INTERNATIONAL MARKETING RESEARCH LECTURE 1 AUEB PRIMA
Introduction Panos Repoussis Lecturer Department of Marketing and Communication AUEB Assistant Professor School of Business
Introduction Welcome to IMR Participant introductions
Brief CV Dipl. in Chemical Engineering, National Technical University of Athens MSc. in Process Systems Engineering, Imperial College London Ph. D. in Management Science & Technology, Athens University of Economics and Business 12 years experience in EU R&D and ICT projects Areas of expertize: Freight Transportation and Logistics Supply Chain Analytics Marketing and Retail Analytics
Purpose and Goals Purpose of Course As the complexity of the problems facing managers has increased in recent years, so has the need for information – about the business environment, the competition, and more importantly, the customer. As a marketing or general manager, you will frequently come in close contact with market research and data analysis throughout your career.
Purpose and Goals Purpose of Course Good understanding of the rational of marketing research, by covering the various types of research designs and stages of the marketing research process. Role of marketing research in facilitating decision making, through the use of applied case studies in real business settings. Give students the opportunity to develop their skills in the use of various IT related software packages (e. g. , SPSS and Rapid Miner) for the analysis of consumer and market research data.
Learning Objectives Upon completion, students will specifically learn how to: Define research problems and critically evaluate alternative research designs. Develop and implement a sound market research plan (including the selection of the appropriate research design, development of the data collection instrument, sampling method, collection and analysis of data, results reporting). Understand the various data analysis procedures used in international marketing research.
Course Syllabus
Course Material Assigned Readings: Students should be prepared on each reading assignment on the day it is to be discussed. Lectures: Difficult and technical areas will be reviewed in class to increase understanding. The lectures will build on literature and theories in core areas of marketing research. Applied Examples: A selection of real life examples will be discussed thoroughly in class sessions. During these sessions, students will be called upon individually to express their thoughts, analytical approaches, conclusions, recommendations, etc. through an interactive dialogue with the instructor.
Course Grading Exam = 60% The exam will be a comprehensive evaluation of the students’ understanding of the various international marketing research concepts covered in class, through their application in real case scenarios. Group Project = 40% Students will form groups of 4 -5 people and each group will be asked to carry out an actual marketing research project. All stages of the research process will be involved, from problem definition to presentation of the findings.
Other Course Aspects Textbooks Marketing Research: An International Approach (2006), Schmidt and Hollensen, Pearson Education, (S&H) International Marketing Research (2005), Craig and Douglas, John Wiley & Sons, 3 rd edition, (C&D) International Marketing Research (2004), Birgelen and Beuckelaer, European Commission, (B&B) E-class Library In class material Web sources
Contact Information If you have questions, comments, or suggestions, please feel free to write, call or send e-mail Dr. Panagiotis Repoussis, prepousi@aueb. gr or prepouss@stevens. edu, appointment after phone or email. Greece: Troias Building, Office no. 508 2108203484 and 6944794763
Introduction Globalization of markets and international marketing research
What is marketing research? The systematic and objective process of generating information for aid in making marketing decisions
What is marketing research? We can use Marketing Research to: Identify & Evaluate Opportunities Analyze Market Segments Select Target Markets Plan & Implement Marketing Mixes Analyze Marketing Performance Monitoring Research
What is market intelligence? Market intelligence (MI) is, “the process of acquiring and analyzing information in order to understand the market (existing and potential customers); to determine the current and future needs and preferences, attitudes and behavior of the market; and to assess changes in the business environment that may affect the size and nature of the market in future. ”
Spending on Market Research by Sector in the UK Non-ad. research agencies 4% 5% Ad. agencies Retailers and wholesalers Other 4% 9% 44% 13% Public sector 21% Service companies Manufacturing Companies
The Ten Most Common Market Research Activities Activity Percentage of companies doing activity* Directly relevant to NPD Determination of market characteristics 97 Measurement of market potential 97 Market share analysis 97 Sales analysis 92 Studies of business trends 91 Short range forecasting 89 Competitive product studies 87 Long range forecasting 87 Pricing studies Testing existing products * based on research activities of 599 companies in the US 83 80
A more rigorous definition Marketing research is a key element within the total field of marketing information. It links the consumer, customer and public to the marketer through information which is used to identify and define marketing opportunities and problems; to generate, refine and evaluate marketing actions; and to improve understanding of marketing as a process and of the ways in which specific marketing activities can be made more effective. ESOMAR = European Society for Opinion and Marketing Research
Potential Problems Correctly Positioning New Products In China, Pepsi. Co was initially unsuccessful in introducing its Frito-Lay brand of potato chips into the market. Sales were particularly low in summer months. Research revealed that Chinese shoppers associated fried foods with yang, believed to generate body heat in summer months (Fowler and Setoodeh, 2004). As a result, Lay’s introduced a ‘cool lemon’ variety in pastel-colored packaging to reflect yin, a cool feeling. The product subsequently became Lay’s most successful in China.
Potential Problems Avoiding Product Formulation Errors Research can also help in uncovering how to reformulate products for local palates. HJ Heinz, for instance, wanted to market its oat-based baby food in China. Research showed that the Chinese were not familiar with oats and hence it was unlikely to be a popular food for babies (Fowler and Setoodeh, 2004). On the other hand, whitebait, a tiny fish, was discovered to be a staple food for infants in China. Heinz reformulated its baby food and produced a whitebait–oats combination.
Potential Problems Sensitivity to Geographical Differences Microsoft launched Windows 95 in India with a color-coded map that did not show the disputed Jammu-Kashmir region as being part of India. As a result, Windows 95 was banned throughout India, leading to a substantial loss of sales. When Office 97 was launched, the color coding was eliminated and the company sold 100 000 copies.
Potential Problems Understanding Cultural Change Rapid changes around the world make it imperative that firms understand what consumers are thinking and how values are changing. To help its clients, Mc. Cann Erickson, the large global advertising agency, conducts marketing research in more than 40 countries simultaneously. Comparisons are made between sets of countries.
Potential Problems Identifying Appropriate Advertising Appeals The appropriateness of advertising appeals also needs to be assessed through research. An $800000 research project in Brazil helped Coke identify a motherly female kangaroo as the advertising device mostly likely to appeal to women shopping for their families. Although there are no kangaroos in Brazil, the animal tested well among Brazilian women, who said they thought it represented freedom, but at the same time responsibility and care for children.
Potential Problems Assessing Translation Errors Research can also aid in assessing the need for translation. In entering Eastern Europe, Procter & Gamble (P&G) translated its detergent labels into Polish and Czech to adapt its products to the local market. However, consumers reacted negatively, perceiving this as an effort to dupe customers by passing the company off as a local Polish firm.
Globalization An international market researcher has to deal with a number of countries that may differ considerably in a number of important ways. cultural dynamics on consumption and purchasing patterns worldwide. Globalization is a factor of growing importance. It represents the growing interdependence of national economies – involving consumers, producers, suppliers, and governments of different countries.
Globalization (cont. ) Lack of familiarity with customers, competitors and the market environment information, coupled with the growing complexity and diversity of international markets makes it increasingly critical to collect information pertaining to these markets. The speed of business, the flood of information provided by new technologies, and flatter organizational structures are driving this trend.
Information collection difficulty Collecting information about international markets is hard. While numerous sources of secondary data for international markets are readily available, issues of comparability from one country to another and reliability arise especially with regard to emerging country markets.
Information collection difficulty Primary data collection is also complex, since the research design has to be adapted to different cultural, linguistic, economic and social environments. Often, exploratory research has to be conducted in order to define the problem more clearly, to determine precisely what should be investigated, as well as by whom. Questionnaires have to be translated and the research instrument adapted to the new environment.
Market research interview Cultural differences… The way in which respondents interact with interviewers varies greatly. In some lesserdeveloped countries, there is a real desire to please the interviewer. This, along with other cultural differences, results in the variation in scaling. Differences also exist between “no answer” and “refused”.
Complexity of International Marketing Diversity of the International Environment High-income vs low income countries Level of literacy Linguistic heterogeneity Continually Changing Environment of International Markets Technology diversity and new modes of communication Innovations are now spreading horizontally across countries and societies. No sooner does a new trend or fashion emerge in one country than it spreads rapidly to another.
What information market research can provide? Information for International Market Entry Information for Local Market Planning Information for Global Rationalization
Information needed Phase 1 Deciding whether to internationalze Phase 2 Deciding which markets to enter International marketing Research Decision support system Phase 3 Deciding how to enter foreign markets (market-entry strategies) • Assessment of global market opportunities (global demand) for the firm’s products • Commitment and competences for internationalizing • Market potential in regions/countries/segments • Local competition • Competitiveness of the firms compared to local and international competitors • Nature of the product (standard versus complex) • Behaviour of potential intermediaries • Behaviour of local competition Phase 4 Designing the international marketing programme (the 4 Ps) (standardisation or adaptation) • Buyer behaviour (intermediaries and end-customers) Phase 5 Implementing, coordinating, and controlling the international marketing programme • Negotiation styles in different cultures Phases in international marketing planning Source: Hollensen: Marketing Management: A Relationship Approach , © Pearson Education Limited • Competitive practice • Available distribution channels • Media and promotional channels • Sales by product line, sales force, customer type and country/region • Contribution margins
Make or buy a market research? Some years ago, Philip Kotler observed "companies tend to spend ½% on research and 99. 5% on promotion, when they would be better off spending 1. 5 to 2% on research. “ Today's world, however, is more complex and fast moving than it used to be. All firms must use their marketing information more efficiently!
Make or buy? Advantages (pros) of outsourcing: Market research firms specialize in gathering, analyzing and reporting information. Market research companies have access to diverse professional talent that few other firms have (statisticians, psychologists, etc. ). For full-scale consumer surveys, it is unlikely that you have the personnel in-house or that you could divert sufficient staff to do the job properly.
Make or Buy? Market research outfits have specialized facilities and software, including focus group rooms with twoway mirrors and state-of-the-art taping capability, electronic interviewing and data processing capability and product test centers. Anonymity and security. Reputable market research companies never divulge the name of their client, which protects you while simultaneously increasing the validity of study findings by minimizing bias.
Make or Buy? Objectivity, especially if emotions are running high, the marketing issues have become politicized, or there is internal disagreement among different factions. Market research companies have access to a wide range of information and do business with clients in many different industries. They know where to find data.
Make or Buy? Disadvantages (cons) of outsourcing: It is unlikely that a vendor will ever understand a client's situation as well as that client's own employees do. With outsourcing, you get a broad range of experiences that are usually not available internally. With internal work, you get a deeper knowledge of your organization and its needs.
Make or Buy? Disadvantages (cons) of outsourcing: Less control over the work than you would have with your own internal staff doing the research. Vendors usually have their own way of doing things. As a result, they may be slow to adjust to your needs or preferences or procedures.
Determining whether to conduct a market research Time Constraints Availability of Data Is sufficient time available? Information already on hand inadequate? No Yes No Nature of the Decision Yes Benefits vs. Costs Is the Does the decision of Yes information Yes strategic value or tactical exceed the importance? research cost? No Do Not Conduct Marketing Research No Conduct Marketing Research
The market research process simplified Define the Problem Develop an Approach to the Problem Type of Study? Exploratory, Descriptive, Causal? Mgmt & Research Questions, Hypotheses Formulate a Research Design Methodology Questionnaire Design Fieldwork Prepare & Analyze the Data Prepare & Present the Report
Figure 2. 1 C. Samuel Craig & Susan P. Douglas, International Marketing Research, Third Edition © 2005 John Wiley & Sons, Ltd.
Information for Strategic Decisions Table 2. 1
Information for Tactical Decisions Table 2. 2
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