chapter 5 presentation from goblal marketing svend hollensen

1. Process Of Selecting The
Right International
Market
GLOBAL MARKET RESEARCH
FOREIGN MARKET( MICRO-ENVIRONMENT)
- Market potential - Market size
- Competition - Market growth
- Profit potential - Market access
BUYER/DECISION-MAKING
UNIT
- Individuals - Family
- Business - Government
Presented by: Fatima Ali
• ECONOMIC FORCES
• POLITICAL & LEGAL FORCES
Regions/Countries/Markets
Screening
Screening
One Specific Market
INTERNATIONAL MARKET
SELECTION (IMS) PROCESS

2. CHAPER - 5
Global Market Research
MARKET RESEARCH: Gathering, Analyzing and
Presenting information related to a well-defined
problem.
What customers want can be access through
market research
GLOBAL MARKETING: Make & sell what
International buyers want

3. Before:
• Act as an aid to
decision maker
• Was viewed as a
staff function not a
line function
• Little interaction
with marketing
managers
• Did not participate
is market decision
making
Now:
• Market researcher
is the marketing
manager
• Market
researchers are
also part of the
team responsible
for organization
change in
response to
customer
satisfaction survey
CHANGING ROLE
OF A MARKET
RESEARCHER

4. Sources of
Information • Primary: Information that is
collected first-hand, generated by
original research tailor-made to
answer specific research
questions.
• Secondary: Information that has
already been collected for other
purposes and thus is readily
available.

5. INTERNAL EXTERNAL
Firm General Data
(Firm-Context)
• Size
• Product line
• Financial situation
Macroeconomic Data
from Country B
• GNP
• Stability of currency
• Inflation
Industry
• Growth patterns
of sector
• Analysis of
import
• Characteristics of
Competition
Competition
• Specific
Strategies
Strength-Weakness
Profile ( benchmarking)
• Corporate level
• Product Level ( SBU)
• Specific Product Level
End Customers
• Threat of using
substitute
• Consumption
Pattern
Intermediaries
• Purchasing behavior
• Financial Capabilities
• Access to distribution
channel
PROBLEM
Is there a market for
product? How large is
the market?
S
E
C
O
N
D
A
R
Y
P
R
I
M
A
R
Y

6. Secondary Research
Advantage of Secondary
Research in Foreign Market
• Conducted from home
base - less expensive &
less time consuming
• Commitment to future
project is low
• Benefit of objectivity
• Quickly generate
background information(
eliminate low potential
countries)
Disadvantages of Secondary
Research on Foreign Market
• Non-availability of data –
developing/weak economics
have limited statistics
available
• Reliability of data – political
influence, incorrect data
collection& lack accuracy)
• Data classification – broadly
classified construct
• Comparability of data –
national definition of
statistics differ

7. Internal Data Source
Internal company data is a fruitful source of
information
• Total sales
• Sales by country
• Sales by products
• Sales volume by market segment
• Sales volumes by type of channel distribution
• Pricing information – pricing adjustment
• Communication mix information
• Sales representative records and reports

8. External Data Source
• Public library
• Internet –
Electronic
Data Base
Secondary
Research
• Universities

9. Secondary data used for estimation of
foreign market potential
LEAD- LAG ANALYSIS
• Determinants of
Population size in the United Kingdom: 60 million
Population demand size and in the Germany: rate
82 million
Furthermore of diffusion we are know the
that the number of refrigerators sold
in same the United in two
Kingdom in 2002 was 1.1 million units.
Then countries, by analogy but we time
estimate the sales to be the following in
Germany:
separates the two.
(82/60) × 1.1 million units = 1.5 million units
ESTIMATION BY
ANALOGY
• A correlation value
(between a factor and
the demand for the
product) for one
market is used in
another international
market.

10. Qualitative
Provides a holistic view of a
research problem by integrating a
larger number of variables, but
asking only a few respondents
Quantitative
Data analysis based on
questionnaires from a large
group of respondents.

11. Comparison

12. Difference in Source of Data
Quantitative Research
• Distance from the source
of data
• Structuring of
questionnaire, retrieval
and analysis of data
conducted by different
people
• Questionnaire is the
critical element of
research process
Qualitative Research
• Proximity to the source of
data
• Data retrieval and data
analysis conducted by the
same person – The
interviewer
• Interviewers competence
is the critical element of
research process

13. Triangulation

15. Research Problem &
Objective:
• Establish specific objectives
• Difficulty is translating business
problem into research
questions
• Symptoms mistaken as causes

16. Research Approaches
• Observation
• Survey
• Experiment

17. • Watching Stock Checks
& recording market related behavior
• Investigate Mechanical what observation people do to measure & why they TV
do it
• Avail viewership
information that people are unwilling to provide
• • Feelings, Cash register attitudes Scanners
& motives cannot be observed
• Infrequent behavior cannot be observed

18. Experiments
• Gather Casual Information
• Select matched group of people & give them
different treatment
• Control unrelated factors
• Check difference in response
• Explains cause- effect relationship
• Test marketing: product placed on sale in
select outlets – conducted in self-contained
markets
• Performance in these areas give indication of
expected performance

19. Survey
Involves a formal questionnaire
Questions asked are in pre-arranged order
Survey research is used for a variety of
marketing issues:
• Customer attitudes
• Customer buying habits
• Potential market size
• Market trends
Generates descriptive rather than casual
data

21. Contact Method
Researchers balance between speed, degree
of accuracy and costs.
Mail:
• least expensive
• Questionnaire can include pictures
• Respondents can answer in leisure
• Wait to receive the reply takes longer
• Response rate is lower in countries of low
literacy & education level

22. Contact Method
Internet/e-mail Survey
• Collects a large amount of data that can
be quantified and coded into a computer.
• Perfect for low budget & widely dispersed
population
• Possible to attach picture and sound clips
• People often do not respond to
unsolicited mails
• Difficult to generalize finding from e-mail
to population

23. Telephone Interviews
• Response rate higher than
mail. Lower than face-to-face
interview
• Cost less than personal
interviews
• Allows a degree of flexibility
• Use of visual aid not possible
• Limited number of questions
can be asked

24. Individual: Involves interviewing from
home/office/street
Interviewer should gain corporation of
respondents
Group: Focus group interviewing
Requires trained moderator
Moderator needs to be objective,
knowledgeable on subject & consumer
behavior
Advantage:
• Flexible
• Can collect large amount of
information
• Can show actual product/
advertisement/ package to gauge
reaction
Drawbacks:
• High cost
• Sampling problems
• Group interviews are hard to
generalize
• Interviewer Bias

26. Sampling Plan
Impractical & expensive to contact all people
relevant to research
Contact selective group of people
representative of entire population
Sampling plan is a scheme outlining the group
(or groups) to be surveyed in a marketing
research study, how many individuals are to be
chosen for the survey, and on what basis this
choice is made.

27. Sampling Procedure
Probability Sampling: Specify the chance each
sampling unit has of being included in the sample.
• Simple random sampling
• Stratified sampling
• Cluster sampling
• Systematic Sampling
Non-Probability Sampling: Not possible to
determine the probability or calculate the sampling
error. Relay on personal judgment.
• Convenience sampling
• Quota sampling
• Snowball sampling

28. Sample Size
Sample size & Cost have a linear
relationship
Sampling error decreases at the rate of
square root of the increase in sample size
Methods of determining the sample size:
• Traditional statistical techniques
• Budget Available
• Rule of thumb
• Number of sub-groups to be analyzed
For Transnational Researches: The
researcher wants the same sampling
method for all countries

29. Contact Medium Measurement Instrument
Designing the Questionnaire
Information requirements are known
Research objectives are translated into questions
Questionnaire can be:
• Structured: close-ended questions / on the street
interviews
• Unstructured: open ended questions/ in-depth
interviews
In cross cultural studies open- ended questionnaires
are useful
Questions can be:
• Indirect
• Direct

30. Formulation (wording) of Questions
• The wording must be clear. avoid two
questions in one.
• Select words so as to avoid biasing the
respondent. avoid leading questions.
• Consider the ability of the respondent to
answer the question.
• Consider the willingness of the
respondent to answer the question.
Embarrassing’ topics must be dealt with
carefully. One technique is to ask the
question in the third person or to state
that the behavior or attitude is not
unusual prior to asking the question.

31. When evaluating the
questionnaire, the
following items should
be considered:
• Is a certain question
necessary?
• Is the questionnaire
too long?
• Will the questions
achieve the survey
objectives?

32. Pretest
• Carried out with the subset of the population under study
• Should be conducted with knowledgeable experts/individuals
• Conducting in the same mode as the final interview/
questionnaire
• Pretest eliminates the risk of poor research

33. 6 COLLECTION • Should be conducted Efficiently & Economically
• Researcher establishes parameters
• Give clear instructions
• Sample interview to ensure reasonable data quality
ANALYSIS
DATA
INTERPRETATION
• Requires creativity & skepticism
• International research requires advice from local research firms
• Cautioned against using overly sophisticated tools for
unsophisticated data.

34. Problems with using Primary Research
Sampling in Field Surveys
Lack of adequate demographic data
problems in drawing a random sample include:
• No officially recognized census of population
• Incomplete and out-of-date telephone directories
• No accurate maps of population centers
Non-Response
Inability to reach selected elements in the sample frame
Two main reason for non-response:
• Not being at home
• Refusal to respond – sensitive subject, privacy issues
Language Barriers
In countries with low literacy rate, written questionnaires are
useless
Use technique of back translation

35. Measurement
Reliability:
If the same phenomenon is measured repeatedly with the
same measurement device and the results are similar then
the method is reliable (the ‘how’ dimension).
Validity
If the measurement method measures what it is supposed
to measure, then it has high validity (the ‘what’ dimension).
There are three types of validity:
• Construct : Correct operational measures for the concept
• Internal : Establish the causal relationship
• External : Generalization of research to other population

36. If a measurement instrument is not reliable there are no
circumstances under which it can be valid.
Just because the instrument is reliable doesn’t mean its valid too

37. Online/Internet Primary Research
Methods
Advantages
• Low financial resource
implication
• Short response time
• Saving time with data
collection & analysis
• Visual stimuli can be
evaluated.
Disadvantages
• Respondents have no
physical address
• Guarding respondents
anonymity
• Time wasted
downloading the page

38. E-mail and Web-based Surveys
Online quantitative market
research
• Can be designed as pop-up
survey
• Researchers control over
respondents on website
survey is lower than that
for E-mail survey
• Web based survey have
better display of
questionnaire
Online qualitative market
research
• Saving money on
travelling cost
• Cross-country qualitative
research is possible
• Online focus groups
generate less interactions

39. OTHER TYPES
OF
MARKET
RESEARCH

40. Delphi Studies
Aims at qualitative measures
10-30 key informants/experts identify
major issues and rank them in order
Other participants state their agreement
& disagreement
After several rounds coherent
consensus is reached
Ad Hoc Research1
Focus on specific market
problems
Collect data from one
point in time, from one
sample of respondents
Custom Designed Studies
Research brief given to
market research agencies or
internal market researcher
These researches can be very
expensive
Multi Client Studies
Low cost way for company to
answer specific research
questions without conducting
primary research on their
own
• Independent research
studies
• Omnibus studies

41. 2 • Longitudinal Design
• Sample or panel remains the same over time
• Gives series of pictures of the development taking
place
• Respondents agree to provide information at
intervals over an extended period of time
Consumer Panel
on their purchase overtime
Retailer Panel
Measured by laser
scanners & barcodes

42. Short- Term Forecast
3 Medium -Term Forecast
Sales Forecasting
Sales forecast for individual
products
• Up to 3 months ahead
• Used in tactical method
• More emphasis on short term
fluctuations than on sales
trend
• For one year ahead
• Important in the area of budgeting
• Incorrect forecast leads to error in
budget.
• Over optimistic forecast leads to
excess stock
• Pessimistic forecast leads to missed
opportunities
• Periods of 3 years or more -
Depends on type of industry
• Meet the requirements of macro-environment
factors
• Long- term implications
• Board of Director’s concern

44. GUIDELINES FOR SENARIO PLANNING
• ESTABLISH A CORE PLANNING TEAM
• GET A CROSS SECTION OF EXPERTISE
• INCLUDE OUTSIDE INFORMATION &
OUTSIDE PEOPLE

45. SETTING UP
INTERNATIONAL
MIS
Incorporate information into management
decision making.
MIS is an interacting organization of
people, systems, and processes
devised to create a regular, continuous
flow in information essential to the
international marketer’s problem- solving and
decision- making activities around the world.
• Transform information from statistics & data into facts, opinion and
predictions
• Develop closer customer relationship through MIS
• MIS reduces the cost of making wrong decisions
• MIS reduces uncertainty in the complex marketplace

46. International MIS can be conceptualized as a four-stage process
consisting of locating, gathering, processing and utilizing information