Week 6:International

marketing research

Prepared by Alistair Hodgson & Robin Roberts

Key Themes

After studying this chapter you should be able to:• Understand how to formulate a high-quality research

problem definition• Identify secondary international marketing research

sources• Identify the need for primary international marketing

research

Key Themes

• Perform a market size assessment• Use new market information technologies• Understand the issues involved in managing

international marketing research

• This week’s topic is very unlike any of the other topics in the course – focus is more practical

Scene Setter: Gauging the market at a distance

• Sources such as the CIA World Factbook and World Bank can be incredibly useful for key factual data and information.

• However, raw data doesn’t always reflect the reality in a country. How can data be used to develop marketing strategies?

• Statistics often differ – even for basic information, such as population. Can be based on different measures for a particular area. Those responsible for collection can also make mistakes.

Overview

• There is a six step approach to international marketing research

• Follows a similar pattern to domestic market research– but the international context gives rise to six

problems specific to international marketing research

International marketing researchprocess

1. Define the research problem(s)2. Develop a research design3. Determine information needs4. Collect the data (secondary and primary)5. Analyse the data and interpret the results6. Report and present the findings of the study

How different is this process compared to domestic market research?

International marketing researchprocess

Major challenges

1. Complexity of research design • Due to environmental & cultural differences

2. Lack and inaccuracy of secondary data• As already discussed

3. Time and cost requirements to collect primary data

International marketing researchprocess

4. Coordination of multi-country research efforts and data collection efforts

5. Difficulty in establishing comparability across multi-country studies

Secondary data often has different measurements

Primary research questions might not translate effectively

6. Different practical considerations Legal aspects of research; cultural norms guiding the

sharing of information with strangers

International marketing researchprocess

Figure 6.1

Research problem formulation

• Start with a precise definition of the research problem

• The foundation of a good market research study

• Difficulties arise due to lack of familiarity of the foreign environment & SRC (self-reference criterion)

• Preliminary research often conducted to more-effectively define your problem (research agencies, i.e. Nielsen, often engaged to do this)

Secondary marketing research

Definition• Data that have already been collected for some other

purpose• A range of sources includes:– the internet– government sources • e.g. Austrade www.austrade.gov.au

– corporate• directories both online and offline (we’ll look at some of

these in today’s tutorial)

Secondary marketing research

• Problems with secondary data sources

– accuracy of data

– age of data

• A country with a ten-year schedule for census data will ultimately have an out-of-date record of the nation

– reliability of data over time

Secondary marketing research

– comparability of data (triangulation can be used in response – use of multiple data sources)

• Conceptual/functional equivalence problems (China vs. Australia and use of bicycles). This changes over time though.

– lumping data

• Statistics often group together in broad categories

Primary marketing research

• Quantitative data– data that represents an attitude or opinion by

assigning a number that can be statistically analysed• i.e. Likert scale provides scaled responses

• Qualitative data– data that describes attitudes, opinions and

motivations in the words of each respondent

Collecting primary data

• Primary data can be collected in three ways:1. Focus groups2. Survey methods• marketing research• questionnaire design• construct equivalence• measure equivalence• sampling

3. Test markets

Primary marketing research

• Focus groups– exploratory– loosely structured free flowing discussion among a

group of target customers facilitated by a moderator• helps with new product development• testing new product concepts• precursor to quantitative research

International issues for focus groups

• Cultural sensitivity• Nature of group dynamics– individual versus collective• Japanese and Chinese more collective while NZ

and Australia more individualistic• How would this affect the outcome of a focus

group?• Non-verbal cues are even more important than in

domestic market research

Primary market research

• Survey methods for cross-cultural marketing research– questionnaire design• most popular form of gathering data in

quantitative market research• cross cultural research does present problems• comparability of survey results across borders

could be an issue

Primary market research

• Survey methods for cross-cultural marketing research– construct equivalence• the degree to which marketing constructs have

the same meaning and significance across cultures • e.g. bicycles mean different things in different

countries and this needs to be reflected in the construction of the research device–recreation in Australia–transportation in China

Primary market research

• Survey methods for cross-cultural marketing research– measure equivalence• calibration equivalence–US is imperial (pounds, inches)–Thailand is metric (metres, litres)

• translation equivalence

–translation from one language to another

–embarrassing mistakes can occur…

Primary market research

• A couple of examples:

Primary market research

• Survey methods for cross-cultural marketing research– measure equivalence (cont’d)• parallel translation

– a process in which a document is translated independently by a number of translators and the translations compared to reconcile differences

• scalar (metric) equivalence– the degree to which scores from subjects of different

countries have the same meaning and interpretation– Likert scale relevant here again

Primary market research

• Survey methods for cross-cultural marketing research– Sampling (think back to the video focused on

Columbis, Ohio)• who should be surveyed?• how many people should be surveyed?• how should prospective respondents be chosen?• not all countries are homogenous–What is ‘Chinese’?– China has more than a dozen ethnic minorities– Some countries have very distinct demographics

Primary market research

Torbay (UK) London

Primary market research

• Survey methods for cross-cultural marketing research– collecting the information• there are a number of biases–courtesy bias»desire to be overly polite (common in

Asia & the Middle East)–social desirability bias»subjects attempt to reflect a certain

social status in their response

Primary market research

• Survey methods for cross-cultural marketing research– collecting the information (cont’d)• redundancy

– repetition of survey questions in different ways to allow for robustness and cross-checking

– This is actually beneficial

• ethnographic research– researchers embed themselves in the community they

are studying– Usually more accurate but involves personal dedication

& sacrifices

Market size assessment

• Determining the potential of a market is one of the key drivers of international market research

• There are several methods:– analogy method (picking a market at the same stage of

economic development as the country of interest)– the trade audit– the chain ratio method– cross-sectional regression analysis

• All are useful when there is very little data available or the quality of data is questionable

Market size assessment

• Analogy method– comparison of a similar product in a similar

environment/country– Example in the textbook of estimating Blu-ray player

market size in a country where this is not known.• Looking for an estimate for Ukraine, data on Poland is used. This is

determined by looking at the relationship between Plasma/LCD Tv sales in Poland in comparison with Blu-ray player sales. The relationship between these two figures in Poland can be extrapolated for use in Ukraine (where this figure isn’t known)

• Poland selected on the basis of similar economic and demographic characteristics

Market size assessment

Trade audits– estimate based on local production and

imports/exports

– Market size in country A = Local production + imports – exports

– Inventory levels need to be considered, though acquiring data on these is difficult

Market size assessment

• Chain ratio method– estimating market size based on fine-tuning broad estimates– i.e. looking at the potential market for nicotine substitute

products• General Population > Population of 15-64 year olds >

Percentage of smokers in this group > possible additional chains?

• Cross-sectional regression analysis– relating the issue you are interested in to a set of ‘predictor

variables’ > can determine which predictor is most significant

New market information technologies

• Point-of-sale store scanner data– the Swiss supermarket chain Metro can monitor

shopper trends in their Hanoi store• Data is communicated easily and quickly

• Consumer panel data– collecting data from a range of consumers on a continuous

basis• what to do when Japanese supermarket chains are not

very cooperative?– ask consumers to collect it in their homes

New market information technologies

Figure 6.5

Managing international marketingresearch

• There are a number of issues the international marketer needs to consider:– selecting a research agency• global or home grown?

– coordination of multi-country research• who is responsible?• head office or each of the regional offices

– ethical research considerations• accidentally misrepresenting the nature of the study• Marketing to children

Summary

You should now have an understanding of:• How to formulate a high-quality research problem

definition• How to identify secondary international marketing

research sources• Identifying the need for primary international

marketing research

Summary

• How to perform a market size assessment

• New market information technologies

• The issues involved in managing international marketing research