Marketing Research and the International Environment at Play

In this modern day and age, it is difficult to imagine that one can withstand the pressures of the workplace without having in consideration the demands of the global market arena.  Yes, it may be true that corporations, sole proprieties and the like need not be dependent on other entities, but dependency can have a different meaning when placed in the context of globalization and marketing research.  Obtaining the proper knowledge of the “domino effect” prevalent in the global environment is ammunition any marketer should be armed with to enable its business to become sustainable and competitive.  In the course of this paper, the topic of Marketing Research in the International Environment will be the main focus, while touching on the significant areas of the Value of Information and Issues in International Marketing Research that pose real challenges to the business and to the senior management.

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How the international environment affects businesses in various parts of the world can be elaborated further using the concept of the intricacies of supply and demand in economics as a metaphor. For instance, each supply is made for each demand raised.  Quantitatively, this supply-demand formula can be as simple as one is to one, or as complicated as one is to a hundred, thereby resulting to an imbalance, a lack of the other element.  Qualitatively, this can be translated to supply being not able to meet its corresponding demand, or perhaps the other way around wherein there is a surplus (Wikipedia, 2007).  Business management when performed blindly in the international scene can also lead to either dramatic or catastrophic results.  The necessity of knowledge and the ability to utilize that knowledge is imperative so that an imbalance in this supply-demand formula is avoided or if unable to do so, at least is found to be negligible.

Given the above premise, management should be able to devote a significant amount of their resources in marketing research as the need to diversify, be flexible (yet still remaining to be rock-solid amongst competitors) and to strategize accordingly are seemingly expected of a goal-oriented organization.  The scope of data mining can be as extensive as determining the factors at play such as, traditional notions of cultures, trends in lifestyle and consumption patterns, level of penetration of information technology, political and economic constraints and psyche of the target market towards the various facets of product-selling.  In this manner, the business is able to perform domestically and internationally, with strategic intent in mind.

The international environment is continually changing and is strongly becoming very competitive – a survival of the fittest game.  Because of improved technology and transportation, trade commerce has never been so full of opportunities for both consumers and sellers (Perner, Ph. D, 2007). Globalization has pushed private and public companies to become interdependent and efficient in their selling strategies.  The governments started to lay firm policies to protect the welfare of their respective constituents and also for economic growth and development.  All these factors at play are significantly of vital information to have, especially if one is in the midst of becoming internationally involved.

International Marketing stems from the simple verity and recognizing the basic truth that people across the globe have various needs, wants and desires (The Times 100, 2007).  Products sold may or may not be able to address the needs of certain markets.  On the other hand, if the product is delivered in such a way that the global audience is dealt with, then there is a take-up.  Hence, it is necessary to understand what goes beyond the boundaries of the manufacturing country.  Examples of companies who have successfully embraced the international scheme of things are Gillette, Coca-Cola, BIC, and Cadbury Schweppes (The Times 100, 2007).  Should other companies follow these market leaders, they must be able to accept the fact that Product A can only be suitable to Market A & B and not to Market C; as Market C needs a totally different product if it is really worth pursuing.  This recognition will then lead to the understanding that significant marketing research needs to be specific, measurable, accurate, reliable and timely so as to become the guiding tools of the decision-makers.  This implies the value of information in International Marketing is indeed critical to the making or breaking of the business.  According to QuickMBA Marketing, the value of information is determined by the following:

The ability and willingness to act on the information,
The accuracy of the information,
The level of indecisiveness that would exist without the information,
The amount of variation in the possible results,
The level of risk aversion,
The reaction of competitors to any decision improved by the information, and
The cost of the information in terms of time and money
With knowledge as one’s ultimate power, how is this generated systematically in International Marketing? Several levels of research should be conducted – all of which should be able to deliver Information Needs.  Information Needs are able to provide the basic information of the strengths, weaknesses, opportunities and threats of the global market to the existing or to a new product.  This initial phase of testing the waters abroad will determine the next steps for strategic planning (Craig, 2005).  The three (3) phases for Information Needs are as follows:

Phase 1 – Information for International Market Entry

For the initial phase of collecting the most vital information for management utilization, two (2) sets of information are needed to assess market entry: (1) general business environment, and (2) product market or service entry planned to be penetrated (Craig, 2005).  For (1), this talks about the governing political situation, financial stability of the country, the market infrastructure, the regulatory boards and the demographic profiles.  This will provide insight of how healthy or harmful the environment can be to the potential product for entry.  The legality of the entry is also something that should always be taken into consideration, as there is no excuse for ignorance of the law.

For (2), this tackles the forecasted sales growth and sustainability in that particular area.  What are the possible sources of expansion?  Are their direct or indirect competitors?  After which, data gathered needs to be processed and analyzed to assess country market attractiveness and determine estimates for market demand.  The level of concentration for processing this information depends upon the company as to how much time and budget is allocated for the procedure.

 

Phase 2 – Information for Local Market Planning

Research now will have to go in-depth, that is, dwell in-market.  For local market research, assessing the product for entry needs to gain sufficient data on its marketing mix applied in the context of the international environment.  First, the product:  is the existing one able to withstand the demands of the new market?  Does it need refining or localization of taste/look/feel?  Pricing:  what is the standard cost of living in that particular area, vis-à-vis the cost of production?  Are there possible resources of materials that can dilute the costs of production abroad?  What is the economic profile of the target market?  Are there substitute products that may be present should the price be not as attractive   Positioning: how will the product be sold to the market?  What socio-economic class is it targeting?  How is the packaging and the branding that it will be carrying over?  Promotion: what are the means of advertisement?  What are the direct and indirect messages of the promotional platforms?  Note that heavy consideration on prevailing culture, religion, sensitivity to issues, conservatism, consumerism patterns, and literacy should be incorporated, to name a few (Craig, 2005).

Research need not be confined in two or three methodologies.  One can be as creative enough to source these information so as to attain local market intelligence.

 

Phase 3 – Information for Global Rationalization

At this stage, data gathered should be able to provide the necessary framework in monitoring the changes in the firm’s operating environment and assess the degree of market integration and interlinkages (Craig, 2005).  Political unrest may come unexpectedly; inflation rates may jeopardize the markets; economic growth can boost or drop dramatically – the list goes on.  Systematic collection on the data gathered should translate how far the boundaries of change are the market susceptible to.  Global rationalization also pertains to the impact of the improved information technology on the effective operations of international markets.  In this manner, the company is prepared to take on systems upgrading and the likes.  Global management information systems play a crucial role in handling classified data, global strategies’ implementation and performance monitoring.

This phase also addresses the issue on global branding across common markets.  Although not strictly correct to sweep generalizations, one best practice in the other may or may not work for the other.  Global branding, therefore, needs to be carefully thought out and evaluated.

From here we can sum up that information is gathered in a purposeful way to address problems or potential concerns (FAO, 1997).  These are all intended to support the management’s decision-making processes.  They may come across questions such as, what are the potential products for overseas selling.  Will there be any adjustments that should take place in the product line, the marketing mix of the product, or even in the product packaging?  What are the corresponding costs involved for entering that particular market?  And as a business-oriented person, what are the returns on investment?  With the right information in hand, the managers or the decision-makers are pretty much in good hands.

This information is thoroughly processed in the Step-by-Step procedures in International Marketing Research, which follows:

Determining Information Requirements
–          Commercial Research

–          Academic Research

Obtaining Primary and Secondary Data
Collecting Secondary Data
Data Analysis
Adding to theory/knowledge base
However, we all know as well that ideal is ideal, and things may not happen as planned.  This is where one is tested on their ability to cope with challenges, distractions, and threats.  We will now be tackling the issues pertaining to International Marketing.

 

Complexity of Research Design

Conducting research in a single country is as tedious and complicated as it can be.  So one can imagine how complex it is definitely going to get if we are talking about several countries with varying markets and differing preferences on a single product in question (Craig, 2005).  To name a few elements of the research design that may pose certain problems across markets are: the units of analysis, varying responses of varying respondents (culture, demographics, preferences, standards of living, etc.), age brackets, gender issues, and other parameters in the research design.  The inconsistencies may affect studies quantitatively and qualitatively by leading to fluctuating graphical results or outliers increasing in number.

 

Difficulties in Establishing Levels of Comparability & Equivalence

The danger in tacitly assuming that certain concepts, terms, units of measurements, etc. to be equally and equivalently evaluated poses inaccurate data gathering (KNAW, 2007).  Even the manner of translation from one language to another and the handling of sourced primary and secondary data may have loopholes towards achieving and error-free research.  When crossing culture boundaries, the very meaning of the scale being utilized may change, and traditional quality indicators (reliability, validity) may be influenced by prevailing cultural factors.  Dealing with equivalence concerns bears risks that questionable units of measurements may render the overall research meaningless or severely diminish its usefulness (Salzberg, 1999).  Administration of equivalence issues should therefore ensure that no specific variables are present that may damage the quality of the data collected.

 

Coordination of Research and Data Collection across countries

Harmonizing the efforts conducted across countries for data consolidation is imperative to reach a high-quality marketing research.  Divisions should come to an agreement when synergizing the data gathered, most especially if third party research groups are concerned.  This is also important so as not to duplicate efforts and so minimize costs and reduce time allotted for a certain scope of research.

 

Intra-functional Research

Due to the intrafunctional characteristics of the global environment, there is also a for intrafunctional operations across countries for international operations.  Economies of scale are most of the time affected in standardizing intrafunctional operations.  This is because integration of resources is not met.  To give an example, certain markets may adapt different policies in marketing operations.  If they will be delivering a single product, but the message sent across markets does not harmonize the global branding, there is a possibility of reduced efficiency and productivity in these markets.  It is important that although they may perform according to the needs of the specific market, the system is robust and is coordinated with the rest of the departments across the globe.  Operating globally is also a costly job.  With the ability of these work units to link and integrate necessary systems, executive decisions will be in order and delivered faster and faster.

 

Economics of International Investment and Marketing Decisions

This is the most interesting part amongst all the issues concerning International Marketing Research.  This aspect dwells into the following factors:  the growth rate of the international market, the time span of global operations, forecasted meeting of targets, long-term views of market sustainability, and timing of entry, impact of globalization, environmental scenarios and political and socio-economic determinants (Craig, 2005).  These are all ingredients as to whether the product should be entered into the global scene.  Will the product last for long?  How sustainable is the target market for this particular product?  We are never one hundred percent guaranteed for a positive outcome, despite the tedious and efficient workload placed in marketing research.  Things change.  They change as rapidly as they can and they may or may not affect us at all.

How favorable the market can be despite the varying economics at play will determine the attractiveness of the product for global investments.  With the amount of work devoted to determining the product’s potential, limited resources will always need a back-up: in monetary and non-monetary terms.  Breaking-even with the costs may take some time depending on the take-up of the product upon entry.  This is one aspect, International Marketing Research continues to face.  We can only be one hundred percent ready, but never one hundred precent certain of what is going to likely happen.

International marketing research offers promising opportunities to expand knowledge about purchasing behaviors of the target market and the impact of the market environment and marketing activities towards that behavior in various contexts and cultures.  Greater attention and a certain level of resources should be allocated for the company’s research programs. The elimination of research paradigms and broadening evaluations and out-of-the-box thinking will enable the actual research materials be more comprehensive, non-discriminating and a very reliable source of information.  Information gathered provides businesses another eye or angle to look at; another perspective of things from either the suppliers or the end-user.

International marketing will always have the element of being diverse and constantly-changing, thereby an avenue for more learning, further growth and sustainable development.  Data will naturally be helpful of great magnitude to the decision-making bodies and other entities with authority in assessing the environment they are in – is still healthy? What are the patterns affecting our operations?  What characteristics of the target markets differ across cultures, etc.

Truly, it is when one tries to open himself to risks or to the world, where he is able to understand more that one entity can never run smoothly without reaching out to the world.  In other words, work and play … in both, but better to learn first the rules of the game and most especially, the players and where you are all playing – the ace under your sleeve can, at the right time, bring you a full house.

 

 

 

References

Craig, S., & Douglas, S. (2005). International marketing research. England: John Wiley

Sons, Ltd.

 

FAO Corporate Document Repository. (1997). Marketing research. Retrieved September 20,

2007, from  www.fao.org

 

KNAW, Onderzoek Informatie. (2007). Bias and equivalence in cross-cultural survey

research. Retrieved September 20, 2007, from www.niwi.knl.nl

 

Lars Perner, Ph. D. (2007). The global marketplace. Retrieved September 20, 2007, from

www.consumerpsychologist.com

 

QuickMBA. (2007). Marketing research. Retrieved September 20, 2007, from

www.quickmba.com

 

Salzberg, T. (1999). Data equivalence in cross-eultural research. Australasian Marketing

Journal. Retrieved September 20, 2007, from  www.personal.mbs.ac.uk

 

The Times 100. (2007). Marketing. Retrieved September 20, 2007, from

www.thetimes100.co.uk

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Wikipedia. (2007). Marketing. Retrieved September 20, 2007, from  www.wikipedia.org