personal interview: PROs: - Very high response rate - Most flexible - Clarification of questions on the spot - More control on data quality - Most effective method in developing countries CONs: - Expensive - Interviewer bias (gender issue, misinterpretation, …) Telephone interview: PROs: - Reduced cost - High response rate - Possibility to call back CONs: - Not for long interviews - Interviewer bias - Only very simple questions - No visual aids EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 26 International Marketing Research Chapter 4 - Often only upper echelons of the society (non-representativity) Mail survey: PROs: - Very cheap (no fieldwork costs), but cost per survey may still be high (due to nonresponse) CONs: - Very low response rate E-survey: PROs: - Time to respond is short - Relatively cheap (but considerable start-up costs) - Visual aids may be used; higher degree of sophistication (e.g. response format) - Increased flexibility (e.g. randomizing questions and/or questionnaires) - Reduction of errors (especially coding [i.e., human] errors) - Higher quality of response (compared to mail) CONs: - Representativity may be low (e.g. coverage error) - Sampling error (if not all members of the population are invited to participate) - Increased likelihood of nonresponse bias 4.3 Assessing the equivalence between online and mail surveys in service research Deutskens, de Ruyter, and Wetzels (2006) investigate whether online and mail surveys produce similar (i.e., convergent) results in the context of B-to-B service quality studies. First of all, they provide a very nice overview on the (methodological) literature comparing mail and online surveys. Next, they use empirical data to assess whether substantial differences are obtained using online and mail surveys. To make such an assessment they use an advanced statistical analysis approach, namely mean- and covariance structure modeling (see Chapter 5 of this textbook). Apart from a few minor differences (see paper) no substantial differences were obtained. This result is promising as it may provide an indication EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 27 International Marketing Research Chapter 4 that in mixed-mode surveys (in particular: surveys which combine online and mail surveys) no mode-related bias is to be expected. The next paper shows, however, that mode of data collection should still be considered to be an important (potential) source of (method) bias. 4.4 Mode of data collection can have serious effects on data quality The paper by Bowling (2005) is very interesting as it provides a systematic overview of the specific strengths and weaknesses of: (1) face-to-face interviews; (2) telephone interviews; (3) self-administered (postal) interview; and (4) selfadministered, programmed, electronic interview. Bowling argues that: (1) the degree of impersonality of the mode of data collection; (2) the cognitive burden imposed by that mode under study; (3) the legitimacy of the study; (4) the degree of control over the questionnaire; (5) rapport between between respondent and interviewer [if present!]; and (6) communication style may lead to differential results across modes of data collection. 4.5 What is a survey? In his booklet ‘What is a survey?’, Scheuren (2004) discusses briefly all essential aspects concerning the design and conduct of surveys, which can be of great help for persons who plan to conduct some international marketing research. In particular, valuable information is provided concerning: • What is a survey? • How to plan a survey? • How to collect survey data? • How to judge the quality of a survey? • What are focus groups? • How to design a questionnaire? • How to conduct pretesting? • What is a margin of error? EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 28 International Marketing Research 4.6 Chapter 4 Summary Crucial issues in collecting primary survey data in international marketing research that have been presented in this chapter include: the definition and selection of the units of analysis, the pros and cons of alternative data collection techniques, structuring the survey-based research design taking into account differences in sociocultural settings and economic contexts, and the acknowledgement of possible culturally-determined biases in survey-based research design, communication, and interpretation. Questions 1. ‘Kölsch’ is a local beer speciality brewed in and around the city of Cologne (Germany). Please consult Wikepedia (free encyclopedia on Internet) to learn more about Kölsch and the many Kölsch brands available on the local beer market. The great majority of Kölsch manufacturers run pubs and restaurants in the city of Cologne. One of the Kölsch brands, Päffchen Kölsch, has experienced a decline in direct and indirect sales in the last couple of years. Direct sales are sales in manufacturer-owned pubs and restaurants, whereas indirect sales are sales to independent pub owners. The management of Päffgen (http://www.max-paeffgen.de/) would like you to assist in finding out what factors contribute to the decline in sales. For this purpose you are expected to design a survey (in English; they will help you later on with the translation!). When designing a survey make sure you answer the following questions: a) Who should answer the survey questions? b) What questions will you ask? c) What mode of data collection would be most appropriate for this study? (face-to-face, telephone, web-based)? d) What factors may potentially threaten the reliability and validity of your research outcomes? e) What can you do to avoid getting unreliable and/or invalid research outcomes? EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 29 International Marketing Research Chapter 4 References Bowling, A. (2005). Mode of questionnaire administration can have serious effects on data quality. Journal of Public Health, 27, 3, 281-291. Craig, C.S., & Douglas, S.P. (2005). International marketing research (3rd ed.). Chichester, UK: John Wiley and Sons: Chapter 5. Deutskens, E., de Ruyter, K., & Wetzels, M. (2006). An assessment of equivalence between online and mail surveys. Journal of Service Research, 8(4), 346-355. Kumar, V. (2000). International marketing research. New Jersey: Prentice Hall. Scheuren, F. (2004). What is a survey? (Chapters 2-7; pp. 15-51; Chapter 10; pp. 63-67; booklet downloadable from Internet: http://www.whatisasurvey.info) EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 30 International Marketing Research Chapter 5 Chapter 5 5 Comparability of Data From Multiple Nations S pecific issues that will be dealt with in this chapter, the additional literature, and the lectures/classroom sessions include the ‘emic’ and ‘etic’ perspective on comparative (cross-national) research, different forms of biases (e.g. construct, method, and item bias) and equivalence (e.g. construct, measurement unit and scalar equivalence). In addition, various methods to identify non-equivalent survey questions (across nations) will be introduced and demonstrated (e.g. logistic regression, exploratory and confirmatory factor-analytical approaches, etc.). Learning objectives After reading this chapter, you should: • Be aware of alternative frameworks for conducting cross-national studies (e.g. etic, emic, imposed etic, adapted etic, linked emic); • Better understand different forms of (data) equivalence in cross-national marketing research; • Better understand the adequacy of different research procedures designed to avoid, diagnose (and repair) violations of the various forms of data equivalence across nations, whenever possible. As such, the reliability and validity of cross-national comparisons may be enhanced. Keywords Etic, emic, imposed etic, adapted etic and linked emic, equivalence and bias, construct / measurement unit / scalar equivalence, construct / method / item bias, statistical approaches to measurement equivalence testing (e.g. MACS modeling; IRT/DIF analysis; logistic regression; multimethod approach; etc.) EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 31 International Marketing Research 5.1 Chapter 5 The Emic and Etic perspective This section deals with the purpose of cross-national research, alternative approaches that can be taken, and recognized requirements from the literature for carrying such studies. Purpose The fundamental purpose of cross-national marketing/consumer research is to test whether the marketing/consumer theories and concepts developed in one or some nations are applicable to other nations as well. Furthermore, if differences exist between nations cross-national marketing/consumer research will be focused at offering scientific interpretations and explanations for these differences. Etic and emic approach to cross-national marketing/consumer research Cross-national marketing/consumer research faces the problem of comparability of data across nations. It is common that each nation is unique (at least to some extent), and people show high variations in terms of the dimensions of (national) culture. Diversity between (and also within) nations may form a serious threat to making cross-national comparisons both in terms of chosen research methodologies as well as in terms of data obtained. The specific characteristics of each individual nation may require different research methodologies, which may limit the comparability of data across nations (Kumar, 2000). There are two major ‘schools of thought’ when it comes to cross-national research methodology (Hulin, 1987; Triandis & Marin, 1983). The first school, referred to as ‘emic’, believes in the uniqueness of each nation and emphasizes the importance of studying the peculiarities of each nation, identifying and understanding its uniqueness. The study is typically nation-specific and inferences are made about cross-national similarities and differences in a subjective manner. The emic school attempts to reconstruct the experiential world of the individual through his/her reports and explanations. A proponent of the emic school of thought is H.C. Triandis (Triandis et al., 1980, 1981, 1985) along with many cultural anthropologists. The other school, named ‘etic’, is primarily concerned with identifying similarities in terms of dimensions of national culture, and aims at developing EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 32 International Marketing Research Chapter 5 nation-fair measures. According to this school, the marketing/consumer models (i.e., including measurement models) derived in one nation may be expected to be universal and applicable to other nations. If this assumption is legitimate, such measures make comparisons across nations feasible and objective. Proponents of this school of thought are G. Hofstede, M. Rokeach, L.R. Kahle, S.H. Schwartz, and many psychologists and marketing professionals (see Craig & Douglas, 2000; Kumar, 2000). The terms ‘etic’ and ‘emic’ were introduced into anthropology in the 1960s by the linguist Kenneth Pike (1954, 1971). They were extrapolated from the distinction in linguistics between phonetic and phonemic.1 Pike (1971) argued that the emic and the etic approach should not be perceived as opposite approaches. According to Pike, they describe the problem of cross-national comparability from two different standpoints, which lead to results, which shade into one another. The major strengths and shortcomings of both the emic and the etic approach are summarized in Table 5.1. The study of phonemics involves the examination of the sounds used in a particular language, while phonetics attempts to generalise from phonemic studies in individual languages to a universal science covering all languages. By analogy, emics apply only in a particular society, while etics are nation-free or universal aspects of the world (Berry, 1969). 1 EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 33 International Marketing Research Chapter 5 Table 5.1: Major strengths and shortcomings of the Emic and Etic approach Emic approach Strengths It permits an understanding of the way in which a specific nation/culture is constructed. It helps one to understand how individuals behave, and why exactly they behave the way they do (e.g. what the impact is of cultural/national influences). According to some proponents of the emic approach (e.g. Pike, 1971) only the emic approach provides a basis upon which a predictive science of behavior can be expected to make progress, since even statistical predictive studies will in many instances prove invalid (see Pike, 1971). Etic approach Strengths It provides a broad perspective about different events around the world, so that differences and similarities (in terms of the cultural components) can be recognised. Techniques for recording differing phenomena can be acquired. The etic approach is the only point of entry, since there is no other way to begin an analysis than by starting with a rough, tentative etic description of it (Pike, 1971). Weaknesses Emic research is subject to systematic bias. Systematic bias occurs when individuals represent or misinterpret their own behavior (Helfrich, 1999). Emic research is subject to arbitrariness. Arbitrariness refers to the subjective status of scientific knowledge (Helfrich, 1999). Weaknesses It is easy to overlook the differential aspects of cultural impact. It is easy to overlook that nation/culture does not represent an independent variable in the usual sense* (Helfrich, 1999). The definition of the phenomena being studied (e.g. variables) may itself be culture-bound. An etic comparison of selected cultures may allow the researcher to meet practical demands, such as financial or time limitations. Note .*Culture is not an independent variable in the sense of an experimentally controlled variable. The assignment of individuals to different groups can, at best, be based on a selection according to their natural membership in that group (i.e. a ‘quasi-experimental’ research design) (Helfrich, 1999). Several authors have suggested to combine the emic and the etic approach (Przeworski & Teune, 1970; Triandis, 1972; Davidson, Jaccard, Triandis, Morales, & Diaz-Guerrero, 1976; Triandis & Marin, 1983; De Vera, 1985). Triandis (1972), for example, claimed that, in general, etic measures are needed to compare cultures and emic measures to fully understand them. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 34 International Marketing Research Chapter 5 In the 1980s and 1990s a couple of authors (e.g. Berry, 1989; Helfrich, 1999) proposed alternative approaches which build on the strengths of both the etic and emic approach while minimizing their weaknesses. Berry (1989), for instance, proposed a five-step process that may provide a basis for an integrated approach to studying cultural differences. The steps in the process are: Step 1: Examine a research problem in one’s own culture (emic A) and develop a conceptual framework and a set of relevant instruments. Step 2: Transport this conceptualisation and measurement to examine the same issues in a similar manner in another culture (i.e. ‘imposed etic’). Step 3: Enrich the imposed etic framework with unique aspects of the second culture (emic B). Step 4: Examine the two sets of findings for comparability. Step 5: If these findings are not comparable, the two conceptualisations will be considered to be independent. But, if they are comparable, then the common set, the ‘derived etic’, will form the basis of a unified etic framework. Berry’s approach is referred to as Berry’s ‘derived etic’ (1989). The approach is graphically depicted in Figure 5.1. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 35 International Marketing Research Chapter 5 Figure 5.1: Berry’s five-step process (Berry, 1989) STEP & RESEARCH ACTIVITY 1. BEGIN RESEARCH IN OWN CULTURE EMIC A IMPOSED ETIC 2. TRANSPORT TO OTHER CULTURE 3. DISCOVER OTHER CULTURE EMIC B 4. COMPARE TWO CULTURES EMIC A EMIC B 5-1 COMPARISON NOT POSSIBLE EMIC A EMIC B 5-2 COMPARISON POSSIBLE EMIC A EMIC B DERIVED ETIC Berry’s five-step process provides a guideline for cross-national research at the operational level (Helfrich, 1999). It offers, at least in principle, an attractive alternative to researchers in the field of international marketing. Given that the conceptualization and measurement can be interchanged from one nation to another (i.e. ‘imposed etic’), researchers can –at least- make a start investigating certain phenomena in other nations. By repeating Berry’s five-step process in new nations, a universal framework can be developed to explain the phenomena under study (Maheswaran & Shavitt, 2000). Several researchers in the field of international marketing/management have adopted an ‘imposed etic’ approach (e.g. Ryan, Chan, Ployhart, & Slade, 1999; Ployhart, Wiechmann, Schmitt, Sacco, & Rogg, 2003). In such EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 36 International Marketing Research Chapter 5 studies, an emic approach would not be feasible as the research process would become too complex. Different variables would need to be collected in each nation, and separate validation studies would be required (Ployhart et al., 2003). Most conceptualizations regarding the phenomena under study in international marketing are defined and operationalized in a Western nation (typically the United States). In some cases, it may well be that the conceptual domain and/or the measurement may not be totally transferable to other nations (Yaprak, 2003). Nevis (1983), for instance, has shown that Maslow’s hierarchy of needs does not apply in Chinese societies. Taking this into account, it is clear that the enrichment of the imposed etic framework (i.e. step 3 in Berry’s five-step process) is a crucial research step. In international marketing, however, it is very likely that this particular research step in the process will not be executed. Time- and budget constraints often lie at the basis of skipping this research step. Such practical limitations may form a serious threat to the validity of comparisons made between nations. 5.2 Concepts, constructs, and causal theory Prior to examining equivalence issues (e.g. construct equivalence) in cross- national research, the terms ‘concepts’, ‘constructs’, ‘theory’, and ‘causal theory’ will be discussed in detail. A ‘construct’ can be generally defined as: “a conceptual term used to describe a phenomenon of theoretical interest” (Cronbach & Meehl, 1955; Nunnally, 1978; Schwab, 1980). The notions of ‘constructs’ and ‘concepts’ (i.e. conceptual terms) are similar, but they are not the same. Kerlinger (1986, p. 26) defines a concept as “an abstraction formed by generalization from particulars”. ‘Corruption’, for instance, can be seen as a concept because people in our society are aware of certain behaviors of individuals (i.e. the particulars) which may be classified as ‘corruption’ (i.e. the generalization). A ‘construct’ is defined as a “concept with added meaning” (Kerlinger, 1986, p. 26). According to Kerlinger, meaning is added because a deliberate and conscious attempt has been made to define, specify, and operationalize the concept for the purpose of scientific study. A construct makes it possible for the researcher to judge whether a particular instance is or is not a member of the category. The notion of EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 37 International Marketing Research Chapter 5 ‘corruption’ can be considered a construct once it is defined as “lack of integrity or honesty (especially susceptibility to bribery); use of a position of trust for dishonest gain”. Other examples of constructs are general intelligence (in psychological research), national identity (in political research), employee satisfaction (in research in HR management), and consumer innovation adoption (in consumer research). These constructs are typically operationalised by means of a set of ‘variables’. A variable is “a construct that has been defined so that instances of it can be assigned value and counted” (Kerlinger, 1986). Variables are expected to change either from one time to another or from one person (or unit) to another. With two (or more) constructs, it is possible to form a ‘theory’. A theory is defined as a “set of interrelated constructs, definitions, and propositions that present a systematic overview of phenomena specifying relations among variables, with the purpose of explaining and predicting the phenomena [under study]” (Kerlinger, 1986, p. 9). A theory may be considered a ‘causal’ theory if hypotheses are made about ‘causes’ and ‘consequences’. A very simple causal theory may state that corruption leads to a decrease in economic growth. According to this theory, the construct ‘corruption’ is expected to exert a (causal) influence on the construct ‘economic growth’. A causal diagram may be drawn to depict such a theory: corruption (decrease in) economic growth. 5.3 Improving the conceptual foundations of international marketing research Douglas and Craig (2006) carefully examine the conceptual underpinnings of marketing/consumer research needed to guide expansion of global markets. Key issues discussed include: (1) the adequacy of the conceptual framework used; (2) the unit of analysis; and (3) construct measurement. In the paper, the importance of decentralizing the research perspective (e.g. getting local management involved in the research effort) is strongly emphasized. The authors propose two new (iterative) approaches to enhance the cross-national comparability of marketing/consumer data without ignoring emic elements. The two approaches are the adapted etic model and the linked emic model (for details see paper). EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 38 International Marketing Research 5.4 Chapter 5 Towards a theory of bias and equivalence As argued before, comparability of data and research procedures (e.g. data collection procedures, statistical analyses, etc.) as applied across nations is key in comparative cross-national marketing/consumer research. As indicated by Johnson (1998), ensuring comparability across nations implies the establishment of many different types of ‘equivalencies’. Van de Vijver (1998) distinguishes between three major forms of equivalencies: construct equivalence (i.e., the identity of constructs across nations/same construct is measured in each cultural group; comparing nomological networks across cultures as well as factor analysis are commonly used for testing construct equivalence); measurement unit equivalence (i.e., the identity of measurement unit across nations/same scale (measurement unit) with different origins in each cultural group); and scalar equivalence (i.e., the identity of measurement unit and scale origin across nations/same scale with same origin in each cultural group). Subsequent forms of equivalence imply the establishment of earlier forms of equivalence (e.g. scalar equivalence implies the establishment of both construct and measurement unit equivalence). The most stringent form of equivalence, scalar equivalence, is required whenever the researcher aims at comparing (estimated) construct means across nations (i.e., absolute level comparisons). However, if causal relationships are to be tested in multiple nations (i.e., structure-level comparisons), the establishment of measurement unit equivalence is sufficient. By establishing these levels of equivalence cross-national bias can be avoided. Bias refers to the presence of nuisance factors in cross-national research, and forms a threat to the reliability and validity of cross-national comparative research. In the paper by van de Vijver (1998), three forms of bias are distinguished: construct bias (i.e., dissimilar constructs across nations), method bias (e.g. sample, instrument and/or administration bias across nations), and item bias (i.e., anomalies at item level in particular nations). The influences of the different types of biases on the level of equivalence established (e.g. construct, measurement unit, and scalar) are EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 39 International Marketing Research Chapter 5 discussed. In addition, many strategies for enhancing equivalence in cross-national (i.e.., multi-lingual) studies are discussed in the paper as well. 5.5 The issue of equivalence Partially based on the work by Van de Vijver, Fontaine (2005) also provides an overview of the concepts of equivalence and bias in cross-national research. Next, he discusses the major forms of equivalence and the factors that can (potentially) bias cross-national measurement. In addition, he also provides a general overview of data-analytic strategies/models that are used to justify cross-national equivalence or to detect cross-national bias. Among the data-analytical strategies/methods presented are: assessment of the nomological network; studying the domain of investigation [in a rather open and unstructured way]; techniques based on the analysis of variance; exploratory factor analysis; confirmatory factor analysis augmented with mean structures (i.e.., mean- and covariance structure modeling); logistic regression; IRT/ DIF-based approaches; the multimethod approach; etcetera. 5.6 Equivalence of survey data: Relevance for international marketing Van Herk, Poortinga, and Verhallen (2005) provide a framework for establishing equivalence (and identifying sources of non-equivalence) in subsequent stages of the international marketing/consumer research process. The stages included in the framework are: 1. problem definition; 2. research design; 3. sample selection; 4. data collection; 5. data editing and coding; and 6. analyzing and interpreting data. The framework may certainly help marketing managers to find out to which extent consumer perceptions can be considered equal across nations. 5.7 Assessing measurement invariance in cross-national consumer research In their very well-cited paper, Steenkamp and Baumgartner (1998) demonstrate how cross-national equivalence (i.e., construct, measurement unit and scalar equivalence) of multi-item survey instruments can be tested using mean- and covariance structure (MACS) modeling. The test procedure proposed (see paper page 83) consists of evaluating a series of increasingly stringent measurement equivalence EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 40 International Marketing Research Chapter 5 models. The paper also includes an empirical examination of the equivalence of the consumer ethnocentrism scale in three European nations. 5.8 Response biases in marketing research In their book chapter, Baumgartner and Steenkamp (2006) discuss the potential (cross-national) bias caused by differences in respondents’ response styles. In particular, the impact of social desirability responding, acquiescence response style and extreme response style are examined in detail. The authors provide a stateof-the-art overview of known sociodemographic correlates of these response styles, and argue that such response styles should be controlled for in order to ensure the cross-national comparability of marketing/consumer data. In addition, the paper discusses several strategies to (statistically) control for these response styles. 5.9 Summary Specific issues that have been dealt with in this chapter include the ‘emic’ and ‘etic’ perspective on comparative (cross-national) research, different forms of biases (e.g. construct, method, and item bias) and equivalence (e.g. construct, measurement unit and scalar equivalence). In addition, various methods to identify non-equivalent survey questions (across nations) have been introduced (e.g. logistic regression, exploratory and confirmatory factor-analytical approaches, etc.) and demonstrated by the instructor. Questions 1. What is the crucial difference between an ‘etic’ and an ‘emic’ view on crossnational research? What are the advantages and disadvantages of both points of view? Can these two opposite views be reconciled? If so, how? 2. How is bias and equivalence defined? Are these two concepts related? In what sense? 3. What major types of bias are distinguished by F. van de Vijver? 4. What factors may (potentially) threaten the cross-national equivalence of survey data? Discuss! EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 41 International Marketing Research Chapter 5 5. What statistical methods can be used to detect cross-nationally biased survey questions? What are the advantages and disadvantages of these methods? 6. What major types of response styles are discussed by Baumgartner & Steenkamp (2006)? What individual is more likely to exhibit these response styles? How can one adequately control for each of these response styles? References Baumgartner, H., & Steenkamp, J.-B.E.M. (2006). Response biases in marketing research. In R. Grover, & M. Vriens (Eds.). The handbook of marketing research: Uses, misuses, and future advances (pp. 95-109). Thousand Oaks, CA: Sage. Berry, J.W. (1969). On cross-cultural comparability. International Journal of Psychology, 4(2), 119-128. Berry, J.W. (1989). Imposed etics – emics - derived etics: The operationalisation of a compelling idea. International Journal of Psychology, 24, 721-735. Craig, C.S, & Douglas, S.P. (2000). International marketing research. New York, NY: Wiley. Craig, C.S., & Douglas, S.P. (2005). International marketing research (3rd ed.). Chichester, UK: John Wiley and Sons: Chapter 6. Cronbach, L.J., & Meehl, P.E. (1955). Construct validity in psychological tests. Psychological Bulletin, 52, 281-302. Davidson, A. R., Jaccard, J. J., Triandis, H. C., Morales, M.L., & Diaz-Guerrero, R. (1976). Cross-cultural model testing: Toward a solution of the etic-emic dilemma. International Journal of Psychology, 11(1), 1-13. De Vera, M. V. (1985). Establishing cultural relevance and measurement equivalence using emic and etic items. Unpublished dissertation. Urbana, IL: University of Illinois. Douglas, S. P., & Craig, C. S. (2006). On improving the conceptual foundations of international marketing research. Journal of International Marketing, 14, 1-22. Fontaine, J. R. J. (2005). Equivalence. In Encyclopedia of social measurement, Volume 1. Elsevier. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 42 International Marketing Research Chapter 5 Helfrich, H. (1999). Beyond the dillema of cross-cultural psychology: Resolving the tension between etic and emic approach. Culture and Psychology, 5(2), 131-153. Hulin, C.L. (1987). A psychometric theory of evaluations of item and scale translations: Fidelity across languages. Journal of Cross-Cultural Psychology, 18, 115-142. Kerlinger, F.N. (1986). Foundations of behavioral research. New York, NY: Hold, Rinehart, and Winston. Kumar, V. (2000). International marketing research. Upper Saddle River, NJ: Prentice-Hall. Maheswaran, D., & Shavitt, S. (2000). Issues and new directions in global consumer psychology. Journal of Consumer Psychology, 9(2), 59-66. Nevis, E.C. (1983). Cultural assumptions and productivity. Sloan Management Review, Spring, 11-29. Nunnally, J.C. (1978). Psychometric theory (2nd ed.). New York, NY: McGraw-Hill. Pike, K.L. (1954). Emic and etic standpoints for the description of behavior. In K.L. Pike (Ed.), Language in relation to a unified theory of the structure of human behavior (pp. 8-28). Glendale, IL: Summer Institute of Linguistics. Pike, K.L. (1971). Language in relation to a unified theory of the structure of human behavior. The Hague, The Netherlands: Mouton. Ployhart, R.E., Wiechmann, D., Schmitt, N., Sacco, J.M., & Rogg, K. (2003). The crosscultural equivalence of job performance ratings. Human Performance, 16(1), 4979. Przeworski, A., & Teune, H. (1970). The logic of comparative social inquiry. New York, NY: Wiley. Ryan, A.M., Chan, D., Ployhart, R.E., & Slade, A.L. (1999). Employee attitude surveys in a multinational organization: Considering language and culture in assessing measurement equivalence. Personnel Psychology, 52, 37-58. Schwab, D.P. (1980). Construct validity in organizational behavior. In L.L. Cummings, & B.M. Staw (Eds.), Research in organizational behaviour, Vol. 2 (pp. 3-43). Greenwich, CT: JAI Press. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 43 International Marketing Research Chapter 5 Steenkamp, J.-B.E.M., & Baumgartner, H. (1998). Assessing measurement invariance in cross-national consumer research. Journal of Consumer Research, 25, 78-90. Triandis, H.C. (1972). The analysis of subjective culture. New York, NY: Wiley. Triandis, H.C., Berry, J.W., Bristin, R.W., Draguns, J.G., Heron, A., Lambert, & Lonner, W. (Eds.) (1980, 1981, 1985). Handbook of cross-cultural psychology (Six volumes). Boston, MA: Allyn and Bacon. Triandis, H.C., & Marin, G. (1983). Etic plus emic versus pseudoetic: A test of the basic assumption of contemporary cross-cultural psychology. Journal of CrossCultural Psychology, 14, 489-500. Van de Vijver, F., (1998). Towards a theory of bias and equivalence. ZUMA Nachrichten Spezial, January, 41-65. Van Herk, H., Poortinga, Y.H., & Verhallen, T.M.M. (2005). Equivalence of survey data: Relevance for international marketing. European Journal of Marketing, 39(3/4), 351-364. Yaprak, A. (2003). Measurement problems in cross-national consumer research: The state-of-the-art and future research directions. In S.C. Jain (Ed.), Handbook of research in international marketing. Edward Elgar Publishing. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 44 International Marketing Research Chapter 6 Chapter 6 6 Survey Instrument Design and Sampling in International Marketing Research I n this chapter, the additional material discussed, and the lectures/classroom sessions, specific attention will be paid to methodological problems concerning question/item formulation in an international research context (e.g. using items which require too much cognitive effort). Strategies will be presented which could help repairing or avoiding such problems. In addition, considerable attention will be given to the adequacy of sampling procedures as applied in international marketing/consumer research. It will be argued that the use of such procedures should be justified on a theoretical basis. Learning objectives After reading this chapter, you should: • Have gained more insight into survey instrument design-related issues, e.g. the formulation of adequate survey questions, the use of survey pretesting methods, etc.; • Be aware of problems in sampling procedures and various data collection procedures that can be used for international marketing/consumer research. Keywords Quality of survey questions/items, survey pretesting, international comparability of survey questions/items, probabilistic and nonprobabilistic sampling, hypothesis testing using (complex) survey data, theoretical justification of sampling procedures EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 45 International Marketing Research 6.1 Chapter 6 Why it is easy to write bad questions Fowler (2001) discusses eight important quality criteria to consider when designing high quality survey questions. The quality criteria comprise: (1) contentrelated aspects; (2) cognitive aspects; (3) interpersonal standards related to the interaction between interviewer and interviewee; (4) psychometric quality criteria; (5) usability aspects (e.g. easiness of use); (6) multi-mode capability; (7) multilanguage capability; and (8) cost-effective use of survey time. Depending on the type of study conducted different (types of) quality criteria may be essential to meet. As such, the reader will find out that survey researchers have a difficult job in trying to find the right balance between (sometimes conflicting) quality standards. The applied marketing/consumer researcher will also greatly benefit from Fowler’s assessment of the strengths and weaknesses of different methods to pretest surveys. He demonstrates that, in ideal circumstances, the application of multiple pretest methods is necessary to meet all quality criteria mentioned above. So, in practice, a well-considered choice has to be made between alternative and complementary survey pretest methods. 6.2 Assessing the difficulty of questions used in the ISSP-questionnaires, the clarity of their wording and the comparability of responses Van der Zouwen (2000) introduces a conceptual model describing the major factors affecting response quality in surveys. Special attention is given to the clarity (or lack of clarity) and difficulty of survey questions. Specific problems with the clarity and difficulty of survey questions are discussed using numerous examples taken from a wide range of surveys conducted within the International Social Survey Program (ISSP). Additionally, survey questions exhibiting cross-national bias are identified, and suggestions are given to avoid such problems. The paper provides thus many examples of what may go wrong when developing survey items for international research. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 46 International Marketing Research 6.3 Chapter 6 Sampling and weighting In his book chapter, Mallett (2006) provides a non-technical introduction to the methodological literature on sampling. It discusses the terms ‘sampling bias’ and ‘sampling error’; different forms of probabilistic sampling (e.g. simple random sampling, stratified sampling, and cluster sampling); different forms of nonprobabilistic sampling (e.g. judgment sampling, convenience, and quota sampling); the principle of ‘design weighting’ to compensate for unequal selection probabilities and the principle of ‘poststratification’ to support projections for many subgroups of the sample which are typically of interest to the marketing researcher (e.g. specific consumer segments). This book chapter provides an excellent overview of essential terms and concepts related to statistical sampling. 6.4 Theoretical justification of sampling choices in international marketing research: Key issues and guidelines for researchers Reynolds, Simintiras, and Diamantopoulos (2003) argue in their paper that most international marketing/consumer research studies have failed to provide theoretical justification for the choice of sampling approach. One major theoretical dilemma in international marketing/consumer research concerns the difficulty to achieve both within-nation representativeness (as required [for instance] in descriptive international studies) and between-nation comparability (as required [for instance] in comparative and theoretical international studies). Reynolds et al. present a theoretical framework (see Tables 1 and 2 in the paper) that helps researchers to justify international sampling choices in relation to the main objective(s) of the research study. The paper is an eye-opener as it does succeed in dispelling some common myths. For instance, the reader will learn that a probability sample is not always necessary or desirable. In comparative and theoretical international studies, a nonprobability sample will often be ‘good enough’! EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 47 International Marketing Research 6.5 Chapter 6 Summary In this chapter, specific attention has been paid to methodological problems concerning question/item formulation in an international research context (e.g. using items which require too much cognitive effort). Strategies were presented which could help repairing or avoiding such problems. In addition, considerable attention was given to the adequacy of sampling procedures as applied in international marketing/consumer research. It has been argued that the use of such procedures should be justified on a theoretical basis. Questions 1. Why could one argue that even the best survey researchers may fail to write high quality survey questions? 2. The International Social Survey Program (ISSP) aims at high quality standards and has a tradition in implementing rigorous (pre)tests on the quality of the survey items (to be) used. How could one explain that ISSP questionnaires still contain quite some problematical items? 3. Compared to random sampling, convenience sampling is regarded as an inferior sampling method. Could you think of any research situation in which convenience sampling may be considered good enough? 4. Suppose you were to consult an international marketer on important issues to be considered when deciding on the sampling strategy. What practical recommendations would you give on the basis of the paper by Reynolds et al. (2003)? References Craig, C.S., & Douglas, S.P. (2005). International marketing research (3rd ed.). Chichester, UK: John Wiley and Sons: Chapters 8 and 9. Fowler, F.J. Jr. (2001). Why it is easy to write bad questions. ZUMA Nachrichten, 48, 49-66. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 48 International Marketing Research Chapter 6 Mallett, D. (2006). Sampling and weighting. In R. Grover, & M. Vriens (Eds.), The handbook of marketing research: Uses, misuses, and future advances (pp. 159177). Thousand Oaks, CA: Sage. Reynolds, N.L., Simintiras, A.C., & Diamantopoulos, A. (2003). Theoretical justification of sampling choices in international marketing research: Key issues and guidelines for researchers. Journal of International Business Studies, 34, 8089. Scheuren, F. (2004). What is a survey? (Chapters 2-7; pp. 15-51; Chapter 10; pp. 63-67; booklet downloadable from Internet: http://www.whatisasurvey.info) Van der Zouwen, J. (2000). An assessment of the difficulty of questions used in the ISSP-questionnaires, the clarity of their wording and the comparability of responses. ZA-Information, 46, 96-114 EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 49 International Marketing Research Chapter 7 Chapter 7 7 Cross-national Scale Development and Use in International Marketing Research M easuring relevant constructs oftentimes occurs through the use of scales. In this chapter and the corresponding lectures/classroom sessions some marketing-related papers dealing with the development of consumer/marketing scales and/or the crossnational applicability of such scales are presented. The papers illustrate research procedures which have been discussed in earlier chapters, and illustrate the practical problems one may encounter when developing and using marketing/consumer scales in cross-national settings. Learning objectives After reading this chapter, you should: • Be aware of issues regarding the development and use of scales to measure constructs in an international marketing research context. Keywords Scale development, reliability and validity assessment, cross-national equivalence of multi-item scales 7.1 Measuring export market orientation: Scale development and cross- cultural validation The paper by Cadogan, Diamantopoulos, and De Mortanges (1999) has been selected as it clearly illustrates how the psychometric (i.e., measurement) quality of multi-item scales may be assessed. Based on the Export Market Orientation (EMO) concept the following phases in the research process are further examined: (1) Conceptual underpinnings of the concept under study; (2) Item generation; (3) EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 50 International Marketing Research Chapter 7 Instrument pretesting; (4) Data collection; (4) Psychometric assessment of the quality of the scale (i.e., including reliability and validity assessment). In addition, the crossnational applicability of the EMO scale is assessed using survey data from the U.K. and The Netherlands. 7.2 Cross-cultural similarities and differences in shopping for food In this short paper, Brunso and Grunert (1998) introduce a 69-item (survey) measurement instrument which has been designed to adequately measure the concept of ‘food-related lifestyle’ (FRL). The concept FRL is defined as: “a system of cognitive categories, scripts, and their associations, which relate a set of products to a set of [consumer] values” (see paper page 146). The concept is based on theoretical assumptions about what motivates and directs actual consumer behavior (e.g. product purchase). As such, the FRL instrument may be of real use for actual consumer research. In the paper, Brunso and Grunert examine the cross-national validity of the instrument across four European nations (i.e., Denmark, Great Britain, France and Germany). Using an advanced statistical modeling approach (i.e., meanand covariance structure models) they demonstrate that the cross-national comparability of some of the items may still be enhanced. In their concluding comments, they further elaborate on the trade-off between accounting for crossnational differences in FRL in an optimal way (i.e., the ‘depth’ of the FRL instrument), and the requirement to establish measurement instruments which are to a large extent cross-nationally valid in cross-national comparative research. 7.3 Cross-cultural invariance of measures of satisfaction and service quality Ueltschy, Laroche, Tamilia, and Yannopoulos (2004) assess to what extent a measure of consumer satisfaction and (perceived) service quality exhibit measurement equivalence across respondents from the US, English-speaking Canadians (i.e., English questionnaire) and French-Canadian subjects (i.e., French questionnaire). In their analyses, they distinguish invariant from non-invariant measures, and test some interesting hypotheses concerning cross-group differences in terms of satisfaction and (perceived) service quality. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 51 International Marketing Research 7.4 Chapter 7 Using ‘borrowed’ scales in cross-national research: A cautionary note One fundamental problem with the direct application of marketing/consumer scales as developed in one nation (i.e., the original context) in an international context has to do with the assumed equivalence in meaning of the construct and the universality of the theory underlying construct operationalization (i.e., in contexts other than the original context). As shown in the paper by Douglas and Nijssen (2003), this assumption may simply be unrealistic, making the direct application of marketing/consumer developed in one nation meaningless. Douglas and Nijssen support their argument using survey data on consumer ethnocentrism (i.e., CETSCALE) as collected in The Netherlands. They argue that the CETSCALE may be meaningfully applied in large industrialized nations such as the U.S., France, Germany and Japan, where similar feelings of patriotism, national superiority, and a belief that domestic products are superior and of better quality have been identified. In small market economies with open borders and a high proportion of foreign trade such as The Netherlands such feelings may be less salient, implying that the theory underlying construct operationalization (i.e., perceived superiority of domestic products) may turn out to be invalid. 7.5 Summary When using (multi-item) scales in international marketing research, it is of key importance to assess their psychometric (i.e., measurement) quality. As shown in this chapter, several research steps need to be taken as part of a psychometric quality assessment. In a cross-national context, one is also required to ensure the crossnational validity of the scales used. As illustrated in several studies, this is not a trivial task. Questions 1. What major research steps are typically applied when assessing the psychometric (i.e., measurement) quality of multi-item scales? EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 52 International Marketing Research Chapter 7 2. What exactly is meant by the dimensionality of a multi-item scale? What statistical method would you use to assess the dimensionality of a multi-item scale? 3a. What is the difference between the following notions ‘reliability of a scale’ and ‘validity of a scale’? 3b. How can one adequately assess the reliability and validity of scales? 4. One could argue that researchers are paying a high price for having to establish cross-nationally valid scales. Discuss! 5. What major issues are encountered when scales which are developed in one cultural setting are directly applied in another cultural setting? Are these issues relevant for the field of international marketing? References Brunso, K., & Grunert, K. G. (1998). Cross-cultural similarities and differences in shopping for food. Journal of Business Research, 42, 145-150. Cadogan, J. W., Diamantopoulos, A., & Mortanges, C. P. de (1999). A measure of export market orientation: Scale development and cross-cultural validation. Journal of International Business Studies, 30, 689-707. Craig, C. S., & Douglas, S. P. (2005). International marketing research (3rd ed.). Chichester, UK: John Wiley and Sons: Chapter 10. Douglas, S. P., & Nijssen, E. J. (2003). On the use of ‘borrowed’ scales in crossnational research: A cautionary note. International Marketing Review, 20, 621642. Netemeyer, R.G., Bearden, W.O., & Sharma, S. (2003). Scaling procedures. Issues and Applications. Thousand Oaks: Sage (pp. 18-85). Ueltschy, L.C., Laroche, M., Tamilia, R.D., & Yannopoulos, P. (2004). Cross-cultural invariance of measures of satisfaction and service quality. Journal of Business Research, 57, 901-912. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 53 International Marketing Research Chapter 8 Chapter 8 8 Cross-national Consumer Segmentation Studies I n this chapter and the corresponding lectures/classroom sessions a series of published papers dealing with international marketing/consumer segmentation research will be presented and discussed. Special emphasis will be put on major (design) issues in international consumer segmentation. As consumer segmentation is more applied at the crossnational level, consumer segmentation efforts are becoming increasingly complex both in terms of the design of the study and the statistical analysis techniques used (e.g. multi-level approaches). As consumers from multiple nations are jointly segmented in global consumer segments, considerable attention should be given to the danger of possible cross-national biases. The use of a multi-level framework (e.g. to separate between-nation variation from within-nation variation) and the ability of advanced statistical models to correct for certain response styles (i.e., mainly acquiescence response style) comprise important methodological contributions to the field of international marketing (research). Learning objectives After reading this chapter, you should: • Better understand the issue of cross-national consumer segmentation based on a critical review of some examples of segmentation studies using consumer data from multiple nations. Keywords International consumer segmentation, segmentation basis; segmentation approaches, Means- End Theory, Means- End Chains, Means-End Data, multilevel modeling, mixture modeling EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 54 International Marketing Research 8.1 Chapter 8 Introducing international consumer segmentation Consumer segmentation concerns the subdividing of the market into increasingly homogeneous subgroups of consumers where any subgroup can be selected as a target market to be met with a distinct marketing mix. In fact, consumer segmentation is a compromise between mass marketing which assumes everyone can be treated the same, and the assumption that every consumer needs a dedicated marketing effort (i.e., micro marketing). International consumer segmentation differs from domestic consumer segmentation in that consumers from different nations are jointly segmented into global consumer segments. This chapter will only deal with aspects of international consumer segmentation. As such, segmentation of products or brands in international markets is not considered. In marketing practice, consumer segmentation is often the first step in a threestep process. After the consumer segmentation is completed, market targeting and market positioning will follow. Market targeting involves evaluating each market (read: consumer) segment’s attractiveness (as well as for with the company’s vision and core business activities), and selecting one or more of the market segments to enter. Next, market positioning involves efforts to set the competitive positioning for the product and creating a detailed marketing mix. As mentioned before, a couple of papers will be discussed in this chapter. Whereas the first paper is more theoretical discussing key issues in international consumer segmentation, all other papers introduce interesting applications of international consumer segmentation. Apart from their scientific relevance, all papers discussed are relevant for management/marketing practice as well. 8.2 International market segmentation: Issues and perspectives A more theoretical paper by Steenkamp and Ter Hofstede (2002) discusses key issues in the field of international consumer segmentation. As a starting point, the authors provide a literature overview of different empirical studies dealing with international consumer segmentation. Based on this literature overview key conceptual and methodological issues are identified, which deserve further attention in future international segmentation studies. The conceptual issues comprise: (1) the EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 55 International Marketing Research Chapter 8 level of (data) aggregation (e.g. individuals, nations, regions); (2) choice of segmentation bases (i.e., variables used for the actual segmentation) given the necessity to derive high-quality consumer segments; and (3) construct equivalence. Methodological issues concern: (1) measure equivalence; (2) sampling equivalence; (3) choice of segmentation method; and (4) considerations regarding sample size. The authors strongly recommend: (1) the use of a two-stage segmentation approach (i.e., first decide on what nations to focus on and then segment all consumers across nations); (2) the application of model-based segmentation approaches (see Ter Hofstede et al., 1999; discussed later on); (3) to correct the data for cross-national differences in response styles; (4) to apply sampling weights (when sample sizes are disproportional to population sizes). Some of these issues have been discussed in earlier chapters but are nicely integrated in a framework which is specifically designed for international segmentation studies. 8.3 International market segmentation based on consumer-product relations Ter Hofstede, Steenkamp, and Wedel (1999) introduce a model-based approach to segment consumers (from multiple nations) based on dichotomous variables representing consumers’ perceived links between product attributes and derived consumer benefits (i.e., AC links), as well perceived links between derived consumer benefits and different human values that may guides people’s life (i.e., CV links). Such kind of individual-level data is referred to as consumer Means-End data (i.e., data linking product features with certain goals related to their consumption [i.e., consumer benefits or the achievement of certain values in life]) in the marketing literature. The international segmentation approach is based on the estimation of the extent to which individuals are likely to indicate the different (AC and CV) links as existent as opposed to non-existent. Advanced statistical methods (i.e., finite-mixture models) are used to segment consumers in the international market. An attractive feature of their modeling approach is the ability to correct for cross-national differences in response style (i.e., mainly acquiescence response style). The new segmentation approach is illustrated using Means-End data from a survey in 11 EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 56 International Marketing Research Chapter 8 European nations. As a result, global consumer segments are identified and assessed with respect to their market potential. 8.4 Country and consumer segmentation: Multi-level latent class analysis of financial product ownership Bijmolt, Paas, and Vermunt (2004) present another interesting application of international consumer segmentation in the financial market. Based on ownership data of eight financial products consumers from 15 European nations are segmented into global consumer segments. The authors use a two-level multi-level latent class framework for this purpose. The two levels are ‘country’ and (nested within nation) ‘consumer’. The relative sizes of the consumer segments (i.e.., latent classes) are considered to be nation-specific by the latent class model. The global segmentation effort resulted in seven nation segments and 14 consumer segments which were present in all nations. The global consumer segmentation is of great practical value as it turned out that the ‘profile’ of the 14 consumer segments differed in terms of key demographic variables (e.g. age, income, marital status, and type of community). As such, the global consumer segments are actionable for international marketing management. 8.5 Summary In this chapter, special emphasis has been put on major (design) issues in international consumer segmentation. As consumer segmentation is more applied at the cross-national level, consumer segmentation efforts are becoming increasingly complex both in terms of the design of the study and the statistical analysis techniques used (e.g. multi-level approaches). As consumers from multiple nations are jointly segmented in global consumer segments, considerable attention should be given to the danger of possible cross-national biases. The use of a multi-level framework (e.g. to separate between-nation variation from within-nation variation) and the ability of advanced statistical models to correct for certain response styles (i.e., mainly acquiescence response style) comprise important methodological contributions to the field of international marketing (research). EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 57 International Marketing Research Chapter 8 Questions 1. From a practitioner’s point of view what advantages does international consumer segmentation offer over domestic consumer segmentation? 2. What methodological problems complicate international consumer segmentation efforts? 3. Ter Hofstede, Steenkamp, and Wedel (1999) use Means-End Data to segment consumers in the international market? Why do they use such kind of data? Suppose they would not have such data, what other kind of data would be most interesting to segment consumers on (see also Steenkamp & Ter Hofstede, 2002). 4. As demonstrated in Bijmolt, Paas, and Vermunt (2004), latent class segmentation approaches offer a powerful analysis tool to segment consumers in international markets. How do they manage to establish a link between key demographical variables and the likelihood of belonging to particular consumer segments? Explain! References Bijmolt, T.H.A., Paas, L.J., & Vermunt, J.K. (2004). Country and consumer segmentation: Multi-level latent class analysis of financial product ownership. International Journal of Research in Marketing, 21, 323-340. Craig, C.S., & Douglas, S.P. (2005). International marketing research (3rd ed.). Chichester, UK: John Wiley and Sons: Chapters 11 and 12 Steenkamp, J.-B.E.M., & Ter Hofstede, F. (2002). International market segmentation: Issues and Perspectives. International Journal of Research in Marketing, 19, 185213. Ter Hofstede, F., Steenkamp, J.-B.E.M., & Wedel, M. (1999). International market segmentation based on consumer-product relations. Journal of Marketing Research, 36, 1-17. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 58 International Marketing Research Chapter 9 Chapter 9 9 Challenges and Future Directions in International Marketing Research: Capita Selecta A s conclusion, this final chapter, combined with the additional literature and the lectures/classroom sessions, examines some key challenges and future directions pertaining to conducting international marketing research. As such, it sets the stage for the future of international marketing research. Several of the themes addressed previously will be brought together and insights provided into the challenges that researchers face as markets become increasingly integrated and diverse at the same time. Technological advances, new analytical techniques, ethical issues, as well as special challenges pertaining to conducting research in emerging markets will be presented. In addition, future developments will be discussed that concern cross-national data comparability and equivalence, developing the research design, improving crosscultural data analysis, and the growth of internet research. Learning objectives After reading this chapter, you should: • Be aware of some key challenges and future directions pertaining to conducting international marketing research. Keywords Challenges in international marketing research (Change, Complexity, Competition, Conscience), future of international marketing research (Comparability and equivalence, The research design, Analysis of cross-cultural data, Internet research) EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 59 International Marketing Research 9.1 Chapter 9 Challenges in international marketing research With the growing internationalization of business activities, the international marketing research arena will be facing numerous challenges for the future. According to Craig and Douglas (2005, p. 444), “firms attempting to compete effectively in global markets are faced with four interrelated challenges, the challenges of change, complexity, competition and conscience.” These challenges are also relevant for marketing research firms. Indeed, the general market place is rapidly changing. Developments in marketing practices, mass communications technology, global en regional media, the worldwide expansion of retailers, and improvements of the basic infrastructures within countries affect both marketers and consumers and create new opportunities for conducting international marketing research. Specific technological changes that are of interest are computerized modes of data capture, using the Internet for data access and collection, and the linking of information via Intranets. On the other hand, the increase in the amount of research that is conducted cross-nationally and specifically in emerging markets “adds to the complexity of conducting marketing research as the range of research contexts becomes increasingly heterogeneous” (Craig & Douglas, 2005, p. 444). Specifically, conducting research in emerging international markets can be considered complex. This is mainly due to contextual differences, difficulty of achieving comparable results, and the dramatic variability in the cost of conducting marketing research in emerging markets. Furthermore, the international competitive environment in which research companies have to operate in order to serve clients is becoming more and more intense, making the ability to readily respond crucial. Indeed, “research firms must be able to meet the changing needs of these [multinational] firms [that are their clients] as they expand globally (Craig & Douglas, 2005, p. 455). When expanding the geographical scope of their operations, research firms need to thoroughly consider market presence and access, market knowledge, and local capability. Finally, the issue of conscience can be considered an overarching challenge, which pertains to the requirement that research firms should conduct marketing EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 60 International Marketing Research Chapter 9 research in a socially responsible way and on the highest ethical plane (Craig & Douglas, 2005). By doing so, more trustworthy information can be generated for managers to base their decisions on. Since they all have a specific role in the research process and a different stake in the outcome, ethical considerations in international marketing research specifically pertain to the four main parties involved in the research process: (1) the respondent; (2) the interviewer; (3) the research supplier; and (4) the client (Craig & Douglas, 2005). 9.2 Future directions in international marketing research Craig and Douglas (2005) identify several interesting directions in the subject area of international marketing research. They refer to these as “more fundamental issues relating to the design and comparability of information collected in multiple and diverse environments” (Craig & Douglas, 2005, p. 465). Four specific areas of interest include: • The revisiting of comparability and equivalence o Decentering theories and constructs o Examining construct equivalence o Greater reliance on unstructured approaches • Developing the research design o Extending the range of contexts o Establishing geospatial boundaries o Isolating confounding influences o Extending the time dimension • Improving the analysis of cross-cultural data o Developing more rigorous and better calibrated measures o Triangulation o Fitting analytical methods • The growth of Internet research. Below, several interesting articles pertaining to some challenges and the future of conducting international marketing research are presented and briefly discussed. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 61 International Marketing Research 9.3 Chapter 9 Creating local brands in multilingual international markets In light of the growing internationalization by companies, Zhang and Schmitt (2001) discuss an interesting topic related to the future of international marketing (research): the creation of local brands in multilingual international markets. Despite the importance of decisions regarding international brand names, research in brand naming has focused primarily on English name creation. The authors conceptualize the local brand-name creation process in a multilingual international market. They present a framework that incorporates (1) a linguistic analysis of three translation methods – phonetic (i.e., by sound), semantic (i.e., by meaning), and phonosemantic (i.e., by sound plus meaning) – and (2) a cognitive analysis focusing on the impact of primes and expectations on consumer name evaluations. Using dual English-andChinese brand names, the authors show that the effectiveness of the translation depends on the emphasis of the original English name (versus the Chinese name) and the method of translation used previously for brand names within the same category. 9.4 Summary This chapter has brought together several of the themes addressed throughout this textbook/course and provided insights into the challenges that researchers face as markets become increasingly integrated and diverse at the same time. Technological advances, new analytical techniques, ethical issues, as well as special challenges pertaining to conducting research in emerging markets have been presented. In addition, future developments have been discussed that concern crossnational data comparability and equivalence, developing the research design, improving cross-cultural data analysis, and the growth of internet research. Questions 1. Suppose you are a market researcher at beer brewery XYZ. Already for several years, the brewery successfully brews ‘Cherry Ale’, a cherry-flavored beer, for the local Dutch market. Research, however, has indicated that may also be a potential demand for such beer in China. The product manager of ‘Cherry EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 62 International Marketing Research Chapter 9 Ale’ asks you to investigate the brand name possibilities that may exist for ‘Cherry Ale’ in China. Given this request, you remember the article by Zhang and Schmitt (2001) that you have once read during a course on International Marketing Research. Based on the findings of the article, how would you go about in order to create a possible brand name for ‘Cherry Ale’ in the Chinese market? 2. If you were to formulate the most critical learning points concerning the use and the conduct of international marketing research, what points would you come up with, both from an academic and a managerial perspective? 3. Realizing now that international marketing research is rather complex, what (possible) future developments would lead to a substantial reduction in this complexity and why? References Craig, C. S., & Douglas, S. P. (2005). International marketing research (3rd ed.). Chichester, UK: John Wiley and Sons: Chapters 14 and 15. Zhang, S., & Schmitt, B. H. (2001). Creating local brands in multilingual international markets. Journal of Marketing Research, 38, 313-325. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 63 International Marketing Research Marketing Research for Market Entry Decisions MARKETING RESEARCH FOR MARKET ENTRY DECISIONS This case investigation was prepared by Marcel van Birgelen and Alain De Beuckelaer, Nijmegen School of Management, Radboud University Nijmegen, The Netherlands as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. The investigation makes use of a ‘Note on the global beer industry’ prepared by David Wesley from Richard Ivey School of Business and obtained from the European Case Clearing House. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 64 International Marketing Research Marketing Research for Market Entry Decisions Case investigation topic Market research for international market selection for market entry Case investigation description To enter or not to enter, that’s the question… Brewery Haacht is the largest Belgian brewery under 100% Belgian ownership. It is the number 3 in Belgium considering market share and is named after the town of Haacht in which proximity the brewery is located. For more information on the brewery you may want to visit www.haacht.com. The management of Haacht is wondering whether or not there will be a market outside Belgium for their recently developed beer named Mystic. Mystic is a refreshing lemon-flavoured white beer with a light ticklish sensation from citrus fruits and a pleasant sweetness (www.mystic.be). Always having had an open mind towards international expansion, the brewery is now highly interested in opportunities for internationalizing Mystic to foreign markets as well. According the brewery’s management, relevant questions that need to be investigated are the following: − What does the international beer market look like at the moment? − What submarkets (e.g. in terms of product clusters) can be distinguished internationally? − What are the main players in the international beer market? − What products and/or brands have been very successful internationally in recent years? What factors have contributed to their success? − How likely is it that foreign beer consumers will appreciate the specific taste of Mystic? In other words, what are the chances of a favourable attitude towards Mystic abroad? − Is there already any competition in foreign markets for a beer with such specific taste? − Are there any non-consumer-related forces (e.g. political, legal) that may a play role in determining the international chances of such a new beer? EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 65 International Marketing Research Marketing Research for Market Entry Decisions − What would the international market potential for Mystic be? In which market(s)? − How should the foreign operation be designed (e.g. exporting, cooperating with local partners)? Why? The management turns to you and your research team to find an answer to these questions… Obviously, the collection and use of secondary data will be very important in this respect. Crucial issues to consider are: (1) Where can the necessary information be found to answer the questions raised?, and (2) How good would this information be in terms of its quality? The ‘Note on the global beer industry’, which accompanies this case investigation description and was prepared by David Wesley from Richard Ivey School of Business, may be a good starting point for the case investigation. The end-product of your investigation will be a research report to be prepared by a team of course participants. The report should consist of 1 title page with the names of the team members, 1 page with table of contents, 5 pages of main text including an introduction, analysis, and conclusion (approximately 2500 words), and 1 page with references. The report will be presented by the team to fellow course participants and the course instructors during a 15 minutes’ presentation. The final grade for the assignment will be based on the presentation (25%) as well as the content of the report (75%). In principle, the grade will be the same for all team members. The grade for this assignment will count for 40% in the participant’s final grade for the team assignments. References Wesley, D. (2003). Note on the global beer industry. Richard Ivey School of Business, College of Business Administration, Northeastern University. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 66 International Marketing Research A Cross-National Evaluation of Services Marketing Efforts by Conducting International Marketing Research in Practice A CROSS-NATIONAL EVALUATION OF SERVICES MARKETING EFFORTS BY CONDUCTING INTERNATIONAL MARKETING RESEARCH IN PRACTICE This case investigation was prepared by Marcel van Birgelen and Alain De Beuckelaer, Nijmegen School of Management, Radboud University Nijmegen, The Netherlands as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 67 International Marketing Research A Cross-National Evaluation of Services Marketing Efforts by Conducting International Marketing Research in Practice Case investigation topic Evaluating chances for effectively initiating, customizing, and/or harmonizing services marketing efforts across a set of countries Case investigation description Managing service relations in a global context Customers may engage in long-term relationships with companies for various reasons. Customer relational benefits have been identified as a driving motivation to do so. Establishing long-lasting relationships with customers from the company’s country-of-origin already is a challenging task. However, doing so in a global economy may even be more challenging. In their paper “Managing service relationships in a global economy: Exploring the impact of national culture on the relevance of customer relational benefits for gaining loyal customers”, Hennig-Thurau, Gwinner, Gremler, and Paul (2005) explore the impact of culture on the relevance of relational benefits for establishing customer loyalty. Based on an extensive review of the literature, the authors develop several propositions on the moderating role of national culture for the impact of relational benefits on loyalty. Hennig-Thurau et al. (2005) summarize their investigation as follows: “Customer relational benefits have been identified as a driving motivation for consumers to engage in long-term relationships with service providers. Such benefits can be expected to play a crucial role in the success of service firms when extending their business into other countries and cultures. Most of the previous discussion of relational benefits has been conducted almost exclusively in North-American contexts and has not addressed the impact a nation’s culture may have on the relevance of relational benefits for gaining relationship outcomes such as customer loyalty. The aim of this paper is to deepen our understanding of the role of relational benefits in developing long-term relationships with consumers in a crosscultural context. Specifically, propositions focusing on the moderating role of power distance, individualism/collectivism, masculinity/femininity, and uncertainty avoidance for the benefits-outcomes relationship are developed. The paper concludes with a discussion of potential implications for service firms and researchers.” EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 68 International Marketing Research A Cross-National Evaluation of Services Marketing Efforts by Conducting International Marketing Research in Practice Unfortunately, the propositions developed by Hennig-Thurau et al. (2005) have never been tested using empirical data. Using all the relevant knowledge and insights you have obtained during the International Marketing Research course, it is your task to fill in this gap by (as a team) conducting a real international marketing research among real-life customers using a survey. In order to do so effectively, you need to start by thoroughly reading the paper by Hennig-Thurau et al. (2005). Furthermore, a thorough understanding of how to conduct a survey-based research in an international marketing context is crucial. For this, we (of course) refer to the insights you have obtained during the earlier sessions of this course. In addition, consulting basic marketing research books may be useful as well, such as: • Malhotra, N.K., & Birks, D.F. (2006). Marketing research: An applied approach. Harlow, etc.: Financial Times/Prentice Hall. Specifically, chapters 10, 12, 13, 14, 16, 17, 18, 25, and 26. AND • Scheuren, F. (2004). What is a survey? Downloadable from: http://client.norc.org/whatisasurvey/download.htm With your team you are entirely free to select the specific service setting you would like to focus on in your survey. However, it is important that you are able to test the propositions in the paper by Hennig-Thurau et al. (2005) using the data you are going to collect. You are requested to test as many proposition as possible taking into account your samples’ specific (cultural) characteristics, as identified by Hofstede, one of the leading academics in cross-cultural research. In order to do so, it is obviously important to bring in some variation in your sample with respect to respondents’ country of origin/cultural background. You can do so, for instance, by comparing a Dutch sample with several non-Dutch samples (e.g. German, French, your own country of origin, …., etc.). Besides a sample with respondents from the country in which you currently reside and study, you are expected to collect data from at least two other countries, with a minimum of 50 valid respondents per country. For a better understanding of the cultural EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 69 International Marketing Research A Cross-National Evaluation of Services Marketing Efforts by Conducting International Marketing Research in Practice dimensions on which countries differ and country-level scores on these dimensions we refer to: • Hofstede, G. (2001), Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations (2nd ed.). Beverly Hills, Sage. AND/OR • Hofstede, G. (1991), Cultures and organizations: Software of the mind. London: McGraw-Hill. In order to complete this case investigation successfully the following steps are crucial: 1. ‘Translate’ the propositions (or better, the variables that are central in these) into survey items; 2. Make a thorough a-priori assessment of the cross-country usability and equivalence of these items in terms of language, use of wording, meaning of words, scaling procedures used, etc., etc.; 3. Put these items in a questionnaire. Do not forget to include relevant background variables as well, such as gender, age, education,…, etc.; 4. Define your population and draw at least three samples (one Dutch, two nonDutch) keeping in mind the sampling-related issues when conducting international marketing research; 5. Collect data from your samples by administering the questionnaire; 6. Enter the data in a statistical package, preferably SPSS; 7. Analyze the data and draw conclusions with respect to the propositions you chose to test; 8. Last, but certainly not least: (with an open mind) discuss the results of your research and draw implications from these, both academic as well managerial. Particular attention should be paid to the cross-cultural usefulness of your findings for a service provider that may be seeking international expansion. In this respect, you should think in terms of customer perceptions, their effect on outcomes such as customer satisfaction and loyalty, the cross-national (in)equality of these effects, and the strategic consequences of all this for services marketing strategy (e.g. the design of the service marketed, how it is EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 70 International Marketing Research A Cross-National Evaluation of Services Marketing Efforts by Conducting International Marketing Research in Practice to be promoted, advertised and branded, how it will be delivered and by whom, etc.) The end-product of your research will be a research report. The report should consist of 1 title page with the names of the team members, 1 page with table of contents, 10 pages of main text including an introduction, analysis, and conclusion (approximately 5000 words), and 1 page with references. Furthermore, the questionnaire as well as the SPSS-output of your analysis should be put in an appendix. In the report, it is important to provide a thorough justification of the propositions under consideration given the cultural characteristics of your sample, and to discuss how you developed the questionnaire, how you ensured its crosscountry usability/comparability/equivalence, how you collected the data, how you analyzed the data, what the results of the data analysis are, and of course what the implications of your results for marketing practice and academia are. The report will be presented by the team to fellow course participants and the course instructors during a 15 minutes’ presentation. The final grade for the team assignment will be based on the presentation (25%) as well as the content of the report (75%). In principle, the grade will be the same for all team members. The grade for this assignment will count for 60% in the participant’s final grade for the team assignments. References Hennig-Thurau, T., Gwinner, K.P., Gremler, D.D., & Paul, M. (2005). Managing service relationships in a global economy: Exploring the impact of national culture on the relevance of customer relational benefits for gaining loyal customers. In P. Pauwels, & K. de Ruyter (Eds.), Advances in international marketing; Vol. 15: Research on international service marketing, A state of the art (pp. 11-31). Amsterdam, The Netherlands: Elsevier. Hofstede, G. (1991), Cultures and organizations: Software of the mind. London: McGraw-Hill. Hofstede, G. (2001), Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations (2nd ed.). Beverly Hills: Sage. EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 71 International Marketing Research A Cross-National Evaluation of Services Marketing Efforts by Conducting International Marketing Research in Practice Malhotra, N.K. & Birks, D.F. (2006). Marketing research: An applied approach. Harlow: Financial Times/Prentice Hall. (specifically: Chapters 10, 12, 13, 14, 16, 17, 18, 25, and 26). Scheuren, F. (2004). What is a survey? Downloadable from: http://client.norc.org/whatisasurvey/download.htm EU Grant Agreement Number: 29089-IC-1-2004-1-GR-ERASMUS-PRO-1 72