International Marketing

1. International Marketing International Marketing Research Dr. Bikramjit Rishi

2. Defining the Issue • What is marketing research? • Traditional view • “the function that links the consumer, customer, and public to the marketer through information.” • Redefined view • “systematic and objective identification of information, collection, analysis and dissemination of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in marketing.”

3. International versus Domestic Research • Similar but different • International research involves the use of similar tools and techniques as in domestic research, but the market environments differ. • The primary differences • New parameters • New environments • Number of factors involved • Broader definition of competition

4. The Need for Research • Reasons that firms may be reluctant to view international research as important: • Lack of sensitivity to differences in consumer tastes and preferences. • Limited appreciation for the different marketing environments abroad. • Lack of familiarity with national and international data sources and the inability to use them. • Actual but limited business experience in a country or with a specific firm may be used as a substitute for organized research.

5. Research Objectives • Research objectives vary from firm to firm because of the views of management, the corporate mission, and the marketing situation. • Information needs are linked closely to the level of international expertise in the firm.

6. Opportunity Analysis • Foreign-market opportunity analysis • Broad-brush approach to narrow down market possibilities. • Cursory analysis of general market variables- total and per capita GDP, mortality rates, and population data. • Individual market data, product data,market trends, and restrictions. • Consideration of governmental restrictions.

7. International MR Perspective

8. INTERNATIONAL MARKETING RESEARCH PROCESS Define the problem and research objectives Developing the research plan Collect the information Analyze the information Present the findings

9. DEVELOPING THE RESEARCH PLAN Calls for decisions on : • Type of Research Design (Exploratory or Descriptive) and Research Approach (which specific method) • Data Required (Primary data and Secondary Data) • Data Sources ? • Data Collection Methods– Observation, Survey Experimentation (Contd.)

10. Research • Primary research • Conducted to fill specific information needs. • Essential to strategic marketing plan formation. • Useful in international market segmentation. • Determining information requirements • Formulate research questions to determine precisely the information that is sought.

11. Secondary Data Sources • Governments • International organizations • Service organizations • Directories and Newsletters • Electronic Information Services • Other firms

12. Research Techniques • Interviews • Knowledge persons are a valuable information resource (personal bias must be discounted). • Goal, obtain in-depth information instead of a wide variety of information. • Focus groups • Interaction within a group about a specific topic. • Ideal size, 7-10. • Observation • Observation results can be influenced by presence of the observer. • Surveys • Gather quantitative rather than qualitative information through personal or remote contact with the subject population.

13. Designing the Survey Questionnaire • Question format • Structured or unstructured. • Direct or indirect. • Ensure data equivalence. • Question content • Consider interviewee’s ability and willingness to answer. • Adapt questions to societal constraints. • Question wording • Use simple unambiguous words, terms and questions. • Check for errors using translation-re-translation approach and alternative wording for questions. • Pretest the survey.

14. DEVELOPING THE RESEARCH PLAN Specific Research Instruments – Observation Method – Camera, Voice recorder, Tally sheets Survey Method - Questionnaire (Structured/Unstructured) (Disguised/Non-disguised) (Open ended/Closed ended) Experimentation - Lab/Field (Mechanical Instruments)

15. DEVELOPING THE RESEARCH PLAN • Sampling Plan Sampling Unit (Who is to survey…?) Sampling Size (How many to survey…?) Sampling Procedure (How to select…?) Probability or Non-probability Method (which specific method …?) Sampling Media (How to reach to your respondents…?) Telephone/Mail/Personally

16. Likert Scale The Likert scale requires the respondents to indicate a degree of agreement or disagreement with each of a series of statements about the stimulus objects. Strongly Disagree Neither Agree Strongly disagree agree nor agree disagree 1. Sears sells high quality merchandise. 1 2 3 4 5 2. Sears has poor in-store service. 1 2 3 4 5 3. I like to shop at Sears. 1 2 3 4 5 • The analysis can be conducted on an item-by-item basis (profile analysis), or a total (summated) score can be calculated. • When arriving at a total score, the categories assigned to the negative statements by the respondents should be scored by reversing the scale.

17. Semantic Differential Scale The semantic differential is a seven-point rating scale with end points associated with bipolar labels that have semantic meaning. SEARS IS: Powerful --:--:--:--:-X-:--:--: Weak Unreliable --:--:--:--:--:-X-:--: Reliable Modern --:--:--:--:--:--:-X-: Old-fashioned • The negative adjective or phrase sometimes appears at the left side of the scale and sometimes at the right. • This controls the tendency of some respondents, particularly those with very positive or very negative attitudes, to mark the right- or left-hand sides without reading the labels. • Individual items on a semantic differential scale may be scored on either a -3 to +3 or a 1 to 7 scale.

18. A Semantic Differential Scale for Measuring Self- Concepts, Person Concepts, and Product Concepts 1) Rugged :---:---:---:---:---:---:---: Delicate 2) Excitable :---:---:---:---:---:---:---: Calm 3) Uncomfortable :---:---:---:---:---:---:---: Comfortable 4) Dominating :---:---:---:---:---:---:---: Submissive 5) Thrifty :---:---:---:---:---:---:---: Indulgent 6) Pleasant :---:---:---:---:---:---:---: Unpleasant 7) Contemporary :---:---:---:---:---:---:---: Obsolete 8) Organized :---:---:---:---:---:---:---: Unorganized 9) Rational :---:---:---:---:---:---:---: Emotional 10) Youthful :---:---:---:---:---:---:---: Mature 11) Formal :---:---:---:---:---:---:---: Informal 12) Orthodox :---:---:---:---:---:---:---: Liberal 13) Complex :---:---:---:---:---:---:---: Simple 14) Colorless :---:---:---:---:---:---:---: Colorful 15) Modest :---:---:---:---:---:---:---: Vain

19. FACTORS • EXAMPLES • Differences in language and meaning • Words or concepts may not mean the same in two different countries. • Differences in market segmentation opportunities • The income, social class, age, and sex of target customers may differ dramatically in two different countries. • Differences in consumption patterns • Two countries may differ substantially in the level of consumption or use of products or services. Table: Basic Research Issues in Cross-Cultural Analysis • Differences in the perceived benefits of products and services • Two nations may use or consume the same product in very different ways.

20. Table: continued • FACTORS • EXAMPLES • Differences in the criteria for evaluating products and services • The benefits sought from a service may differ from country to country. • Differences in economic and social conditions and family structure • The “style” of family decision making may vary significantly from country to country. • Differences in marketing research and conditions • The types and quality of retail outlets and direct-mail lists may vary greatly among countries. • Differences in marketing research possibilities • The availability of professional consumer researchers may vary considerably from country to country.

21. Product Adaptation

22. Product Variables • The Core Product • a product or services that is essentially the same as that of competitors. • The Tangible Product • a product or service that is differentiated composition, origin, or tangible features from competing products. • The Augmented Product • a product or service which is serviced after the sale and carries a warrantee from the producer, producing a continuing relationship with the seller.

23. Standardization versus Adaptation • The fundamental international product decision after the decision to internationalize. • International market approach alternatives to adaptation. • Sell the product as it is internationally. • Modify product for different countries or regions. • Design new products for foreign markets. • Incorporate all differences into one product and introduce it globally.

24. FACTORS ENCOURAGING STANDARDIZATION Economies of scale in production Economies in product R&D Economies in marketing “Shrinking” of the world marketplace/economic integration Global competitions FACTORS ENCOURAGING ADAPTATION Differing use conditions Government and regulatory influences Differing consumer behavior patterns Local competition True to the marketing concept Standardization versus Adaptation

25. Strategic Adaptation to Foreign Markets High Need for Adaptation Degree of Cultural Grounding Low Industrial/ Technology Intensive Consumer Nature of Product Source: Adapted from W. Chan Kim and R. A. Mauborgne, “Cross-Cultural Strategies,” Journal of Business Strategy 7 (Spring 1987): 31; and John A. Quelch and Edward J. Hoff, “Customizing Global Marketing,” Harvard Business Review 64 (May-June 1986): 92-101.

26. Factors Affecting Adaptation Decision to Alter Domestic Product SOURCE: Adapted from V.Yorio, Adapting Products for Export (New York; Conference Board, 1983), 7. Reprinted with permission

27. The Market Environment • Government Regulations • Political and social agendas often dictate regulatory requirements. • Nontariff Barriers • Product standards, testing, subsidized local products. • Customer Characteristics, Expectations, and Preferences • Physical size, local behaviors, tastes, attitudes, and traditions. • Consumption patterns, psychosocial characteristics, and general cultural criteria.

28. The Market Environment • Economic Development • The stage of economic development affects the market size and demand characteristics. Backward innovation of the product may be required to meet local requirements. • Competitive offerings • Monitoring competing local products is critical in adjusting the product for competitive advantage. • Climate and geography • Local climatic conditions and terrain features can make products vulnerable to damage.

29. Product Characteristics • Product Constituents • Branding • Packaging • Appearance • Method of Operation or Usage • Quality • Service • Country-of-Origin Effects

30. Product Constituents and Branding • Product ingredients must not violate local legal regulations and social or religious customs. • Care must be taken that the brand in name, symbol, sign, or design does not offend the local customer. Trademarks are especially vulnerable to counterfeiters. • Selecting the global brand name • Translation • Transliteration • Transparency • Transculture

31. Packaging and Appearance • Packaging serves three major functions: • Protection • Improper handling and pilferage • Promotion • Language and symbols • User convenience • Packaging aesthetics- color and shape, overall size, and purchase quantity • Adaptations in styling, color, size, and other appearance features play an importance role in how a consumer perceives a product.

32. Method of Operation or Usage • The product that is operable in in the domestic market may not be operable in the foreign market. • Electrical voltages and connectors vary around the world. English and metric standards are not comparable. • Software may have to be translated into the local language.

33. Quality and Service • Quality is essential to marketing products internationally, especially in markets where price is an important competitive factor. • ISO compliance may be required by buyers. • Servicing products in international markets requires producers to develop local repair staffs.

34. Swiss “Mad Cow” Country-of-Origin Effects • The origin of a product may have a strong effect on consumer perceptions and biases about foreign products. France

35. Company Considerations • Organizational capabilities? • Is it worth it? • Can we afford not to do it? • Can a specific return-on-investment (ROI) be attained? • Quality, price, and user perceptions? • Warranties? • Managerial talent?

36. Product Counterfeiting • Costs U.S. firms over $60 billion a year • In 2001, losses to software piracy were more than 11 billion dollars. • Counterfeiting is estimated at 2% to 5% of total world trade annually. • The largest number of counterfeit goods come from: • China • Brazil • Taiwan • Korea • India

37. Product Counterfeiting FIGHTING PRODUCT COUNTERFEITING • Secure valuable intellectual property rights • patent applications • registration of trademarks • mask works • Act to enforce • legislative action • bilateral and multilateral negotiations • joint private sector action • individual company measures