Planning and Research in International Markets

E13 International Marketing
Module 3
Planning and Research in International

Markets
Introduction
This module covers the following themes:
 Product and market selection process
 Planning and researching for international markets
o Pitfalls in foreign market assessment
o A framework for assessing foreign markets
o Guidelines for market research in assessing international
markets
o Introduction to different secondary sources of
information
o Forecasting market potential
Upon completion of this module you will be able to:
 discuss the aspects of segmentation and the process of matching

products and markets.
 describe and conduct the preliminary study/feasibility study to
understand market attractiveness.
Outcomes
 explain and apply the process of international marketing
research.
 discuss and avoid pitfalls in conducting research.
 describe and apply gains and outcomes of research
Demographic: The size, structure, and distribution of a

population.
Psychographics: An operational technique of measuring lifestyles

Terminology
that can be used with the large samples needed for
defining market segments.
Concentrated The target strategy that calls for creating a

Marketing: marketing mix to reach a niche segment of
consumers.
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Module 3
Market Segment: Dividing a market into distinct groups of

consumers who have different needs,
characteristics, or behaviour, and who may require
different products or marketing mix programmes.
Targeting: The process of evaluating each market segment’s

attractiveness and selecting one or more segments
to serve.
Positioning: Marketers’ activities designed for a product to

occupy a clear, distinctive, and desirable place in
the minds of target consumers.
Lesson notes9
One of the major challenges for the modern marketer remains the
identification of which markets to enter and with what kind of product
mix. Sometimes marketers think that the sheer size of the market is
enough to give them reasons to enter. However, such estimates can be
deceptive. Often the geographical diversity or the cultural diversity may
become deterrents for the company. Take for instance, the China and the
India story. The population and the geographical expanse of these
destinations often lead international marketers to consider them as
attractive destinations. But, it can be a mirage, often leading to wrong
estimations or even a lack of basic understanding of cultural and social
issues. The KFC (Kentucky Fried Chicken) story in India is one such
example of how marketers sometimes get their estimation horribly
wrong. Often, marketers’ ethnocentric approach to operating in the host
country and the air of superiority that flows from it could become a
reason for frequent wrongful estimations. It is therefore critical for
marketers to assess and research the market well before physically setting
foot. For SMEs, the context is even more important as the limited
resources and access issues for them add to the risk associated with
market entry.
The global environment must be analysed before a company pursues

expansion into new geographic markets. Through global market
segmentation, a company can identify and group customers or countries
according to common needs and wants. Demographic segmentation can
be based on country income and population, age, ethnic heritage, or other
variables. Psychographic segmentation groups people according to
attitudes, values, and lifestyles. BSB’s Global Scan, DMBB’s
Euroconsumer Study, and Young & Rubicam’s 4Cs are examples of
proprietary psychographic segmentation studies prepared by advertising
agencies for their global clients. Behavioural characteristics such as user
9
As a Participant in the programme , you are encouraged to read the article, Evaluating
International Markets: The importance of information by industry, by country of destination, and by
type of export transaction by Van R. Wood and Kim R. Robertson, International Marketing Review,
Year: 2000 Volume: 17 Issue:1 Pages: 34-55
30
status and usage rate are also used as segmentation variables.

Segmentation can also be based on the benefits sought by buyers.
After marketers have identified segments, the next step is targeting: the
identified groups are evaluated and compared, and one or more target
segments with the greatest potential are selected from among them. The
groups are evaluated on the basis of several factors, including segment
size and growth potential, competition, compatibility and feasibility.
After evaluating the identified segments, marketers must decide on an
appropriate targeting strategy. The three basic categories of global target
marketing strategies are standardised marketing, concentrated (niche)
marketing, and differentiated (multi-segment) marketing.
Positioning a product or brand in the minds of targeted customers can be

accomplished in various ways. Attribute or benefit, quality and price, use
or user, and a company’s competition can all serve as the basis for a
strong positioning strategy. For Global Marketing, global consumer
culture positioning (GCCP), foreign consumer culture positioning
(FCCP), and local consumer culture positioning (LCCP) are additional
strategic options.
Information is one of the most basic ingredients of a successful marketing

strategy. A management information system provides decision makers
with continuous flow of information. Interactive technology is profoundly
affecting Global Marketing activities by allowing managers to access,
analyse and manipulate data to assist in decision making. Electronic data
interchange, efficient consumer response, and data warehouses are some
of the tools and techniques available to marketers today. Global marketer
must scan the world for information about opportunities and threats and
make information available via a management information system.
Market scanning can be accomplished by keeping in touch with an area
of information via surveillance or actively seeking out information via
research. Information can be obtained from human and documentary
sources or from direct perception.
Formal research is often required before specific marketing decisions can

be made. The research process begins when marketers define the problem
and set research objectives; this step may entail assessing whether a
particular market should be classified as latent or incipient. A research
plan specifies the relative amount of qualitative and quantitative
information that will be required, using primary or secondary data
sources. In today’s wired world, the Internet has taken its place alongside
more traditional channels as an important secondary information source.
In some instances, the cost of collecting primary data may outweigh the
potential benefits. Secondary sources are especially useful for
researching a market that is too small to justify a large commitment of
time and money. If collection of primary data is justified on a cost-benefit
basis, research can be conducted via surveys, personal interviews,
consumer panels, observation, and focus groups.
Before collecting data, researchers must determine whether a probability

sample is required. In Global Marketing, careful attention must be paid to
issues such as eliminating cultural bias in research, accurately translating
survey instruments, and ensuring data comparability in different markets.
A number of techniques for analysing data, including demand pattern
31
Module 3
analysis, income elasticity measurements, estimation by analogy,

comparative analysis, and cluster analysis are used in international
marketing research. Research findings and recommendations must be
presented clearly. A final issue is how much control headquarters will
have over research and the overall management of the organisation’s
information system. To ensure comparability of data, the researcher
should utilise both emic and etic approaches.
Reading: Chapters 6 and 7

Keegan Chapters 6 and 7
You should now read Chapters 6 and 7 of the Keegan text (Global
Marketing, 4th edition).
Reading
In applying your knowledge of this material, you should take note of the
following:
 The first aspect of the chapter deals with the Global Marketing
Note it! information systems. This is an internal mechanism of how
organisations are involved in the process of gathering continuous
information. Participants to the programme must understand how
global companies lay the foundations for a strong Management
Information System (MIS). Use of technology and integrating them
into their departmental feedback mechanism are critical.
 Research is of prime importance for Global Marketing. The

dichotomy in the markets and the uncertainty of the environment can
largely be reduced through the set-up of a strong mechanism of
research. The difference between Global Marketing and domestic
marketing research is largely related to geography, people and their
culture. This heterogeneity can be captured through a well-
established research network.
 When researching any market, marketers must know where to go to

obtain information, what subject areas to investigate and the
information to look for, the different ways information can be
acquired, and the various analysis approaches that will yield
important insights and understanding. Market information today has
become available on the Internet. Even so, marketers need to
understand that information technology and marketing information
systems are strategic assets. Second, they need a framework for
information scanning and opportunity identification. Third, they
require a general understanding of the formal market research
process. Finally, they should know how to manage the marketing
information collection system and how to apply the marketing
research effort for informed decision making.
32
 MTV's worldwide success is a convincing example of the power of

superior global market segmentation and targeting, as discussed in
chapter 7. Market segmentation represents an effort to identify and
categorise groups of customers and countries according to common
characteristics. Targeting is the process of evaluating the segments
and focusing marketing efforts on a country, region, or group of
people that has significant potential to respond. Such targeting
reflects the reality that a company should identify those consumers it
can reach most effectively and efficiently. Finally, proper positioning
is required to influence the perceptions of target customers. Global
markets can be segmented according to buyer category, gender, age,
and other criteria. These activities serve as the link between market
needs and wants and specific decisions on the part of company
management to develop products that meet the specific needs of one
or more segments. Segmentation, targeting, and positioning are all
examined in this chapter.
Activity 3.1
The Japanese Keiretsu and Korean Chaebol organisations prevalent in
Japan and Korea, respectively, represent somewhat unique and culturally
defined business organisational structures. Using the Internet or other
library resources, investigate these structures and develop a comparative
table of the features that define both organisational structures and how
Activity they impact upon international trade for their respective countries.
Share your comments and observations with your class colleagues and
instructor.
33
Module 3
Summary
In this module, you learned:
 The aspects of segmentation, targeting and positioning strategies

to match products offered by a firm and its desired target
Summary segment.
 That a consumer market could be differentiated by careful

analysis of market segments, and therefore, successfully dividing
segments according to its characteristics.
 The different methods of segmentation; demographic,

behavioural, usage, needs and psychographic.
 How marketing research is done to understand market

attractiveness prior to entry.
 The challenges, pitfalls, gains and outcomes of marketing

research.
Assignment
Case Study: Nokia Segments the Global Cellphone Market
Read through the case study entitled, Nokia Segments the Global
Cellphone Market on pages 259-260 in your Keegan text and respond to
the following questions:
Assignment
1. How does Nokia segment the market for cell phones?
2. What factors were paramount in Nokia’s decision to enter the game-

playing market?
3. Evaluate the appropriateness of Nokia’s marketing programme for

the N-Gage in terms of the desired target market.
Submit your responses to the case study questions to your instructor or

tutor for evaluation.
34
Assessment
1. Compare and contrast standardised, concentrated, and differentiated
Global Marketing. Illustrate each strategy with an example from a
global company.
Assessment
2. How can a company review current and potential product offerings in
terms of suitability for the country market or segment?
3. What are the different modes of information acquisition? Which is

the most important mode for gathering strategic information?
4. What issues do marketers need to address as they proceed to the data

collection step?
5. Outline the basic steps of the market research process.
35

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E13 International Marketing

Planning and Research in International

Upon completion of this module you will be able to:

 discuss the aspects of segmentation and the process of matching

Demographic: The size, structure, and distribution of a

Psychographics: An operational technique of measuring lifestyles

Concentrated The target strategy that calls for creating a

Market Segment: Dividing a market into distinct groups of

Targeting: The process of evaluating each market segment’s

Positioning: Marketers’ activities designed for a product to

The global environment must be analysed before a company pursues

status and usage rate are also used as segmentation variables.

Positioning a product or brand in the minds of targeted customers can be

Information is one of the most basic ingredients of a successful marketing

Formal research is often required before specific marketing decisions can

Before collecting data, researchers must determine whether a probability

analysis, income elasticity measurements, estimation by analogy,

Reading: Chapters 6 and 7

 Research is of prime importance for Global Marketing. The

 When researching any market, marketers must know where to go to

 MTV's worldwide success is a convincing example of the power of

 The aspects of segmentation, targeting and positioning strategies

 That a consumer market could be differentiated by careful

 The different methods of segmentation; demographic,

 How marketing research is done to understand market

 The challenges, pitfalls, gains and outcomes of marketing

2. What factors were paramount in Nokia’s decision to enter the game-

3. Evaluate the appropriateness of Nokia’s marketing programme for

Submit your responses to the case study questions to your instructor or

3. What are the different modes of information acquisition? Which is

4. What issues do marketers need to address as they proceed to the data

5. Outline the basic steps of the market research process.

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