Steps of International Marketing Research Process
The international marketing research
process as well as domestic one is a serious of separate steps. However, the
international marketing research process has some peculiarities such as the
national differences between countries arising out of political, legal,
economic, social and cultural differences and, the comparability of research
results due to these differences.
Step 1.
Research Problem Definition.
Problem definition is the most critical
part of the research process. Research problem definition involves specifying
the information needed by management. Unless the problem is properly defined,
the information produced by the research process is unlikely to have any value.
Step 2.
Information Value Estimation.
Information has value only to the extent
that it improves decisions. The value of information increases as
(1) the cost of a wrong decision
increases,
(2) our level of knowledge as to the
correct decision decreases, and
(3) the accuracy of the information the
research will provide increases.
The principle involved in deciding
whether to do more research is that research should be conducted only when the
value of the information to be obtained is expected to be greater than the cost
of obtaining it.
Step 3.
Selection of the Data Collection Approach.
There are three basic data collection
approaches in international marketing research:
(1) secondary data,
(2) survey data, and
(3) experimental data.
Secondary data were collected for other
purpose than helping to solve the current problem. Primary data are collected
expressly to help solve the problem at hand. Survey and experimental data are
therefore secondary data if they were collected earlier for another study; they
are primary data if they were collected for the present one. Secondary data are
virtually always collected first because of their time and cost advantages.
Step 4.
Measurement Technique Selection.
Four basic measurement techniques are used
in marketing research:
(1) questionnaires,
(2) attitude scales,
(3) observation, and
(4) depth interviews and projects
techniques.
As with selecting the data collection
method, selection of a measurement technique is influenced primarily by the
nature of the information required and secondarily by the value of the
information.
Step 5.
Sample Selection.
Most marketing studies involve a sample
or subgroup of the total population relevant to the problem, rather than a
census of the entire group. The population is generally specified as a part of
the problem definition process.
Step 6.
Selection of Methods of Analyses.
Data are useful only after analysis. Data
analysis involves converting a series of recorded observations into descriptive
statements and/or inferences about relationships. The types of analyses, which
can be conducted, depend on the nature of the sampling process, measurement
instrument, and the data collection method.
Step 7.
Evaluation of the Ethics of the Research.
It is essential that marketing
researchers restrict their research activities to practices that are ethically
sound. Ethically sound research considers the interests of the general public,
the respondents, the client, and the research profession as well as those of
the researcher.
Step 8.
Estimation of Time and Financial Requirements.
Time refers to the time needed to
complete the project. The financial requirement is the monetary representation
of personnel time, computer time, and materials requirements. The time and
finance requirements are not independent.
Step 9.
Preparation of Research Proposal.
The research design process provides the
researcher with a blueprint, or guide, for conducting and controlling the
research project. This blueprint is written in the form of a research proposal.
A written research proposal should precede any research project. The research
proposal helps ensure that the decision maker and the researcher are still in
agreement on the basic management problem, the information required, and the
research approach.
International
Secondary Data Sources
1. The Nature
of International Secondary Data
Secondary data for international
marketing decisions are subject to some disadvantages. Unfortunately, many of
the disadvantages are multiplied when the data involve more countries. An
additional problem is that most secondary data are available only in the host
country’s language. Thus, multi-country searches require utilizing specializing
firms or maintaining a multilingual staff.
Data availability, recency, accessibility,
and accuracy vary widely from country to country. Until recently, there were
few commercial databases in Japan because of the difficulty of using Japanese
characters on computers. Now the problem is resolved. The Japanese government
prepares many potentially useful reports, but even Japanese firms seldom use
them because they are poorly organized and indexed. Secondary data in many
non-democracies often reflect political
interests more closely than reality. In general, the amount of secondary data
available in a country varies directly with its level of economic development.
Even when the accurate data are
accessible, it may not be possible to make multinational comparisons. Data from
several countries may not be comparable because the data were collected at
different times, use different units of measurement, cover slightly different
topics, or define the classes (such as age groups) differently. This has become
a major problem in the European Community as firms begin to analyze the market
as a whole rather than as a collection of individual countries. To resolve part
of the problem, ESOMAR (European Society
for Opinion and Marketing Research) has proposed a standardized set of
questions to gather demographic data in both government and private surveys.
Similar work is underway in Brazil, India, and the Middle East.
2. Internal
Sources of International Secondary Data
The internal sources of data for
international decisions can be classified into four broad categories –
a. accounting records,
b. sales force reports,
c. miscellaneous records and
d. internal experts.
However, utilizing international internal
data can be difficult. Different accounting systems, decentralized (often on a
country basis) management and information systems, sales forces organized by
country or region, and so forth, all this increases the difficulty of acquiring
and using internal data in a timely manner. To deal with these problems global
firms implement international information systems and require some
standardization across countries in terms of internal recordkeeping and
reporting.
3. External
Sources of International Secondary Data
For a example, when a company
starts an external search for international secondary data it consults general
guides to this type of data, such as International Marketing Handbook of the US
Department of Commerce’s International Trade Administration, The World of
Information (Africa Guide), or it contacts Euromonitor, the leading provider of
world business information and market analysis. An alternative to conducting
such a search “in house” is to use a
specialist firm such as PricewaterhouseCoopers
and McKinsey.
a) Foreign
Government Sources
All developed countries provide
census-type data on their populations. However, the frequency of data
collection and the type and amount of data collected vary widely from country
to country. Germany went 17 years between its last two censuses, and Holland
has not conducted a census in 20 years. The U.S. collects income data in its
census and marketers make extensive use of it. Most other nations, including
Japan, Britain, France, Spain, and Italy, do not. (Australia, Mexico, Sweden,
and Finland do.) While the Scandinavian countries, Japan, South Korea, Taiwan,
and Thailand publish English-language versions of their main census reports,
most countries report them only in their home language.
b)
International Political Organizations
Three major international political
organizations provide significant amounts of data relevant to international
marketing activities. The United Nations and its related organization, the
United Nation’s Educational, Scientific and Cultural Organization, provide
hundreds of publications dealing with the population, economic, and social
conditions of over 200 countries.
The World Bank lends funds, provides
advice, and serves as a catalyst to stimulate investments in developing
nations. To carry out its missions, it collects substantial amounts of useful
data which can be purchased inexpensively.
The Organization of Economic Cooperation
and Development (OECD) consists of 24 economically developed countries with
the mission of promoting the members’ economic and social welfare by
coordinating national policies. As part of this mission, it publishes reports
on a broad range of socioeconomic topics involving its members and the
developing nations.
4. Issues in
International Primary Data Collection
Primary data are the data collected to
help solve a problem or take advantage of an opportunity on which a decision is
pending.
The main advantage of primary data lies
in the fact that it is collected for solving the exact problem and that is why
it is characterized by high usefulness and novelty. The disadvantage is that
the costs of collecting primary data are much higher in foreign developing
markets as it involves lots of money.
The international primary data is
collected with the help of qualitative and quantitative research approaches.
Qualitative research is particularly used as a first step in studying international
marketing phenomena (focus groups, observation). However, the main constraint
is that responses can be affected by culture as individuals may act differently
if they know they are being observed.
Quantitative researches are more
structured. They involve both descriptive research approaches, such as survey
research, and causal research approaches, such as experiments. More respondents
take part in quantitative research, although it highlights fewer problems than
qualitative research.
International marketing research in
cross-cultural environment requires the measurement of behaviors and attitudes.
A major issue in primary data collection is the existence of the so-called EMIC
vs. ETIC dilemma (EMIC [insider view for the study of culture] & ETIC [outsider
view for the study of culture] are two different approach for the study of
culture). The EMIC school states that attitudinal and behavioral phenomena are
unique to a culture. The ETIC school is primarily concerned with identifying
and assessing universal attitudinal and behavioral concepts, and developing
pan-cultural or culture-free measures.
5. Survey
Methods of International Marketing Research
The techniques of data collection used in
international marketing research have both advantages and disadvantages.
1. Personal interviews are considered to
be the most popular method of data collection in international marketing
research. However, there are several constraints for the usage of this
technique. In the Middle East countries personal interviews are treated with
great suspicion. Moreover, the personnel for the survey should be male and they
may conduct interviews with housewives only when their husbands are at home. In
Latin American countries, where tax protest movement is being developed, the
interviews are thought to be tax inspectors.
2. Mall intercept surveys may be used in
the United States, Canada and the European countries. As far as the developing
countries are concerned, they are not common.
3. Telephone interviews have several
advantages over other survey methods of international marketing research. The
time and costs of international telephone calls are reducing, the surveys may be
conducted from one place, the results of telephone interviews are considered
reliable and it is easier to perform the client and interviewer control. But
telephone surveys also have some limitations because of poor telecommunication
systems in several countries. For example, in India telephone penetration is
only 1 per cent and telephone surveys reduce the survey coverage greatly. But
even in such developed countries as Great Britain telephone penetration
comprises only 80 per cent. That is why a lot of marketers are very skeptical
about telephone surveys and nowadays there is a great reduction in their
application.
4. Mailing surveys are widely used in
industrialized countries, where there is a high level of literacy, good mailing
services and availability of mailing lists. However, the use of this method in
developing countries has some constraints. In some countries people consider
the mailing surveys to be the invasion into their private life and the
effectiveness of these surveys is reduced. In such countries as Brazil, where
only 30 per cent of mail is delivered, mailing surveys can’t be used as well.
5. Electronic surveys become more popular
in the United States and Europe and they are used for the products which
require technological literacy such as computers and computer software. E-mail
surveys begin to replace mail and telephone surveys. The limiting factors for
electronic surveys are as follow: there are still many countries with low
internet access, the internet versions available in various countries may not
be compatible and there may be a big number of non-responses because of
technical issues. At the same time the speed of getting responses and low costs
of surveys makes this method suitable for international marketing research.
Conclusion
International marketing research is the
systematic design, collection, recording, analysis, interpretation, and
reporting of information relating to a particular marketing decision facing a
company operating internationally. The international marketing research process
has some peculiarities such as the national differences between countries
arising out of political, legal, economic, social and cultural differences and,
the comparability of research results due to these differences.
A company performing the international
marketing research may experience several problems. Firstly, there is a
complexity of research design due to operation in a multi country,
multicultural, and multi linguistic environment. Secondly, the availability of
secondary data varies widely from country to country. On some markets,
especially emerging and unstable, the data is neither available nor reliable.
Thirdly, the costs of collecting primary data are much higher in foreign
developing markets as there is the lack of an appropriate marketing research
infrastructure.
Fourthly, problems associating
with coordinating research and data collection in different countries may
arise. And finally, there are the difficulties of establishing the
comparability and equivalence of data and research conducted in different
context.
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