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INTERNATIONAL MARKETING 6e Chapter 7 Building the Knowledge Base Copyright © 2001 by Harcourt, Inc.. All rights reserved. Requests for permissions to make copies of any part of the work should be mailed to the following address: Permissions Department, Harcourt, Inc., 6277 Sea Harbor Drive, Orlando, Florida 32887-6777. Defining the Issue What is marketing research? Traditional view • “the function that links the consumer, customer, and public to the marketer through information” Redefined view • “systematic and objective identification of information, collection, analysis and dissemination of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing” Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-2 International versus Domestic Research Similar but different • International research involves the use of similar tools and techniques as in domestic research, but the market environments differ. The • • • • primary differences New parameters New environments Number of factors involved Broader definition of competition Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-3 Recognizing the Need for Research Reasons that executives may view international research as unimportant: • Lack of sensitivity to differences in consumer tastes and preferences. • Limited appreciation for the different marketing environments abroad. • Lack of familiarity with national and international data sources and the inability to use them. • Actual but limited business experience in a country or with a specific firm may be used as a substitute for organized research. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-4 The Benefits of Research V(dr) - V(d) > C(r) • V(dr) is the value of the decision with research • V(d) is the value of decision without research • C(r) is the cost of research Conduct research if the value of the decision with research is greater than the value of the decision without research. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-5 Determining Research Objectives Research objectives vary from firm to firm because of the views of management, the corporate mission, and the marketing situation. Information needs are linked closely to the level of international expertise in the firm. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-6 Going International: Exporting Foreign-market opportunity analysis • Broad-brush approach to narrow down market possibilities • Cursory analysis of general market variablestotal and per capita GNP, mortality rates, and population data • Individual market data, product data, market trends, and restrictions • Consideration of governmental restrictions Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-7 Researching Foreign Market Potentials Stage 1: Preliminary Screening for Attractive Country Markets Key Question: Which Foreign Markets Warrant Detailed Investigation? Stage 2: Assessment of Industry Market Potential Key Question: What is Aggregate Demand for Each Warrant Selected? Stage 3: Company Sales Potential Analysis Key Question: How Attractive is the Potential Demand for Company Products/Services? Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-8 Going International: Importing Information • • • • The reliability of a foreign supplier Consistency of its product or service quality Length of delivery time Government rules and regulations Information • • • • • to know for importing: needs for the importing decision: Identify markets for desired supplies or materials Reliability of a foreign supplier Product or service quality Length of delivery time Government rules and regulations- foreign and domestic Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-9 Market Expansion Data Needs Detailed information for penetrating a market Designing or fine-tuning the marketing mix Monitoring the political climate of a country. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-10 Secondary information requirements What do you really need to know? • Was sufficient research conducted to answer the research question(s)? • Is macro data sufficient or will micro data be required to complete the market assessment and selection? • What market restraints are present ? • Is knowledge of international accords required? • Is specific product data necessary for marketing mix determination? Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-11 Evaluating Data Is it appropriate to the task at hand? What is the quality of the data source? What is the quality of the data? How compatible and comparable are the data to your problem? Are data categories comparable? Are there any societal implications of obtaining data? Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-15 The Primary Research Process Primary research • Conducted to fill specific information needs. • Essential to strategic marketing plan formation. • Useful in international market segmentation Determining information requirements • Formulate research questions to determine precisely the information that is sought. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-17 The Primary Research Process… continued Industrial versus consumer research • Deciding whether to conduct research with consumers or industrial users. • Consumers are large in number and easy to reach • Industrial users are fewer in number and harder to reach Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-18 Determining Research Administration Centralized • The research specifications are designed by the home office and forwarded to country operations for implementation. Coordinated • An intermediary such as an outside research agency brings headquarters and country operations together. Decentralized • Corporate headquarters establishes the broad thrust of research and delegates design and implementation to the local countries. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-19 Outside Research Services Deciding factors in whether or not to use outside research services • The size of the firm’s international operations. • The presence or absence of specialized expertise in international marketing research in the firm • The scale of the research to be conducted • Quality of research versus its cost Choosing a research firm • Previous research experience • General technical capabilities Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-20 Determining the Research Technique Objectivity requirements for the acquired data • Standard collection techniques work best with objective data. Subjective data collection takes more effort to collect and interpret. Soft data and hard data • Subjective (soft) data from dealer interviews and objective (hard) data from shipments, inventories, and retail sales. Interviews • Knowledge persons are a valuable information resource (personal bias must be discounted). Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-21 Determining the Research Technique Focus groups • Interaction within a group about a specific topic can uncover hidden issues, perceptions, emotions, and nonovert factors. Cultural influences can restrict the usefulness of focus groups. Observation • Observation results can be influenced by presence of the observer. • Useful in understanding practices not captured in or accessible to other research techniques. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-22 Determining the Research Technique Surveys • Gather quantitative rather than qualitative information through personal or remote contact with the subject population. • Can be difficult to conduct if method of contact (eg.,telephone or mail) is unreliable or if cultural influences bias response rates. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-23 Determining the Research Technique Survey questionnaire design issues • Question format – Structured or unstructured – Direct or indirect – Ensure data equivalence • Question content – Consider interviewee’s ability and willingness to answer – Adapt questions to societal constraints • Question wording – Use simple unambiguous words, terms and questions. – Check for errors using translation-retranslation approach and alternative wording for questions. – Pretest the survey. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-24 Determining the Research Technique Presenting research results • Disseminate and communicate results clearly and concisely to all interested and affected parties in the organization. Follow-up and review • Check to determine if managerial decisions and organizational actions are taken in recognition of the findings of the research. Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-25 The International Information System System • • • • • • data must be: Relevant Timely Flexible Accurate Exhaustive Convenient Copyright © 2001 by Harcourt, Inc. All rights reserved. 7-26