IM/U2 Topic 1 International Marketing Research
One of the most striking developments of recent decades has been the globalization of business. The growth of world trade requires more information about foreign markets and companies which expand into new and unknown markets must possess the information about the demand and conditions of these markets. Companies invade not only into such developed markets as Europe, US and Japan, but also into the unstable but growing markets of Latin America, the politically uncertain markets of the Middle East and Russia, and the rapidly changing markets of South East Asia and the emerging African market.
The development of new communication and information technologies change the lifestyle, consumption behavior and purchasing patterns of different nations. All this indicates that the marketing research in global environment has become essential.
The purpose of this paper is to give definition of the international marketing research and describe the factors which influence the marketing research in different countries. The paper also deals with the steps of international marketing research process and its main categories. The advantages and disadvantages of collecting secondary and primary data and survey methods of international marketing research are presented in the paper. Finally, the problems which may occur in the international marketing research are summed up.
Definition of International Marketing Research
International marketing research is the systematic design, collection, recording, analysis, interpretation, and reporting of information pertinent to a particular marketing decision facing a company operating internationally.
International Market Research is a particular discipline of Market Research, focusing on certain geographical areas.
International Market Research is concerned with consumer goods, but also with any resource or service within a value chain which will be commercially utilized or further processed – which is the area of industrial goods and B2B-Marketing.
Marketing Research in a Global Environment
Marketing research practices and techniques have become truly global. For example, the world’s largest research firm, Nielsen, is headquartered in the U.S. but derives almost two-thirds of its revenue from outside the U.S. It is standardizing much of the data it routinely collects in 27 different countries.
International marketing managers make the same basic types of decisions as do those who operate in only one country. Of course, they make these decisions in a more complicated environment. As with marketing decisions, the basic function of marketing research and the research process does not differ between domestic and multinational research. However, the process is complicated almost exponentially as more and more countries are involved in the same decision.
The main factors which influence the marketing research in different countries are:
- Cultural differences
Culture refers to widely shared norms or patterns of behavior of a large group of people. It is the values, attitudes, beliefs, artifacts and other meaningful symbols represented in the pattern of life adopted by people that help them interpret, evaluate and communicate as members of society. A company which works on the international market is in need of cross cultural awareness. Cross cultural differences (language, non-verbal communication, different norms and values) may cause cross cultural blunders. There are examples of cultural blunders in the marketing mix.
(i) Product: When a soft drink was launched in Arab countries, it has a label with six-pointed stars. The sales were very low as the stars were associated with Israel.
(ii) Price: An American firm was willing to set a reasonable price for the product they intended to sell to the Japanese. A detailed presentation was made to the Japanese businessmen, but it was followed by a deep silence. The Americans thought that the Japanese were going to reject the price and offered a lower price. The Japanese kept silence again. After that the Americans lowered the price again saying that it was the lowest they could sell at. After a brief silence the offer was accepted. Later the Japanese confessed that the first offered price was quite acceptable, but they had a tradition to think over the offer silently. An American company suffered great losses in this case.
(iii) Place: A company wanted to enter the Spanish market with two-liter drinks bottles and failed. Soon they found out that Spaniards prefer small door fridges and they could not put large bottles into them.
(iv) Promotion: Pepsico came to Taiwan with the ad ‘Come Alive with Pepsi’. They could not imagine that is it translated ‘Pepsi will bring your relatives back from the dead’ into Chinese.
- Racial Differences
This refers to the differences in physical features of people in different countries. For example, types of haircut and cosmetic products differ greatly in various countries.
- Climatic Differences
These are the meteorological conditions such as temperature range or degree of rain. For example, Bosch-Siemens adapted their washing machines to the markets they sell. In Scandinavia, where there are very few sunny days, they sell washing machines with a minimum spin cycle of 1,000 rpm and a maximum of 1,600 rpm, whereas in Italy and Spain a spin cycle of 500 rpm is enough.
- Economic Differences
Economic development of various countries is different and when a company introduces a new product it adapts it to that new market. There are factors which show the level of economic development
(i) Buying power and revenue of the market: In developed countries with higher income of revenue people prefer complicated product with advanced functions, while in poor countries simple product are preferable.
(ii) The infrastructure of the market: Such elements of the infrastructure of the country as transport, communication system and others influence the product. When Suzuki entering the Indian market the suspension was reinforced as the state of roads in India is very poor.
- Religious Differences
Religion affects the product greatly and makes companies adapt their product to religious norms. If a company exports grocery products to Islamic countries it must have a special certificate indicating that the animal was slaughtered according to ‘Halal’ methods.
- Historical Differences
Historical differences affect the consumer behavior. For instance, Scotch whiskey is considered fashionable in Italy and not very trendy in Scotland.
- Language Differences
The correct translation and language adaptation is very important. For example, when Proctor & Gamble entered the Polish markets it translated properly its labels but failed. Later they found out that imperfect language must have been used in order to show that the company fits in.