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Transcript
CHAPTER 6
GLOBAL MARKETING RESEARCH
CHAPTER OBJECTIVES
1. Research Problem Formulation
2. Secondary Global Marketing Research
3. Primary Global Marketing Research
4. Leveraging the Internet for Global Market Research
5. Market Size Assessment
6. New Market Information Technologies
7. Managing Global Marketing Research
CHAPTER OVERVIEW
Given the changing global markets and their complexities, solid marketing research is
critical for a host of global marketing decisions. Skipping the research phase in the
international marketing decision process can often prove to be a costly mistake. It is
clear that good information will facilitate solid decision making and will aid in gaining a
competitive advantage over competition. Doing research (whether in the domestic or
international market place) is still a question of benefit versus cost.
The complexities of the global market place are mind boggling. There are hurdles to be
overcome in gathering secondary and primary information. The chapter discusses the
processes of gathering information as applied to the international marketing effort.
To make cross-country comparisons meaningful, companies need to adequately manage
and coordinate their market research projects with a global scope. Locals (including the
markets themselves) are very important to this process. For any meaningful decisions to
be reached, the locals must not only be a part of but support the conclusions of the
research effort. The local support goes a long way to making overstandardized research
instruments and techniques more customized and culturally sensitive.
CHAPTER OUTLINE
72
A. Introduction
1. Market research assists the global marketing manager in two ways:
a. By making better decisions that recognize cross-country similarities and
differences.
b. By gaining support from the local subsidiaries for proposed marketing
decisions.
2. To some degree, the procedures and methods that are followed to conduct global
marketing research are close to those used in standard domestic research.
3. The steps to be followed are generally recognized to be:
a. Define the research problem(s).
b. Develop a research design.
c. Determine information needs.
d. Collect the data (secondary and primary).
e. Analyze the data and interpret the results.
f. Report and present the findings of the study.
*****Use Exhibits 6-1 and 6-2 Here*****
4. Major challenges that global marketing researchers face are:
a. Complexity of research design due to environmental differences.
b. Lack and inaccuracy of secondary data.
c. Time and cost requirements to collect primary data.
d. Coordination of multi-country research efforts.
e. Difficulty in establishing comparability across multi-country studies.
B. Research Problem Formulation
1. Any research starts off with a precise definition of the research problem(s) to be
addressed.
2. Once the nature of the research problem becomes clear, the research problem needs
to be translated into specific research questions.
3. Often in an international marketing research effort, the problem formulation
process is hindered by the self-reference criterion.
4. A major difficulty in formulating the research problem is the unfamiliarity with
the foreign environment.
a. To reduce uncertainty, some exploratory research at the early stage is often
called for.
b. An omnibus survey can often be useful for this purpose.
1). Though advantageous, there is the disadvantage that only a limited
amount of company relevant information is obtainable through an
omnibus.
2). These surveys should be done with some frequency so that data can be
historically tracked.
*****Use Exhibit 6-3 Here; Use Review Question #1 Here; Use Discussion
73
Question #1 Here*****
C. Secondary Global Marketing Research
1. Assessing the information needs is the next step after the research problem
definition.
a. Information that is already available is called secondary research.
b. Information that must be originally collected is called primary research.
2. Secondary Data Sources.
a. Researchers in developed countries have been spoiled with a vast amount of
information at their disposal.
b. The underdeveloped portion of the world is a different story with respect to
available data.
c. Computerized services (such as Lexis/Nexis) are aiding in the data acquisition
effort.
*****Use Exhibit 6-4 Here*****
d. Researchers will first tap information sources within the company itself.
e. Several companies specialize in nothing but providing information for the
international market place.
f. As firms move from governmental publications to syndicated data, the
richness of the information increases enormously. However, cost goes up also.
3. Problems with Secondary Data Research.
a. Sometimes data are nonexistent. If so, data from previous time periods might
have to be used.
b. Primary problems include:
1). Accuracy of Data. Issues can be quality, sophistication, purpose for the
data collection, and coverage of all relevant issues.
2). Age of Data.
3). Reliability over Time. Historical patterns, taking into account sudden
changes, and variable measures can cause problems.
4). Comparability of Data. Cross-country research often demands a
comparison of indicators across countries (which can prove to be very
difficult).
a). Triangulation (using more than one source) might help.
b). Functional or conceptual equivalence hinders the research effort.
*****Use Review Question #2 Here*****
5). Lumping of Data. Grouping of data can cause the researcher many
problems.
c. A checklist can be useful in assessing the quality of data:
1). When were the data collected? Over what time frame?
2). How were the data collected?
3). Have the variables been redefined over time?
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4). Who collected the data?
5). For what purpose were the data gathered?
D. Primary Global Marketing Research
1. Since secondary research seldom produces all the answers needed in a global
marketing research effort, the next step is to collect primary data specifically for
the purpose of the research project.
2. Data can be collected in several ways:
a. Focus Groups.
1). The focus group is a popular method of doing exploratory research.
2). The focus group is a loosely structured free-flowing discussion among
a small group (8-12 people) of target customers facilitated by a professional
moderator.
3). Purposes include:
a). To generate information to guide the quantitative research projects.
b). To reveal new product opportunities.
c). To test out new product concepts (to name a few).
4). When analyzing and interpreting focus group findings, market researchers
should also concentrate on the non-verbal cues as well as the verbal cues.
*****Use Review Question #3 Here; Use Discussion Question #5 Here *****
*****Use Global Perspective 6-1 “Global Market Research in the World of Beauty”
Here*****
b. Survey Methods for Cross-Cultural Marketing Research. Questionnaires are
the most common method.
1). Steps include:
a). Design of a questionnaire.
b). Develop a sampling plan.
c). Physical collection of information to the questionnaires.
2). Questionnaire Design has several procedures to help avoid sloppy
translations in the international area--back-translation, parallel translation,
and to perform scalar equivalence.
*****Use Exhibit 6-5 Here*****
***** Use Discussion Question #7 Here*****
3). Sampling has to answer the following questions:
a). Who should be surveyed? What is our target population (sampling unit)?
b). How many people should be surveyed (sample size)?
c). How should perspective respondents be chosen from the target
population (sampling procedure)?
4). Contact Method deals with the prospective subjects of the survey. The
most common choices are:
a). Mail.
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b). Telephone.
c). Person-to-person interviews.
5). Collecting the Information is done in the field and may include
observational research. Problems that must be
watched for include:
a). Non-response due to reluctance to talk.
b). The courtesy bias.
c). Biases toward yea or nay-saying.
d). Social desirability bias.
*****Use Discussion Question #8 Here*****
*****Use Global Perspective 6-2 Here, “Nokia’s Use of Ethnographic Research”
E. Leveraging the Internet
1. Key issues about Internet use
a. there is too much information
b. how to separate useful from useless information
c. where is the most reliable information found
2. Pros and cons to using the Internet in global research
Advantages
a. Large samples
b. Global access
c. Lower costs
d. Anonymity
e. Short response times
f. Instant data entry
Disadvantages
a. Limited infrastructure in some countries
b. Self-selection bias
c. Download time
d. Technology problems (e.g. incorrect e-mail address, poor connection)
e. Low response rates
f. Multiple responses from same person
3. Useful measurement tools for the Internet
a. Online surveys
(1) e-mail surveys
(2) website surveys
(3) panel website surveys
b. Bulletin boards & chat groups
c. Web visitor tracking
d. Focus groups
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*****Use Exhibits 6-7 and 6-8 Here*****
*****Use Discussion Questions #3 and #8 Here*****
F. Market Size Assessment
1. When deciding whether or not to enter a particular country, one of the key drivers
is the market potential.
2. There are four methods that can be fruitfully employed to assess the size of the
market for any given product.
3. Method of Analogy.
a. Pick a country that is at the same stage of economic development as the country
of interest and for which the market size is known.
b. The relationship between the demand for a product and a particular indicator
(for instance, the demand for a related product) is similar in both countries.
c. The critical issue is in finding the right comparisons.
d. McDonald’s uses a variation of this method to establish its markets.
*****Use Exhibit 6-9 Here; Use Discussion Question #2 Here*****
4. Trade Audit.
a. Estimates are made on local production, import and export figures for the
product of interest.
b. While this method makes sense, the data is hard (and sometimes expensive) to
find.
5. Chain Ratio Method.
a. The chain ration method starts with a very rough-base number as an estimate for
the market size.
b. The base number is then systematically fine-tuned by applying a string of
percentages to come up with the most meaningful estimate for the total market
potential.
*****Use Discussion Question #6 Here*****
6. Cross-Sectional Regression Analysis.
a. With regression analysis, the variable of interest (market size) is related to a set
of predictor variables.
b. The predictor variables are of utmost importance to the success of this method.
7. When using market size estimates, keep the following rules in mind:
a. Whenever feasible, use several different methods that possibly rely on
different data-inputs.
b. Don’t be misled by the numbers.
c. Don’t be misled by fancy methods.
d. When many assumptions are to be made, do a sensitivity analysis by asking
77
what-if questions.
e. Look for interval estimates with a lower- and upper-limit rather than for point
estimates.
*****Use Review Question #4 Here; Use Discussion Question #4 Here*****
G. New Market Information Technologies
1. Major advances in information technologies that have affected business in general
and international business specifically are:
a. Point-of-Sale (POS) Store Scanner Data. The advantage here is that far better
quality of data is obtained. The information can be very detailed.
b. Consumer Panel Data. This method is popular in some countries (Japan)
where consumers enjoy being involved in the research effort.
c. Single-Source Data. One of these methods is the people meter which can
monitor in-home television viewing behavior.
2. Major developments caused by IT include:
a. Shift from mass to micro marketing.
b. Continuous monitoring of brand sales/market share movements.
1). Scanning data are used by manufacturers to support marketing decisions.
2). Scanning data are used to provide merchandising support to retailers.
3. State-of-the-art marketing research tools are being developed to track the
effectiveness of newer marketing mix media vehicles such as the Internet.
H. Management of Global Marketing Research
1. Selecting a Research Agency.
a. Even companies with in-house expertise will often employee local research
agencies to assist with multi-country research projects.
b. The first step is to see what sort of research support services are available to
conduct the research project.
c. Factors to be considered in selecting a firm to do the work for the company
would include:
1). Subsidiary status.
2). Expertise.
3). Qualifications.
4). Track record.
5). Experience.
6). Clients and client references.
7). Ability to cross borders to get the job done.
8). Cost.
d. Tips on how to use agencies more effectively would include:
1). Use your agency creatively.
2). Take your agency 100% into your confidence--create a partnership.
3). Use your agency strategically.
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*****Use Discussion Question #5 Here*****
2. Coordination of Multicountry Research.
a. Who should do the coordinating?
b. What degree of coordination?
c. The degree of coordination centers around the conflicting demands of various
users of marketing research--the global headquarters and local subsidiaries.
1). Headquarters (an etic approach--emphasize universal behavioral and
attitudinal traits) wants one thing.
2). Local subsidiaries (an emic approach--focus on the peculiarities of the
country) often wants something else.
d. The key to success is coordination of needs and leave some leeway for
individual country peculiarities (this is especially important when considering
soft data such as lifestyles).
*****Use Global Perspective 6-3 “How Does Japanese Market Research Differ?”
Here; Use Review Question #5 Here*****
REVIEW QUESTIONS
INSTRUCTOR’S NOTE: The following chapter review questions are meant to challenge
the student to think about material presented in the chapter and formulate a creative
answer to the review questions. Many of the answers require judgments rather than
specific line-by-line quotation of facts. The answers provided are meant to provide
stimulation of creative answers.
1. What are the major benefits and limitations of omnibus surveys?
The major benefit of the omnibus survey is that cost expenses of the survey are shared by
the subscribers. It is a very economical way to get data on large numbers of consumers
(especially if general information is what is primarily needed). However, the major
disadvantage is that only a limited amount of company relevant information is obtainable
through the omnibus survey format. Also, the panel (used to obtain the data) is usually
not representative of the firm’s target market profile.
2. What is the notion of “triangulation” in global market research?
Cross-country research often demands a comparison of indicators across countries.
Different sources on a given item often produce contradictory information.
Reconciliation can be achieved through triangulation. In other words, obtain information
on the same item from at least three different sources and speculate on possible reasons
behind these differences.
3. Discuss the major issues in running focus group discussions in an international
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context.
Focus groups can be used for many different purposes: to generate information to guide
the quantitative research projects, to reveal new product opportunities, to test new
product concepts, and so forth. Rules that should be followed are to hire a trained
moderator, make sure cultural sensitivity is part of the process, make sure the group is
homogeneous and able to bond, make sure the moderator is skilled in group dynamics,
and make sure the moderator can recognize consensus. Lastly, analysis and interpretation
on non-verbal cues is just as important as recording the verbal cues.
4. Discuss why market size estimates may differ depending on the method being
used. How can such differences be reconciled?
Market size estimates in the international area are many times “guesstimates.” The lack
of quality data is the cause. The chapter describes four methods that can be used to
approximate market size. The marketing manager is advised to use more than one
measure to improve their decision making ability. The methods are the method of
analogy, the trade audit, the chain ration method, and cross-sectional regression analysis.
Factors considered cause differences between these methods. An averaging, as well as a
common sense approach, helps to resolve differences. The watchword, however, is
caution. Do not make numbers out to be more than they are. Observe where the data
came from, how it was collected, the validity of the data, the recency of the data, and
what the data included and excluded.
5. Contrast the emic versus the etic approach in international marketing research.
The degree of coordination of marketing research efforts centers around conflicting
demands of various users of marketing research: global (or regional) headquarters and
local subsidiaries. Headquarters favor standardized data collection, sampling procedures,
and survey instruments. This is called an etic philosophy (emphasizes universal
behavioral and attitude traits) bias. Local user groups prefer country-customized research
designs that recognize peculiarities of their local environment. This approach can be
described as being an emic philosophy (where attitudinal phenomena and values unique
to a particular country are what is studied because the researchers feel that the uniqueness
warrants study in this manner). Both approaches have merit and a combination is usually
advised for accuracy.
DISCUSSION QUESTIONS
INSTRUCTOR’S NOTE: Discussion Questions are found at the end of each chapter in
the text. These questions (in many cases) are too lengthy to repeat in this manual.
Suggestions for answering and discussing the questions are presented in this section.
Many of the questions require student opinion and judgment.
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1. The answer to this question is a judgment call. Either method can produce desirable
results. Factors to be considered in making the judgment between single country research
and clustering might center around: 1) the number of countries involved, 2) the ability to
cluster, 3) data availability, 4) amount of time to do the research, 5) agencies that might
be able to do the research for the firm (such as a specialization service), and 6) cost of
obtaining information versus the value of obtaining the information.
2. This question requires that the students apply the information from Exhibit 6-6 found
in the chapter on page 212. Be sure to monitor the results of the mathematical exercise.
If there are differences, resolve these. In most cases (beyond simple math error), the
differences are attributable to the consideration of different factors. Factors that are
excluded from the calculation include competition and trade barriers, technological
advances, and there is always the question of comparability.
3. The Internet presents a wonderful opportunity to do research. If the difficulty of
specialized markets (only a few distinct groups primarily use the Internet at this point in
time---though this will change in the future with wider acceptability) is overcome, the
Internet will be a great data source for the future. Research has shown that the average
Internet user is willing to give information and opinions about a wide variety of subjects.
In addition, based on the design of most Web pages, the interested firm will be able to tell
a lot about the person who clicks on to their Web site (such as what did they look at, how
long did they look, where did the inquiry come from, was there any interest in further
information or inquiry about the product or service).
4. This is an interesting example where the class can get data on three variables to
produce market size estimates for the four countries (Bahrain, Kuwait, Saudi Arabia, and
the UAE). The instructor should remind the students that when applying regression to
calculate market size estimate, they should be careful in interpreting the results. Caution
is warranted whenever the range of one of the predictors for the countries of interest is
outside the range of the countries used to calibrate the regression.
5. If one understands the bonding aspect that is a valuable element of the focus group
technique, one sees the limitations to the videoconferencing technique except for
specialized purposes. In addition, the homogeneity of the international focus group might
be suspect. This does not mean that the technique might not have useful outcomes,
however, the limitations and differences between domestic focus group research must be
accounted for. Benefits might outweigh the disadvantages with respect to getting a
multicultural outpouring. The expense might be prohibitive.
6. Before attempting to answer this question, students are encouraged to re-read the
material on the chain ratio method in the text. In order to use this method, the students
will have to do library research on the four countries mentioned or use the Internet to
obtain information that will fit the prescribed categories of the method.
7. An excellent source of secondary information on the subject of scales is usually a text
on Marketing Research. The primary concern with building scales is in what they are
81
attempting to measure. Be careful about interpretation, use multiple measurement scales
if possible, be sure to accurately describe the audience being described, use measures that
will accurately measure opinions and attitudes of the survey group, and always remember
that the data is opinion oriented rather than strictly factual.
8. A useful sight might be: http://www.durex.com/enUS/SexualWellbeingSurvey/pages/default.aspx
a.
The main challenges will include such issues:
i.
Properly conveying what the term “sexual satisfaction” means in various
cultures
ii.
Eliciting information on privacy issues—some countries will be far more
open than others
iii.
Education levels of respondents
iv.
Whether women could participate in some cultures
b. Online surveys are cheaper to administer, have instant data entry, and can span
the globe far more easily.
Disadvantages include access to the Internet—it was an online survey, hence
results may be skewed toward more wealthy participants in some countries. Also,
there is no one to clarify confusing questions and no safeguards to avoid multiple
responses from a single Internet address. Finally, many people may share the
same address, so some confusion may arise when linking responses with
demographic data.
c. The firm can gain insights into modifying its promotion
messages to address varying needs and expectations of the audience. Durex may
find that gaining cooperative assistance from government or other agencies
regarding sex education would aid their sales. Perhaps some cross-over
recognition between Durex and Scholl’s might be possible. Data on frequency
and other answers could be used to adjust package sizes or suggest changes in
promotion messages.
STUDENT PROJECTS and INTERNET FOCUS
1. Go to the library and do research on two foreign markets of your choice. Use any of
the four methods mentioned in Chapter 6 (method of analogy, trade audit, chain ration
method, or cross-sectional regression analysis) to make a market size assessment for a
product or service of your choice. Once you have completed your assignment, evaluate
your research experience. What was difficult? What additional data did you need? What
was the easiest and hardest data to find? Would you be willing to make decisions
regarding the market based on the data collected?
2. Using the steps outlined in the text: 1) Define the research problem, 2) Develop a
research design, 3) Determine information needs, 4) Collect the data, 5) Analyze the data
82
and interpret the results, and 6) Report and present the findings of the study. Do a
research project on a subject of your choice with respect to the international marketing
environment or a specific country. Additional instructions can be given by the instructor.
Report on your research experience. Critique your effort.
INSTRUCTOR’S NOTE: The following projects require the students to both use and
understand the Internet. If students do not understand how to use the Internet,
explanation should be given before these projects are undertaken. The Web sites
provided were current at the time of this writing. However, since Web addresses change
frequently, the instructor should re-affirm the site addresses and the content of the site
before making an assignment.
3. As mentioned in the chapter, a comprehensive resource in gathering data in
international marketing is the GLOBUS and National Trade Data Bank (NTDB) found at
(http://www.stat-usa.gov/tradtest.nsf). Go to the site and report on the forms of data that
can be obtained. This listing of reference areas might be useful for other reports or
projects assigned in this course.
4. There are many valuable on-line resources is International Business. Go to the
following sites and report on the forms of data that can be obtained. These sites might be
useful for other reports or projects assigned in this course.
a. International Business Resource Connection
(http://www.ibrc.business.ku.edu/)
b. Global Edge (http://globaledge.msu.edu/)
c. Marketing & International Business Links
(http://wtfaculty.wtamu.edu/~sanwar.bus/otherlinks.htm)
5. A frequently used program for computers that is useful in conducting research
(especially in the international area) is SPSS (Statistical Package for the Social
Sciences). Go to the SPSS Web site at (http://www.spss.com) and explore the different
statistical programs available that might be used for doing research as suggested in this
chapter. Pick one of the packages and report on what it might be used for and how you
could access it. This site can be very valuable as a reference listing for other reports and
projects that might be assigned in this course.
WEB RESOURCES
AMA’s Global Marketing Special Interest Group
(www.amaglobalsig.msu.edu)
Eurostat
(http://ec.europa.eu)
Harvard-MIT Data Center
(http://hmdc.harvard.edu/)
83
InfoPlease.com: World Statistics
(http://www.infoplease.com/ipa/A0004372.html)
International Market Research & Statistics, KnowThis.com
(http://www.knowthis.com/)
International Market Research Reports, Strategis, Canada
(http://strategis.ic.gc.ca/epic/internet/inimr-ri2.nsf/en/gr-01000e.html)
International Marketing, L. Perner, University of Southern California
(http://www.consumerpsychologist.com/international.htm)
Market Research Library, U.S. Commercial Service
(http://www.buyusainfo.net/adsearch.cfm?search_type=int&loadnav=no)
National Statistics, U.K.
(http://www.statistics.gov.uk/)
Nielsen Media Research
(http://www.nielsenmedia.com/nc/portal/site/Public/)
OECD: Statistics Portal
(http://www.oecd.org/statistics/)
U.S. Agency for International Development
(http://www.usaid.gov/)
Statistical Resources on the Web, University of Michigan
(http://www.lib.umich.edu/govdocs/stecon.html)
Statistical Sites on the WWW, U.S. Department of Labor
(http://www.bls.gov/bls/other.htm)
STAT.USA/Internet
(http://www.stat-usa.gov/)
UNESCO Institute for Statistics
(http://www.uis.unesco.org/ev.php?ID=2867_201&ID2=DO_TOPIC)
United Nations Statistics Division
(http://unstats.un.org/unsd/)
U.S. Census Bureau
(http://www.census.gov/)
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