International Marketing Week 3 Winter 2024 PDF
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2024
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Summary
This PowerPoint presentation covers various aspects of marketing research, including primary and secondary data collection methods, and different analysis techniques. It details the use of various proxies (like ownership of household appliances) to derive information about a country's market potential. It also discusses different types of market research, such as ad-hoc and continuous studies. This presentation is likely part of a university-level course on international marketing.
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Marketing Research Why does every company use cookies? Why does every app want access to all of your information? Why must you agree to let companies have your information before you do anything on their website? Information is powerful! Market Research International markets are...
Marketing Research Why does every company use cookies? Why does every app want access to all of your information? Why must you agree to let companies have your information before you do anything on their website? Information is powerful! Market Research International markets are both complex and diverse Collecting information on current or potential markets Facilitates familiarity with customers and competitors Helps understand the market environment in your own and other countries International market research is a bit different Need to prioritize which countries to research Allocation of resources between countries Market Research Gathering, analysing and presenting information related to a well- defined problem Must be focused on Specific problem Project with a beginning and an end Research is only information It aids the decision maker, it doesn’t make the decision Reduces the risk of the decisions Focuses strategic thinking on the needs of the marketplace Information for the major global marketing decisions Market Research Primary Data Information collected first-hand Generated by original research Customized to address specific current research questions Advantages Information is specific (fine-grained) Relevant Up to date Disadvantages of primary data High costs Amount of time associated with its collection Market Research Secondary Data Information that has already been collected for other purposes Often referred to as desk research Helps to define problems and research objectives Makes primary research more effective Advantage Is readily available Less time needed to collect information Low-cost Disadvantage Data is often more general and coarse-grained in nature Secondary Data Conducted from home base Less expensive Less time-consuming No contacts are necessary outside of the home country Since research about foreign markets is conducted from home country Possibly more objective No need to conform to foreign customs Quickly generates background information Helps eliminate many countries from the scope of the research Secondary Data Disadvantages Non-availability of data Developing countries have poor statistical services Problems with or lack of population census Difficulty finding accurate (or any) retail or wholesale trade Reliability of data Political players may skew data Governments looking to entice investors Always ask: Who collected the data? For what purpose? How was the data collected? Is the information consistent and logical compared to what we know or what the market says? Comparability of Data Different nations may define phenomena differently “Supermarket” doesn’t mean the same thing in Japan and the UK Japanese supermarkets are much larger and have sporting goods, restaurant, furniture UK calls this a superstore Collecting Secondary Data Internal data is a wonderful source of information Marketing and Sales departments usually are the main sources Total sales Sales by country Measures competence of export manager as well as degree of market penetration Sales by products Sales volume by market segment Help forecast trends in the segment (growing, static, declining) Sales volume by type of channel distribution Online, offline, B2B, Direct selling, etc. Pricing information How have price changes affected demand Sales representatives’ records and reports Reports explain orders lost to competitors and why Future purchasing decisions by firms Reports can affect the marketing strategy Collecting Secondary Data External Data Public libraries University libraries Internet databases These sources can be used to do research on the market and your competitors Secondary Data can be used to estimate the size of potential foreign markets Proxy indicators Chain ratio method Lead-lag analysis Estimation by analogy Proxy Indicators When you can’t measure something directly, use indirect variables Example: If you want to measure the economic development of a country Look at the ownership of large household appliances i.e., washing machines Refrigerators (or any large household appliance) can be a proxy for washing machines If you want to measure the level of interest or tendency for buying IT products Look at the number of households connected to the internet Although relatively inexpensive and convenient to implement, may have validity problems Chain ratio method Arithmetic technique - ratios are used to reduce a base population Used to derive realistic demand Can provide reasonably precise estimates If the ratios are logical and make practical sense Example: market potential for household air conditioners in a country Depends on Rate of urbanization (percentage of people living in cities) Total number of households Percentage of population having access to electricity Percentage of population who can afford the product Multiply the metrics to get a rough estimate for the potential air conditioner market in a country Thailand has 21 million households, 85 per cent of these households have electricity and 60 per cent have a running water supply Multiply the variables 21 * 0.85 * 0.60 The total market potential is 10.7 million Lead-Lag Analysis Based on time-series data from one country to predict sales in another country Assumes determinants of demand are the same Requires that the rate of diffusion is the same in all countries Products introduced more recently (especially technology-related) diffuse more quickly Problems with Lead-lag Analysis Identifying the appropriate time-lag Identifying the range of factors that impact future demand Has “intuitive” appeal for managers Lead-lag Analysis Example: By the end of 2018, it was assumed that 60 per cent of the 125 million US TV households would have access to Video-on-demand (VOD) It was assumed that ‘only’ 25 per cent of Italian households would have access to VOD We define the time-lag between the American and the Italian VOD market as two years If we were to estimate the future penetration of VOD in Italian households (and as a consequence also demand), we could make a parallel displacement of the S-formed US penetration curve by two years Estimation by Analogy Single-factor index with a correlation value* from one country applied to a target foreign country *between a factor and demand for a product 1. Establish a relationship (correlation) between the demand to be estimated and the factor which is to serve as the basis for the analogy 2. Use the correlation value to attempt to draw an analogy between the known situation and the market demand in question Example: estimate the market demand for refrigerators in Germany Known – market size in UK; Unknown – market size in Germany Since nearly all households have a refrigerator, # of households or population size could be a good correlation (we will use population size) Population size (2018): UK = 66 million; Germany = 83 million Number of refrigerator units sold in UK (2018) = 1.2 million units (83/66) x 1.2 million units = 1.5 million units Caution! Analogy assumes other factors (besides the correlation factor) are similar in both countries the same culture, buying power of consumers, tastes, taxes, prices, selling methods, availability of products, consumption patterns, etc. Primary Research Qualitative Large number of variables Fewer respondents Tries to explain why something is happening Quantitative Well-defined questions, usually questionnaire Large number of respondents Explains what is happening Primary Research Primary research process should begin with a definition of the research problem Every research project must have specific objectives Possible difficulty Translating the business problem into a research problem Your company may only have a vague grasp of the actual problem Don’t mistake symptoms for causes Why are sales low? Low brand awareness Consumer apathy Quality issues Changes in competitor behavior Changes in the market Research Objectives May include obtaining detailed information for: Better penetrating the market Designing and fine-tuning the marketing mix Monitoring the political climate of a country So the firm can expand its operations successfully The better defined the research objective is, the better the researcher will be able to determine the information requirement Primary Data Collection: Research Design Problems with Primary Research Lack of adequate demographic data Non-response Respondents aren’t home or refuse to answer Language barriers Translation errors Low literacy rates Local dialects Measurement Market research is useless without proper measurement Reliability and validity of the measurement method are essential Construct validity Is the method actually measuring what it’s supposed to? Internal validity Is there a causal relationship? When X exists, Y occurs. External validity Can these results be generalized to other markets/countries? High external validity = results for country A will also apply to country B or C Types of Market Research Ad hoc research focuses on a specific marketing problem and collects data at one point in time from one sample of respondents Multi-client studies Independent research studies Carried out by independent research companies Ipsos, Oriens Czech Republic s.r.o., marketingintelligence.io Omnibus studies A research agency will target specified segments in a particular foreign market and companies will buy questions in the survey Continuous research (longitudinal designs) Similar to Ad hoc research but provides a series of pictures that give an in-depth view of developments taking place More examples available in Chapter 5 of the book Data sources and tools – Web 3.0 Web 1.0 – read only websites, no real interactivity Web 2.0 – Interactive, socially connected, user- generated content Web 3.0 Interactive web with some AI integration language processing Image recognition More decentralized content Mobile data Allows geo-targeting Web 3.0 Mobile Data Allows for the collection of real-time geographic information Geo-targeting Reach your customers at the right time and the right place Coca-Cola – optimized their supply chain for popular vending machines Domino’s Pizza – sent messages to customers when there was bad weather Hyundai – sent offers to customers who were visiting competitor’s stores User-Generated Content Web 3.0 is a gathering place for internet users Social media, blogs, forums Huge amounts of textual data is gathered Text-mining tools allow marketers to “listen” to consumers Allows firms to better understand consumer opinions, competitive environment, market structure Web 3.0 Web browsing Analysis of clickstream data (click by click web page viewing) Advances in technology now allow companies to collect, store and analyze the huge amounts of data sets Social networks and online communities Fastest growing sources of information Networking element enables quick questionnaire survey distribution Brand communities open a direct line of communication with consumers Harley-Davidson, Nike, Proctor & Gamble, Lego Google Analytics “Freemium” service Lets you measure and analyze data about the traffic on your website