global marketing research - cap 5

Process Of Selecting The

Right International

Market

GLOBAL MARKET RESEARCH

FOREIGN MARKET( MICRO-ENVIRONMENT)

- Market potential - Market size - Competition - Market growth - Profit potential - Market access

BUYER/DECISION-MAKING UNIT

- Individuals - Family - Business - Government

• ECONOMIC FORCES• POLITICAL & LEGAL FORCES

Regions/Countries/Markets

Screening

Screening

One Specific Market

INTERNATIONAL MARKET SELECTION (IMS) PROCESS

Presented by: Fatima Ali

MARKET RESEARCH: Gathering, Analyzing and

Presenting information related to a well-defined

problem.

What customers want can be access through

market research

GLOBAL MARKETING: Make & sell what

International buyers want

Global Market ResearchCHAPER - 5

Before:

• Act as an aid to

decision maker

• Was viewed as a

staff function not a

line function

• Little interaction

with marketing

managers

• Did not participate

is market decision

making

Now:

• Market researcher

is the marketing

manager

• Market

researchers are

also part of the

team responsible

for organization

change in

response to

customer

satisfaction survey

CHANGING ROLE OF A MARKET RESEARCHER

Sources of

Information • Primary: Information that is

collected first-hand, generated by

original research tailor-made to

answer specific research

questions.

• Secondary: Information that has

already been collected for other

purposes and thus is readily

available.

Firm General Data (Firm-Context)

• Size• Product line• Financial situation

Macroeconomic Data from Country B

• GNP• Stability of currency• Inflation

Industry• Growth patterns

of sector• Analysis of

import• Characteristics of

Competition

Competition• Specific

Strategies

Strength-Weakness Profile ( benchmarking)

• Corporate level• Product Level ( SBU)• Specific Product Level

End Customers• Threat of using

substitute• Consumption

Pattern

Intermediaries• Purchasing behavior• Financial Capabilities• Access to distribution

channel

PROBLEMIs there a market for

product? How large is the market?

EXTERNALINTERNALS

E

C

O

N

D

A

R

Y

P

R

I

M

A

R

Y

Secondary Research

Advantage of Secondary Research in Foreign Market

• Conducted from home base - less expensive & less time consuming

• Commitment to future project is low

• Benefit of objectivity

• Quickly generate background information( eliminate low potential countries)

Disadvantages of Secondary Research on Foreign Market

• Non-availability of data –developing/weak economics have limited statistics available

• Reliability of data – political influence, incorrect data collection& lack accuracy)

• Data classification – broadly classified construct

• Comparability of data –national definition of statistics differ

Internal Data SourceInternal company data is a fruitful source of

information

• Total sales

• Sales by country

• Sales by products

• Sales volume by market segment

• Sales volumes by type of channel distribution

• Pricing information – pricing adjustment

• Communication mix information

• Sales representative records and reports

External Data Source

• Public library

• Internet –

Electronic

Data Base

Secondary

Research

• Universities

Secondary data used for estimation of

foreign market potential

LEAD- LAG ANALYSIS

• Determinants of

demand and the rate

of diffusion are the

same in two

countries, but time

separates the two.

ESTIMATION BY

ANALOGY

• A correlation value

(between a factor and

the demand for the

product) for one

market is used in

another international

market.

Population size in the United Kingdom: 60 millionPopulation size in Germany: 82 millionFurthermore we know that the number of refrigerators sold in the United Kingdom in 2002 was 1.1 million units.Then by analogy we estimate the sales to be the following in Germany:

(82/60) × 1.1 million units = 1.5 million units

Qualitative

Provides a holistic view of a

research problem by integrating a

larger number of variables, but

asking only a few respondents

Quantitative

Data analysis based on

questionnaires from a large

group of respondents.

Comparison

Difference in Source of Data

Quantitative Research

• Distance from the source of data

• Structuring of questionnaire, retrieval and analysis of data conducted by different people

• Questionnaire is the critical element of research process

Qualitative Research

• Proximity to the source of data

• Data retrieval and data analysis conducted by the same person – The interviewer

• Interviewers competence is the critical element of research process

riangulationT

Research Problem &

Objective:

• Establish specific objectives

• Difficulty is translating business

problem into research

questions

• Symptoms mistaken as causes

Research Approaches

• Observation

• Survey

• Experiment

• Watching & recording market related behavior

• Investigate what people do & why they do it

• Avail information that people are unwilling to provide

• Feelings, attitudes & motives cannot be observed

• Infrequent behavior cannot be observed

• Stock Checks

• Mechanical observation to measure TV

viewership

• Cash register Scanners

• Gather Casual Information

• Select matched group of people & give them different treatment

• Control unrelated factors

• Check difference in response

• Explains cause- effect relationship

• Test marketing: product placed on sale in select outlets – conducted in self-contained markets

• Performance in these areas give indication of expected performance

Experiments

Survey

Involves a formal questionnaire

Questions asked are in pre-arranged order

Survey research is used for a variety of marketing issues:

• Customer attitudes

• Customer buying habits

• Potential market size

• Market trends

Generates descriptive rather than casual data

Contact MethodResearchers balance between speed, degree

of accuracy and costs.

Mail: • least expensive

• Questionnaire can include pictures

• Respondents can answer in leisure

• Wait to receive the reply takes longer

• Response rate is lower in countries of low

literacy & education level

Contact Method

Internet/e-mail Survey• Collects a large amount of data that can

be quantified and coded into a computer.

• Perfect for low budget & widely dispersed

population

• Possible to attach picture and sound clips

• People often do not respond to

unsolicited mails

• Difficult to generalize finding from e-mail

to population

Telephone Interviews

• Response rate higher than

mail. Lower than face-to-face

interview

• Cost less than personal

interviews

• Allows a degree of flexibility

• Use of visual aid not possible

• Limited number of questions can be asked

Individual: Involves interviewing from

home/office/street

Interviewer should gain corporation of

respondents

Group: Focus group interviewing

Requires trained moderator

Moderator needs to be objective,

knowledgeable on subject & consumer

behavior

Advantage:

• Flexible

• Can collect large amount of

information

• Can show actual product/

advertisement/ package to gauge

reaction

Drawbacks:

• High cost

• Sampling problems

• Group interviews are hard to

generalize

• Interviewer Bias

Sampling Plan

Impractical & expensive to contact all people

relevant to research

Contact selective group of people

representative of entire population

Sampling plan is a scheme outlining the group

(or groups) to be surveyed in a marketing

research study, how many individuals are to be

chosen for the survey, and on what basis this

choice is made.

Sampling ProcedureProbability Sampling: Specify the chance each sampling unit has of being included in the sample.

• Simple random sampling

• Stratified sampling

• Cluster sampling

• Systematic Sampling

Non-Probability Sampling: Not possible to determine the probability or calculate the sampling error. Relay on personal judgment.

• Convenience sampling

• Quota sampling

• Snowball sampling

Sample SizeSample size & Cost have a linear relationship

Sampling error decreases at the rate of square root of the increase in sample size

Methods of determining the sample size:

• Traditional statistical techniques

• Budget Available

• Rule of thumb

• Number of sub-groups to be analyzed

For Transnational Researches: The researcher wants the same sampling method for all countries

Measurement InstrumentContact Medium

Designing the Questionnaire

Information requirements are known

Research objectives are translated into questions

Questionnaire can be:

• Structured: close-ended questions / on the street interviews

• Unstructured: open ended questions/ in-depth interviews

In cross cultural studies open- ended questionnaires are useful

Questions can be:

• Indirect

• Direct

• The wording must be clear. avoid two

questions in one.

• Select words so as to avoid biasing the

respondent. avoid leading questions.

• Consider the ability of the respondent to

answer the question.

• Consider the willingness of the

respondent to answer the question.

Embarrassing’ topics must be dealt with

carefully. One technique is to ask the

question in the third person or to state

that the behavior or attitude is not

unusual prior to asking the question.

Formulation (wording) of Questions

When evaluating the

questionnaire, the

following items should

be considered:

• Is a certain question

necessary?

• Is the questionnaire

too long?

• Will the questions

achieve the survey

objectives?

Pretest• Carried out with the subset of the population under study

• Should be conducted with knowledgeable experts/individuals

• Conducting in the same mode as the final interview/ questionnaire

• Pretest eliminates the risk of poor research

ANALYSIS

DATA

INTERPRETATION

COLLECTION6 • Should be conducted Efficiently & Economically

• Researcher establishes parameters

• Give clear instructions

• Sample interview to ensure reasonable data quality

• Requires creativity & skepticism

• International research requires advice from local research firms

• Cautioned against using overly sophisticated tools for unsophisticated data.

Problems with using Primary Research

Sampling in Field SurveysLack of adequate demographic data

problems in drawing a random sample include:

• No officially recognized census of population

• Incomplete and out-of-date telephone directories

• No accurate maps of population centers

Non-Response

Inability to reach selected elements in the sample frame

Two main reason for non-response:

• Not being at home

• Refusal to respond – sensitive subject, privacy issues

Language Barriers

In countries with low literacy rate, written questionnaires are useless

Use technique of back translation

Measurement

Reliability:

If the same phenomenon is measured repeatedly with the same measurement device and the results are similar then the method is reliable (the ‘how’ dimension).

Validity

If the measurement method measures what it is supposed to measure, then it has high validity (the ‘what’ dimension). There are three types of validity:

• Construct : Correct operational measures for the concept

• Internal : Establish the causal relationship

• External : Generalization of research to other population

If a measurement instrument is not reliable there are no

circumstances under which it can be valid.

Just because the instrument is reliable doesn’t mean its valid too

Online/Internet Primary Research

Methods

Advantages

• Low financial resource

implication

• Short response time

• Saving time with data

collection & analysis

• Visual stimuli can be

evaluated.

Disadvantages

• Respondents have no

physical address

• Guarding respondents

anonymity

• Time wasted

downloading the page

E-mail and Web-based Surveys

Online quantitative market research

• Can be designed as pop-

up survey

• Researchers control over

respondents on website

survey is lower than that

for E-mail survey

• Web based survey have

better display of

questionnaire

Online qualitative market research

• Saving money on

travelling cost

• Cross-country qualitative

research is possible

• Online focus groups

generate less interactions

OTHER TYPESOF

MARKET

RESEARCH

1Ad Hoc ResearchFocus on specific market

problems

Collect data from one

point in time, from one

sample of respondents

Custom Designed StudiesResearch brief given to

market research agencies or

internal market researcher

These researches can be very

expensive

Multi Client StudiesLow cost way for company to

answer specific research

questions without conducting

primary research on their

own

• Independent research

studies

• Omnibus studies

Delphi StudiesAims at qualitative measures

10-30 key informants/experts identify

major issues and rank them in order

Other participants state their agreement

& disagreement

After several rounds coherent

consensus is reached

2• Longitudinal Design

• Sample or panel remains the same over time

• Gives series of pictures of the development taking

place

• Respondents agree to provide information at

intervals over an extended period of time

Consumer Panel

on their purchase overtime

Retailer PanelMeasured by laser

scanners & barcodes

Short- Term Forecast

Medium -Term Forecast3Sales ForecastingSales forecast for individual

products

• Up to 3 months ahead

• Used in tactical method

• More emphasis on short term

fluctuations than on sales

trend

• For one year ahead

• Important in the area of budgeting

• Incorrect forecast leads to error in

budget.

• Over optimistic forecast leads to

excess stock

• Pessimistic forecast leads to missed

opportunities

• Periods of 3 years or more -

Depends on type of industry

• Meet the requirements of macro-

environment factors

• Long- term implications

• Board of Director’s concern

GUIDELINES FOR SENARIO PLANNING

• ESTABLISH A CORE PLANNING TEAM

• GET A CROSS SECTION OF EXPERTISE

• INCLUDE OUTSIDE INFORMATION &

OUTSIDE PEOPLE

SETTING UPINTERNATIONAL

MIS

• Transform information from statistics & data into facts, opinion and

predictions

• Develop closer customer relationship through MIS

• MIS reduces the cost of making wrong decisions

• MIS reduces uncertainty in the complex marketplace

Incorporate information into management

decision making.

MIS is an interacting organization of

people, systems, and processes

devised to create a regular, continuousflow in information essential to the

international marketer’s problem- solving and

decision- making activities around the world.

International MIS can be conceptualized as a four-stage process

consisting of locating, gathering, processing and utilizing information