Chapter 8 – researching global markets

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Internationl Marketing MSQ-T/F-Essay Questions

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Chapter 8 – researching global markets

  1. 1. Chapter 8 – Researching Global Markets2. Discuss how the shift from making “market entry” decisions to “continuous operations” decisions creates need for different types of information and data. What assistance does an MMIS provide? The fundamental difference hinges on the type of information necessary for the two different decisions. Market entry decisions require information that may be, for all practical purposes, important only in the original decision to enter or not to enter a market. Those kinds of information that help the marketer make a decision on short-term as well as long-term demand for his product or the profitability of his product after entry are the types necessary to decide market entry. Once a decision to enter a market has been made and a beachhead established, then the marketer needs the constant monitoring of his relative position in the new market, as well as his market share, to continue his operations within that country. This kind of information requires a constant or continuous monitoring of one’s market position. Thus, some continuous system designed to generate, store, catalog, and analyze information from sources within the firm and external to the firm are necessary for decision making. MMIS is designed specifically to provide this kind of continuous flow of information.3. Discuss the breadth and scope of international marketing research. Why is international marketing research generally broader in scope than domestic marketing research? The information requirements of foreign market research can be divided into at least three different types. These three types are: (1) general information about the country, area, and/or market, (2) the study of specific information used to solve such problems as advertising, pricing, distribution, and product development in a marketing of specific products, and (3) forecasting future marketing requirements by anticipating social, economic and consumer trends in specific markets or countries. A researcher’s activities are frequently much broader than those of a domestic marketer and can involve all types of information essential to conducting business abroad. It would not be unusual to expect a foreign marketer to provide all the information relevant to the question of a firm entering a new market, political stability of a country, cultural attributes, geographical characteristics, and market characteristics as well as projections of potential economic growth. In addition, a foreign research department might be expected to be a source of information necessary to compensate for the possible lack of empathy within a strange environment. Research should provide assistance for adequate foreign market information. This would include foreign factors which can vary from country to country or quite frequently from area to area within a country. International marketing research is generally broader in scope than domestic marketing research because the foreign marketer must make up for a lack of knowledge which the domestic marketer has gained from years of business experience within a single market. For the foreign marketer, each market is a completely new market, and thus kinds of information which a domestic marketer would be expected to know from his general experience and from having lived within a country must be attained for every new market the foreign marketer
  2. 2. enters.4. “The measure of a competent researcher is his ability to utilize the most sophisticated and adequate techniques and methods available within the limits” (of time, cost, and the present state of the arts). Comment. The main theme of the comment on this question should center around the awareness that marketing research is not as sophisticated or as capable of providing information as most would like to believe. In each market research case, the researcher is faced oftentimes with severe limitations imposed by the foreign environment and by his lack of complete understanding of the problems imposed by the environment. In spite of these limitations, he must provide the best information possible. Limitations to research are extremely important in international marketing research since they may be greater than in domestic situations. In any case, while the limitations in foreign marketing research may be severe, the real test is the ability of the researcher to provide adequate information in spite of these limitations. An important point is that there are no special “foreign marketing research techniques” to be applied. A foreign marketing researcher must be able to apply his regular techniques as deftly as possible.5. What is the task of the international market researcher? How is it complicated by the foreign environment? The task of the international market researcher is to answer questions with current, valid information that a marketer can use to design and implement successful marketing programs. This task is complicated by the foreign environment in the case of secondary data by a lack of collected data or data which have been poorly collected and the reliability of the secondary data available. In many countries, national pride comes before statistical accuracy, and frequently secondary data are opinions rather than fact. Another difficulty with secondary data involves the comparability and currency of available data. Oftentimes, data are not comparable from period to period, nor are they current or collected on a predictable basis.6. Discuss the stages of the research process in relation to the problems encountered. Give examples. The research program should include the following steps: a. Define the research problem and establish research objectives. b. Determine the sources of information to fulfill the research objectives. c. Gather the relevant data from secondary and/or primary sources. d. Analyze, interpret, and present the results. The task of the research is to execute each of these steps with maximum objectivity and accuracy within the limits of cost and time. The major difficulty in defining the problem and establishing research objectives is translating the business problem into a research problem with a set of specific research objectives. This first stage frequently goes astray because of improper problem definition. The problem may be more acute in foreign marketing research than in domestic marketing research, since unfamiliarity with the foreign environment tends
  3. 3. to cloud problem definition, thereby complicating the process. Most difficulty arises whenthe researcher fails to anticipate the influence of the local culture upon the problem. A seconddifficulty in foreign research stems from the failure to establish sufficiently broad problemlimits, which include all the relevant variables. This problem arises mainly because of theresearcher’s failure to appreciate the kinds of information that the decision maker lacks. Indomestic marketing research, much of these kinds of information are taken as “given” andthus is not included in the typical market research project. However, foreign marketingresearch is much broader in scope; that is, it must include more information than is ordinarilyincluded in domestic research, and thus in defining the problem, the inexperienced researchermay fail to define the problem as broadly as it should be defined.The second step in the research process is to determine the sources of information to fulfillthe research objectives. The major problem here is being aware of the availability ofsecondary data and its reliability. The researcher is faced with the problem of making adecision between using secondary data, which may not be as reliable as he wishes, versuscollecting primary data. Cost is a major factor in this decision; that is, the cost of collectingthe data from primary sources versus using what may be poor or secondary data.The third step concerns the problems of gathering the relevant data from either secondaryand/or primary sources. There is a general lack in most cases of extensive secondary data asare available in the United States. For those data which are available, there are some very realproblems with their reliability. These problems are listed as: (1) the availability of detaileddata on specific areas. While broad data covering an entire country may be available, data forsubregions within the country are surprisingly unavailable. (2) The reliability of thesecondary data which are available. These data may, in some cases, be too optimistic, eitheron purpose or as a result of not being collected properly. They may tend to understateconditions because of improper collection procedures. (3) Comparability and currency of thedata which are available. Data may be many years out of date, they may have been collectedon an infrequent and unpredictable schedule, there may be no historical series with which tocompare the current information, and the data which are collected may be in categories whichare much too broad to be of specific value.The problems of gathering primary data are also important. The major problem facing theforeign market researcher in gathering primary data is one of getting the unwillingrespondent to provide current and truthful information. Cultural variations also hamper theforeign researcher in locating knowledgeable sources of information as well as influencingthe general willingness to respond. In some cultures, to discuss personal or family matters istaboo. Private matters are just not discussed with strangers. There is also the problem of taxeswhen a researcher must ask questions which may cause the respondent to feel that there issome possibility of divulging income. The respondent may be reluctant for fear that theresearcher is collecting tax information. Tax evasion is an accepted practice if it can besuccessfully accomplished. In fact, it can even be a point of pride for the more adept taxevaders. In many countries, this philosophy is not considered immoral or unethical, as itwould be in the United States. As a consequence, the art of income tax evasion may interferewith the researcher’s ability to gather information which may be remotely related to taxes.
  4. 4. Another problem is the inability of the respondent to articulate the desired response. It isdifficult for a person to clearly articulate his feelings or to provide reasonable informationabout purchase intentions, likes or dislikes, when he has little understanding of the product orhas never used the product.Another major problem in the collection of primary data is concerned with samplingprocedures. An important problem stems from the lack of adequate detail on universalcharacteristics and lists from which to draw meaningful samples. Current and reliable lists arefrequently not available. Telephone directories, census tract and block data and detailedsocial and economic characteristics of the universe are not available, if at all. Thus, samplingbecomes much more complex and frequently less reliable than if these kinds of lists wereavailable. Besides the inadequacy of details on universal characteristics, the effectiveness ofthe various methods of communication (mail, telephone, and personal interview) in surveys isalso limited. In many countries, for example, telephone ownership is extremely low, makingtelephone interviews virtually worthless. Adequate mailing lists and poor postal service alsopose problems for the market researcher who wants to use the mail to conduct research. Andlast, inadequate lists and inadequate details of the population may make personalinterviewing virtually impossible or very difficult.A final problem with sample surveying is the language. The difference in idioms and thedifficulty of exact translations create problems in obtaining the desired information and theinterpretation of the respondent’s answers. Coupled with this language difficulty is illiteracy.In many countries with low literacy rates, written questionnaires are completely useless. Theproblem of dialects in different languages can make a national questionnaire surveyimpractical. In addition, some respondents with a minimum of education may have difficultyin comprehending the meaning of questions asked. Although answers may be given, theymay not be the answers of the questions the researcher has in mind, but rather answers to therespondent’s misinterpretation.The last step in the research process is analyzing the problem and interpreting researchinformation. Once the data have been collected, the final and perhaps most critical step is theanalysis and interpretation of the findings in light of the stated marketing problem. Finalanalysis must take into consideration the limitations mentioned above, and in spite of thelimitations, produce meaningful guides for management. The meaning of words, theconsumer’s attitude toward a product, the interviewer’s attitude or the interview situation canall distort research findings. Just as culture and tradition can influence the willingness to giveinformation, it can also influence the type of information given. In foreign market research,accepting information at face value can be a dangerous practice. Newspaper circulationfigures, readership of the census studies, retail figures, and sales volume can all be distortedthrough local business practices.The market on which he is doing research. In order to analyze and in some cases tocompensate for research findings, he must determine the customs, viewpoints, semantics,current attitudes, and business customs of a society, or a subsegment of a society. Second, theresearcher must possess a creative talent in adapting research findings. Ingenuity andresourcefulness, patience and a sense of humor, and a willingness to be guided by original
  5. 5. research finding even when they conflict with popular opinion or prior assumptions are all necessary aspects in the interpretation of foreign market research. Third, the researcher should be skeptical in handling both primary and secondary data. He or she is frequently the only individual in a business firm capable of making an accurate judgment on the reliability and validity of primary and secondary data sources.7. Why is the formulation of the research problem difficult in foreign market research? The formulation of the research problem is difficult in foreign market research because of the cultural variation from country to country and because of the vast amount of information which should be known but often is not available to the decision maker. The situation is oftentimes acute in foreign market research since unfamiliarity with the foreign environment tends to cloud problem definition. In most cases, this is the result of the researcher failing to anticipate the influence of the local culture upon the problem. Other difficulties in foreign research stem from failure to establish sufficiently broad problem limits to include all the relevant variables. Such limits must include a far greater range of factors than necessary for domestic research in order to offset a totally unfamiliar background on the part of the researcher. Much of the information which a domestic market researcher has acquired through a lifetime of living in a country is not available to the foreign market researcher. Therefore, this tends to cloud or to limit his ability in defining a problem since he or she is not in a position to bring to bear all of the possible variations upon the problem formulation. As a consequence, there is a tendency not to define the problem clearly or to define the problem much too narrowly.8. Discuss the problems of gathering secondary data in foreign markets. The problems of gathering secondary data are: a. The availability of detailed data on specific market areas. There often is a lack of detailed data on such items as numbers of wholesalers, retailers, manufacturers, and facilitating services. Surprisingly, enough data on population and income are often unavailable as well. b. Reliability of the secondary data which are available. When there is an abundance of data, it must be screened carefully. The data can be overstated, understated, or riddled with holes. c. Comparability and currency of available data. In many countries, especially the lesser developed, data can be many years out of date as well as having been collected on an infrequent and unpredictable schedule. Furthermore, there are often very little historical data available with which to compare the current information. Data from a secondary source from any country, including the United States, should always be checked very carefully. As a practical matter, the following questions should be asked in order to judge the reliability of data sources: Who collected the data? Would there be any purpose for misrepresenting the facts? For what purpose were the data collected? How were they collected? Are the data generally consistent and logical in light of known data sources or market factors?9. “In many cultures, personal information is inviolably private and absolutely not to be discussed with strangers.” Discuss.
  6. 6. This, of course, is a major problem in the collection of primary data. This factor leads to some very difficult and challenging problems in the collection of primary data, and it is one of the primary reasons why respondents are unwilling to answer or participate in market research surveys. In many cultures, the housewife’s role is such that she is not available to any stranger, let alone to a stranger asking personal or private questions. In other cultures, for example, the French Canadians, people tend to be simply reticent about family affairs and do not answer questions as a result. In other cultures, the male would not under any circumstances answer questions about his personal behavior. These and other factors certainly test the creative abilities of the foreign market researcher. He must be able to get around or over these kinds of difficulties in order to get certain types of information.10. What are some of the problems created by language and the ability to comprehend in collecting primary data? How can a foreign market researcher overcome these difficulties? The problems created by language are many. The obvious, of course, is the ability of the individual to understand or the ability of the researcher to translate accurately a question into the language of the respondent. Dictionary translation is seldom adequate. The key is the ability to translate the question into the proper idiom of the respondent. A questionnaire is difficult to construct even in one’s own tongue. When one has to translate the questionnaire from his own tongue into an unfamiliar tongue, the difficulties can be great. The most important one, of course, is being certain that the question being asked is the same when translated. These problems can be overcome by the researcher by the use on nationals. A warning, however, is that one must be certain that the national does understand the language of the researcher and can translate it correctly.11. Discuss how “decentering” is used to get an accurate translation of a questionnaire. A hybrid of back translation, is called “decentering.” A successive iteration process of translation and retranslation of a questionnaire, each time by a different translator. The two English versions are compared and where there are differences, the original English version is modified and the process is repeated. If there are differences between the two English versions, the original English version of the second iteration is modified and the process of translation and back translation is repeated. The process continues to be repeated until an English version can be translated into French and back translated, by a different translator, into the same English. In this process, wording of the original instrument undergoes a change and the version that is finally used and “its translation have equally comprehensive and equivalent terminologies in both languages.”12. Discuss when qualitative research may be more effective than quantitative e research. Qualitative research is more effective than quantitative research when: 1) the researcher seeks open-ended, in-depth and unstructured responses that reflect the person’s thoughts and feelings on a subject. Qualitative research interprets what the “ . . . people in the sample are like, their outlooks, their feelings, the dynamic interplay of their feelings and ideas, their attitudes and opinions, and their resulting actions,” 2) the researcher wants to formulate and define a problem more clearly and to determine relevant questions to be examine in
  7. 7. subsequent research. It can also be used where interest is centered on gaining anunderstanding of a market, rather than quantifying relevant aspects; 3) the researcher seeks anunderstanding of the impact of sociocultural factors on behavior patterns and wants todevelop research hypothesis that can be tested in subsequent studies designed to quantify theconcepts and relevant relationships uncovered in qualitative data collection. Researchconducted by Procter & Gamble in Egypt is an example of how qualitative research leads tospecific points that can be measured by using survey or quantitative research; and, 4) therespondent has no immediate experience with the product or concept under study and a smallsample of carefully selected consumers is sufficient. For example, it is often difficult forrespondents to know whether a product, flavor, concept or some other new idea is appealingif they have no experience with the issue being studied. To simply ask in a direct way mayresult in no response or worse, a response that does not reflect how respondents would reactif they had more experience.
  8. 8. 13. Sampling offers some major problems in market research. Discuss. There are several difficulties encountered in the process of taking samples and conducting field surveys. The greatest problem stems from the lack of adequate detail of universal characteristics and lists from which to draw meaningful samples. If current and reliable lists are not available, sampling becomes much more complex and generally less reliable. In many countries, telephone directories, cross-ndex street directories, census tract and block data, and detailed social and economic characteristics of the universe are not available on a current basis, if at all. The researcher then has to estimate characteristics and population parameters, sometimes with little basic data on which to build an accurate estimate. To add to the confusion, in some cities in South America, Mexico, and Asia, street maps are unavailable; and in some large metropolitan areas of the Near East and Asia, streets are not identified and houses are not numbered. A lack of detailed social and economic information also can hamper the effectiveness of sampling techniques. Without an age breakdown of the universe, for example, the researcher can never be certain he or she has a representative sample on an age criterion since there is no basis or comparison with the age breakdown in the sample. Although a lack of detailed information does not prevent the use of sampling in obtaining reliable market information, it does make it more difficult. In place of the probability techniques, many researchers who have found themselves faced with such situations have had to rely upon conveniences, samples in marketplaces and other public gathering places. Besides the inadequacy of details on universal characteristics, the effectiveness of the various methods of communications (mail, telephone, and personal interview) in surveys is also limited. In many countries, for example, telephone ownership is extremely low, making telephone surveys virtually worthless unless the survey is intended to cover only the wealthy. In addition to potentially poor service within countries, there is also the major problem of the time required for delivery and returns when a mail survey is to be conducted from another country. Surface delivery can require three weeks or longer between some points on the globe, and although airmail reduces this time drastically, it also increases costs considerably. Although adequate lists and adequate detail on the population may be critically short in some countries, this is not universally true. In those countries where every adult is required to register with various government agencies, there are extremely adequate lists of people, along with ample socio-economic detail. In many European countries, as well as in Japan, voter lists, police registration lists, and tax records are available to researchers. In those areas where there is a paucity of adequate lists, other research tools must be relied upon. Mainly the various convenience sample methods are used.14. Select a country. From secondary sources compile the following information for at least a 10-year period prior to the present data. Principal imports Principal exports Gross national product
  9. 9. Chief of stateMajor cities and populationPrincipal agricultural cropLibrary Project.
  10. 10. 15. “The foreign market researcher must possess three essential capabilities in order to generate meaningful marketing information.” Discuss. The foreign market researcher must possess three essential capabilities in order to generate meaningful marketing information. First, he must possess a high degree of cultural understanding of the market on which he is doing research. In order to analyze, and in some cases, to compensate for research findings, he must understand the customs, viewpoint, semantics, current attitudes, and business customs of a society or a subsegment of a society. Second, the researcher must possess a creative talent in adapting research findings. Unfortunately, the researcher in foreign markets often finds himself “flying by the seat of his pants,” and he or she is sometimes called upon to produce results under the most difficult of circumstances. Third, the researcher should be skeptical in handling both primary and secondary data. He might find it necessary to have a newspaper press run checks over a period of time to get accurate circulation figures, or he or she might find it necessary to deflate or inflate reported consumer income in some areas by 25 to 50 percent on the basis of observable socioeconomic characteristics. Frequently, he is the only individual in a business firm capable of making an accurate judgment on the reliability and validity of primary and secondary data sources. These essential capabilities suggest that the foreign market researcher should be either a foreign national or should be advised by someone who can accurately appraise the data collected in light of the local environment, thereby helping to validate secondary as well as primary data.

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