Pe s e w a Pr e s e n t a t i o n s
International Marketing – Building a
Knowledge Base
The Importance of the Knowledge Base
• Key condition for international marketing
success
• Companies need to accumulate data and
information through research
• Primary and secondary research
• It should have a business purpose
Defining Marketing Research
• “Systematic and objective identification, collection, analysis and dissemination
of data for the purpose of improving decision making related to the
identification and solutions of problems and opportunities in marketing.”
AMA
• Marketing research is the systematic search for, and analysis of, information
relevant to the identification and solution of problems relevant to the firm in
marketing decisions and activities.
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Functions: description and explanation, prediction, evaluation.
To provide information for planning, control and evaluation.
Information from both present and potential customers is of particular
importance. Customer satisfaction measurement.
International Market Research
• The tools may be the same but the environment
differs. Although the objectives can be the same, the
execution of the research may differ as a process.
• New parameters
• New environments
• Number of factors involved
• Broader definition of competition
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Research Problems
Language
Lack of published market information
Time factor
Lack of international standardisation and so
statistical bases.
• Governments compile statistics for their own
use.
• Beware local market distortion factors
Comparability of National Statistics?
• Very little! Government is the largest single
source of statistical information, compiled for
its own purposes.
• Harmonisation is taking place across nations.
Identifying Messages
• Can we find out hidden information in
officially published statistical data?
• How can such analysis and derived
information help marketing decision makers?
Decision Making for Foreign Markets
• More expensive, more variables involved, special
legal, financial and area skills required
• Less likely to arise from company market survey,
more likely to result from external pressures on the
firm
• More likely to be result of selective analysis of
market opportunities rather than universal and
comparative analysis
Steps in Secondary Data Research Process
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Understand the need for information
Determine research objectives
Identify sources of data
Evaluate data source, quality and
compatibility
• Obtain data
• Interpret and analyse data
• Present research results
Sequential Process of Researching
Foreign Markets
• Stage 1: Preliminary screening for attractive country markets – so,
which foreign markets warrant detailed investigation?
• Stage 2: Assessment of industry market potential - so, what is the
aggregate demand in each of the selected markets?
• Stage 3: Company sales potential analysis – so, how attractive is
the potential demand for company products and services?
S.Tamer Cavusgil
Research Plan
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Background information
Analysis of supply
Demand and end-use analysis
Demand forecasts
Information on prices
Market access
Trading practices
Sales promotion
Documentation
Evaluating Data Source and Quality
• Source Quality
• Data Compatibility
• Data Quality
• Comparability of data from different countries
often a problem: different definitions, different
methods of data collection, different views and
uses of products.
Most Critical Information
• Macro Data
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Tariff information
Import/export information
Non-tariff measures
Foreign export/import data
Data on government trade policy
• Micro data
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Local laws and regulations
Size of market
Local standards & specifications
Distribution system
Competitive activity
Market segmentation
• A breakdown into segments of customers for particular products in particular
countries.
• Need to consider countries, channels, customer segments, etc.
• Bases of segmentation
– General market indicators; specific product indicators
– Several models available as guides to market segmentation, no one model is a
complete guide.
• psychographic segmentation.
• segmentation by core values for certain products.
• Strategies available to increase sales, include (Asoff’s product/market
matrix):
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(a) increase penetration: extra market share in existing markets
(b) develop products: product innovation
(c) extend markets: new users for existing basic offerings
(d) widen activities: new products and markets around core activities.
toand
Know
Behaviour,Need
attitudes
needs of
– Consumers
– Intermediaries
– Competitors
and response of consumers and intermediaries
to these activities
Where Data is Lacking…
• Market Quality Index calculated by averaging
the percentage figures over eight variables
(apart from population)
– First 4 reflect economic development
– Next 4 reflect quality of life
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Market Quality Index and
Market
Potential
Population
Income per capita
Employment in manufacturing????
Steel consumption
Kilowatt hours produced
Motor vehicle registration
Telephones in use
Radio licences
Television licences
Foreign Market Entry
Decision Criteria
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Speed of market entry desired
Costs (direct and indirect)
Flexibility
Risk
Investment payback period
Long term profit objectives
Operating Risk Reduction Mechanisms
• Production & Logistics
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Stimulation of local suppliers.
Specialisation of production.
Multiple sourcing of production.
Location of facilities e.g. refineries.
Control of transportation.
Control of patents and know-how.
• Marketing
– Marketing control.
– Brand name & trademark control.
Operating Risk Reduction Mechanisms
• Financial
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Maximising local debt finance
Localising capital structure.
Utilising contractual protection devices.
Internal money management practices.
• Organisation
– Joint ventures.
– Multiple nationality.
– Management contracts.
Operating Risk Reduction Mechanisms
• Political
– Gain home country political support.
– Political patronage.
– Active external relation strategy.
– Bribery & illicit methods.