Marketing Research Overview and Strategies

Marketing Research Overview

• Marketing research uses data to understand markets, customers, and competitors
• Essential for informed decision-making in international markets

Information is Power

• Companies collect information to understand markets and customers
• Information, especially user data, is valuable and influential

Market Research: International Markets

• International markets are complex and diverse
• Gathering information on global markets is crucial
• Research helps understand foreign market environments
• Decision-making needs differ in various markets

Market Research: Essential Elements

• Well-defined problem is essential for focused research
• Research must have a clear start, scope, and end goal
• Analysis and presentation of data support decision-making
• Research helps reduce risk for decisions

Global Marketing Decisions and Needed Information

• Planning for international expansion
• Choosing target markets
• Determining entry strategies
• Designing global marketing programs
• Managing and controlling global marketing efforts

Primary Data

• Collected firsthand through original research
• Tailored to specific, current research questions
• Advantages: Offers detailed insight, up-to-date data, and relevance
• Disadvantages: Time-consuming, expensive

Secondary Data

• Information gathered from pre-existing sources
• Useful in defining research objectives and supporting primary research
• Advantages: Accessible, inexpensive, and readily available
• Disadvantages: Often less specific and less current than primary data

Categorization of Data

• Internal data (company records)
• External data (market research reports, public databases)
• Using a combination of internal and external data is most effective

Collecting Secondary Data

• Internal data: Company marketing/sales information, sales by product and country, sales volumes, price changes, reports from sales representatives
• External data: Public libraries, university libraries, internet databases, specific data sources for potential foreign markets (proxies, chain ratio, lead-lag methods, estimation by analogy)

Secondary Data: Advantages

• Less expensive than primary data
• Less time-consuming than primary data
• Reduced need for foreign contacts
• Conducted from a home base, providing objectivity

Secondary Data: Disadvantages

• Data may lack accuracy, especially in developing countries
• Data availability or quality may be inconsistent
• Data may not be specific or current enough
• Data may be skewed by factors like politics

Collecting Secondary Data

• Provides valuable background information
• Helps eliminate less-promising markets from further investigation
• Helps to understand the potential market for products in new markets

Proxy Indicators

• Used to measure indirect variables when direct measurement is impossible
• Provide relatively inexpensive methods of evaluating market potential
• Example: Using the number of households with refrigerators to gauge economic development

Chain Ratio Method

• Arithmetic method using ratios to derive estimates for base populations
• Can yield reasonably precise estimates for potential markets
• Example: Estimating the market potential for air conditioners using variables like urbanization/population living in cities, access to power grids, percentage of the population owning homes, and affordability

Lead-Lag Analysis

• Based on time-series data from one market to predict sales in another
• Assumes rates of diffusion are similar across countries
• Useful for products introduced more recently, specifically technology-related ones

Estimation by Analogy

• Single-factor approach using correlation values from one country for a target market
• Uses a known market (e.g., UK) to estimate demand in a new market (e.g., Germany)
• Key: correlation of chosen factor with demand, must ensure similar underlying market factors between the two markets

Primary Research: Qualitative

• Focuses on understanding reasons behind market phenomena, open-ended questions, and various perspectives
• Larger number of variables, fewer respondents
• Aims to uncover underlying motivations and drivers of consumer behavior

Primary Research: Quantitative

• Utilizes well-defined questions, often in questionnaires
• Focuses on measuring and quantifying data through large samples of respondents
• Aims to assess market size and trends, and to understand consumer preferences and opinions

Primary Research: Objectives and Issues

• Defining the research problem accurately
• Establishing specific objectives for accurate measurement
• Avoiding misinterpreting symptoms as causes
• Understanding factors that affect low sales

Research Design: Primary Data Collection

• Outline the research problem
• Identifying data requirements
• Selecting research approaches
• Choosing appropriate contact methods and sampling plans
• Finalizing the method of data collection and analyzing findings

Primary Research: Problems

• Data inadequacy: Lack of demographic information
• Non-response: Respondents don't participate
• Language barriers: Difficulty in communication
• Low literacy rates: Impacts questionnaire/data reliability
• Local dialects: Potential challenges in communication

Measurement

• Proper measurement is essential for meaningful research
• Addresses methods' reliability, validity, internal, and external validity
• Enables generalization of findings to other markets or countries

Types of Market Research

• Ad hoc research: Addresses a single, specific marketing question
• Multi-client studies: Conducted by independent research firms, often involving multiple clients
• Omnibus studies: Existing surveys that include questions for multiple companies
• Continuous research: Longitudinal studies, analyzing market trends over time

Data Sources and Tools: Web 3.0

• Interactive websites and user-generated content
• Real-time data collection, geo-targeting, and analysis of trends
• Access to vast amounts of consumer information

Mobile Data

• Collection of real-time geographic information
• Ability to target customers effectively
• Understanding consumer behavior and preferences in relation to location