Chapter 6 Global Information Systems and Market Research Thiago Barbosa Jorge Padilla Global Market Research • Market Research: Project specific, systematic gathering of data in the search scanning mode • Global Market research: carried out on a global scale. The challenge is to recognize and respond to the important national differences that influence the way information can be obtained. It includes: - Cultural, linguistic, economic, political, religious, historical and market differences • Same interest (Global and domestic) • However, some factors are required for Global Market research for succeed Environmental factors that differ from International to Domestic 1. 2. 3. 4. Researches must be prepared for new parameters of business “Cultural Megashock” may occur Burgeoning network of interacting factors Competitive pressure Subject Agenda Categories For a Global Marketing Information System Category Coverage Market Potential Demand estimates, consumer behavior, review of products, channels, communication media Competitor Information Corporate, business, and functional strategies. Resources and intentions. Capabilities Foreign Exchange Balance of payments, interest rates, attractiveness of country currency, expectations of analysts Prescriptive Information Laws, regulations, rulings concerning taxes, earnings, dividends in both host and home countries Resource Information Availability of human, financial, physical, and information resources General Conditions Overall review of sociocultural, political, technological enviroments Global Market research • Expenditures on global market research totaled $16.6 billion in 2002 • Two ways to conduct market research: 1. Design and implement a study with in-house staff 2. Use an outside firm specializing in Marketing research • For global market research, both are advised Headquarter’s Control of Marketing Research • Where to locate control of the organization’s research capability • Multinational: Polycentric. Research delegated to the operating subsidiary. • Global: Geocentric. Research delegated to subsidiary, but retains overall responsibility and control of it. Comparability • Key difference between single country market research and global market research • Means that results can be used to make valid comparisons between countries covered in the research • Emic analysis: study a culture from within, using its own system of meanings and values • Etic analysis: a more detailed perspective that is often used in comparative or multicountry studies World wide research program Research Objective Country Cluster A Country Cluster B Identify Market potential Country Cluster C X Appraise Competitive intentions Evaluate Product Appeal X Study Market Response to Price X Appraise Distribution Channels X X X X X X X Step 1: Identify Information Requirement • A problem or opportunity is presented – A well defined problem is a problem half solved • Product introduction to foreign country • Two key questions: – What information do I need? – Why do I need this information? Step 2: Problem Definition • Self-Reference Criterion (SRC) – This happens when a person’s values and beliefs intrude on the assessment of a foreign culture or country • Disneyland Paris – Awareness of SRC • Increase willingness to conduct research • Minimize home-country bias in research efforts • Enhance receptiveness to accepting research findings Step 3: Choose Unit of Analysis • Identify which parts of the world the company should do research and learn how to do business – A city such as Shanghai – A country such as India – A region such as Europe Step 4: Examine Data Availability “The key to creating a cost-effective way of surveying foreign markets is to climb on the shoulders of those who have gone before” • Secondary Sources - Useful to look for growth patterns, consumption patterns, production patterns, which are helpful in assessing market opportunities • Census Data, Trade facts, World Factbook, etc • Publications such as Financial Times, The Economist, etc - Syndicated Studies • Studies published by private research companies. - MarketResearch.com Step 5: Assess Value of Research • Collecting information costs money and time • Determine the value of research information for the company – Perform a cost-benefit analysis • If benefits greater than costs the research should be performed • Global Researcher must know how to keep expenditures in line with market’s profit potential Step 6: Research Design • Primary Data is gathered through original research related to the particular problem identified – Use multiple indicators and techniques rather than a single measure – Individual companies should develop customized specific indicators for industry, product market, or business model – Conduct comparative assessment in multiple markets – Observation should be more important than other measures Step 6: Research Design • Issues with Research Methodologies – Survey: • • • • Telephone directories not available Unwillingness to answer certain questions Back translation, Parallel Translation SRC bias – Personal Interview: • Telephones not available • Unwillingness to answer certain questions – Observation • Reactivity • SRC bias Step 6: Research Design • Existing Markets – Customer needs are already being served by other companies. – Company should assess overall competitiveness in terms of product appeal, price, distribution, and promotion • Potential Markets – Latent Markets: these are undiscovered segments of one market. Demand would materialize if an appropriate product were made available – Incipient Markets: these are markets that will emerge if a particular economic, demographic, political, or sociocultural trend continues Step 6: Research Design • Scale Development – Market research requires assigning some type of measure, ranking, or interval response. • Scalar equivalence: scale measurement has to be consistent with the country doing research in • Two respondents in different countries with the same value for a given variable must receive equivalent scores on the same survey item Step 7: Analyzing Data • Data must is analyzed to become useful information for decision makers – Data is prepared, stored, tabulated, etc • Interdependence Techniques – They analyze interaction between variables – Factor Analysis: Subjects are asked to rate product benefits – Cluster Analysis: Analyze within-group similarities and between-group differences – Multidimensional Scaling (MDS): It’s used for creation of conceptual maps by comparing pair of products Step 7: Analyzing Data • Dependence Techniques – Assess the interdependence of two or more dependent variables with one or more independent variable – Cojoint Analysis: It’s used to gain insights into the features or utilities most attractive to consumers • Market Estimation by Analogy – It could be possible to estimate market size or potential demand of one country by analogy with other countries • Polaroid Market Step 8: Presenting Findings • The report should be clearly stated and provide basis for managerial action • The conclusions must relate clearly to the problem or opportunity identified at the beginning of research Any Questions?