Chapter 8

Developing a Global Vision

Through Marketing Research

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 Learning Objectives
8-1 The importance of problem definition in
international research
8-2 The problems of availability and use of secondary
data
8-3 Sources of secondary data
8-4 Quantitative and qualitative research methods
8-5 Multicultural sampling and its problems in less-
developed countries
8-6 Using international marketing research

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 Introduction 1 of 2
Marketing Research
• Systematic gathering, recording, and analyzing of data
• Provides useful information for decision making
• Marketer must find most accurate and reliable data within limits
of time, cost, and technology

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 Introduction 1 of 2
Information is the key component in developing successful marketing strategies, avoiding major
marketing blunders, and promoting efficient exchange systems.

Information needs range from the general data required to assess market opportunities to specific
market information for decisions about product, promotion, distribution, and price.

Sometimes the information can be bought from trusted research vendors or supplied by internal
marketing research staff. But sometimes even the highest-level executives have to “get their shoes
dirty” by putting in the miles, talking to key customers, and directly observing the marketplace in
action.

Both international and local interpersonal networks are crucial resources for executive decision
making. As an enterprise broadens its scope of operations to include international markets, the need
for current, accurate information is magnified.

Indeed, some researchers maintain that entry into a fast-developing, new-to-the-firm foreign market
is one of the most daunting and ambiguous strategic decisions an executive can face.

A marketer must find the most accurate and reliable data possible within the limits imposed by time,
cost, and the present state of the art.

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 Introduction 2 of 2
International Marketing Research
• Necessary as firms expand abroad, but challenging
• Info must be communicated across cultural boundaries
• Application of research tools different in environment of foreign
market

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 Introduction 2 of 2

Marketing research is traditionally defined as the systematic gathering, recording,

and analyzing of data to provide information useful to marketing decision making.

international marketing research involves two additional complications.

• First, information must be communicated across cultural boundaries.
• Second, the environments within which the research tools are applied are often
different in foreign markets. Rather than acquire new and exotic methods of
research, the international marketing researcher must develop the capability for
imaginative and deft applications of tried and tested techniques in sometimes
totally strange milieus.

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 Breadth and Scope of International Marketing 1 of 2
Three basic market research needs
1. General info about the country, area, and market
2. Info to forecast future marketing requirements (social,
economic, consumer, industry trends)
3. Specific info to develop marketing plan (product,
promotion, distribution, price)
Third type most emphasized in domestic operations
Broader scope necessary to analyze foreign markets

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 Breadth and Scope of International Marketing 2 of 2
Broader scope of research necessary in foreign markets
Unisys Corporation's suggestions
1. Economic and demographic info
2. Cultural, sociological, and political climate
3. Overview of market conditions
4. Summary of the technological environment
5. Competitive situation
Cost, time, and human elements critical variables of
research

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 Breadth and Scope of International Marketing 2 of 2
• Economic and demographic. General data on growth in the economy, inflation,
business cycle trends, and the like; profitability analysis for the division’s products;
specific industry economic studies; analysis of overseas economies; and key economic
indicators for the United States and major foreign countries, as well as population
trends, such as migration, immigration, and aging.

• Cultural, sociological, and political climate. A general noneconomic review of

conditions affecting the division’s business. In addition to the more obvious subjects, it
covers ecology, safety, and leisure time and their potential impacts on the division’s
business.

• Overview of market conditions. A detailed analysis of market conditions that the

division faces, by market segment, including international.

• Summary of the technological environment. A summary of the state-of-the-art

technology as it relates to the division’s business, carefully broken down by product
segments.

• Competitive situation. A review of competitors’ sales revenues, methods of market

segmentation, products, and apparent strategies on an international scope.

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 The Research Process
1. Define the research problem and establish research
objectives.
2. Determine the sources of information to fulfill the
research objectives.
3. Consider the costs and benefits of the research effort.
4. Gather the relevant data from secondary or primary
sources, or both.
5. Analyze, interpret, and summarize the results.
6. Effectively communicate the results to decision makers.

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 Defining the Problem and Establishing Research
Objectives
Critical in Foreign Markets
• Unfamiliar environment tends to cloud problem definition
• Failure to anticipate influence of local culture on problem
• Failure to be aware of self-reference criterion (SRC)
• Failure to establish problem limits broad enough to include all
relevant variables

• Must seek info on greater range of factors

• Will help to offset unfamiliarity of environment
other difficulties in foreign research stem from failures to establish problem limits
broad enough to include all relevant variables. Information on a far greater range of
factors is necessary to offset the unfamiliar cultural background of the foreign market.
Consider proposed research about consumption patterns and attitudes toward hot
milk–based drinks.
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 Problems of Availability and Use of Secondary
Data 1 of 3
Myriad Info in the U.S.
• The government provides comprehensive statistics
• Censuses on population, housing, business, agriculture

• Additional market info provided by other groups

• Commercial and trade associations, management groups, state
and local governments

• U.S. data unmatched in terms of quality and quantity

• Although many countries striving to improve

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 Problems of Availability and Use of Secondary
Data 2 of 3
Shortcomings Faced by Foreign Marketers
• Availability of data
• Language and privacy concerns limit access

• Reliability of data
• Willful errors common to improve image of country or company

• Comparability of data
• Data collected at random times and through random methods
• Some data reported in too broad of categories

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 Problems of Availability and Use of Secondary
Data 2 of 3
Availability of data

While the quantity and quality of marketing-related data available in the United States is
unmatched in other countries, things are improving.

The data available on and in Japan are a close second, and several European countries do
a good job of collecting and reporting data. Indeed, on some dimensions, the quality of
data collected in these latter countries can actually exceed that in the United States.

However, in many countries, substantial data collection has been initiated only recently.

Through the continuing efforts of organizations such as the United Nations and the
Organization for Economic Cooperation and Development (OECD), improvements are
being made worldwide

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 Problems of Availability and Use of Secondary
Data 2 of 3
Another problem relating to the availability of data is researchers’ language skills.

For example, though data are often copious regarding the Japanese market, being able to read
Japanese is a requisite for accessing them, either online or in text. This problem may seem
rather innocuous, but only those who have tried to maneuver through foreign data can
appreciate the value of having a native speaker of the appropriate language on the research
tea
Finally, a growing issue for governments and consumers alike that limits the
availability of data is privacy concerns.

Not only in the United States, but also in China and Europe, more and more
complaints and regulations limit researchers’ and companies’ access and use of data,
even those they collected themselves.
New and very unremarkable measures of consumer responses are being developed
such as machine reading of faces; and the concerns about invasion of privacy are
great.

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 Problems of Availability and Use of Secondary
Data 2 of 3
Reliability of data
Available data may not have the level of reliability necessary for confident decision
making for many reasons.
Official statistics are sometimes too optimistic, reflecting national pride rather than
practical reality, while tax structures and fear of the tax collector often adversely
affect data.
Comparability of available

Comparability of available data is the third shortcoming faced by foreign marketers. In

the United States, current sources of reliable and valid estimates of socioeconomic
factors and business indicators are readily available.
Furthermore, even though many countries are now gathering reliable data, there are
generally no historical series with which to compare the current information.
Comparability of data can even be a problem when the best commercial research firms
collect data across countries, and managers are well advised to query their vendors
about this problem .A related problem is the manner in which data are collected and
reported. Too frequently, data are reported in different categories or in categories much
too broad to be of specific value.
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 Problems of Availability and Use of Secondary
Data 3 of 3
Validating Secondary Data
1. Who collected the data? Would there be any reason for
purposely misrepresenting the facts?
2. For what purposes were the data collected?
3. How (by what methodology) were the data collected?
4. 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
is an effective and often-used way of judging validity

In general, the availability and accuracy of recorded secondary data increase as the level
of economic development increases. There are exceptions; India is at a lower level of
economic development than many countries but has accurate and relatively complete
government-collected data.
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 Gathering Primary Data: Quantitative and
Qualitative Research 1 of 3
Primary Data
• Collected specifically for the project at hand
• Pursued if secondary data leaves unanswered questions

• Gathered by firm’s researcher

• Questions sales representatives, distributors, middlemen, and
customers for accurate market info
• Uses qualitative and quantitative methods

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 Gathering Primary Data: Quantitative and
Qualitative Research 2 of 3
Quantitative Research
• Usually large number of respondents answer questions
• Verbally or in writing
• Questions are structured with specific response format
• Questions designed to obtain info about behavior, intentions,
attitudes, motives, and demographics

• Data presented as precise estimations

• Can be summarized with percentages, averages, or other statistics

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 Gathering Primary Data: Quantitative and
Qualitative Research 2 of 3
In quantitative research

• usually a large number of respondents are asked to reply either verbally or in

writing to structured questions using a specific response format (such as yes/ no)
or to select a response from a set of choices.
• Questions are designed to obtain specific responses regarding aspects of the
respondents’ behavior, intentions, attitudes, motives, and demographic
characteristics.
• Quantitative research provides the marketer with responses that can be presented
with precise estimations.
• The structured responses received in a survey can be summarized in percentages,
averages, or other statistics.
• Scientific studies, including tightly designed experiments, often are conducted by
engineers and chemists in product-testing laboratories around the world.
• There, product designs and formulas are developed and tested in consumer usage
situations.
• Often those results are integrated with consumer opinions gathered in concurrent
survey studies
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 Lego’s Target Market

© Studio 101/Alamy
Over the years, Lego has five times aimed its strategic initiatives at girls, with little
success. On its sixth try, the company has spent $40 million globally. The new
campaign and associated products were designed based primarily on qualitative
research methods. This time the new product line has been a huge success, boosting
Lego’s profits by more than $1 billion in the most recent year.

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 Gathering Primary Data: Quantitative and
Qualitative Research 3 of 3
Qualitative Research
• Seeks to interpret what people in sample are like
• If questions are asked, they are usually open-ended
• Unstructured responses reflect person’s thoughts and feelings

• Direct observation of consumers often a method

• Formulates and defines problem more clearly
• Exposes impact of sociocultural factors on behavior patterns
• Helps develop research hypotheses to be tested in further studies

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 Gathering Primary Data: Quantitative and
Qualitative Research 3 of 3
In qualitative research
• if questions are asked, they are almost always open-ended or in-depth, and
unstructured responses, including storytelling, that reflect the person’s thoughts
and feelings on the subject are sought. Consumers’ first impressions about
products may be useful.
• Direct observation of consumers in choice or product usage situations is another
important qualitative approach to marketing research.
• Qualitative research is used in international marketing research to formulate and
define a problem more clearly and to determine relevant questions to be
examined in subsequent research.
• It also is used to stimulate ad message ideas and where interest centers on gaining
an understanding of a market rather than quantifying relevant aspects.
• Qualitative research is also helpful in revealing the impact of sociocultural factors
on
• behavior patterns and in developing research hypotheses that can be tested in
subsequent studies designed to quantify the concepts and relevant relationships
uncovered in qualitative data collection
• Oftentimes the combination of qualitative and quantitative research proves quite
useful in consumer markets and business-to-business marketing set
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 Problems of Gathering Primary Data 1 of 2
Ability to Communicate Opinions
• Product’s value or use may not be understood
• Respondent unable to provide accurate survey responses
Willingness to Respond
• Culture impacts desire and ability to respond
• Leaders might prevent market research altogether

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 Outsourcing of Research

©Bojan Milinkov/Shutterstock
Midnight in New Delhi—both customer service and telephone survey
research are being outsourced to lower-wage English-speaking countries. Cost
savings of such outsourcing must be balanced with consumer reluctance in
cross-cultural communication settings, particularly those involving voluntary
responses to marketing research.
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 Problems of Gathering Primary Data 2 of 2
Sampling in Field Surveys
• Some countries lack adequate demographic data
• Difficult to draw reliable, accurate sample groups
Language and Comprehension
• Language barrier between marketer and respondents
• Back translation, parallel translation, decentering

• Literacy impacts success of written survey

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 Problems of Gathering Primary Data 2 of 2
Back Translation.
In back translation, the questionnaire is translated from one language to another, and
then a second party translates it back into the original, and the two original language
versions are compared. This process often pinpoints misinterpretations and
misunderstandings before they reach the public

Parallel Translation.
Back translations may not always ensure an accurate translation because of
commonly used idioms in both languages. Parallel translation is used to overcome
this problem. In this process, more than two translators are used for the back
translation; the results are compared, differences discussed, and the most
appropriate translation selected. Most recently, researchers have suggested
augmenting this process by integrating pretesting steps and iteratively adapting the
translations

Decentering.
A third alternative, known as decentering, is a hybrid of back translation. It is a
successive process of translation and retranslation of a questionnaire, each time by a
different translator.

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 Japanese versus English

©Jed Share/Kaoru Share/Getty Images

The complexities of the Japanese language confront second graders in Kyoto,
where students write some of the 200-plus characters for the sound shou.
The language commonly uses 15,000 kanji characters, which are borrowed
from Chinese. The differences in the structure of the language from English
make translation of questionnaires a most daunting task.
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 Multicultural Research: A Special Problem
Companies becoming more global
• Seek to standardize marketing mix across cultures
• Important to do multicultural research
• Compare and contrast language, economy, social structure,
behavior, and attitude patterns of cultures
• Helps determine how much marketing mix should be adapted
• May need to use different research methods in different cultures
• Ensure comparability and equivalency of results

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 Multicultural Research: A Special Problem
As companies become global marketers and seek to standardize various parts of the
marketing mix across several countries, multicultural studies become more important.

A company needs to determine to what extent adaptation of the marketing mix is

appropriate. Thus, market characteristics across diverse cultures must be compared for
similarities and differences before a company proceeds with standardization on any
aspect of marketing strategy.

The research difficulties discussed thus far have addressed problems of conducting
research within a culture. When engaging in multicultural studies, many of these same
problems further complicate the difficulty of cross-cultural comparisons.

The marketing mix refers to the set of actions, or tactics, that a company uses to
promote its brand or product in the market. The 4Ps make up a typical marketing mix -
Price, Product, Promotion and Place. However, nowadays, the marketing mix increasingly
includes several other Ps like Packaging, Positioning, People and even Politics as vital mix
elements.

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 Multicultural Research: A Special Problem

The goal of comparability work in the research synthesis process is to make the
research findings from different studies in ostensibly the same domain of research
comparable enough to be combined.
Tests that allow us to conclude equivalence (e.g. two process average are equal) with
a specified confidence level are called equivalence tests. When using equivalence
tests, we must specify how large of a difference between the group averages would
represent a practically important difference. Then, smaller differences than that are
considered insignificant when comparing the group averages and equivalence may be
concluded. The interval around 0 that represents the biggest true difference between
the group means that we will accept while still calling the group averages equivalent
is called the equivalence interval. For example, a manufacturer of surgical needles
measures the penetration force to cut through tissue. Perhaps a difference between
lot averages that falls between -5 and +5 grams may be considered insignificant. Thus,
the equivalence interval is (-5,+5).

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 Research on the Internet: A Growing Opportunity
Uses of Internet in International Research
1. Online surveys and buyer panels
2. Online focus groups
3. Web visitor tracking
4. Advertising measurement
5. Customer identification systems
6. E-mail marketing lists
7. Embedded research
8. Observational research (netography)

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 Research on the Internet: A Growing Opportunity
Uses of Internet in International Research
1. Online surveys and buyer panels
2. Online focus groups
3. Web visitor tracking
4. Advertising measurement
5. Customer identification systems
6. E-mail marketing lists
7. Embedded research
8. Observational research (netography)

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 Research on the Internet: A Growing Opportunity

Advertising measurement
A simple way to determine an advertising message's reach is to multiply the
circulation or audience by the number of advertisement insertions, broadcasts or
displays. If the result falls short of expectations, a marketing manager may have to
change the advertising media mix, messaging or do both.

Email Marketing list

It's a collection of email addresses used by an individual or an organization to send
marketing material to multiple recipients. In simple terms, an email list refers to the
total amount of subscribers you have, which basically is a synonym to “the mailing
list”, or “subscriber's list”.

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 Research on the Internet: A Growing Opportunity
Embedded research.
• The Internet continues to automate traditional economic roles of customers, such as
searching for information about products and services, comparison shopping among
alternatives, interacting with service providers, and maintaining the customer–brand
relationship.
• More and more of these Internet processes look and feel like research processes
themselves.
• The methods often are embedded directly into the actual purchase and use
situations and therefore are tied more closely to actual economic behavior than
traditional research methods.
• Some firms even provide the option of custom designing products online—the
ultimate in applying research for product development purposes.

Observational research (also known as netnography)

Chat rooms, blogs, and personal websites all can be systematically monitored to
assess consumers’ opinions about products and services.
TimeWarner also maintains a laboratory full of iPads, 3D televisions, and Xbox gaming consoles,
such that it can use all sorts of high-tech observational devices to measure people’s eye
movements, heart rates, facial movements, and skin temperatures as they experience visual
stimuli such as television programs or video games.

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 Estimating Market Demand
Expert Opinion
• Experts asked about market size and growth rates
• Triangulation is key; compare multiple responses

Analogy
• Assumes demand develops similarly in all countries
• As GDP grows in Country X, so does its demand for product
• So, as GDP grows in Country Y, so should its demand for product

• Careful: correlation does not always equal causation

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 Predicting the Future

© John Graham
Everybody wants to see the future—even the ancient Greeks consulted the Oracle of
Delphi, who resided in the temple pictured. Modern forecasters may have better
tools, but the hazards of the job are still great. Or, as Yogi Berra eloquently put it, “The
future ain’t what it used to be.”

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 Problems in Analyzing and Interpreting
Research Information 1 of 2
Limitations of Foreign Data
• Information given in surveys is influenced
• Word meaning, consumer’s attitude, interviewer’s attitude,
interview situation, culture and tradition

• Impacts both primary and secondary data

• Accepting info at face value is irresponsible

Face value is a financial term used to describe the nominal or dollar

value of a security, as stated by its issuer. For stocks, the face value is
the original cost of the stock, as listed on the certificate. For bonds, it is
the amount paid to the holder at maturity, typically in $1,000
denominations.

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 Problems in Analyzing and Interpreting
Research Information 2 of 2
Coping with Disparities in Foreign Data
• Need a high degree of cultural understanding in market
being researched
• Social customs, semantics, current attitudes, business customs

• Creatively adapt research methods when necessary

• Approach analysis of data with skeptical attitude
• Both primary and secondary data should be evaluated critically

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 Problems in Analyzing and Interpreting
Research Information 2 of 2
First, the researcher must possess a high degree of cultural understanding of the market in which
research is being conducted.
To analyze research findings, the social customs, semantics, current attitudes, and business customs
of a society or a subsegment of a society must be clearly understood. At some level, it will be
absolutely necessary to have a native of the target country involved in the interpretation of the
results of any research conducted in a foreign market.

Second, a creative talent for adapting research methods is necessary. A researcher in foreign
markets often is called on to produce results under the most difficult circumstances and short
deadlines. Ingenuity and resourcefulness, willingness to use “catch as catch can” methods to get
facts, patience (even a sense of humor about the work), and a willingness to be guided by original
research findings even when they conflict with popular opinion or prior assumptions all are
considered prime assets in foreign marketing research.

Third, a skeptical attitude in handling both primary and secondary data is helpful.
For example, it might be necessary to check a newspaper pressrun over a period of time to get
accurate circulation figures or to deflate or inflate reported consumer income in some areas by 25 to
50 percent on the basis of observable socioeconomic characteristics. Indeed, where data are suspect,
such triangulation through the use of multiple research methods will be crucial.

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 Responsibility for Conducting Marketing Research
Decentralization
• Foreign-based entity does research for company
• Becoming more widely used
• Local analysts have more near knowledge of culture
• Results are quick and more accurate

• Disadvantages
• Possible ineffective communications with home-office executives
• Potential dominance of large-market studies in decisions about
global standardization

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 Responsibility for Conducting Marketing Research
The advantage of foreign based agency

Depending on the size and degree of involvement in foreign marketing, a company in need
of foreign market research can rely on an outside, foreign-based agency or on a domestic
company with a branch within the country in question. It can conduct research using its
own facilities or employ a combination of its own research force with the assistance of an
outside agency

A trend toward decentralization of the research function is apparent. In terms of

efficiency, local analysts appear able to provide information more rapidly and accurately
than a staff research department can. The obvious advantage to decentralization of the
research function is that control rests in hands closer to the market. Field personnel,
resident managers, and customers generally have more intimate knowledge of the
subtleties of the market and an appreciation of the diversity that characterizes most
foreign markets.

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 Responsibility for Conducting Marketing Research

The disadvantage of foreign based agency

One disadvantage of decentralized research management is possible ineffective

communications with home-office executives. Another is the potential unwarranted
dominance of large-market studies in decisions about global standardization. That is to
say, larger markets, particularly the United States, justify more sophisticated research
procedures and larger sample sizes, and results derived via simpler approaches that are
appropriate in smaller countries often are erroneously discounted.

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 © John Graham Decentralization of Research

© John Graham
Both Ford and Philips keep track of European technology and consumers and develop
products for global markets at their research centers in Aachen, Germany. Some of
the best technical universities in Europe are close by in Belgium, the Netherlands,
and Germany.
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 Communicating with Decision Makers
Obtaining and analyzing data is half the job
• Important to provide executives with analyses and
interpretation in timely manner
• Decision makers should be involved in process
• Problem definition and question formulation
• Direct fieldwork to get a “feel” for their market

• Marketing research can be muddied through process

• Use of research agencies can further muddy data
This is data that doesn't fit into a normalized schema. You could also say that it's something
that isn't easily stored and retrieved from third normal form. This might be complex
attributes from an object model, user sessions, or user specified properties.
Even though there are many ways to do this, we're going to take a look at three different
ways to model and store this muddy data.

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 Communicating with Decision Makers
Decision makers, often top executives, should be directly involved not only in problem
definition and question formulation but also in the fieldwork of seeing the market and
hearing the voice of the customers in the most direct ways when the occasion warrants (as in
new foreign markets).

Top managers should have a “feel” for their markets that even the best marketing reports
cannot provide.

Finally, international marketers face an additional obstacle to obtaining the best information
about customers. At the most basic level, marketing research is mostly a matter of
interaction with customers.

Marketing decision makers have questions about how best to serve customers, and those
questions are posed and answered often through the media of questionnaires and research
agencies.

Even when both managers and customers speak the same language and are from the same
culture, communication can become garbled in either direction. That is, customers
misunderstand the questions and/or managers misunderstand the answers. Throw in a
language/cultural barrier, and the chances of misinformation expand dramatically.
.
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 Exhibit 8.2 Managing the Cultural Barrier in
International Marketing Research

There are four kinds of company–agency–customer relationships. Options B and C are

better suited for managing the cultural barrier across the chain of communication.
That is, in both cases, the cultural barrier is bridged within a company where people
have a common corporate culture and work together on an everyday basis.
Jump to long description.
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 Exhibit 8.2 Managing the Cultural Barrier in
International Marketing Research
Such problems can be exacerbated when research agencies also are involved. The four
kinds of company–agency–customer relationships possible are presented in Exhibit 8.2.

• Options B and C are better suited for managing the cultural barrier across the chain
of communication. That is, in both cases, the cultural barrier is bridged within a
company wherein people have a common corporate culture and work together on an
everyday basis.

• In B the translation (in the broadest sense of the term—that is, of both
questionnaires and reports) is worked out between employees of the international
marketing research agency. In C the translation is managed within the company itself.

• In cases A and D, both cultural and organizational barriers are being crossed
simultaneously, thus maximizing the chances for miscommunication. Indeed, these
same company–agency–customer considerations are pertinent to other kinds of
communications between companies and customers, such as advertising and
distribution channel control, and this unique international topic will be addressed
again in subsequent chapters.
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 Appendix of Image Long Descriptions

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 Appendix 1 Figure 8.2 Managing the Cultural Barrier
in International Marketing Research
Option A: The company communicates with an agency, who then
communicates with customers.
Option B: The company interacts with an agency, who then communicates
with a local agency, who communicates with the customers.
Option C: The company communicates with the subsidiary, who
communicates with the agency, who communicates with the customers.
Option D: The company communicates with a foreign agency, and the foreign
agency communicates with the customers.

Return to original slide.

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