What Is International Marketing

Research?

• The process calls for studying the various

market characteristics for facilitating
marketing decisions that can be taken across
countries. The studies deal with tracing the
various components that are responsible for the
marketing the product.
 Definitions of International Marketing
Research

• International marketing research is the

systematic design, collection, recording,
analysis, interpretation, and reporting of
information related to a particular marketing
decision facing a company operating
internationally.
 Scope of International Marketing
• Global marketing research is meant to provide adequate
data and cogent analysis for effective decision making on a
global scale.
• The analytic research techniques practiced by domestic
businesses can be applied to international marketing
projects.
• The key difference is in the complexity of assignments
because of the additional variables that international
researchers must take into account. Global marketers have
to judge the comparability of their data across a number of
markets and are frequently faced with making decisions
based on the basis of limited data. Because of this, the
researcher must approach the research task with flexibility,
resourcefulness, and ingenuity.
 International and Domestic
Research

• The tools and techniques of international

research are the same as those of domestic
research.
• The difference is in the environment to which
the tools are applied.
 International and Domestic
Research cont.)
The three primary reasons for the differences
between international and domestic research
are:

• New Parameters
• New Environmental Factors
• A Broader Definition of Competition
 New Parameters
• In crossing international borders, a firm
encounters parameters/constraints not found in
domestic business.
• Examples include:
– Duties
– Foreign currencies and changes in their value
– Different modes of transportation
– International documentation
– Differing modes of operating internationally
 New Environmental Factors
• Many of the domestic assumptions on which the
firm and its activities were founded may not hold
true internationally.
• Management needs to:
– Learn the culture of the host country
– Understand its political systems and level of stability
– Comprehend the existing differences in societal structures
and language
– Understand pertinent legal issues
 Broader Definition of
Competition

• The international market exposes the firm to

much greater variety of competition than that
found in the home market.
• Firms must:
– Determine the breadth of the competition,
– Track competitive activities,
– Evaluate their actual and potential impact on company
operations on an ongoing basis.
 The Importance of
International Research
• Firms must learn where the opportunities are,
what customers want, why they want it, and how
they satisfy their needs and wants.
• Research allows management to identify and
develop international strategies.
• Firms must identify, evaluate, and compare
potential foreign business opportunities and the
subsequent target market selection.
• Research is necessary for the development of a
business plan.
 Determining Research
Objectives
• As a starting point, research
objectives must be determined
for a firm.
• These objectives will depend on
the views of management, the
corporate mission of the firm,
the firm’s level of
internationalization, and its
competitive situation.

10
The International Marketing Research
Process
• STEP 1 Define the international research
problem and agree on the research objectives
– Exploratory Research
– Descriptive Research
– Causal Research
• STEP 2 Set specific objectives
 The International Marketing Research
Process

• STEP 3 Develop the International Research

Plan
• STEP 4 Define Information Sources
– Secondary Data
• Researchers must determine if the information is
available, and, if so, how reliable it is
• Internal data is useful only if company has collected
similar info from relevant respondents in a country with
similar environment
 Secondary Data Constraints
• Conceptual Equivalence
Concepts have different meanings in different
cultural environments

• Functional Equivalence
Products themselves may be used for different
purposes in different country environments.
 Secondary Data Constraints,
continued
• Availability, Reliability, and Validity
– Accuracy of secondary data can be questionable:
Published statistics may be unreliable
– Sources of reliable data:
- World Bank
- United Nations Development Program
- Organization of Economic Cooperation and
Development (OECD)
- Euromonitor
Other Sources of Secondary Data

Other Firms
Directories

Governments

International
Institutions

Trade Associations Service

Organizations
15
 Conducting Primary Research

• Primary data are obtained by a

firm to fill specific information
needs.
• The researcher must decide
whether research is to be conducted
in the consumer or the industrial
product are
• Cost can be quite high
16
Primary Data Research Approaches

• Qualitative research has been particularly

useful as a first step in studying
international marketing phenomena.
– Focus Groups
– Observation
– Interviews
• Constraints: Responses can be affected by culture and
interpretation. individuals may act differently if they know they are
being observed.
 Primary Data Research
Approaches, continued

• Quantitative research are more structured,

involving either descriptive research
approaches, such as survey research, or
causal research approaches, such as
experiments.
– Content Analysis
– Survey Research
– Experimental Research
• Constraints: Respondent factors, infrastructure factors
 Data Collection
• STEP 5 Design Data Collection Instrument
• Constraints: Translation; Instrument
Reliability; Reluctance to answer certain
questions
 Data Collection, continued
• STEP 6 Decide on the Sampling Plan
– Sample Size
– Sampling Procedure
• STEP 7 Collect, Analyze, and Interpret Data
 The International
Information System
• An information system is the systematic and continuous
gathering, analysis, and reporting of data for decision-
making purposes. (aslo called ,Decision Support
System, D.S.S
• To be useful, the information system must be:
– Relevant
– Timely
– Flexible
– Accurate
– Exhaustive
– Consistent
– Convenient
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 Global Market Segmentation
• Macro-segmentation:
Macro-segmentation or country-based segmentation
identifies clusters of countries that demand similar
products. Macro-segmentation uses geographic,
demographic and socioeconomic variables such as
location, GNP per capita, population size or family size
to group countries intro market segments, and then
selects one or more segments to create marketing
strategies for each of the selected segments. This
strategy enables a company to centralize its operations
and save on production, sales, logistics and support
functions.
Macro-segmentation bases
 Global Market Segmentation
• Micro-segmentation:
Micro-segmentation or consumer-based
segmentation involves grouping consumers
based on common characteristics using
psychographic and/or behavioristic
segmentation variables such as cultural
preferences, values and attitudes, lifestyle
choices.
 Micro-segmentation bases
• Behavioral segmentation: What benefits do
customers want, and how do they use our product?
• Demographic segmentation: How do the ages,
races, and ethnic backgrounds of our customers
affect what they buy?
• Geographic segmentation: Where are our
customers located, and how can we reach them?
What products do they buy based on their
locations?
• Psychographic segmentation: What do our
customers think about and value? How do they live
their lives
 International Positioning Strategies
• Can global positioning work for all products? One study suggests that
global positioning is most effective for product categories that approach
either end of a “high-touch/high-tech” continuum. Both ends of the
continuum are characterized by high levels of customer involvement and
by a shared “language” among consumers.

1- High Tech Positioning:

• Personal computers, video and stereo equipment, and automobiles are
examples of product categories where high-tech positioning has proven
effective. Such products are frequently purchased on the basis of
concrete product features, although image may also be important.
Buyers typically already possess or wish to acquire considerable
technical information. High-tech products may be divided into three
categories: technical products, special-interest products, and
demonstrable products.
 International Positioning Strategies
i) Technical Products:
• Computers, chemicals, tires, and financial services are just a sample
of the product categories whose buyers have specialized needs;
require a great deal of product information and who share a common
“language.”
ii) Special-Interest Products:
• While less technical and more leisure or recreation oriented, special-
interest products also are characterized by a shared experience and
high involvement among users. Again, the common language and
symbols associated with such products can transcend language and
cultural barriers. Fuji bicycles, Adidas sports equipment, and Canon
cameras are examples of successful global special- interest products.
iii) Products that Demonstrate Well:
• Products that “speak for themselves” in advertising of features and
benefits can also travel well.
 International Positioning Strategies
2- High-Touch Positioning:
• Marketing of high-touch products requires
less emphasis on specialized information and
more emphasis on image. Like high-tech
products, however, high touch categories are
highly involving for consumers. Buyers high-
touch products also share a common language
and set of symbols relating to themes of
wealth, materialism, and romance.
 International Positioning Strategies
i) Products that solve a Common Problem:
• At the other end of the price spectrum from high-tech,
products in this category provide benefits linked to “life’s
little moments.” Ads that show friends talking over a cup of
coffee in a cafe or quenching thirst with a soft drink during
a day at the beach put the product at the centre of everyday
life and communicate the benefit offered in a way that is
understood worldwide.
ii) Global Village Products:
• Channel fragrances, designer fashions, mineral water, and
pizza are all examples of products whose positioning is
strongly cosmopolitan in nature. Fragrances and fashions
have traveled as a result of growing worldwide interest in
high-quality, highly visible, high-price products that often
enhance social status.
 International Positioning Strategies
iii) Products that use Universal Themes:
• Some advertising themes and product appeals
are thought to be basic enough that they are
truly transnational. Additional themes are
materialism (keyed to images of well-being or
status), heroism (themes include rugged
individuals or self-sacrifice), play
(leisure/recreation), and procreation (image of
courtship and romance).
 Global marketing-strategies

Selecting a Potential Market.

• Regional Free Trade Zone.
• Ensure economic growth
• Increase trade relations
• Increase foreign capital inflows
• Create economic trade blocs.
• Integrate policies of member countries.
 Global marketing-strategies
Evaluation of Potential markets
• Analyses markets on the basis of macro
environmental factors.
• Analyzing the market size, product
acceptability and customer perceptions.
• Analyzing micro environmental factors
• Ranking the potential markets based on profit
potential, market share ,investments, margins
sales etc.
 Entry Strategies In International
Marketing
• Exporting
• Licensing
• Franchising
• Contract Manufacture
• Management Contracts
• Joint Ventures
• Strategic Alliances
• Mergers & Acquisition
• Wholly-Owned Subsidiary
• Turnkey Projects
 Indirect Exporting…

• Indirect exports Exporting through a domestic

intermediary
• Brokers , export managers, agents
• Minimum risk
• Marble stones in Rajasthan
 Direct Exporting

• Direct exports Companies sells their goods through

middle men located in foreign countries
• More control over distribution channel
• Open their own sales offices.
 Licensing
– A contractual arrangement: one firm sells access to its patents, trade
secrets, or technology to another
– Licensee pays fixed sum and sales royalties (2%-5%)
– It is quite similar to the "franchise" operation.
– Coca Cola is an excellent example of licensing. In Zimbabwe, United
Bottlers have the license to make Coke.
• Popular because
– Courts have begun upholding patent infringement claims
– Patent holders have become vigilant in suing violators
– Foreign governments have been pressed to enforce their patent
laws
 Franchising
• Franchising
Form of licensing in which one firm contracts with
another to operate a certain type of business under
an established name according to specific rules

Examples: McDonald’s, Starbucks, Subway etc.

 Contracts
• Management Contract
– Arrangement by which one firm provides management in all or specific
areas to another firm

• Contract Manufacturing
– Arrangement in which one firm contracts with another to produce products
to its specifications but assumes responsibility for marketing
– Many multinationals employ this in India example: Park Davis Hindustan
Lever, Ponds.
 Joint Venture…
• Joint Venture
– Cooperative effort among two or more organizations that
share common interest in business enterprise
• corporate entity formed by international company and
local owners
• corporate entity formed by two international companies
for the purpose of doing business in a third market
• a corporate entity formed by a government
 Strategic Alliances…
• Partnerships between competitor, customers, or suppliers
that may take various forms
• Aims to achieve
– Faster market entry and start-up
– Access to new
• Products
• Technologies
• Markets
– Cost-savings by sharing
• Costs
• Resources
• Risks
 MERGERS AND ACQUISITIONS
• Mergers and acquisitions (abbreviated M&A) are both
aspects of corporate strategy, corporate finance and
management dealing with the buying, selling, dividing and
combining of different companies and similar entities that
can help an enterprise grow rapidly in its sector or location
of origin, or a new field or new location, without creating a
subsidiary, other child entity or using a joint venture.
• This strategy is also known as an expansion strategy.
• M&As have been imp & powerful driver of globalization.
• A large no. of foreign firms have entered India through
acquisition.
• Example: Automobiles, Pharmacy, banking, telecom etc.
 WHOLLY-OWNED SUBSIDIARY
• A wholly owned subsidiary is a company that
is completely owned by another company
called the parent company or holding
company.
• A wholly owned subsidiary is the most costly
method of serving a foreign market.
• Companies taking this approach have to bear
the full costs and risks associated with setting
up overseas operations.
 TURNKEY PROJECTS
• A turnkey operation is an agreement by the seller
to supply a buyer with a facility fully equipped &
ready to be operated by the buyer, who will be
trained by the seller.
• The term is used in fast food franchising when a
franchiser agrees to select a store site, build he
store, equip it, train the franchisee & employee.
• Many turnkey contracts involve
government/public sector as buyer.
• A turnkey contractor may subcontract different
phases/parts of the project.