International Market Research

Market Research is a systematic, objective collection and analysis of data about a particular target market, competition, and/or environment. It always incorporates some form of data collection whether it be secondary research (often referred to as desk research) or primary research which is collected direct from a respondent.

Defined as the systematic gathering, recording, and analyzing of data to provide information useful in marketing decision making.
International Marketing Research follows the same path as domestic research, but there are a few more problems that may arise. Customers in international markets may have very different customs, cultures, and expectations from the same company. In this case, Marketing Research relies more on primary data rather than secondary information. Gathering the primary data can be hindered by language, literacy and access to technology.

International Marketing Research Complications Information must be communicated across cultural boundaries. The environments within which the research tools are applied are often different in foreign markets. How is international marketing research different? Added complexity / diversity Need to consider priorities and allocation of resources between countries 3 types of different information needs: 1. Assessment of foreign markets (general information relating to countries) Economic Social / Cultural Political / Legal Technological 2. Industry information (relates to product category) Market size Segmentation Competition Consumer Specific Market Information (used to develop marketing plan)

Product Pricing Distribution Promotion

Steps In research Process

Step I: Define the research problem Step 2: Developing a research plan Step 3: Collecting data Step 4: Analysing research data Step 5: Presenting the findings

1. Define the problem and establish objectives

Critical step because of unfamiliarity with international markets Problems can arise when researchers: Fail to recognize or anticipate the influence of the local culture or fail to identify the SRC effect Treats the problem as if it exists in the home country Fail to establish problem limits broad enough to include all relevant data

2.Developing the research plan

Determining specific information needs Research objectives must be translated into specific information needs

Plan for gathering secondary information information that already exists somewhere, having been collected for another purpose relevant, current, impartial (objectively collected & reported)

Primary data collection plan information collected for the specific purpose at hand - research approaches : observation,survey, experiment

 Deciding contact method mail, telephone, personal Detailing the sampling plan sampling unit, sample size, sampling procedure

3. Collecting data
Primary Data When data is not available, and must be obtained through some form of data collection. Secondary Data When data exists and is available through a variety of sources (i.e. internet, publications, government records, etc.) Secondary Data defined Data collected by another agency or researcher Problems with obtaining relevant and accurate Secondary data 1. 2. 3. 4. Availability of Data Reliability of Data Comparability of Data Validating Secondary Data

Gathering Primary data Qualitative research Quantitative research Methods for Developing Primary Data Interviews Observation Surveys Panels Experiments Focus Groups Problems of Gathering Primary Data Ability to Communicate Opinions

Willingness to Respond Sampling in Field Surveys Language and Comprehension Back Translation, Parallel Translation, Decentering.

data collection phase is generally the most expensive & most subject to error - wrong implementation, problems in contacting respondents, biased or dishonest answers, problems with interviewers (mistakes or short-cuts)

o o o o o o o

Uses of Internet in International Research On-Line Surveys and Buyer Panels On-Line Focus Groups Web Visitor Tracking Advertising Measurement Customer Identification Systems E-Mail Marketing Lists Embedded Research

4. Analysing research data

Cultural Understanding Creative Talent for Adapting Research Findings Skeptical Attitudes when Handling Both Primary and Secondary Research

5. Presenting the findings

Both researchers & managers must work together at this stage - researchers know methodology better while managers understand problems and possible management solutions better

Five Rules of International Research

1. 2. 3. 4. 5. Apply the WHAT, WHY, WHERE and WHEN of information. Use locally available information first. Identify information sources abroad. Know where to look. Do not assume the information you get is comparable or accurate

The importance of international marketing research

o o o o o o o o

Finding where your products are most likely to sell Identifying market segments and niches Determining both domestic and international competitors Discovering how to overcome barriers to market entry Understanding customers' needs Identifying new trends Establishing fair market prices for your products Your company may begin exporting without any market research if it receives unsolicited orders from abroad. But, you will find even more promising markets by conducting a systematic search. Businesses that invest time in market research increase their chances of succeeding in international markets.

Market research is the vital link between the organization and its customers. The objective of Sound market research is to interpret consumer behaviour and translate the perspective of key Customers into actionable marketing strategies. Without this open dialog with customers, companies are unable to keep in touch with vital consumer behaviour trends and the many influences that affect the customers of an organization. In today's consumer environment of over-choice and over-communication, growth can only be realized by organizations that are very skilled at crafting well-targeted strategies directed at specific micro-niches of the larger macro market. Companies that go to market without first uncovering specific segment needs and perceptions risk facing the monumental cost of marketing failure.

Appendix
http://media.wiley.com/product_data/excerpt/39/EHEP0002/EHEP000239-3.pdf

Do opportunities exist in foreign markets for the rms products and services? Which foreign markets warrant detailed investigation? What are the major economic, political, legal, and other environmental facts and trends in each of the potential countries? What mode of entry does the company plan to adopt to enter the foreign market? What is the market potential in these countries? Who are the rms present and potential customers abroad? What is the nature of competition in the foreign markets? What kind of marketing strategy should the rm adopt ? With new consumer product launches typically costing $25 million or more, the risk of not incorporating consumer behavior into marketing strategy is considerable. Since the mid-1990s, the international research business has grown tremendously. In 1995, the top 25 global market research organizations had aggregate revenues of only $5.7 billion, and 45% of their revenues came from outside the companies' home countries. By 2004, revenues had grown 133%, to $13.3 billion, while out-of-home-country share grew to 67% (Marketing News, 2005). As illustrated by these figures, it is clear that spending on international market research projects is on the rise in the U.S. and other countries. It has been estimated that it costs six times as much to attract a new customer as it does to keep a current customer (Reichheld, 1996). This fact demands that organizations increasingly must stay in touch with their best customers. The most actionable method employed by market-driven organizations to keep pulse with their valued customers is the effective use of market research. Only by having an open dialog with their customers can companies learn about the subtle shifts in buying preferences that, without proper management, ultimately lead to company and/or brand defection. As more organizations pursue global business strategies, they will require and demand international sources of market information. In order to compete effectively in the 21st century, these businesses will need specialized, targeted information about buyers in dispersed international markets. Connell (2002) argues that, in the business-tobusiness market, there is ample justification for conducting international market research in support of the design, execution, and interpretation of a wide variety of global marketing strategies. As illustrated by the examples offered in this article, research tactics routinely used in the United States are much more problematic when deployed in developing foreign markets. Companies

that pursue multi-domestic and global marketing strategies face a wide variety of strategic questions relating to foreign market entry. According to Rydholm (1996), prior to pursuing international marketing strategies, managers should ask: Have international sales been increasing as a percentage of overall revenue? Are international markets growing faster than domestic markets? Does the organization have the same competitive position outside the U.S.? Are the fundamental needs of foreign customers known? What is the interaction of the four P's in foreign markets? Can the Internet help with research design? The answers to these and other questions can help organizations prioritize their need for international marketing research. While it makes sense for increasing numbers of companies to go global, making the correct decisions regarding target markets, brands, and other strategic marketing mix variables is both challenging and problematic.Furthermore, the Internet may not necessarily be the optimum medium for conducting international market research projects, despite its rapid growth and acceptance by certain consumers.