L6: Global Marketing Research and Decision Making

MK328 Strategic Marketing in an International Context

Lecture 6: Global Marketing Research and Decision Making

• Overview of Lecture 6: Focuses on gathering and analyzing international data and the methodologies of secondary and primary research. A recap of Learning Outcomes from Lectures 1 to 5 is also included.

Information for Major Global Marketing Decisions

• Summary of Principal Tasks: Global marketing research necessitates both internal (firm) and external (market) data.

Categorizing Data for Market Potential Assessment

• Types of Data:
    - Internal (firm) Data: Specific financial and operational insights from the company.
    - External (market) Data: Industry-wide research and market insights.
    - Data is further categorized into primary and secondary data across four distinct categories as illustrated in Figure 5.1 (refer to p. 172 of GM).
    - Limitations: Only a limited number of variables are displayed in the illustration. Primary research should follow thorough analysis of secondary data, as secondary data may not provide comprehensive answers tailored for specific uses.

Figure 5.1: Categorization of Data

• Quadrant Analysis: Emphasizes that primary/internal data is often the most difficult and costly to collect, yet crucial for analyzing the firm in relation to its competitors and establishing international competitiveness.

Secondary Research in Foreign Markets

• Advantages:
    - More cost-effective and less time-consuming from the home base.
    - Involves lower commitment.
    - Objectivity is generally higher.
    - Unconstrained by local customs.
    - Can quickly eliminate unsuitable markets.

• Disadvantages:
    - May lack specific and relevant data.
    - Concerns about the reliability of data and the methodologies used for its collection.
    - Issues with data classification.
    - Challenges with comparability of data across different markets (e.g., the term ‘supermarket’ may correlate with department stores in different countries).

Sources of Data

• Internal Sources:
    - Sales data: total sales, sales by country, product-wise breakdown, volume of market segments, distribution channel performance, pricing information, and sales representative records.
  

• External Sources:
    - Library searches, marketing data sets, trade press, and public publications or announcements.

Secondary Data Forecasting Techniques

• Proxy Indicators: Utilized when direct measures are difficult to obtain. These are indirect variables that can serve as surrogates.
    - Example: The consumption rate of household appliances like refrigerators can effectively indicate potential demand for washing machines.

• Chain Ratio Method: A systematic technique for predicting total market demand for a product by utilizing several percentages to narrow down a base population to determine the relevant target group.
    - Example Calculation: Estimating demand for washing machines in Thailand:
      - Calculation: $21,000,000 imes 0.85 imes 0.60 = 10,700,000$ units as the total market potential for washing machines.

Lead–Lag Analysis of Video-on-Demand (VOD)

• Analysis Context: Observes the penetration of VOD services in the US compared to Italy as a case study.
    - Demand determinants and diffusion rates are similar, but time lags exist.
    - Challenges include accurately estimating the time lag and understanding the factors affecting future demand.

Estimation by Analogy

• A correlation metric is used to predict demand in one market based on another similar market's data.
    - Example Calculations:
      - Population: UK = 66 million (2018), Germany = 83 million (2018)
      - Refrigerator sales in UK (2018): 1.2 million units.
    - Fridge Demand in Germany:
      - Calculation: $rac{83}{66} imes 1,200,000 ext{ (UK sales)} <br>ightarrow 1,500,000 ext{ units (approx.)}$
      - Note: Other considerations like cultural differences in buying behavior must be assessed.

Primary Research

• Qualitative Research:
    - Methods include in-depth interviews and focus groups, providing a holistic view by integrating numerous variables though sampling fewer respondents.

• Quantitative Research:
    - Involves surveys or questionnaires aimed at a larger respondent base, yielding new information specific to market needs, though it can be time-consuming and costly.

Other Considerations in Primary Research

• Mixed and Multi-Methods: Combining qualitative and quantitative methodologies can enhance judgment accuracy and data validity.

Primary Data Collection Techniques

• Observation Methods:
    - Store checks, mechanical observations, and cash register scans.

• Survey Methods:
    - Assess customer attitudes, buying habits, potential market size, and market trends.

• Experimental Methods:
    - Conduct test marketing to discover cause-and-effect relationships.

Challenges with Primary Research

• Common problems stem from cultural differences leading to:
    - Language barriers, poor translations, and incorrect sampling techniques.
    - Measurement concerns regarding reliability (how data is collected) and validity (what the data measures).

Other Types of Marketing Research

• Various methodologies discussed:
    - Ad hoc research: Custom-designed studies.
    - Multi-client studies: Shared across multiple companies to reduce costs.
    - Delphi studies: Qualitative approach focusing on expert consensus.
    - Continuous designs: Longitudinal research capturing data over time.
    - Sales forecasting: Providing short, medium, and long-term projections.
    - Scenario planning: Outlining potential future market conditions.
    - Web 3.0 research: Utilizing modern digital tools for insights.

International Marketing Information System (IMS)

• Definition: An IMS is defined as an interacting organization of people, systems, and processes aimed at facilitating continuous information flow essential for solving international marketing issues. This system aids in decision-making and integrates the findings from various research methodologies into actionable marketing strategies.