Global Information Systems and Market Research Global Marketing

Global Information Systems and Market Research Global Marketing Chapter 6

Introduction • Understand the importance of information technology and marketing information systems • Utilize a framework for information scanning and opportunity identification • Understand the formal market research process • Know how to manage the marketing information collection system and market research effort 6 -2 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Information Technology for Global Marketing • Information Technology refers to an organization’s processes for creating, storing, exchanging, using, and managing information • Management Information Systems provide managers and other decision makers with a continuous flow of information about company operations. 6 -3 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• An MIS should provide a means for gathering, analyzing, classifying, storing, retrieving, and reporting relevant data. The MIS should also cover important aspects of a company's external environment, including customers and competitors. • Global competition intensifies the need for an effective MIS that is accessible throughout the company. 6 -4 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Tools of MIS • Intranet • Electronic Data Interchange (EDI) • Efficient Consumer Response

Intranet • An intranet is a private network that allows authorized company personnel or outsiders to share information electronically in a secure fashion. • 24 -Hour Nerve Center • Allows companies like Amazon. com and Dell to operate as real time enterprises 6 -6 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Electronic Data Interchange • Allows business units to: – Submit orders – Issue invoices – Conduct business electronically • Transaction formats are universal • Allows computers from different companies to speak the same language 6 -7 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Efficient Consumer Response (ECR) • A joint initiative by members of a supply chain to work toward improving and optimizing aspects of the supply chain to benefit customers • This is in addition to EDI • An effort for retailers and vendors to work closely on stock replenishment • ECR systems utilize electronic point of sale (EPOS) data gathered by checkout scanners. 6 -8 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Customer Relationship Management • A new business model that helps companies collect, store, and analyze customer data is customer relationship management (CRM). • CRM is a philosophy that values two-way communication between company and customer. • Every point of contact with a consumer is an opportunity to collect data • Can make employees more productive and enhance corporate profitability 6 -9 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• CRM tools allow companies such as Credit Suisse, AT&T, and Hewlett-Packard to determine which customers are most valuable and to react in a timely manner with customized product and service offerings that closely match customer needs. • If implemented correctly, CRM can make employees more productive and enhance corporate profitability; it also benefits customers by providing value-added products and services. 6 -10 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• A visitor to Amazon. com who buys a U 2 CD encounters CRM when he or she is prompted by the message "Customers who bought this title also bought “Bruce Springsteen’s “Working on a Dream. ” 6 -11 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Data Warehouses • Integral part of CRM • Help fine-tune product assortments for multiple locations • Enhance the ability of management to respond to changing business conditions 6 -12 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Organizational IT Necessities • An efficient, effective system that will scan and digest published sources and technical journals • Daily scanning, translating, digesting, abstracting, and electronic input of information into a market intelligence system • Expanding information coverage to other regions of the world 6 -13 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Sources of Market Information • Personal sources – Company executives based abroad who have contact with distributors, consumers, suppliers, and government officials – Friends, acquaintances, professional colleagues, consultants, and prospective employees • Direct sensory perception – Using the senses to find out firsthand what is going on in a particular country 6 -14 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Formal Market Research • Global Marketing Research is the project -specific, systematic gathering of data in the search scanning mode on a global basis – Challenge is to recognize and respond to national differences that influence the way information is obtained 6 -15 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• Marketing Research is defined as “the activity that links the consumer, customer, and public to the marketer through information • Global market research is the marketing research activity carried out on a global scale. • The challenge of global marketing research is to recognize and respond to the important national differences that influence the way information can be obtained. These challenges include: cultural, linguistic, economic, political, religious, historical, and market differences. 6 -16 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Leading Global Market Research Companies 6 -17 © 2011 Pearson Education, Inc. publishing as

Steps in the Research Process 1. 2. 3. 4. 5. 6. 7. 8. Identify the information requirement Define the problem Choose a unit of analysis Examine data availability Assess value of research Design the research Analyze the data Present the findings 6 -18 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Step 1: Identifying the Information Requirement • Formal research is often undertaken after a problem or opportunity has been identified. • The first two questions a marketer should ask are: • “What information do I need? ” • “Why do I need this information? ” 6 -19 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Step 2: Problem Definition and Overcoming the SRC • Self-Reference Criterion occurs when a person’s values and beliefs intrude on the assessment of a foreign culture • Must be aware of SRC’s – Enhances management’s willingness to conduct market research – Ensures that research design has minimal homecountry bias – Increases management’s receptiveness to findings 6 -20 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• When approaching global markets, it is best to have “eyes wide open. ” In other words, marketers must be aware of the impact that SRC and other cross-cultural assumptions can have. • Such awareness can have several positive effects. • First, it can enhance management’s willingness to conduct market research in the first place. 6 -21 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• Second, an awareness of SRC can help ensure that the research effort is designed with minimal homecountry or second-country bias. • Third, it can enhance management’s receptiveness to accepting research findings—even if they contradict “tried and true” marketing experience in other markets. 6 -22 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• When the Walt Disney Company opened Disneyland Paris, park employees were expected to comply with a detailed written code regarding personal appearance. • The goal was to ensure that guests receive the kind of experience associated with the Disney name. However, the French considered the code to be an insult to French culture, individualism, and privacy. 6 -23 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Step 3: Choose a Unit of Analysis • Will the market be: – Global

• The next step involves the need to identify what part(s) of the world the company should be doing business and finding out as much as possible about the business environment in the area(s) identified. • The unit of analysis may be a single country; it may be a region such as Europe or South America, or it may be global (see Table 6 -2). 6 -25 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• Are countrywide data required for all market entry decisions? • Countrywide data are not required for all market entry decisions. Rather, a specific city, state, or province may be the relevant unit of analysis. • For example, a company that is considering entering China may focus initially on Shanghai. Located in the Jiangsu province, Shanghai is China’s largest city and main seaport. Because Shanghai is a manufacturing center, has a welldeveloped infrastructure, and is home to a population with relatively high per capita income, it is the logical focus of a market research effort. 6 -26 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Step 4: Examine Data Availability • Sources may be: – Company’s records – Secondary sources • Trade journals • Government sources like CIA World Factbook, Statistical Yearbook of the UN, World Bank • Commercial sources like The Economist and Financial Times, Marketresearch. com 6 -27 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• The first task at this stage is to answer several questions regarding the availability of data. What type of data should be gathered? • Can secondary data – for example data available in company files, a library, industry or trade journals, or online be used? ? 6 -28 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Step 5: Assess Value of Research • Research requires investment of both money and managerial time, and it is necessary to perform a cost-benefit analysis before proceeding further. • What is the information worth vs. what it will cost to collect? • What will it cost if the data are not collected? • What will the company gain with this information? 6 -29 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Step 6: Research Design— Research Methodologies • Primary Data Collection Methods – Survey research – Interviews – Consumer panels – Observation – Focus groups 6 -30 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• Research requires investment of both money and managerial time, and it is necessary to perform a cost-benefit analysis before proceeding further. • Next, the decision must be made to use quantitative techniques (numerical data that can be subjected to statistical analysis) or qualitative techniques (non-numerical data). 6 -31 © 2011 Pearson Education, Inc. publishing as Prentice Hall

What is the difference between Existing Markets and Potential Markets? • Existing markets are those in which customer needs are already being served by one or more companies. • 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. 6 -32 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• 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 sociocultural trend continues. • A company is not likely to succeed if it offers a product in an incipient market before the trends have taken root. 6 -33 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Special Considerations for Surveys • Benefits – Data collection from a large sample – Both quantitative and qualitative data possible – Can be self-administered • Issues – Subjects may not want to answer or intentionally give inaccurate response – Translation may be difficult • Use back and parallel translations to ensure accuracy and validity 6 -34 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• 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 by a different translator. • For even greater accuracy, parallel translations – two versions by different translators – can be used as input to the back translation. 6 -35 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Research Methodologies • Personal interviews • Consumer panels – Nielsen—TV viewing • Observation – Using people or cameras • Focus groups 6 -36 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• 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. 6 -37 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• 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. 6 -38 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Observation Research? • 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. • In focus group research, a trained moderator facilitates discussion of a product concept, a brand’s image and personality, advertisement, social trend, or other topic with a group comprised of 6 to 10 people. 6 -39 © 2011 Pearson Education, Inc. publishing as Prentice Hall

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. – Probability samples each member of the population under study has an equal chance—or probability—of being included in the sample. – Non-probability samples -One form of nonprobability sample is a convenience sample – researchers select people who are easy to reach. © 2011 Pearson Education, Inc. publishing as Prentice Hall 6 -40

Step 7: Analyzing Data • Clean the data • Tabulate the data using statistical techniques—ANOVA, regression, factor analysis, cluster analysis • Perceptual mapping, conjoint analysis 6 -41 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• 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. 6 -42 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Presenting the Findings • Report must clearly address problem identified in Step 1 • Include a memo or executive summary of the key findings along with main report 6 -43 © 2011 Pearson Education, Inc. publishing as Prentice Hall

Enhancing Comparability of Data • Emic analysis – Ethnographic in nature – Studies culture from within – Uses culture’s own meanings and values • Etic analysis – From the outside – Detached perspective that is used in multicountry studies – Enhances comparability but minimizes precision 6 -44 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• A key difference between single country market research and global market research is the importance of comparability. • • 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. 6 -45 © 2011 Pearson Education, Inc. publishing as Prentice Hall

• 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. 6 -46 © 2011 Pearson Education, Inc. publishing as Prentice Hall

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