39 International Marketing Research

Vishal Kumar

1. Learning Objectives:

After completing this, module students will be able to:

i. Understand the meaning and concept of International Marketing Research

ii. Understand the evolution of marketing research

iii. Know about the nature and objectives of International Marketing Research and also

iv. Understand the importance of International Marketing Research

2. Introduction: The fundamental objective of MNCs is to achieve its goal by satisfying the needs and wants of the consumer from different countries. In this context marketing attains the core position in the international business operations and its activities. The complexity in the marketplace has increased many folds in recent years and related decision making also has got complex. This dynamism of the market affects marketing continuously because of the continuous change in the international business environment. The decision maker is finding it difficult to take decision in today’s environment because of such changes. For example, changing character of the market, growing concern for environmental quality, increase in competition, growing shortage of raw materials, volatility of the political relationships, rapidly changing technology and shift in international economy power give rise to the growing difficulties in making efficient marketing decisions.

As these complexities in market increase, the decision makers feel increasing need for understanding the market and its players be it customers, suppliers or any other stakeholder. Managers must know who their customers are, what they want, what their competitors are doing, if they are to make sound decisions. Due to the increase in complexity each right or wrong decision may cost company a fortune.

Marketing Research is a critical part of marketing decision making in international business operations. It helps in improving management decision making by providing relevant, accurate, and timely information. Every decision poses unique needs for information, and relevant strategies can be developed based on the information gathered through marketing research in action. Too often, marketing research is considered narrowly as the gathering and analyzing of data for someone else to use. However, firms can actually achieve and sustain a competitive advantage through the creative use of market information generated by marketing research. Hence, marketing research is defined as information input to decisions, not simply the evaluation of decisions that have been made. Market research alone, however, does not guarantee success; the intelligent use of market research is the key to business achievement. A competitive edge is the result of how information is used than who does or does not have the information.

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3. Evolution of Marketing Research

The successful entrepreneurs always make an effort to search for information and identify newer ways to create, communicate and deliver value to their markets. So far the history of marketing research is apprehensive, the role and impact of industrial revolution is ineradicable. Consequently, the paradigm shift in the ways of production and management had shown the seeds of market research of modern days. Though before the beginning of industrial revolution some cases of marketing research were reported, yet the beginning of marketing research as an organized business activity began between 1910 and 1920. It is believed that in 1911, the appointment of Charles Collidge Parlin as the manager of the Commercial research division of the advertising department of the Curtis Publishing Company marked the beginning of organized marketing research.

After the World War II, there seems to be a dramatic rise in the area of marketing research. Though by the 1950s and 1960s, television became the part of life and with came the era of television advertisement. Further, the revolution in the area of Information and Communication Technology and the process of globalization has intensely influenced the marketing research activities.

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The marketing research activities in India also got thrust in the post economic liberalization scenario. Till the 1990s, marketing research was given much importance and used to be carried out as a custom activity and not on a challenging basis. The real changes in marketing research activities started taking place with the large scale entry of many Multinational Companies to India. These MNCs used the market research for making better business and strategic decisions. This led the many Indian companies to realize the significance of marketing research, which resulted in the growth of marketing research industry in India. The following factors are responsible for the development of marketing research:-

Shift in philosophy of business: Till 1930 the emphasis of business was on production and development of quality goods only. After the great depression an oversupply of goods and services led to the steadily shift in the emphasis from production to market. Today market is accepted as managerial philosophy and businesses are more attuned to satisfy the consumers need.
Change in cost structure: The fixed cost component of organization has increased with the process of computerization. To justify the huge capital investment high and quality production are needed.
Shift from price to non-price competition: The non-price competition such as advertising, product differentiation, branding and packaging etc. are playing significant role in the realm of marketing.
Expansion of production processes: The specialization in the area of labour has led to a lengthening the production process. The production process that was expected to be controlled by one manufacturer is now split among various manufacturers; each specialized in the part of the process.
Increase in the discretionary buying power: With the increase in the income and standard of living of consumer’s spending on unnecessary and luxury goods has increased as well. As competition is high, the organization needed to be well notified about market and other factors affecting industry.
High cost of marketing: Marketing activities are not limited to the local or domestic area rather it has crossed the national boundaries. This requires the huge investment as marketing operations has to cover wide geographical area. So marketing research provides the information about the market and assist in the reduction of cost.
Emergence of professional manager: The development in the speciality of professional management also led to the development of marketing research.

4. Definitions of Marketing Research

1. According to American Marketing Association (AMA), MR is “The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services.”

2. According to Richard D. Crisp, MR is “The systematic, objective and exhaustive search for and study of the facts relevant to any problem in the field of marketing.”

3. According to Philip Kotler, “Marketing research is systematic problem analysis, model building and fact-finding for the purpose of improved decision-king and control in the marketing of goods and services.”

4. According to Paul Green and Donald Tull, “Marketing research is the systematic and objective search for, and analysis of, information relevant to the identification and solution of any problem in the field of marketing.”

On the basis of all these definitions, it can be concluded that marketing research is the systematic, scientific and objective identification, collection, analysis, dissemination and use of information for the rationale of improving decision-making related to the identification and solution of problems and connecting the opportunities and facing the threats in marketing. The process of Marketing research has following steps:-

Defining the marketing problem.
Collection of required information systematically and scientifically.
Collection of data which involves the process of editing, coding, classification and tabulation.
Analysis of data by applying the various statistical techniques.
Interpretation of results in the light of prevailing circumstances and problem of the business.
Findings of the research are communicated to the management of organization, who will take ultimate decision in the light of these findings.

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5. The Concept of International Marketing Research

One of the most striking developments of recent decades has been the globalization of business. The growth of international trade requires more information about foreign markets and companies which expand into new and unknown markets and must possess the information about the demand and conditions of these markets. Companies invade not only into such developed markets as Europe, US and Japan, but also into the unstable but growing markets of Latin America, the politically uncertain markets of the Middle East and Russia, and the rapidly changing markets of South East Asia and the emerging African markets. The development of new communication and information technologies change the lifestyle, consumption behavior and purchasing patterns of different nations. All this indicates that the marketing research in global environment has become essential.

Marketing research practices and techniques have become truly global. International marketing managers make the same basic types of decisions as the decisions taken by the mangers working in the domestic country. Of course, they make these decisions in a more complicated environment. As with marketing decisions, the basic function of marketing research and the research process does not differ between domestic and multinational research. However, the process is complicated almost exponentially as more and more countries are involved in the same decision.

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6. Nature of International Marketing Research:

After the analysis of above facts about international marketing research, the following points have been developed to understand the nature and characteristics of research:-

It is a systematic study: International Marketing research is a rational and organised activity. There is definite procedure in which research is conducted. Right from defining the marketing problem to possible solution, there is a succession of operation with logical arrangement.
It is a scientific study: International Marketing research establishes the cause and effect relationship between two or more variables. The various statistical tools and techniques are employed to study the association between variables. The researcher should have the scientific attitude and also follow the scientific methodology of research.
It is a managerial tool: Management of a company has to take many decisions to solve the problems with minimum cost and time. The hallmark of effective decision is to select the best substitute. It is marketing research that can help the management to take sound decision based on scientific methodology.

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Purpose: The first step in the marketing research is to define the problem. In formulating the research problem, the researcher should methodically understand the problem and reshaping the same into meaningful terms from study point of view.
Solution: Marketing research is solution oriented. All steps and actions are directed towards finding the solution of the problem. For this purpose appropriate data is collected, analysed and interpreted to arrive at right conclusion.
Generalization: Marketing research is particular and general. General principles are applied to arrive at the particular theory and particular theory is applied in the general situation to develop the right viewpoint towards defining the research problem. Hence, research highlights to the development of theories, concept, principles and generalization.
Empirical: Marketing research is a orderly and scientific enquiry of facts to reach at the truth. In this way research is always based on apparent experiences, discernible evidences and empirical proofs.
Patience: Patience and equanimity are the core qualities of the research. Researcher must have these two qualities to think over the problem and find out the right solutions than jumping into conclusions.
Description: Marketing research involves concrete observation from the reliable and authentic sources. The data is accurately analysed and presented with the use of various statistical and mathematical measures.
Knowledge: Researcher should be experienced and properly trained person. He must have full knowledge of problem under study. He also must be thoroughly convergent with the various statistical methods for analyzing the collected information.
Replication: The design, procedures and conclusions of the research should be used by any person other than researcher, who can appraise the validity of research. Thus, the conclusions of one research can be used by other researchers.
Skill: Marketing research requires proper training and careful skill in collecting, analyzing, interpreting and reporting the data.

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7. Objectives of International Marketing Research:

The following are the main objectives of the international marketing research:-

Formulation of marketing plans: International Marketing Research is used in the formulation of all marketing plans, policies, programmes and procedure.
Control of plans: It is working for control and evaluation of business plans and policies etc.
Reduction of costs: It is used in curtailing all marketing costs, like, selling, advertising, promotion and distribution costs.
Solution of marketing problems: Marketing problems demanding the best solution through market research system and it can be classified under the major heads: (a) problems relating to o the product itself; product include branding, packaging and labelling and services. (b) Problem relating to consumer markets. (c) Problem relating to each phase of the entire marketing process.
Essential for the growth of business: Programmes of marketing research incidentally provide insurance cover for the survival and growth of the business in a dynamic economy.
Right selection of Marketing mix: Marketing management through marketing research can bring about the sale of right product throughout right channels to right customers at right places and at right prices by developing right plans, policies and programmes with the help of right employees.

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Right decision of production: The main objective of marketing research is to enable entrepreneurs to produce goods satisfactory and saleable and to ensure that they reach the market easily, quickly, cheaply and profitably without sacrificing the consumer’s interest.
Management of risk and uncertainty: International Marketing research helps in the minimization of risk and uncertainly and maximization of sales revenue of MNCs.
Expansion of Market: Helpful in the expansion of market with improved product and will augment revenue and profit of business.
Research knowledge helpful in many ways: With adequate knowledge obtained by marketing research help the business in many ways such as: producers need not make unwanted goods, need not offer those through wrong passages to persons who are not interested; traders need not stack unwanted goods, offer them at the wrong season in the wrong quantities or at wrong pieces; advertisers need not make mistake in what they say, to whom they appeal, and how they appeal to audience.
Understating of economic environment: International Marketing research help in understanding the dynamic economic environment i.e., understanding the nature of business cycles. This will make companies capable to face the challenges of market by making its SWOT analysis.
Helpful in sales forecasting: It helps in attaining information that could help to formulate short -range and long range forecasts.

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Evaluation of Foreign Market: Companies can use marketing research to evaluate new product opportunities and acceptance, and to test existing product relative to competitors’ products.
Evaluation of Marketing Efforts: It is also helpful to evaluate the effectiveness of marketing activities and to call attention to the presence of a potential problem.

On the basis of this discussion it can be concluded that international marketing research facilitates producers, merchants, distributors and advertisers to avoid mistakes either in manufacturing or in marketing. To that extent it can minimize business failures and maximize profitability of multinational corporations.

8. Importance of International Marketing Research:

Marketing research is fast growing in its importance due to increasing competition, fast moving technological developments and changing consumer needs, expectations and attitudes. The importance of marketing research is universally accepted. The status of marketing research in business management is identical to the position of brain in a human body. The following points suggest the importance of marketing research:-

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Knowledge of Market and consumers: Market is the group of present and potential consumers. Growing market required numerous middlemen between producer and consumer. Each middleman erected a variety of wall which blocked the backward flow of communication regarding consumer needs and dealer needs to the manufacturer. Size and specialisation within the business unit and interference of abundant middlemen between producers and consumers created a gap of communication. The broadening of communication gap is the chief single factor for increasing importance of marketing research to fill up the communication gap between the consumer and producer. Marketing research alone can provide first-hand knowledge of consumers and changes in the outline of the market.
Formulation of marketing strategy: Emergence of buyer’s market and increasing competition demanded unremitting need of marketing research to ensure maximum consumer satisfaction and repeated purchases. Marketing research is helpful in invent the appropriate marketing strategies to meet competition, to survive and grow in a competitive market.
Valuable tool for MNCs: Marketing research has become the corner-stone of the marketing concept. No business firm can be market- oriented or customer-centered without the effective use of marketing research. The moment customer become the centre of the marketing activities, the marketing research imagine unique importance and it becomes an invaluable management tool in the formulation of accurate and realistic marketing plans and programmes, advertising and sales promotion based on pragmatic information of consumer demand-changing tastes preferences, whims, fancies etc.

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Helpful in coping with change: Changing is a perpetual phenomenon. Change is the common denominator in planning, organising, motivating and controlling marketing activity. Marketing research enables management to predict, meet and adapt change and creativity and accelerate conditions of change, particularly in consumer demand. The real challenge to marketing management is to firmly believe that change in business-finding its new role, new customer, new product, new market is even more important than efficient operations of the business.
Helpful in understanding the international business environment: In a dynamic environment, marketing information and research helps forward looking marketer to manages all challenges and problems fashioned by environment forces.
Solution of international marketing problems: Marketing research can solve the problem brought about by unparalleled growth of science and technology. It helps management to bring about prompt alteration and innovations in product design, packaging, advertising, sales promotion and distribution policies so that the business can keep itself up-to-date in the marketplace.

9. Summary: In this module, we have discussed the meaning and concept of international marketing research. International marketing research is the systematic design, collection, recording, analysis, interpretation, and reporting of information relating to a particular marketing decision facing a company operating internationally.

The international marketing research process has some peculiarities such as the national differences between countries arising out of political, legal, economic, social and cultural differences and, the comparability of research results due to these differences. A company performing the international marketing research may experience several problems. Firstly, there is a complexity of research design due to operation in a multi country, multicultural, and multi linguistic environment. Secondly, the availability of secondary data varies widely from country to country. On some markets, especially emerging and unstable, the data is neither available nor reliable. Thirdly, the costs of collecting primary data are much higher in foreign developing markets as there is the lack of an appropriate marketing research infrastructure. The module has also highlighted the objectives, nature and scope of international marketing research.

Suggested Readings

Sundharam K.P.M. and Datt Ruddar (2010). Indian Economy, S. Chand & Sons, New Delhi.
Sharan Vyptakesh (2003). International Business: Concept, Environment and Strategy. Pearson Education, New Delhi
Cullen. (2010). International Business. Routledge.
Bennett Roger (2011). International Business. Pearson Education, New Delhi
Paul Justin (2010). Business Environment-Text and Cases. Tata McGraw Hill, New Delhi.
Cherunilam Francis (2010). International Business. Prentice Hall of India Private Limited. New Delhi.
Cherunilam Francis (2013). Global Economy and Business Environment. Himalaya Publishing House, New Delhi.
Levi MauriceD. (2009). International Finance. Routledge.
Conklin David w. (2011). The Global Environment of Business. Sage Publications.
Mithani D M. (2009). Economics of Global Trade and Finance. Himalaya Publishing House New Delhi.
Cherunilam Francis (2011). International Business Environment. Himalaya Publishing House, New Delhi.
Saleem Shaikh (2010). Business Environment. Pearson Education, New Delhi.