International Marketing

Developing a Global Vision Through Marketing Research

Reference Book: International Marketing by Cateora/Graham/Salwan 14e TMH

What Should You Learn?
• The importance of problem definition in international research • The problems of availability and use of secondary data

• Quantitative and qualitative research methods
• Multicultural sampling and its problems in less developed countries

• Sources of secondary data
• How to analyze and use research information

International Marketing Research
• Enterprises with international scope of operations
– Need for current, accurate information magnified

• Marketing research
– The systematic gathering, recording, and analyzing of data to provide information useful in marketing decision making

• International marketing research involves two complications
– Information must be communicated across cultural boundaries – The environments within which the research tools are applied are often different in foreign markets

Breadth and Scope of International Marketing Research
• Types of information needed by research
1. General information about the country, area, and/or market 2. Information to forecast future marketing requirements

By anticipating social, economic, consumer, and industry trends within specific markets or countries

3. Specific market information used to make and develop marketing plans
► ► ► ►

Product Promotion Distribution Price decisions

Breadth and Scope of International Marketing Research
• A country’s political stability, cultural attributes and geographical characteristics are some of the kinds of information not ordinarily gathered by domestic Marketing research departments. Unisys Corporation’s planning steps for collecting and assessing the following types of information
1. 2. 3. 4. 5. Economic and demographic Cultural, sociological; and political climate Overview of market conditions Technological environment Competitive situation

Top 20 Countries for Marketing Research Expenditures (millions of dollars) .

Define the research problem and establish research objectives 2. Determine the sources of information to fulfill the research objectives 3. interpret. Effectively communicate the results to decision makers • Research steps are similar for all countries – Variations and problems can occur in implementation ► Differences in cultural and economic development . Gather relevant data from secondary or primary sources. Consider the costs and benefits of the research effort 4. or both 5.The Research Process • Research process steps 1. Analyze. and summarize the results 6.

most crucial step in research is more critical in foreign markets because an unfamiliar environment tends to cloud problems definition • Other difficulties in foreign research stem from failures to establish problem limits broad enough to include all relevant variables .Defining the Problem and Establishing Research Objectives • The major difficulty is converting a series of often ambiguous business problems into tightly drawn and achievable research objectives • The first.

Problems of Availability and Use of Secondary Data • Some government like US provides comprehensive statistics for their countries • Marketing data not matched in other countries – Quality – Quantity – Exceptions are Japan and several European countries • Continuing efforts to improve data collection – United Nations – Organization for Economic Cooperation and Development (OECD) .

Problems of Availability and Use of Secondary Data: Availability and Reliability of Data • Availability of Data – Most countries simply do not have governmental agencies that collect on a regular basis the kinds of secondary data readily available in some western developed countries like U. while tax structures and fear of the tax collector often adversely affect data ► Less-developed ► Willful countries prone to optimism errors ► “Adjusted reporting” . reflecting national pride rather than practical reality. – Researchers’ language skills impede access to information ► Requires native speaker of language • Reliability of Data – Official statistics are sometimes too optimistic.S.

countries) ► Data can be many years out of date ► Data collected on an infrequent and unpredictable schedule – Too frequently. data are reported in different categories or in categories much too broad to be of specific value .Problems of Availability and Use of Secondary Data :Comparability of Data • Comparability of Data – Issues with data (especially in less developed.

Problems of Availability and Use of Secondary Data: Validating Secondary Data Validating Secondary Data • Questions to judge the reliability of secondary data sources – – – – – Who collected the data? Would there be any reason for purposely misrepresenting the facts? For what purposes was the data collected? How was the data collected? Are the data internally consistent and logical in light of known data sources or market factors? • Checking the consistency of one set of secondary data with other data of known validity – An effective and often-used way of judging validity for eg hospital equipments sold with the number of hospital beds • The availability and accuracy of recorded secondary data increase with level of economic development .

averages.Gathering Primary Data – Quantitative and Qualitative Research • Primary data – Data collected specifically for the particular research project • Quantitative research – Usually a large number of respondents – Respondents answer structured oral or written questions using a specific response format (such as yes/no) or to select a response from a set of choices – Responses can be summarized in percentages. or other statistics ► Toto – a Japanese firm with the premiers quantitative research on bathroom and toilet technology .

they are almost always open-ended or indepth – Seeks unstructured responses that reflect the person’s thoughts and feelings on the subject • Qualitative research interprets people in the sample for eg focus groups. • Qualitative research is helpful in revealing the impact of sociocultural factors on behavior patterns and in developing research hypotheses .Gathering Primary Data – Quantitative and Qualitative Research • Qualitative research – If questions are asked.

Problems of Gathering Primary Data • Hinges on the ability of the researcher to get correct and truthful information that addresses research objectives • Problems in international marketing research – Stem from differences among countries – Range from inability or unwillingness of respondents to communicate their opinions – Inadequacies in questionnaire translation .

Problems of Gathering Primary Data : Ability to Communicate Opinions • Formulating opinions about a product or concept – Depends on the respondent’s ability to recognize the usefulness of such a product or concept – Product or concept must be understood and used in community • The more complex the concept. the more difficult it is to design research that will help the respondent communicate meaningful opinions and reactions – Gerber has more experience in trying to understand consumers with limitations ► Babies can neither answer questions or fill out questionnaires .

the suitability of personal gender-based inquiries. and other genderrelated issues can affect willingness to respond • Less direct measurement techniques and nontraditional data analysis methods may also be more appropriate .Problems of Gathering Primary Data: Willingness to Respond • Cultural differences provide best explanation for unwillingness or inability of many to respond to research surveys • The role of the male.

Problems of Gathering Primary Data: Sampling in Field surveys • Problems in sampling stem from the lack of adequate demographic data and available lists from which to draw meaningful samples • Affected by a lack of detailed social and economic information – – – – No officially recognized census information No other listings that can serve as sampling frames Incomplete and out-of-date telephone directories No accurate maps of population centers .

Problems of Gathering Primary Data: Language and Comprehension • The most universal survey research problem in foreign countries is the language barrier • Literacy poses yet another problem • Marketers use three different techniques to help ferret out translation errors ahead of time – Back translation – Parallel translation – Decentering .

behavior. multicultural studies become more important • Multicultural research involves dealing with countries that have different languages. social structures.Multicultural Research – a Special Problem • As companies become global marketers and seek to standardize various parts of the marketing mix across several countries. and attitude patterns • In some cases the entire research design may have to be different between countries to maximize the comparability of the results . economies.

S. • International Internet use is growing rapidly • Uses for Internet in international research – – – – – – – – Online surveys and buyer panels Online focus groups Web visitor tracking Advertising measurement Customer identification systems E-mail marketing lists Embedded research Observational research .Research on the Internet – a Growing Opportunity • One billion users in more than 200 countries – One-sixth in U.

Estimating Market Demand • To assess current product demand and forecast future demand – Requires reliable historical data • When the desired statistics are not available. with adjustments for exports and current inventory levels • Two methods of forecasting demand – Expert opinion ► The key in using expert opinion to help in forecasting demand is triangulation Assumes that demand for a product develops in much the same way in all countries as comparable economic development occurs in each country – Analogy ► . a close approximation can be made – Using local production figures plus imports.

000 people) Personal Computer Mobile Phone .Personal Computer and Mobile Phone Diffusion Rate (per 1.

A skeptical attitude in handling both primary and secondary data is helpful . The researcher must posses a high degree of cultural understanding of the market in which research is being conducted 2.Problems in Analyzing and Interpreting Research Information • • Accepting information at face value in foreign markets is imprudent The foreign market researcher must posses three talents to generate meaningful marketing information 1. A creative talent for adapting research methods is necessary 3.

Responsibility for Conducting Marketing Research • A company in need of foreign market research can rely on an outside foreign-based agency or domestic company with a branch in that country • A trend toward decentralization of the research function is apparent – Local analysts appear to be able to provide information more rapidly and accurately ► Control rests in hands closer to the market – Disadvantage lies in ineffective communications with homeoffice executives ► Unwarranted dominance of large-market studies in decisions about global standardization .

Responsibility for Conducting Marketing Research • A comprehensive review of the different approaches to multicountry research suggests – Ideal approach is to have local researchers in each country. – Close coordination between the client company and the local research companies • Two stages of analysis are necessary – Individual-country level – Multi-country level .

communication can become garbled in either direction . but also in the fieldwork • Even when both managers and customers speak the same language and are from the same culture.Communicating with Decision Makers • Gathered information must be given to decision makers in a timely manner • Decision makers should be directly involved not only in problem definition and questions formulation.

Managing the Cultural Barrier in International Marketing Research .

International Marketing Identifying Foreign Markets Reference Book: International Marketing Management by Varshney/Bhattacharyya Sultan Chand and Sons Publications Chapter 12 .

• No firm has unlimited resources so proper selection of markets would avoid waste in time and effort. • Better to concentrate on few fruitful markets than to spread too thinly. • Market concentration can lead to better debt collection and cost savings for eg L&T .Identifying Foreign Markets • Selection of markets is the 1st stage in international marketing • The firm will not succeed unless it is marketing the right product in the right export market.

There are several bases of classification. Basis of Stages of Demand 2. principal among them are Classification on the 1. Other Bases of Division of World Markets .Criteria for Classifying World Markets To identify and shortlist markets which offer or might offer in future opportunities that can be exploited by it. 3. Basis of Stages of Development. a classification scheme for segmenting the world markets is required.

Consumer needs are known and are already being serviced by some products. 2. Classification on the Basis of Stages of Demand Keegan has produced a 3 fold classification 1. Existing markets a. but because no-one has offered a product to fill the latent need there is no existing market . The market opportunities can be assessed by estimating the consumption rate and the share of imports in current consumption. b.1. Have potential customers. Latent Markets a.

Classification on the Basis of Stages of Demand…. which if supplied will become an existing market.1. Conditions and trends can be identified that points towards the emergence of future needs and preferences for products and services that will create a latent market. Incipient Markets a) b) They do not exist in the present. . contd 3.

Egs include US.2. UK. Industrial Economies a) These countries lay more emphasis on R&D and devote their resources to production of more sophisticated products and will therefore like to import goods of simpler technology and simpler manufactures. They have an acute shortage of labor and tend to import labor intensive products like electronics and light engineering goods. b) c) d) . Classification on the Basis of Stages of Development The world markets can be divided into 4 distinct segments on the basis of Stages of Development: 1. Japan. They also tend to import spares and components and raw materials. France. Germany etc.

2. Mexico. c. Russia etc b. contd 2. . More Developed Developing Countries a. Also interested in setting up JVs in other less developed countries. Egs include Brazil. Like to update technology for current range of manufacturers and would like to import machinery and equipment to set up new manufacturing facilities. Classification on the Basis of Stages of Development…. India.

Raw material Exporting Economies a. food products. d. . They are interested in importing turnkey projects.2. c. Changes in these countries take place slowly and therefore the level of sophistication in products required by these countries is much less than that required by developed countries. Classification on the Basis of Stages of Development…. Egs include Gulf countries and some countries in Africa and Latin America b. Infrastructure not completely adequate and therefore need various types of goods like consumer durables. contd 3. service facilities etc. transport equipments.

schools. They provide a lot of scope for turnkey projects like housing. building. hospitals etc. Latest developments in technology in production may not have been offered by competitors in these countries and therefore the opportunities are much greater for developing countries like India to export their products to subsistence economies b. contd 4. Classification on the Basis of Stages of Development…. c. Subsistence Economies a. transport equipment etc. . roads. They will require equipments to exploit their untapped resources as also infrastructural facilities like railways.2.

Population – – Generally. The higher the population.3. the bigger the market When analyzing population essential to look at ► ► ► ► ► ► Age Groups and Sex Social Class Educational Background Number of households Geographic concentration and differences Rates of changes in all the above . Other Bases of Division of World Markets 1.

Canada etc are the best markets for consumer good and durables even though these countries manufacture these products themselves. Gross National Product (GNP) – – – its rate of growth Standard of living of population Traditionally Large industrialized nations like the US. Australia. Other Bases of Division of World Markets…. contd 2. Western Europe countries. Japan. people are affluent enough to buy imported products and in many cases prefer to do so .3.

Midwest and West and each part has different market characteristics. On the other hand. What may be sold in California may not be sold in Connecticut. though there are many countries in the continent. South.3. ball point pens. • Industrial goods and capital equipment sales generally correlate better with the industrial structure or total income than with per capita income. • Big countries may have different market characteristics in different parts of the country for eg US can be divided into 4 parts Northeast. contd • Whether the per capita income is a useful indicator of the size or quality of the market or not depends upon the product to be exported. their market characteristics may be more or less same . Other Bases of Division of World Markets…. Sales of many consumer goods correlate more closely with population or household figures than with per capita income for example soft drinks. bicycles etc. radios.

International Marketing Social and Cultural Environments Reference Book: Global Marketing Management by Keegan/Bharagava. Chapter 3 . Pearson education. 7e.

Overview • • • • Basic Aspects of Society and Culture Analytical Approaches to Cultural Factors Handling Cultural Diversity Impact of Social and Cultural Environments on marketing • Industrial Products • Consumer Products .

Learning Objectives • Understanding how important cultural and social differences are in global marketing • Learning fundamental concepts that provide an understanding of cultural differences • Understanding where potential conflicts may arise in global business relations • Knowing how cultural differences impact the marketing of products and services .

attitudes. ideas. and symbols that shape human behaviour and that are transmitted from one generation to the next • Culture is learned.Basic Aspects of Society and Culture • Culture defined as “ways of living” built up by a group of human beings. not innate • Culture defines the boundaries between different groups • All facets of culture are interrelated . which are transmitted from one generation to another • It includes both Conscious and unconscious values.

. Africa and the Middle East suggests that most consumer products have broad . almost universal appeal. • Nevertheless. electronic products. Europe.Basic Aspects of Society and Culture • Attitude towards whole classes of products can also be a function of culture for eg US consumers have a cultural disposition for product innovations having a gadgetry quality. Asia. disposable products and soft drinks in US. luxury consumer products. the demand for convenience foods.

g. A jingle might utilize a bossa nova rhythm for Latin America.g. is a cultural universal that global marketers can adapt to cultural preferences in different countries or regions .: Music provides one example of how these universals apply to marketing. medicine. athletic sports. then. music. Music. cooking. Music is a part of all the cultures. mourning etc • E. body adornment. accepted as a form of artistic expression and source of entertainment but the type of music appropriate for commercial in one part of the world may not be acceptable in some other part of the world. education.The Search for Cultural Universals • Universal = Mode of behaviour existing in all cultures • Universal aspects = opportunities to standardize some or all elements of a marketing program • Cultural universals: e.. marriage. religious rituals. a rock rhythm for North America and high life for Africa.

The Anthropologist’s Standpoint • Global marketers must understand human experience from the local point of view and become insiders with cultural empathy • Global marketers need combination of toughmindedness and generosity • Tough-mindedness: be secure in your own convictions and traditions • Generosity: Appreciate the integrity and value of other ways of life .

Germany ..High.and Low-Context Cultures • Low-context culture: • Messages are explicit • Words carry most of the information in communication • E. United States. Switzerland.g.

and Low-Context Cultures… contd • High-context culture • Less information is contained in the verbal part of the message • More information resides in the context of communication (background. associations. high context culture functions with much less legal paperwork than is deemed essential in low context cultures • India.High. Saudi Arabia and other high context cultures place a lot of importance on a persons values and position or place in society . Japan. basic values of communicators) • In general.

lengthy Competitive . Middle East Responsibility for .everything is dealt with in its own time Negotiations .frequent US.High.„get it in writing‟ .less important .People breathe on each other Low-Context .his/ her bond .very important .and Low-Context Cultures… contd Factors Lawyers A person’s word Time High-Context .infrequent Bidding Japan.„time is money‟ .taken by highest level organizational error Space . Northern Europe – pushed to lowest level – people maintain private space .quick .

Communication and Negotiation • Global marketers face challenges in • Verbal communication • Non-verbal communication • Knowledge and understanding of cross-cultural differences is crucial during negotiations • People growing up in the west tend to be verbal where as eastern world is more non verbal .

Analytical Approaches to Cultural Factors Maslow‟s hierarchy of needs SELF-ACTUALISATION ESTEEM SOCIAL NEEDS SAFETY NEEDS PHYSIOLOGICAL NEEDS .

Analytical Approaches to Cultural Factor…. contd Hofstede’s cultural typology • Cultures of different nations can be compared in terms of four dimensions • Power distance • Integration into groups • Individualist • Collectivist • Masculinity/Femininity • Uncertainty avoidance .

Analytical Approaches to Cultural Factor…. contd Self-reference criterion (SRC) and perception • Perception of market needs is framed by own cultural experience • Four-step framework • Define problem in terms of home country norms • Define problem in terms of host country norms • Isolate SRC influence. See how it complicates problem • Redefine problem without SRC influence. Solve for host country market situation .

g. integrated circuits) .Analytical Approaches to Cultural Factor…..g.. contd Environmental Sensitivity • The extent to which products must be adapted to the culture-specific needs of different national markets • View products on a continuum of environmental sensitivity • Environmental sensitive products • Require significant adaptation to the environments of various global markets (e. food) • Environmental insensitive products • Do not require significant adaptation (e.

computer chips) • Higher levels of environmental sensitivity (e. government policies influencing purchasing behaviour of turbine generators.g..g.Impact of social and cultural environments on marketing INDUSTRIAL PRODUCTS • Industrial products might exhibit • Lower levels of environmental sensitivity (e. “buy national”) ..

Impact of social and cultural environments on marketing CONSUMER PRODUCTS • Consumer goods are usually more sensitive to cultural diversity than industrial goods • Culture is changing so rapidly that innovative marketing may be able to change established consumption patterns rooted in cultural differences .

G) A = influences of other beverages‟ relative prices. tradition. habit E = availability of raw materials F = climatic conditions. C. quality. F. custom. temperature. B. D. all beverage categories C = availability of products in distribution channel D = cultural elements. relative humidity G = income levels .Impact of social and cultural environments on marketing CONSUMER PRODUCTS Example: Consumption of Soft Drinks (C) Y = f (A. taste B = advertising expenditure and effectiveness. E.

Cross Cultural Complications • Culture always has been a major source for disagreement and misunderstandings • Cross-cultural complications can lead to costly failures • Companies realize the importance of training and supporting people in cultural awareness .

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