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Issues in Data Collection
The research problem may be more narrowly focused on marketing issues, such as the need to
adapt products and other mix elements to local tastes and to assess demand and profit potential.
Existing markets are those in which one or more companies are already serving customer needs.
In many countries, data about the size of existing markets—in terms of dollar volume and unit
sales—are readily available. In some countries, however, formal market research is relatively
new phenomenon and data are scarce.
In such situations, market researchers have two initial objectives:
1. To estimate the market size, the level of demand, or the rate of product purchase or
consumption
2. To assess the company’s overall competitiveness in terms of product appeal, price,
distribution, and promotional coverage and effectiveness
In such situations, and in countries, where such data are not available, researchers must first
estimate the market size, the level of demand, or the rate of product purchase or consumption.
Potential markets are those where no market currently exists and can be subdivided into latent
and incipient markets.
A latent market is in essence, an undiscovered segment. It is a market in which demand would
materialize if an appropriate product were made available.
In latent markets, initial success is not based on a company’s competitiveness. Success depends
on the prime mover advantage – a company’s ability to uncover the opportunity and launch a
marketing program that taps the latent demand.
An incipient market is a market that will emerge if a particular economic, demographic,
political, or socio-cultural trend continues.
A company is not likely to succeed if it offers a product in an incipient market before the trends
have taken root. After the trends have had a chance to gain traction, the incipient market will
become latent and, later, existing.
Research Methodologies
Survey research, interviews, consumer panels, observation, and focus groups are some of the
tools used to collect primary market data.
Survey research utilizes questionnaires designed to elicit quantitative data (“How much would
you buy?”), qualitative responses ("Why would you buy?"), or both.
Survey research obtains data using a questionnaire distributed by mail, telephone, or in person.
In global marketing research, several survey design and administration issues may arise (e.g.,
telephone directories or lists may not be available). It is important to remember that what is
customary in one country may be impossible in others because of infrastructure differences,
cultural barriers or other reasons.
At a deeper level, culture shapes attitudes and values in a way that directly affects people’s
willingness to respond to interviewer questions.
SRC bias can originate from the cultural background of those designing the questionnaire
A technique known as back translation can help increase comprehension and validity.
Back translation requires that, after a questionnaire is translated into a particular target language,
it is translated once again into the original language by a different translator.
For even greater accuracy, parallel translations—two versions by different translators—can be
used as input to the back translation.
Personal interviews allow researchers to ask “why?” and then explore answers with the
respondent on a face-to-face basis.
A consumer panel is a sample of respondents whose behavior is tracked over time.
When observation is used as a data collection method, one or more trained observers (or a
mechanical device such as a video camera) watch and record the behavior of actual or
prospective buyers.
INNOVATION, ENTREPRENEURSHIP, AND THE GLOBAL STARTUP
Daniel Ek, Spotify
Daniel Ek is an entrepreneur. He developed an innovative service and started a company called
Spotify to market it. As is true with many entrepreneurs, Ek’s idea was based on his own needs
and wants.
Ek decided to start a music-streaming company, and the result was Spotify. From his base in
Sweden, Ek expanded across Europe and, in 2010, he launched the service in the United States.
By the end of 2014, Spotify had 60 million users who had access to more than 20 million songs.
Spotify’s business model is built on the “freemium” pricing strategy.
Spotify gathers a great deal of data from its listeners.
Among the challenges facing Spotify today as it expands globally is the difficulty of licensing
songs on a country-by-country basis.
In focus group research, a trained moderator facilitates discussion of a product concept, a
brand’s image and personality, an advertisement, a social trend, or another topic with a group
of 6 to 10 people.
The moderator can utilize a number approaches to elicit reactions and responses, including
projective techniques, visualization, and role-plays.
In the projective technique, the researcher presents open ended or ambiguous stimuli to a subject.
Presumably, when verbalizing a response, the subject will “project”—that is, reveal—his or her
unconscious attitudes and biases.
Focus group research yields qualitative data that do not lend themselves to statistical projection.
Such data are extremely valuable in the exploratory phase of a project and are typically used in
conjunction with data gathered via observation and other methods.
Scale Development
Market research requires assigning some type of measure, ranking, or interval to a response. To
take a simple example of measurement, a nominal scale is used to establish the identity of a
survey element. For example, male respondents could be labeled “1” and female respondents
could be labeled “2.”
A Likert scale entails placing each response in some kind of continuum, such as “strongly agree”
to “strongly disagree.”
In a multi-country research project, it is important to have a scalar equivalence, which means
two respondents in different countries with the same value for a given variable receive equivalent
scores on the same survey item.
Even with standard data-gathering techniques, the application of a particular technique may
differ from country to country.
Sampling
When collecting data, researchers generally cannot administer a survey to every possible person
in the designated group. A sample is a selected subset of a population that is representative of the
entire population.
Two types of samples are probability samples and nonprobability samples.
A probability sample is generated by following statistical rules that ensure that each member of
the population under study has an equal chance of being included in the sample. The results of a
probability sample can be projected (with qualifications) to the entire population.
The results of a nonprobability sample cannot be projected with statistical reliability.
One form of nonprobability sample is a convenience sample – researchers select people who are
easy to reach. Although data gathered in this way are not subject to statistical inference, they may
be adequate to address the problem.
To obtain a quota sample, the researcher divides the population under study into categories; a
sample is taken from each category. The term quota refers to the need to make sure that enough
people are chosen in each category to reflect the overall makeup of the population.
Step 7: Data Analysis
The data collected up to this point must be subjected to some form of analysis if it to be useful to
decision makers. First, the data must be prepared – the term cleaned is sometimes used – before
further analysis is possible. Questionnaires must be coded, and some data adjustment may be
required.
Data analysis continues with tabulation, that is, the arrangement of data in tabular form. For
nominally scaled variables such as “male” and “female,” a simple cross tabulation may be
performed.
If the researcher is interested in the interaction between variables, interdependence techniques
such as factor analysis, cluster analysis, and multidimensional scaling (MDS) can be used.
Factor analysis is used to transform large amounts of data into manageable units (see Table 6-2).
Factor analysis is useful in psychographic segmentation studies.
Cluster analysis allows the researcher to group variables into clusters that maximize within-
group similarities and between-group differences.
Cluster analysis shares some characteristics of factor analysis: it does not classify variables as
dependent or independent, and it can be used in psychographic segmentation.
Cluster analysis is well suited to global marketing research because similarities and difference
can be established between local, national, and regional markets of the world.
Multidimensional scaling (MDS) is a technique for creating perceptual maps. MDS is
particularly useful when there are many alternatives from which to choose.
Dependence techniques assess the interdependence of two or more dependent variables with one
or more independent variables.
Conjoint analysis is a tool that researchers can use to gain insights into the combination of
features that will be most attractive to consumers; it is assumed that features affect both
perception and preferences. (see Table 6-4)
Comparative Analysis and Market Estimation by Analogy
One of the unique opportunities in global marketing analysis is to conduct comparisons of
market potential and marketing performance in different country or regional markets at the same
time. A common form of comparative analysis is the intracompany cross-national comparison.
For example, general market conditions in two or more countries (as measured by income, stage
of industrialization, or some other indicator) may be similar. If there is a significant discrepancy
between per capita sales of a given product in the countries, the marketer might reasonably
wonder about it and determine what actions need to be taken.
Drawing an analogy is simply stating a partial resemblance.
David Arnold notes that there are four possible approaches to forecasting by analogy:
1. Data is available on a comparable product in the same country.
2. Data is available on the same product in a comparable country.
3. Data is available on the same product from an independent distributor in a neighboring
country.
4. Data is available about a comparable company in the same country.
Time-series displacement is an analogy technique based on the assumption that an analogy
between markets exists in different time periods.
Step 8: Interpretation and Presentation
The report based on the market research must be useful to managers as input to the decision-
making process. It is advisable for major findings to be summarized concisely in a memo that
indicates the answer or answers to the problem first proposed in Step 1.
HEADQUARTERS CONTROL OF MARKETING RESEARCH
(Learning Objective #4)
An important issue for the global company is where to locate control of the organization’s
research capability.
The difference between a multinational, polycentric company and a global, geocentric company
on this issue is significant. In the multinational company, responsibility for research is delegated
to the operating subsidiary.
The global company delegates responsibility for research to operating subsidiaries but retains
overall responsibility and control of research as a headquarters’ function. A key difference
between single-country market research and global market research is the importance of
comparability.
In practice, this means that the global company must ensure that research is designed and
executed to yield comparable data.
Simply put, comparability, means that the results can be used to make valid comparisons
between the countries covered by the research. To achieve this, the company must inject a level
of control and review of marketing research at the global level.
The research director must pay particular attention to whether data gathered is based on emic
analysis or etic analysis.
Emic analysis attempts to study a culture from within, using its own system of meanings and
values. Etic analysis is “from the outside”; it is a more detached perspective that is often used in
comparative or multicountry studies.
THE MARKETING INFORMATION SYSTEM AS A STRATEGIC ASSET
(Learning Objective #5)
The advent of the transnational enterprise means that boundaries between the firm and the
outside world are dissolving.
The boundary between marketing and other functions is also dissolving, and the traditional
notion of marketing as a distinct functional area within the firm may be giving way to a new
model.
Many global firms are creating flattened organizations with less hierarchical, less centralized
decision-making structures. Such organizations facilitate the exchange and flow of information
between departments that previously have operated as autonomous “silos”.
Information intensity in the firm has an impact on perceptions of market attractiveness,
competitive position, and organizational structure.
The greater a company’s information intensity, the more the traditional product and market
boundaries shift.
Today, when marketers speak of “value added,” the chances are they are not referring to unique
product features. Rather, the emphasis is on the information exchanged as part of customer
transactions, much of which cuts across traditional product lines.
TEACHING TOOLS AND EXERCISES
Additional Cases:
“SAP: Establishing a Research Centre in China”. Kuldeep Kumar, Maya Kumar, Markus
Alsleben. HBS HKU 817.
“International Marketing Research: A Global Project Management Perspective”. Rb Young;
Robert B. Young, Rajshekhar G. Javalgi. HBS BH225.
Activity: Students should be preparing or presenting their Cultural-Economic Analysis and
Marketing Plan for their country and product as outlined in Chapter 1.
Out-Of-Class Reading: Davis, Tim R. V., and Robert B. Young, “International Marketing
Research: A Management Briefing.” Business Horizons 45, no. 2 (March-April 2002), pp. 31-38.
Secondary Research: Using secondary data sources have students compile a listing of the top
20 foreign companies doing business in Russia, China, and India. How many of these businesses
are U.S. owned?
Class Project: Send students to interview personnel in nearby companies that do business
outside the home country market. (Some students may be able to interview relatives or
acquaintances). The point of the interview is to determine what sources of information company
personnel rely on and how information is disseminated to others in the organization. Students can
share their findings during class discussion.
Internet Exercise: Have students take a look at Zoomerang (www.zoomerang.com). Zoomerang
is a company that is becoming well known for conducting reasonably priced market research
using the Web.
SUGGESTED READINGS
Books
Baker, Donald I. and Carol D. Terry. Internet Research, 2nd ed. Tempe, AZ: Facts on Demand
Press, 2004.
Churchill, Gilbert A. and Dawn Iacobucci. Marketing Research: Methodological Foundations,
9th ed. Mason, OH: South-Western, 2005.
Craig, C. Samuel and Susan P. Douglas. International Marketing Research, 3rd ed. New York:
John Wiley and Sons, 2006.
Crossen, Cynthia. Tainted Truth: The Manipulation of Fact in America. Englewood Cliffs, New
Jersey: Simon & Schuster, 1994.
Douglas, Susan P. and C. Samuel Craig. International Marketing Research. Englewood Cliffs,
New Jersey: Prentice-Hall, 1983.
Keyes, Jessica. Infotrends: The Competitive Use of Information. New York: McGraw-Hill, 1993.
Krugman, Paul R. The Age of Diminished Expectations: U.S. Economic Policy in the 1990s.
Cambridge, Mass: MIT Press, 1990.
Kumar, V. International Marketing Research, Upper Saddle River, New Jersey: Prentice Hall,
1999.
Lavin, Michael. International Business Information: How to Find It, How to Use It, Westport,
CT: Oryx Press, 2004.
Articles
Adler, Lee. “Managing Marketing Research in the Diversified Multinational Corporation.” In
Marketing in Turbulent Times and Marketing: The Challenges and Opportunities-
Combined Proceedings, ed. Edward M. Mazze. Chicago: American Marketing
Association, 1975, pp. 305-308.
Cavusgil, S. Tamer. “Qualitative Insights into Company Experiences in International Marketing
Research.” Journal of Business and Industrial Marketing (Summer 1987), pp. 41-54.
Czinkota, Michael R. and Ilkka A. Ronkainen. “Market Research for Your Export Operations:
Part I: Using Secondary Sources of Research.” International Trade Forum 30, no. 3
(1994), pp. 22-33.
_____. “Market Research for Your Export Operations: Part II: Conducting Primary Market
Research.” International Trade Forum 31, no. 1 (1995), pp. 16+.
Davenport, Thomas H., Michael Hammer and Tauno J. Metsisto. “How Executives Can Shape
Their Company’s Information Systems.” Harvard Business Review 67, no. 2 (March-
April 1989), pp. 130-134.
Davis, Tim R.V., and Robert B. Young. “International Marketing Research: A Management
Briefing.” Business Horizons 45, no. 2 (March-April 2002), pp. 31-38.
Doran, Kathleen Brewer. “Lessons Learned in Cross-Cultural Research of Chinese and North
American Consumers,” Journal of Business Research 25 (2002), 823-829.
Douglas, Susan P., C. Samuel Craig, and Warren J. Keegan. “Approaches to Assessing
International Marketing Opportunities for Small- and Medium-Sized Companies.”
Columbia Journal of World Business 17, no. 3 (Fall 1982), pp. 2-30.
Ferley, Stephen, Tony Lea, and Barry Watson. “A Comparison of U.S. and Canadian
Consumers.” Journal of Advertising Research 39, no. 5 (September/October 1999) pp.
55-65.
Gilad, Benjamin. “The Role of Organized Competitive Intelligence in Corporate Strategy.”
Columbia Journal of World Business 24 (Winter 1989), pp. 29-35.
Glazer, Rashi. “Marketing in an Information-Intensive Environment: Strategic Implications of
Knowledge as an Asset.” Journal of Marketing 55 (October 1991), pp. 1-19.
Grunert, Klaus G., Trodsen, Torbjorn, Campous, Emilio, “Market Orientation in the Mental
Models of Decision-Makers: Two Cross-Border Value Chains”. International Marketing
Review, no. 27 (2010).
King, W.R. and V. Sethi. “Developing Transnational Information Systems: A Case Study.”
Omega, January 1993, pp. 53-59.
Luna, David, Laura A. Peracchio, and Maria D. de Juan. “Cross-Cultural and Cognitive Aspects
of Web Site Navigation.” Journal of the Academy of Marketing Science 30, no. 4 (2002),
pp. 397-410.
Naumann, Earl, Donald W. Jackson, Jr., and William G. Wolfe. “Comparing U.S. and Japanese
Market Research Firms,” California Management Review 36, No. 4, (Summer 1994), pp.
49-69.
Prescott, Charles A. “The New International Marketing Challenge: Privacy,” Target Marketing
22, no. 4 (1999), p. 29.
Sethi, S. Prakash. “Comparative Cluster Analysis for World Markets.” Journal of Marketing
Research 8 (August 1971), p. 350.
Sharer, Kevin. “Top Management’s Intelligence Needs: An Executive’s View of Competitive
Intelligence.” Competitive Intelligence Review, Spring 1991, pp. 3-5.
Wasilewski, Nikolai. “Dimensions of Environmental Scanning Systems in Multinational
Enterprises.” Pace University, Working Papers no. 3 (May 1993).
