9 – International Market Research

Introduction

International marketing research is the systematic design, collection, recording, analysis, interpretation, and reporting of information relevant to a multinational corporation’s marketing decision.

This definition of international marketing research includes a disclaimer that is also included in the basic definition of marketing research: in-depth knowledge of the commercial environment. The environment is highly complicated in an international setting, with evident and significant subtle differences in culture, religion, customs and business practices, and general market characteristics from the environment of the company’s home country.

9.1 Marketing Research Concept

International marketing research is a comprehensive market analysis, including information on the nature, size, and organization of various markets, changes in the market, and numerous economic, social, and political variables influencing those changes. The primary goal of international market research is to learn about consumers and the markets for the company’s products and services. The researcher is primarily interested in customer information. It is a way to get to know our current and prospective clients for our products and services. Where do they call home? When and how do they purchase the company’s products? Are our customers happy with our products and services? Who are our biggest rivals, and what strategies do they employ? Market research is undertaken to learn the answers to all of these questions about the market and consumers so that the marketer may identify flaws in his product, policies, and plans.

International market research includes the following activities:

1. Market size analysis based on client age, gender, income, profession, and living level.
2. I am calculating the regional or territorial demand for various markets.
3. They are gathering information about present and future clients of the company’s products, their attributes, and the market share of various competitors.
4. I am researching market changes and the conditions that influence them, such as client preferences and shifts in brand loyalty.
5. They are examining the operation of various distribution channels and their function in establishing market demand for the product.
6. I am estimating the profitability of various marketplaces and marketing sectors.

9.2 Requirements for Marketing Research

There is no point in producing a product if there is no need for it, and market research is the primary tool for determining the magnitude, type, and trend of demand. Market research is required before making a production decision and plays a more significant role even when the demand potential is established. Furthermore, research is needed to determine the feasibility of realisingrealizingntial. It suggests that market research data on distribution methods, promotion systems, alternative pricing strategies, and so on are to be gathered. As a result, the necessity for market research arises to produce a solid database that will assist management in making decisions under the following conditions:

• When a new product is set to hit the market,.
• The reason(s) for the decline cannot be determined when the product’s sales are declining.
• When data and figures concerning the prospective demand are unavailable.
• Customer behaviours, tastes, and market information are unknown when developing an advertising campaign.
• When product development is required to adapt a product to meet customers’ expectations,.
• When income, fashion, habits, and preferences are rapidly changing.
• I understand competitors’ policies and strategies.
• When the company’s pricing policy is incompatible with the competitor’s pricing policies and must be modified.

9.3 Marketing Research Approaches

Three major headings have been selected to conduct step-by-step market research. These are covered under I screening market potential, (ii) assessing targeted markets, and (iii) concluding.

Examine Potential Markets

1. Step 1: Gather export statistics on product exports to various nations. The Department of Commerce’s Export Statistics Profile (ESP) can be helpful. If an ESP is unavailable for a product, the company should reference the Customs Statistical Service, Foreign Trade Report, Export Information Data Reports, or Annual Worldwide Industry Reviews.
2. Step 2: Identify five to ten major and rapidly expanding markets for the company’s product. Look at all of these for the last three to five years.
3. Step 3: Identify some smaller but fast-growing new markets that may offer first-mover advantages.
4. Step 4: Select three to five statistically promising markets for additional investigation.

Analyze Targeted Markets

1. Step 1: Investigate trends in the company’s products and trends in adjacent products that may influence demand.
2. Step 2: Determine the sources of competition in each targeted market, including the size of the industry’s production and the major international countries with which the firm competes.
3. Step 3: Examine the elements influencing product marketing and usage in each market, such as the end-user sector, distribution methods, cultural peculiarities, and business practices.
4. Step 4: Determine whether there are any international barriers (tariff or non-tariff) to the product being imported into the country.
5. Step 5: Determine whether any government incentives exist to encourage the export of the product or services.

Draw Your Conclusions

After analyzing it, the corporation may conclude that focusing on a few nations would better use marketing resources. Generally, if a company is new to exporting, it should focus on no more than ten markets; one or two nations may suffice.

9.4 International Marketing Research’s Scope

International marketing research has a greater reach than domestic marketing research since managers will require more information to compensate for a lack of knowledge of the foreign environment.

9.4.1 Industry, Market Characteristics, and Market Trends Research

Marketing research vendors undertake and distribute studies of industry, market characteristics, and market trends regularly, often in acquisition, diversification, and market-share analysis. Export research is another sort of research in this category; it is motivated by the shortening of the product life cycle, the severity of international rivalry, and rapid technical progress, which increases the need to segment markets more regularly.

9.4.2 Buyer Behaviour Analysis

Buyer behaviour research includes the examination of brand preferences and brand attitudes. Uncertainty is firmly avoided in most Asian countries, resulting in increased brand consciousness, brand loyalty, more vigorous insistence on quality, and customers’ active reliance on reference organization leaders. Whereas consumers worldwide are concerned about monetary, functional, physical, psychological, and social hazards, Asians are more concerned about social risk than Westerners.

Companies routinely perform brand awareness research and purchase behaviour studies to gauge their market position. Other helpful studies in this category include consumer segmentation studies, which are used to determine the profiles of heavy product customers and consumption occasions.

9.4.3 Product Investigation

Corporate research and development divisions typically conduct concept development and testing investigations in industrialised nations. When enterprises go global, they usually already have a successful product to bring to the market; nonetheless, it is still critical that they examine the product/service they offer and the associated marketing mix in light of the various target markets, both regional and local.

Brand name generation and testing are employed in the consumer goods business, where they are evident, and in companies that have traditionally promoted their products regionally, such as agricultural goods companies. Product testing determines how well a product conforms to local tastes.

PepsiCo Foods International, for example, decided to do extension product testing in China before launching its Cheetos snack food brand.

9.4.4 Distribution Analysis

The distribution function is especially significant in international marketing, where extra attention should be paid to import/export legislation and practices. Businesses would be well advised to conduct thorough evaluations.

Another essential analysis is channel performance and coverage, which may reveal that channels need to be further developed at a significant cost to the organisation in certain areas; specific channels dominate much of the activity.

Finally, plant/warehouse location studies and transportation infrastructure evaluation (roads, shipping, and warehousing infrastructure) are critical.

9.4.5 Promotional Analysis

Promotional research is critical for companies doing business globally. By conducting promotional research, the company assesses the extent to which it effectively communicates with the market, ensures that certain promotional strategies are appropriate for that specific market, and finally assesses the extent to which the local media are suitable for the intended message.

First, when conducting premium, coupon, and deal research, it is critical to establish the practices in each country where the specific promotion will be performed. Advertising effectiveness studies are regularly undertaken to investigate the effectiveness and appropriateness of advertising targeted at particular markets.

Conducting media research is also necessary. First, emerging countries face the most challenges in terms of media access. Finally, studies on personal selling activities, such as sales force compensation, quotas, and territory studies, are critical in determining the best methods for particular markets.

9.4.6 Pricing Analysis

Pricing research is significantly more difficult internationally than in a developed country. When a US company does pricing research in the US, it usually looks at things like international market potential, sales potential, sales forecasts, cost analyses, profit analyses, price elasticity studies, and competitive pricing analyses. These are all things that the company has to think about. They also have to think about things like counter-trade and currency issues, inflation rates, and the fact that people in the US traditionally negotiate every transaction. All of these things have effects.

9.5 International Marketing Research Methodology

The steps of the international marketing research process are detailed in the following subsections:.

9.5.1 Determining the Research Problem and Objectives

The first phase in the international marketing research process is for the global marketing manager and marketing researcher to establish the research problem and collaborative objectives collaboratively. The intricacy of the worldwide operations environment does not allow marketing researchers to understand the particulars that the research study should investigate. Instead, they may need to do an exploratory survey on the subject to determine the relevant dimensions of the problem under investigation. Exploratory investigations may aid in the further definition of the problem, the generation of hypotheses, or the identification of additional problems that need to be researched. Descriptive research, on the other hand, depicts a situation, such as how frequently shoppers in Cairo shop for food items, whether they prefer to shop for meat products in state stores, which are less expensive but offer inferior-quality products, or in private stores, which are more costly but offer higher quality and variety of meat products. Finally, informal research investigates cause-and-effect correlations, such as the likelihood that Sony’s cash incentives to electronics salespeople in Ahmedabad, India, will improve Sony brand sales.

9.5.2 Creating a Research Plan

The research plan is a blueprint for the study, detailing all of the decisions to be taken regarding information sources, research techniques, data collection tools, sampling procedures, data gathering methods, data analysis, and the expected expenditures of the research depending on these decisions.

9.5.3 Locating Information Sources

The researcher will begin by identifying secondary data that may shed more light on the problem. This data may have been obtained by the company (internal) or another firm or agency (external). Secondary data may, if necessary, assist the researcher in more precisely defining the problem and setting better objectives. It will also help the researcher determine the type of information that must be acquired to achieve the stated aims.

Secondary Information

Researchers must first assess whether or not information is available and, if so, how much information is available; doing so may aid in acquiring insights into the topic at hand. Secondary data is information gathered for an issue other than the one at hand.

Secondary data can be internal (gathered by the company to address a different problem or gathered by the company to address the same problem but in a different country) or external (gathered by a third party not associated with the company to address the same problem but in a different country).

Primary Information

Primary research is used significantly less frequently than it should be. Cost-benefit assessments indicate that investing in research in remote markets of dubious value is unwise; as a result, the temptation is to employ secondary data to satisfy all research objectives.

Most international marketing research studies require acquiring primary data, information gathered for a specific reason, such as addressing a problem. This necessitates extensive knowledge of instrument design and management, and as a result, it is both costly and time-consuming.

9.5.4 Data Gathering

When the present data is insufficient, new data must be gathered. Typically, “survey” procedures are employed to collect information. It does not have to be a detailed survey; a sample survey would suffice. This approach gathers data from a sample of respondents (groups). The sample is meant to symbolise a group of people, the cosmos, or humanity.

Marketing Exemplification: The sample is a subset of the overall population, which can be a city, a state, a country, or the entire world. Sampling is required to validate and analyse

9.5.5 Data Analyze

Analyzing the source and gathering the data is simply one aspect of the job. The obtained data cannot be accepted because it may contain irrelevant information and over- or under-emphasis. The adage “funder-emphasized, but liars figure” applies here because different interpreters will derive conclusions from the same information collection, depending on their opinions, interests, and biases.

9.5.6 Data Interpretation

This is a critical stage in the research process. The correct interpretation of data gives meaning and purpose to the investigation. Unorganized research fails at this level. The best fact-finding investigation would be meaningless if the facts were misinterpreted. Technical skills, comprehensive awareness, and personal knowledge of the topic are some requirements for accurate data interpretation.

9.5.7 Report Writing

The final step in marketing research is to summarise the findings and create a report. The results and recommendations are presented so that the report’s recipient understands them well enough to put them to use. In general, reports are divided into four types:

1. Executive Report: This report is intended for an executive to carry out the plan as soon as possible. He does not need to interpret the facts anew or conduct a detailed investigation.
2. Technical Report: This report will include a statement of the problem and the methods used in the research (methodology, the proof of the findings, etc.) The main goal of a technical report is to collect and present necessary technical information.
3. Data Report: This is unusual because it does not include any interpretation. It just shows the facts in tables and charts without attempting to understand what these findings or statistics represent. For example, it may provide the sales volume in a specific area for various periods without explaining the fluctuations.
4. Persuasive Report: This is also known as a popular report. It is non-technical, and so it has no commercial value. A narrative account of an incident is a type of persuasive report.

9.6 Market Research

A market survey is a fact-finding trip designed to gather all the essential facts about the market. The survey could be

(a) product-focused or

(b) market-focused.

• Product-oriented Survey: A product-oriented survey aims to find markets for an exporter’s existing product or product line. Sometimes, a company is already producing a product for its native market, where it has a good reputation.
• Market-oriented Survey: The primary goal of such a survey is to find products that may be sold in a particular overseas market. An export organization that produces various products may look into new markets for its export activity. A market-oriented study would find the products that may be marketed in large quantities in that specific market.

Conducting a market survey entails the following steps:

9.6.1 Establishing Goals

From the start, the exporter should explicitly state the survey’s objectives. These objectives may include determining the feasibility of introducing an existing product into a new market, estimating demand for a new product in target markets, identifying the most desirable form of export distribution and promotion, or investigating the causes of buyer complaints or falling market share.

9.6.2 Methodology Adoption

The methods used for gathering market information and analysing strive to explore the analytical aspect of decision-making. The methodology should allow for the acquisition of only relevant data. As a result, no single methodology can be suggested. Two or more data collection methods eliminate the potential for acquiring unnecessary data.

Methods such as desk research and field research are commonly employed for this aim. First, desk research is conducted. Based on the desk research findings, a field survey is carried out to fill in the gaps and collect particular information on the product and the market.

9.6.3 Survey Execution

There are two main ways to conduct a survey: (a) areas of investigation and (b) survey procedures.

Subjects of Research

The following areas should be covered in the inquiry, both in desk research and field research:

• Market profile information: All information on the export market, such as its areas, population, cultural groups, income disparity, income groups, population density, language spoken, taste, traditions, preferences, and cultural background, should be gathered.
• Product information: All product information should be obtained, including the product’s local manufacturing capacity, local imports and market demand, the product’s short-term and long-term plans and anticipated rise, product specifications, and consumer preferences on product ideas. Data on products that could be utilized should be gathered.
• Competitor information: Gather the nature and amount of competition, the number of competitors, their strengths and weaknesses, the items they offer, their sales and distribution networks, policies, and plans.
• Distribution: Determine if the product can be sold directly to the consumer or via intermediaries, as well as the physical transportation of items.
• Pricing and financing: Mode and currency of quotations, buyer credit needs, banking channels and fees incurred in their system, and financing facilities available.
• Sales promotion includes visual aids, sales promotion strategies, discount structure, free samples, gifts, competition, and so forth.
• Additional information: In addition to the preceding, information is provided on the kind and stability of the governmental system, commercial procedures used by banks, import limitations, tariff schedules and duties, and exchange control regulations.

Techniques for conducting surveys

Three strategies are commonly used in field research.

(a) Personal interview

(b) Telephone interview, and

(c). Mail questionnaire survey

Personal Interview: This is the most dependable method. The interviewer gathers information from the interviewee face-to-face using this strategy. His thoughts and feelings on the product are recorded. This approach has a lot of advantages, which are as follows:

1. It is a simple and intensive procedure.
2. It enables in-depth debate and study of specific and pertinent aspects.
3. The information acquired is reliable because the interviewer may persuade the interviewee to divulge confidential and sensitive information that would otherwise be withheld.

This approach has several disadvantages, which are as follows:

1. Personal preconceptions can taint the integrity of information.
2. Extensive use of this strategy is not possible because it requires time planning. Research takes much longer, so it costs more.
3. This technique has difficulty covering some respondents.

Telephone Interview: Both the interviewer and the interviewee talk on the phone about the product and the markets. The following are the benefits of using this technique:

1. It is cost-effective and saves time and travel. A large number of interviewees can be contacted quickly.
2. The surveyor receives an instant response to the queries posed. The questions might be posed systematically.
3. If necessary, personal encounters can be organised.

The approach does have certain drawbacks, which are reorganized.

1. The researchers must have a telephone, which must be inexpensive because not everyone can afford one.
2. Because there is no face-to-face personal contact, the sample may be skewed and imperfect in this scenario.
3. The respondent does not have enough time to respond since he must answer the questions promptly, and he may provide information based solely on options and estimation.
4. Without observational data, respondents cannot be categorised by age, education, occupation, or economic circumstances.

This strategy involves reaching the respondent by mail. A questionnaire, a cover note stating the study’s objective, and an envelope are sent to the foreign respondent. A present is sometimes given to the respondent as well. The completed questionnaire is returned to the surveyor for analysis by the respondent.

If the answer is favourable and prompt, this strategy is cost-effective. The cost per respondent is similarly inexpensive. This technology is widely applicable since it allows for the low-cost coverage of remote locations.

The main disadvantage of this technique is that its responsiveness is relatively weak. People are unconcerned about answering and returning the questionnaire. Furthermore, due to a lack of reaction, only a limited quantity of information may be gathered.

9.6.4 Survey Data Reporting

The information gathered from desk research and the field survey is analysed to reach a meaningful conclusion about the many parts of the analysis strategy. Mathematical models can also be used to analyse data, particularly demand data. Following that, a summary details the data gathered and the conclusions reached.

The survey report’s utility is that it allows the firm to make a marketing decision that will assist the firm in advertising its products in the market and achieving its marketing objectives. Marketing choices can be made in the following areas:

1. Product: Product judgments about the type of product that can be marketed in the overseas market in competition with other brands, as well as its characteristics and market acceptability.
2. Market: The market decision is related to the total market demand for the product, the firm’s market share, target customers, and where effort should be concentrated.
3. Price and delivery: Decisions are made on the price at which the product can be offered in the market and the interval or periodicity of delivery to ensure that there is no shortage of stock in the market.
4. Distribution and promotion: Distribution decisions pertain to the selection of agents, distributors, or the provision of warehouses or stockists, as applicable. The report includes decisions on the sales promotion approach to meet market objectives. These selections involve advertising, sales promotion, visual aids, promotional displays, fairs and exhibitions, etc. A mix of these strategies is frequently used to attain the best outcomes.

9.7 Marketing Information System

Some companies have created marketing information systems that provide management with immediate and astounding detail about buyer demands, preferences, and behaviour.

Every company must organise a steady stream of information for its marketing. Companies investigate their managers’ information requirements and create Marketing Information Systems (MIS) to meet them. A Marketing Information System (MIS) comprises people, equipment, and procedures used to collect, classify, analyze, and deliver necessary, timely, and correct information to marketing decision-makers.

Internal Documentation System

Marketing managers rely on internal reports on orders, sales, prices, expenses, inventory levels, receivables, etc. By analysing these reports, they can identify significant possibilities and challenges.

Order-to-Payment Cycle

The order-to-payment cycle is the heart of the internal records system. Sales representatives’ dealers and customers dispatch orders to the firm. The sales department creates invoices and distributes copies to other departments. Backorders are out-of-stock items. Shipped items are accompanied by shipping and invoicing documentation distributed to various departments.

Information Systems for Sales

Marketing managers require timely and accurate sales reports. Wal-Mart, for example, is aware of each product’s sales by shop and total each evening. This enables it to send nightly orders to suppliers for new replacement stock shipments.

Here are two businesses’ technology selling systems.

Ascom Timeplex, Inc. Before starting a call, sales representatives at this telecommunications equipment company utilize top computers to connect to the company’s global data network. They can use the most recent price lists, engineering and configuration notes, status reports on previous orders, and e-mail from anywhere in the company. When deals are struck, the laptop computers record each order, double-check it for errors, and electronically transmit it to Timeplax headquarters in Woodcliff, New Jersey.

Montgomery Security: Montgomery Security, situated in San Francisco, was in a pickle in 1996. This Nations Bank affiliate needed to establish a mechanism for more than 400 finance, research, sales, and trading staff to stay competitive in the financial sector and communicate information about firms whose shares they considered going public. Siebel Systems Sales Enterprise Software was used to fix the problem. With a standard database structure, everyone could share information while keeping confidential information secure.

Databases, Data Warehouses, and Data Mining

Companies nowadays organise information in customer and salesperson databases and organize and then aggregate data from the various databases. For example, the customer database will include each client’s name, address, historical transactions, and, in some instances, demographics and psychographics (activities, interests, and opinions). Instead of sending a mass “carpet bombing” mailing of a fresh offer to every consumer in its database, a corporation will score each customer based on their buy frequency, frequency, and monetary value. Only the highest-scoring clients will receive the promotion. Aside from saving money on postage costs, this method frequently results in a double-digit response rate.

The Marketing Intelligence System (MIS)

The internal records system provides outcomes data, whereas the marketing intelligence system provides occurrences data. A marketing intelligence system combines managers’ techniques and sources to efficiently provide information about marketing trends. Marketing executives gather marketing intelligence by reading books, newspapers, and trade journals, speaking with consumers, suppliers, and distributors, and meeting with other corporate executives. A corporation can take several initiatives to increase the quality of its marketing intelligence.

It may train and incentivize people to notice and report on new developments. Sales agents are uniquely incentivized to gather information that would otherwise go unnoticed. Second, the corporation can encourage distributors, retailers, and other intermediaries to share critical information about products in stock.