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INTERNATIONAL MARKETING

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Title: INTERNATIONAL MARKETING


1
INTERNATIONAL MARKETING
  • Krista Duniach
  • Université dAngers
  • krista.duniach_at_univ-angers.fr

2
BIBLIOGRAPHY
  • Czinkota and Ronkainen (2002), International
    Marketing, Thomson South-Western.
  • De Mooij (2003), Global Marketing and
    Advertising, Understanding Global Paradoxes,
    Sage.
  • Keegan and Green (2005), Global Marketing,
    Prentice Hall.
  • Kotler and Armstrong (2006), Principles of
    Marketing, Prentice Hall.
  • Prime et Usunier (2004), Marketing international,
    Développement des marchés et management
    interculturel, Vuibert.
  • Usunier (2000), Marketing across Cultures,
    Prentice Hall.
  • Periodicals MOCI, HBR, JIBS, JM, JMR…

3
Introduction
  • What is international business?
  • Wide range of activities involved in conducting
    business transactions across national boundaries
  • Described as being heterogeneous, universal and
    sequential
  • Comprehensive approach to operations of both
    large and small firms engaged in business abroad
  • Concerns all activities of the firm (selling,
    procurement, outsourcing…)
  • About seizing global opportunities (market
    expansion or diversification)
  • Driving forces (regional economic agreements,
    converging needs and wants, communication
    improvements, quality, leverage…) and restraining
    forces (management myopia, corporate culture,
    national controls, globaphobia…)
  • Orientations Export, Internationalization,
    Globalization

4
Introduction
  • EPRG Model
  • Ethnocentric everything is centered on the
    domestic market.
  • Polycentric several important foreign markets
    exist.
  • Regiocentric the market is composed of several
    large economic regions.
  • Geocentric the world is one large global market.

5
EPRG Model - Characteristics
6
EPRG Model - Characteristics
7
Introduction
  • What is marketing?
  • Marketing is a social and managerial process by
    which individuals and groups obtain what they
    need and want through creating, offering, and
    exchanging products of value with others.
    (Kotler)

Process, exchange, value
8
Marketing process
Capture value from customers in return
Create value for customers and build customer
relationships
Construct a marketing program that delivers
superior value
Build profitable relationships and create
customer satisfaction
Capture value from customers to create profits
and customer quality
Understand the marketplace and customer needs
and wants
Design a customer-driven marketing strategy
Marketing technology
Global markets
Ethics and social responsibility
9
Introduction
  • What is international marketing?
  • - International marketing is the process of
    planning and conducting transactions across
    national borders to create exchanges that satisfy
    the objectives of individuals and organizations
    (Czinkota and Ronkainen)
  • - International marketing focuses its resources
    on global market opportunities and threats
    (Keegan and Green)
  • - International marketing is the motor of the
    internationalization process of the firm
    (Usunier)
  • - It is a tool used to obtain improvement of the
    firms position in the global market
  • - Strategy and action, global and local

10
Introduction International Marketing Decisions
Deciding whether to go abroad
Deciding which markets to enter
Deciding how to enter the market
Deciding on the marketing program
Deciding on the marketing organization
11
Introduction
  • What are the similarities and differences
    between international marketing and domestic
    marketing?
  • Similarities basic concepts, practices and tools
    are almost identical, key success factors are the
    same…
  • Differences more strategic, more variables, more
    complex, cultural differences, legal constraints,
    information sources, managing distances, entry
    mode choice…

12
Introduction
  • International marketing concept

Export marketing
Global marketing
Inter-cultural, multi-cultural marketing
13
Course Outline
  • Culture and international marketing
  • International marketing research
  • International marketing strategy and programs

14
Chapter 1 Culture and international marketing

15
Culture and international marketing
  • Concepts of culture
  • Dimensions and models of culture
  • Examples and international marketing consequences

16
What is culture?
  • Culture is the integrated sum total of learned
    behavioral traits that are shared by members of a
    society (Hoebel)
  • Culture is the entirety of societal knowledge,
    norms and values (Antonides and Van Raaij)
  • Culture is the collective mental programming of
    the people in an environment. Culture is not a
    characteristic of individuals it encompasses a
    number of people who were conditioned by the same
    education and life experience (Hofstede)
  • Culture both affects and describes human
    behavior,
  • it is essential in international marketing

17
Fundamentals of culture
  • Culture is a total pattern of behavior that is
    consistent and compatible in its components. It
    is not a collection of random behaviors…
  • Culture is a learned behavior. It is not
    biologically transmitted. It depends on
    environment, not heredity.
  • Culture is behavior that is shared by a group of
    people, a society. It is a distinctive way of
    life.

18
Culture vs. personality
  • Personality is the individuals unique personal
    set of mental programs that he/she does not share
    with any other human being.
  • Culture is what members of a group have in
    common. It is the glue that binds groups
    together (De Mooij)

Human nature depends on culture ideas, values,
acts, emotions… are cultural products. Cultural
patterns help people to live together in a
society.
19
Manifestations of culture
Symbols
Heroes
Rituals
Expressions of culture
Values and Norms
20
Symbols
  • Symbols are words, gestures, pictures, or objects
    that carry a particular meaning recognized only
    by those who share a culture.
  • This is the most superficial manifestation of
    culture.
  • New symbols are easily developed and old ones
    quickly disappear.
  • Symbols from one cultural group are regularly
    copied by others.

21
Heroes
  • Heroes are people, alive or dead, real or
    imaginary, who possess characteristics that are
    highly prized in a society.
  • They serve as role models for behavior.
  • They can become globally known, but their stories
    often become local.

22
Rituals
  • Rituals are the collective activities considered
    socially essential within a culture.
  • They are carried out for their own sake.
  • They are easily observed, but not always
    understood.

23
Values
  • Values are at the core of culture.
  • Values are stable beliefs regarding desired
    behavior or end states.
  • They often have a religious, ideological or
    humanistic background.
  • Goals are derived from values.
  • Values are among the first things children learn,
    not consciously but implicitly.
  • Core values are resistant to globalization they
    vary across cultures and are not likely to change
    frequently.

24
Norms
  • Norms and values are part of the non-material
    culture.
  • Norms are beliefs regarding how to behave and how
    not to behave (dos and donts).
  • People differ in the extent to which they accept
    and comply with norms.
  • They create expectations and criteria regarding
    the conduct of others.

25
Explicit vs. implicit culture
  • Explicit culture languages, behavior, know-how,
    institutions (directly observable)
  • Implicit culture moral values, learning process,
    beliefs and representations (subconscious)

26
According to Hoebel…
  • There are 3 types of cultural norms in terms of
    behavior
  • 10 of norms are technical
  • explicit, logical and transferable written norms
    of a society (laws, technical manuals, rules,
    etc…)
  • 30 of norms are formal
  • explicit, moral and transmissible traditions of
    a culture learned through education (manners,
    courtesy…)
  • 60 of norms are informal
  • implicit, instinctive and imitated sunken part
    of the iceberg (facial expressions, body
    language, cultural perspective on time and space…)

How do these cultural norms influence
international business and marketing?
27
Two levels of cultural diversity in
international business
  • External cultural diversity
  • Cultural determinants influencing purchasing and
    consumption behaviors (Who buys? What? Where?
    How? Why?)
  • Cultural determinants influencing negotiations
    (relationships with suppliers, buyers, partners)
  • Internal cultural diversity
  • Observed within all MNCs (identity and corporate
    culture)
  • Cultural differences that affect the way
    subsidiaries work together

28
Four levels of culture in marketing
DOMINANT CULTURE
Non-material consumer culture
Material culture of products (market)
Non-material culture of the firm (corporate
culture)
29
Transfer of culture
  • Two main cultural transfer processes
  • Socialization transfer of culture to new
    generations older generation to younger
    generation education.
  • Acculturation transfer of culture to adults who
    have grown up in different cultures, who have
    been socialized in different cultures ethnic
    minorities multicultural societies.

30
Cultural transfer and change
SOCIALIZATION
CULTURAL TRANSFER AND CHANGE, DYNAMIC PROCESS
Agents
LEARNING BY OBSERVATION
Agents
ACCULTURATION
31
Agents involved in cultural transfer
32
Processes of cultural change
  • Socialization and acculturation usually imply a
    gradual cultural change because transfer agents
    tend to favor cultural continuity rather than
    jeopardize their powerful position.
  • In contrast, innovative forces are less
    conservative and may challenge the status quo.
  • 4 processes cohort effects, age effects,
    democratization and exclusivation.

33
Cohort effects
  • Acceptance of new values and behaviors begins at
    a young age.
  • These values and behaviors are retained over the
    years.
  • They are spread in society because young people
    grow older and the old values gradually
    disappear with the extinction of the older
    cohorts.
  • Implies a slow cultural change.

34
Age effect
  • Certain values or behaviors are associated with a
    particular age group.
  • Behaviors are modified as age groups change.
  • Age-bound consumer behavior.
  • Possible reverse socialization.

35
Democratization
  • Cultural leveling or spreading
  • Cultural differences across social classes
    decrease.
  • Results from an increasing level of general
    welfare, the influence of mass media and the
    stress on the equality ideal.
  • Mechanisms of democratization trickle-down,
    trickle-up, trickle-across.

36
Exclusivation
  • Reverse of democratization
  • Occurs less frequently
  • Implies limited social spreading of values, goods
    and behavior.
  • Cultural change is limited to a certain group
    (elite, leading edge).

37
Dimensions of culture
  • What makes one culture different from another
    culture?
  • How can we compare cultures or cluster cultures
    according to behavioral characteristics?
  • Stereotypes vs. cultural dimensions
  • Different cultures have different stereotypes of
    other cultures.

Ethnocentrism and SRC
38
Cultural dimension models
  • Hall High-context vs. low-context cultures
  • Kluckhohn Relationship to nature
  • Hofstede Five dimensions of culture

39
Halls cultural model
  • Focuses on communication patterns found within
    cultures
  • Four essential dimensions in terms of
    communication patterns
  • Context
  • Time
  • Space
  • Information flow
  • High-context vs. low-context cultures

40
Low-context and high-context cultures
  • Low-context
  • Messages are explicit
  • Words carry most of the information in
    communication (facts, data)
  • Effective verbal communication is expected to be
    explicit, direct, and unambiguous
  • High-context
  • Less information is contained in the verbal part
    of the message
  • Much more information resides in the context of
    communication (background, associations, symbols,
    basic values of the communicators)
  • Verbal mode is only one part of communication,
    nonverbal is often seen as having greater
    importance

Degree of context of cultures comparison of law
(US and France)
41
Time
  • Different cultures have different concepts of
    time. This can explain differences in behavior.
  • Dimensions of time
  • Closure a task must be completed, if not
    perceived as wasted
  • Long-term vs. short-term thinking
  • Orientation toward past, present or future
  • Linear or circular (tangible or intangible)
  • M-time and P-time
  • Cause and effect
  • Time as symbol (time is money, efficiency,
    waiting, discretionary time)

42
A few examples…

43
Kluckhohns cultural model
  • 3 types of relationships between humanity and
    nature
  • Mastery-over-nature (man is to conquer nature)
  • Harmony-with-nature (man is to live in harmony
    with nature)
  • Subjugation-to-nature (man is dominated by nature)

Further developed with nature of people, duty,
mode of activity, privacy of space, temporal
orientation…
44
Humanity and Nature
Use in international marketing?
45
Hofstedes cultural model
  • Hofstedes 4D or 5D model
  • Quantitative and longitudinal study of cultural
    differences between countries
  • Why some concepts of motivation do not work in
    all countries in the same way
  • Cultures Consequences and Cultures and
    Organizations Software of the Mind
  • Scores for each country explain why people and
    organizations in various countries differ,
    comparative data.

Reference in international business and
international marketing
46
How do we measure cultural distance?
  • Geert Hofstedes Cultural Index
  • - National character survey
  • - 116.000 IBM employees
  • - 72 countries and 20 languages
  • Five different poles make up the cultural index
  • - Power distance
  • - Uncertainty avoidance
  • - Individualism
  • - Masculinity
  • - (Long term orientation)

Original scores for 56 countries, extended to
nearly 90
47
5D Model
PDI
100
UAI
LTO
100
100
Work-related values to consumption-related values
0
100
100
IDV
MAS
48
Power distance (PDI)
  • High PDI vs. Low PDI
  • the extent to which less powerful members of a
    society accept and expect that power is
    distributed unequally
  • Reflected in the values of both the less powerful
    and more powerful members of society
  • Influences the way people accept and give
    authority
  • Shows class or social structure
  • Focuses on the degree of equality, or inequality,
    between people in the countrys society

49
Uncertainty avoidance (UAI)
  • High UAI vs. Low UAI
  • the extent to which people feel threatened by
    uncertainty and ambiguity and try to avoid these
    situations
  • Strong UAI need for rules and formality to
    structure life, search for truth and belief in
    experts
  • Conflict and competition are threatening
  • Higher level of anxiety, show of emotions is
    accepted

50
Individualism (IDV)
  • Individualistic vs. Collectivistic
  • people looking after themselves and their
    immediate family only, versus people belonging to
    in-groups that look after them in exchange for
    loyalty
  • I-conscious and we-conscious
  • Focuses on the degree the society reinforces
    individual or collective achievement and
    interpersonal relationships
  • Distinguishes between societies where the group
    and being a member is important (collectiveness)
    and societies where the group is less important
    (individualism)

51
Masculinity (MAS)
  • Masculine vs. Feminine
  • the dominant values in a masculine society are
    achievement and success the dominant values in a
    feminine society are caring for others and
    quality of life
  • Focuses on the degree the society reinforces, or
    does not reinforce, the traditional masculine
    work role model of male achievement, performance,
    control and power
  • Shows the importance of status in societies
  • Indicates the degree of gender differentiation
    and the importance of masculine values
    (assertiveness, money, material goods, success…)

52
Long-term orientation (LTO)
  • Long-term vs. Short-term orientation
  • Chinese value survey, Confucian dynamism
  • the extent to which a society exhibits a
    pragmatic future-oriented perspective rather than
    a conventional historic or short-term point of
    view
  • High LTO perseverance, ordering relationships
    by status, thrift, sense of shame, family ties,
    long-term thinking, paternalism
  • Focuses on the degree the society embraces, or
    does not embrace, long-term devotion to
    traditional, forward thinking values
  • Indicates whether the country prescribes to the
    values of long-term commitments and respect for
    tradition

53
Examples of Hofstedes Dimensions
54
Some country examples
55
Comparison of cultural dimensions
More information on www.geert-hofstede.com
56
American culture
  • Classical dimensions M-time culture, linear
    time-pattern, low-context, low PDI,
    individualistic, high MAS, low UAI, short-term
    orientation
  • Other dimensions success, obsession with change
    (new and better), credit card culture, education
    for competitiveness, independence, ethnocentrism,
    strong role differentiation, innovativeness,
    creativity, private opinions expressed, education
    teaches students to be critical (ask why not
    how), man must conquer nature, (De Mooij)

57
Japanese culture
  • Classical dimensions P-time culture, circular
    time concept, high-context, high PDI,
    collectivistic, masculine, strong UAI, long-term
    orientation
  • Other dimensions pressure to behave like
    neighbors, shame-based society, avoid jolting
    social harmony, dependence, private opinions not
    expressed, status is important (success) but
    avoid standing out in a crowd, cash culture,
    thrift and perseverance, strong role
    differentiation, education (how instead of
    why), education has an intrinsic value,
    obsession with cleanliness, harmony with nature…
    (De Mooij)

58
Limits to Hofstedes model
  • Generalization, reductive, simplistic (unproven
    and unprovable, flawed assumptions,
    storytelling…)
  • Original objective how values in the workplace
    are influenced by culture
  • Three discrete cultures
  • Organizational
  • Occupational
  • National
  • Questionnaire quantitative data
  • Differences in location intracultural
    differences, subcultures

?
59
Intracultural differences
  • Few cultures are homogeneous in terms of cultural
    traits and norms
  • Consequence of globalization?
  • Intracultural differences (nationality, religion,
    race, language or geographic areas) result in the
    emergence of distinct subcultures
  • Existence of cross-cultural and intracultural
    differences opportunities and threats

60
To summarize on culture…
  • Culture is complex and multi-dimensional, but
    classification is important in business
  • Cultural distance is essential in international
    marketing
  • Culture influences perceptions and drives how we
    communicate and what we communicate
  • SRC and ethnocentrism can explain the failure of
    many companies in the international arena
  • Acculturation (adjusting and adapting to a
    specific culture other than ones own) is one of
    the keys to success in international operations

61
How does culture affect international marketing?
  • Languages and the use of language in
    communicating, advertising, negotiating…
  • Marketing research is much more difficult to
    conduct from a methodological perspective
  • Buying patterns and behaviors will vary in
    different cultural contexts
  • Marketing mix will be perceived differently from
    one country to another
  • Management styles will be directly related to
    culture…

62
Marketing and cultural differences
Source Usunier
63
Cultures consequences on international marketing
  • Marketing research (understanding consumers)
  • Segmentation (classifying consumers)
  • Product policy (satisfying consumers)
  • Distribution channels (reaching consumers)
  • Advertising (communicating with consumers)

64
Chapter 2 International Marketing Research

65
International marketing research
  • Review of marketing research techniques
  • Specific problems in international markets

66
Review of marketing research techniques
  • General principles of marketing research
  • Qualitative research
  • Quantitative research

67
What is marketing research?
  • Marketing research is the link between the
    marketer and the market…
  • It is the starting point of marketing…
  • Marketing research is the systematic design,
    collection, analysis, and reporting of data and
    findings relevant to a specific marketing
    situation facing the company.
  • MIS consists of people, equipment, and
    procedures to gather, sort, analyze, evaluate,
    and distribute needed, timely, and accurate
    information to marketing decision makers.

68
Marketing process
Capture value from customers in return
Create value for customers and build customer
relationships
Construct a marketing program that delivers
superior value
Build profitable relationships and create
customer satisfaction
Capture value from customers to create profits
and customer quality
Understand the marketplace and customer needs
and wants
Design a customer-driven marketing strategy
Marketing technology
Global markets
Ethics and social responsibility
69
Position of marketing research
ANALYSIS
MARKETING RESEARCH
PLANNING
MARKETING STRATEGY
IMPLEMENTATION
MARKETING RESEARCH
CONTROL
70
Marketing research goals
  • UNDERSTAND
  • DESCRIBE
  • EXPLAIN
  • MEASURE
  • FORECAST
  • VERIFY

Product, consumer, distributor, competitor,
environmental analysis
71
Marketing research process
Define problem and research objectives
Develop the research plan
Collect the information
Analyze the information
Present the findings
72
Research design
  • The research design formally describes the
    characteristics of the survey and the procedures
    used to conduct the study.
  • It is the methodological framework of the
    research.
  • Contents
  • Goals
  • Information sources
  • Variables
  • Survey method
  • Sampling method
  • Data analysis
  • Calendar
  • Budget

Internal validity External validity
73
Types of marketing research
EXPLORATORY
  • Documentary
  • Qualitative

DESCRIPTIVE
  • Documentary
  • Quantitative

CAUSAL
  • Experimentation
  • Observation

74
Research methods
  • Observational research
  • - Audit inventories, facing, pantry check…
  • - Mechanical scanning, EDI, eye camera…
  • Experimental research
  • - Product/concept tests prototype, comparative
    or not
  • - Market/store tests laboratory stores,
    catalog sales, mobile stores, in-store tests,
    city tests…
  • Ad hoc research
  • Qualitative research interviews, focus groups…
  • Quantitative research surveys, opinion polls…

75
Qualitative and quantitative research
  • The distinction between qualitative and
    quantitative research depends on the nature of
    the research problem.
  • If why? or how?
  • QUALITATIVE RESEARCH
  • If how many? or how much?
  • QUANTITATIVE RESEARCH

76
Information Sources
  • Secondary sources Existing data. All forms of
    documentary research.
  • DESK RESEARCH
  • Primary sources Data collected for a specific
    situation at companys request.
  • FIELD RESEARCH, AD HOC
  • These sources can be internal or external.
  • The choice will depend on the marketing problem,
    objectives, resources…

77
Documentary Research
  • First step to marketing research
  • 4 steps
  • Define the topic (clear, feasible, pertinent)
  • Identify key words associated to the topic
  • Search for available sources of information
  • Consult, sort and summarize information
  • Questions to ask
  • Does the data correspond to the situation?
  • Is there a risk of obtaining biased information?
  • Was the research design technically coherent?
  • Are the findings clear, precise…?

78
Research and polling institutes
  • These institutes collect information for resale.
  • They can give 2 types of information
  • Standardized periodic information panels,
    longitudinal studies. Firms subscribe to this
    information. This is a secondary information
    source.
  • On-order studies reserved solely for one company
    or omnibus studies. This is a primary information
    source.

79
Advantages and disadvantages of information
sources
80
Sequence and relationship between different
sources of information
SECONDARY SOURCES (Desk Research)
Internal
External
PRIMARY SOURCES (Field Research)
Qualitative
Quantitative
81
Qualitative marketing research

82
What is qualitative marketing research?
  • Collecting and analyzing psycho-sociological
    elements which explain facts, attitudes,
    opinions, motivations and behaviors of all people
    involved in a given marketing situation
  • Qualitative research methods are used for
    in-depth exploratory studies of the
    decision-making process and psychological
    mechanisms that affect individual or group
    behavior

83
Why use qualitative research?
  • Qualitative research studies lead to
    understanding the causes or the basis for
    behaviors, attitudes and opinions.
  • They are often based on analyzing how a product
    or company is perceived by individuals or
    consumers.
  • However, results cannot be extrapolated. They
    cannot be considered as being representative of
    the entire population. Sample size 10 - 70

84
Qualitative research is used in the following
cases
  • Defining the marketing problem is difficult
    (explore market)
  • Finding causes, decision-making criteria of
    consumer behavior
  • Secondary information is insufficient
  • Constructing questionnaire for a survey
  • Explaining surprising results of quantitative
    research
  • Promoting creativity

85
Advantages and disadvantages of qualitative
research
86
Different types of qualitative research
  • Two ways of classifying qualitative studies
  • Degree of induction (level of consciousness)
  • Unstructured interview (pure exploration)
  • Centered or focus interview (exploration and
    in-depth analysis)
  • Structured interview (identification and
    verification)
  • Number of people being interviewed
  • Individual
  • Group

87
Choosing a Type of Interview
Levels of consciousness
OPINIONS
Structured interview
ATTITUDES
Centered or Focus interview
Unstructured interview or centered with
projective tests
MOTIVATIONS / BELIEFS
88
Unstructured interviews
  • Conducted in a face-to-face situation
  • Large, ambiguous opening
  • Funnel approach
  • The respondent is free to express his feelings as
    wishes and for as long as he wishes
  • Non-directive, but reformulation techniques
  • Use in marketing

89
Unstructured interviewing steps
Large opening statement or questions
Present research objectives
Researcher adopts a non-directive attitude
Reformulation techniques ( mirror effect )
Respondent goes further in-depth
 auto-exploration 
90
Centered or focus interviews
  • Same general structure and basic principles as
    the unstructured interview
  • However, an interview guide is used
  • This guide is composed of topics or questions to
    be addressed during the interview
  • The interviewer will bring up topic if and only
    if respondent does not spontaneously address
    issues
  • This is NOT a questionnaire (no order,
    modifications possible, different versions
    allowed)
  • This is the most popular form of qualitative
    research

91
Projective techniques
  • Used to avoid psychological obstacles (taboos,
    reluctance, courtesy bias, subconscious…) or to
    go further in-depth
  • Visual or written stimuli
  • The respondent will overcome hesitations
  • Difficult to analyze, ambiguous
  • Different tests
  • Word association
  • Sentence completion
  • Story completion
  • Frustration or cartoon test
  • TAT (Thematic Apperception Test)
  • Haire test

92
Example Nescafé (Haire test)
  • List 1
  • 1 lb. of carrots
  • Roast beef
  • 1 can of Delmonte corn
  • Heinz ketchup
  • Folgers ground coffee
  • Tide laundry detergent
  • 3 onions
  • List 2
  • 1 lb. of carrots
  • Roast beef
  • 1 can of Delmonte corn
  • Heinz ketchup
  • Nescafé instant coffee
  • Tide laundry detergent
  • 3 onions

?
?
93
Structured interviews
  • Most directive method in qualitative marketing
    research
  • A questionnaire is used
  • However, the questionnaire is only composed of
    open-end questions
  • Questionnaire facilitates the research process as
    well as analysis
  • Confusion between qualitative and quantitative
    research
  • It is theoretically incorrect to extrapolate or
    generalize the findings

94
Focus groups
  • Nearly always use the centered approach
    (interview guide, group discussion is directed by
    interviewer)
  • About 7 to 10 participants per group
  • The role of the interviewer is very important
  • Interviewer must manage the group in terms of
    participation, conflict, domination, summaries,
    etc…
  • Organization and logistical aspects

95
Focus group phases
  • Three phases during the group interview
  • Presentation (warming up) explanations, rules of
    the game, individual introductions, anonymous
    responses…
  • Exchange each participant gives his or her
    opinions, thoughts, group dialogue, tests…
  • Summarize verify all topics of interview guide,
    repeats, star technique (circept), gift…

96
Comparing different types of interviews
  • Unstructured large opening statement and
    non-directive attitude ( 500 to 800 )
  • Centered interview guide to  center 
    discussion ( 250 to 500 )
  • Structured qualitative questionnaire ( 150 to
    200 )
  • Focus group centered interview, 7 to 10
    participants per group ( 5000 to 8000 )

97
Comparing individual interviews and focus groups
98
Qualitative sampling
  • No representative sample, but variety of
    individuals is important
  • No important profiles should be excluded
  • Sequential procedure (arborescence) is used
  • List of criteria explaining differences of
    behavior
  • Rank criteria from most important to least
    important
  • List possibilities for each criteria
  • Build arborescence
  • Verify coherency of arborescence

99
Sampling in focus groups
  • Same basic principles (arborescence)
  • All participants must feel equal
  • However, there are two important rules
  • Group must be heterogeneous (cover all of the
    profiles of the populations)
  • Group must be homogeneous (for criteria that may
    lead to an unbalanced group)

Many groups may be need to be organized in order
to avoid unbalanced groups or inter-group pressure
100
Qualitative data analysis
  • Two different methods can be used
  • Summaries of interviews, verbatims
  • Content analysis
  • Requires re-transcribing of all interviews
  • Specialized software
  • Quantification, scientific rigor
  • Time and budget

101
Quantitative marketing research

102
Differences compared to qualitative research
  • Associated with descriptive research
  • Objectives are different verify, measure,
    estimate...
  • Sampling methods are different
  • Large sample size (300 1000)
  • Methods of administration change
  • Precision of an estimation, margin of error
  • Data analysis is more sophisticated

103
Advantages and disadvantages of quantitative
research
104
Categories of quantitative research
  • Census
  • Collect information from each member of the
    population
  • Complete canvass of the population
  • Depends on the size of the target population
  • Survey
  • Most familiar of all market research
    methodologies
  • Collect information from a portion of the
    population
  • Procedure in which a fixed set of questions is
    asked of a sample of respondents
  • On the basis of information collected on the
    subset, it is possible to infer something about
    the larger group
  • Inference depends on the sampling method

105
Census vs. Survey
  • Census n N
  • Survey n/N subset of the population, survey
    rate or sampling rate
  • Exhaustive or non-exhaustive survey
  • Generalization and extrapolation of findings

106
Validity of quantitative research
  • Representative sample? sampling method and
    response rate
  • Precision? sample size and margin of error
  • Quality of questionnaire and administration
  • Researcher training and experience
  • Quality of information processing
  • Quality of data analysis

107
What is sampling?
n
N
70
70 e
Sampling is necessary every time the population
size is too large to be able to collect
information from all elements of the population.
108
Probability vs. non-probability sampling
  • Probability
  • Each population element has a known, non-zero
    chance of being included in the sample
  • Final elements are selected objectively by a
    specific process
  • Equal probabilities are not necessary
  • Allow an assessment of the amount of sampling
    error likely to occur
  • Requires an exhaustive sample frame
  • Non-probability
  • No way of estimating that probability that any
    population element will be included in the sample
  • Rely on personal judgment somewhere in the
    process
  • Statistically, precision (sampling error) cannot
    be evaluated

109
Quantitative sampling methods
PROBABILITY SAMPLES
NON-PROBABILITY SAMPLES
  • Quota sample
  • Random route sample
  • Judgment sample (on-the-spot sample)
  • Convenience sample
  • Simple random sample
  • Cluster sample
  • Area sample
  • Level random sample
  • Stratified random sample

110
Probability sampling
  • SRS each population element has a know and equal
    chance of being selected central-limit theorem
    (when n is large, the sample mean will be
    normally distributed).
  • Cluster and area first parent population is
    divided into mutually exclusive and exhaustive
    subsets, then a random sample of the subset is
    selected.
  • LRS random sampling occurs at several different
    levels of the population.
  • Stratified population is divided into strata or
    subpopulations and random sampling occurs in each
    stratum (proportionate and disproportionate).

111
Non-probability sampling
  • Quotas attempt to ensure that the sample is
    representative by selecting sample elements in
    such a way that the proportion of the sample
    elements possessing a certain characteristic is
    approximately the same as the proportion of the
    elements with the characteristic in the
    population.
  • Random route each field worker is given a random
    route to follow, leading to the selection of
    people to interview.
  • Judgment sample elements are handpicked because
    it is expected that they can serve the research
    purpose and it is believed that they are
    representative of the population of interest
    (purposive samples).
  • Convenience sometimes called accidental samples
    because those composing the sample enter by
    accident (volunteers, radio shows…)

112
Choosing a sampling method
Do we have a sample frame?
Yes
No
Do we have a frame of clusters?
Is SRS too costly?
Yes
No
Yes
No
Is the population stratified?
Is it too costly?
Are there frames at different levels?
Yes
No
Yes
No
Yes
No
Stratified sample
Cluster or area sample
Level random sample
SRS
113
Do we know the structure of the population for
several variables that explain differences in
behavior?
Yes
No
Is the population widely dispersed?
Quota sample
No
Yes
Random route
Are there mandatory passage points?
Yes
No
Judgment or on-the-spot sample
Snowball or other convenience sample
114
Sample size and precision
  • With probability samples, precision and minimal
    sample size can be determined
  • Sample size must be greater than 30
  • Estimation, confidence level, confidence interval
    and margin of error
  • Probability sampling methods or Kish coefficient
  • Precision of an estimation is not proportional to
    sample size, but to the square root of the sample
    size. To double precision, the sample size must
    be multiplied by four.

115
Sample size and margin of error
2
n t pq e
Non-exhaustive sample
2
n (n x N) / (n N)
Exhaustive sample
e ? t vpq n
Margin of error for probability samples
n budget fixed costs direct cost
per unit
Budget approach
116
Procedure for developing a questionnaire
  • Specify what information will be collected
  • Determine type of questionnaire and method of
    administration
  • Determine content of individual questions
  • Determine form of response to individual
    questions
  • Determine wording of each question
  • Determine sequence of questions
  • Determine physical characteristics of
    questionnaire
  • Reexamine and revise
  • Pretest questionnaire and revise if necessary

117
Type of questionnaire and method of
administration
  • These two decisions are interdependent
  • The length of the questionnaire will influence
    the choice of the method of administration
  • Self-administered questionnaires (mail, Internet,
    questionnaire in magazine, etc…) response rate
    is generally low (lt 20)
  • Questionnaires completed with researcher (direct
    personal interviewing, phone) longer
    questionnaire and higher response rate (50)

118
Form of response
  • Open-ended
  • Dichotomous 2 possible answers
  • Multiple choice 3 or more possible answers
  • Likert scale a statement with which the
    respondent shows the amount of agreement or
    disagreement (strongly agree strongly disagree)
  • Semantic differential scale a scale connecting
    two bipolar words, respondent selects the point
    that represents his/her opinion (enthusiastic
    unenthusiastic)
  • Importance scale rates the importance of some
    attribute (extremely important extremely
    unimportant)
  • Rating scale rates some attribute from poor to
    excellent
  • Intention-to-buy scale describes respondents
    intention to buy a product or service (definitely
    buy definitely not buy)

Avoid halo effect (change direction in scales to
avoid repetition)
119
Question wording
  • The phrasing of a question can directly affect
    the responses.
  • General rules
  • Use simple words
  • Avoid technical vocabulary in consumer research
  • Avoid double negations
  • Avoid ambiguous words and questions
  • Avoid leading questions
  • Avoid double-barreled questions
  • Examples

120
Question sequence
  • General rules
  • Questionnaire should be very logical and easy to
    respond to.
  • Use simple, interesting opening question.
  • Use the funnel approach (start with broad
    questions and progressively narrow down in
    scope).
  • Avoid jumping around from topic to topic.
  • Use transitions.
  • Design branching questions with care.
  • Place difficult or sensitive questions late in
    the questionnaire.
  • Ask for classification information last.

121
Question sequence
Knowledge and awareness questions
Factual behavior questions
Attitude questions
Intention questions
Classification questions
122
Questionnaire pretest
  • Data collection should never begin without an
    adequate pretest of the instrument.
  • Can be used to assess both individual questions
    and their sequence.
  • Small sample of 10 to 30
  • Questionnaire followed by interview to identify
    problems and misunderstandings
  • Pretest results are not included in the final
    results of the survey
  • The pretest is the most inexpensive insurance
    the marketer can buy to ensure the success of the
    questionnaire and the entire research project

123
Quantitative data analysis
  • Univariate analysis? descriptive statistics and
    graphical information
  • Multivariate analysis? cross-tabulations, Chi
    square tests, correlation analysis, multiple
    regression analysis, cluster analysis (perceptual
    mapping), factor analysis….

124
Cost factors affecting surveys
  • Sample size
  • Accessibility
  • Survey length
  • Analysis

100 per respondent
125
Specific problems in international markets

126
General context of international marketing
research
  • Globalization, but change at different rates in
    different parts of the world
  • Challenge of conducting high quality research as
    quick as possible in multiple diverse settings
  • Research conducted simultaneously in developed
    and developing world
  • Unbalanced spread of marketing research
    expenditures
  • Multi-faceted issues (where, how, who, tools,
    comparisons…)
  • New technologies (CATI, CAPI, scanners, Internet…)

127
3 specific problems in international marketing
research
  • Who will conduct the research?
  • ? degree of research centralization
  • Is the information comparable?
  • ? cross-cultural research ? equivalences
  • What are the sources of bias?
  • ? five bias types

128
Who will conduct international marketing research?
  • The firm can use internal or external research
    services.
  • The unknown competitive situation and different
    cultural backgrounds complicate the choice
    between internal and external research.
  • Problem exclusive contracts with marketing
    research firms…
  • To what degree should international marketing
    research be centralized?
  • Three choices internal marketing department,
    domestic research firm, foreign research firm

129
The degree of centralization of international
marketing research
130
Is the information comparable?
  • This question is very important in cross-cultural
    or comparative studies.
  • Some words, ideas, concepts, practices, etc… will
    have different meanings in different cultural
    contexts.
  • Research equivalence is necessary, but not always
    easy to achieve.
  • Equivalences must be verified before conducting
    research on foreign consumer behavior.

131
International equivalences
  • Functional equivalence do products serve the
    same function?
  • Conceptual equivalence do relevant concepts have
    the same meaning and/or importance?
  • Category equivalence does the product belong to
    the same category or domain?
  • Translation equivalence cross-check,
    translation-retranslation
  • Metric equivalence scaling, odd/even, do
    adjectives have the same strength and distances?
  • Respondent equivalence who should answer
    questions? same social role? sampling unit…
  • Sampling frame equivalence how will sample be
    chosen?

132
Sources of bias
  • Bias distorted results, incorrect or false
    compared to reality…
  • Biased responses are more likely to occur in
    international marketing research than in domestic
    research and are harder to avoid
  • Importance of control, pre-test, acculturation…
  • Research plans must be adapted to reduce the risk
    of biased responses

133
5 sources of bias
  • Courtesy bias concerns the social desirability
    of answers, the respondent hopes to please the
    interviewer
  • Subject bias concerns the way a society
    perceives an issue as being more or less
    sensitive
  • Cultural-trait bias a given cultural trait can
    alter the findings (IDV, MAS…)
  • Response style bias some responses are more or
    less extreme in some cultures (scaling, ranking),
    coefficients
  • Non-response bias non-response style varies
    according to country, gender, race…

134
Practical consequences in international
marketing…
  • Qualitative research only accounts for less than
    20 of research expenditures around the world
    (emerging markets, innovation, brand renewal…),
    but this is increasing
  • Length of interview and compensation will vary
    from one market to the other (monochronic and
    low-context shorter interviews and larger
    compensation)
  • Some techniques are unknown or unfeasible
    (projective techniques, on-line surveys,
    CAGI/CATI…)
  • Focus groups are very culture-bound
    (collectivistic vs. individualistic societies,
    social status, disagreement…)
  • Sampling techniques are limited (reliable
    information is not widely available, statistics,
    sampling base…)
  • Collecting information is difficult (level of
    economic development, illiteracy, local
    authorizations…)
  • Cross-cultural research is limited (comparison is
    difficult, concepts/rituals…)
  • Recent developments in international marketing
    research

135
Chapter 3 International Marketing Strategy and
Programs

136
Expanded marketing process model
Capture value from customers
Create value for customers and build customer
relationships
Capture value from customers to create profits
and customer quality
Understand the marketplace and customer needs and
wants
Construct a marketing program that delivers
superior value
Design a customer-driven marketing strategy
Build profitable relationships and create
customer satisfaction
Product and service design build strong brands
Select customers to serve segmentation and
targeting
CRM and CEM build strong relationships with
chosen customers
Research consumers and market
Create satisfied loyal customers
Pricing create real value
Capture customer lifetime value
Manage marketing information and customer data
Decide on a value proposition differentiation
and positioning
Partner relationship management build strong
relationships with marketing partners
Distribution manage demand and supply chains
Increase share of market and share of customer
Promotion communicate VP
Marketing technology
Global markets
Ethical and social responsibility
137
Corporate strategy vs. marketing strategy
SBU SBU SBU
Strategic segmentation
Core market
Strategic positioning
Market segmentation
S1 S2 S3
Market targeting
Target segment
Consumer preferences
Competitor positioning
Firm advantages
Market positioning
Positioning
-Sales objectives -Budgets -4 Ps
Marketing mix
138
Market segmentation
  • What is it?
  • Identifying and profiling distinct groups of
    buyers who might require separate products and/or
    marketing mixes
  • Clustering consumers in terms of behavior, needs,
    attitudes, opinions…
  • Why?
  • Buyers/consumers differ in many ways
  • They do not respond to the same stimuli in the
    same way
  • So, different offers for different types of
    buyers
  • Market segmentation represents an effort to
    increase a companys targeting precision.

139
Levels of market segmentation
  • Mass marketing
  • Mass production, distribution and promotion of
    one product for all buyers
  • Largest potential market, one size fits all
  • Lowest costs lower prices or higher margins
  • Segment marketing
  • Large identifiable group within a market
  • Buyers differ in their wants, purchasing power,
    location, attitudes and habits…but the company is
    not willing to customize its offer to each
    individual customer
  • More appropriate products and services,
    distribution and communication easier, fewer
    competitors
  • Niche marketing
  • More narrowly defined group, a small market whose
    needs are not being well served
  • Smaller companies can become more competitive
    through specialization
  • Better understanding of customers who willingly
    pay a price premium
  • Individual marketing
  • Segments of one, customized marketing, one-to-one
    marketing…
  • More frequent in B to B than in B to C
  • New technologies allow mass customization
    ability to prepare on a mass basis individually
    designed products and communications to meet each
    customers requirements

140
Market segmentation procedure
  • Market segments and niches can be identified by
    applying successive variables to subdivide a
    market. 3 steps
  • Research stage gain insight into consumer
    motivations, attitudes and behavior and collect
    important data (attributes and ratings, brand
    awareness and rating, product-usage patterns,
    attitudes toward product category, customer
    characteristics…).
  • Analysis stage factor analysis to remove highly
    correlated variables and cluster analysis to
    create a specific number of maximally different
    segments.
  • Profiling stage each cluster is profiled in
    terms of its distinguishing attitudes, behavior,
    customer characteristics…

Market segmentation must be redone periodically
because market segments change over time,
especially in international markets
141
Segmentation variables
In international marketing, broader market
segments compared to domestic segments,
transnational segments
142
Example 1 culture-based segmentation
143
Example 2 segmentation of CEE markets
  •  Marketization 
  • Countries exposure to global communications,
    increased product availability and variety, and
    overall attempt to close the living standards gap
    with developed countries
  • Reflects a set of institutional values and
    cultural requirements for the operation of
    effective private markets (materialistic values
    as a stimulus for greater production,
    competition, freedom of information…)
  •  Westernization 
  • Countries proximity to the West
  • The duration and the extent of their openness to
    Western influence and culture

144
CEE clusters
High Marketization
Cluster 1
Cluster 3
Low Westernization
High Westernization
Cluster 2
Cluster 4
Clusters are likely to have common
characteristics and share similar consumer needs
and purchasing behavior
Low Marketization
Source Lascu, Manrai and Manrai
145
Central and Eastern European clusters
  • Cluster 1 High-marketization and
    high-westernization
  • (Hungary, Poland, Czech and Slovak Republics,
    Slovenia)
  • Geographic Central Europe, border developed
    countries, more urbanized
  • Cultural Slavic languages (except Hungary),
    primarily Catholic religion
  • Economic more developed
  • Cluster 2 Low-marketization and
    high-westernization
  • (Bosnia, Serbia, Croatia, Montenegro, Macedonia)
  • Geographic Central Europe, more urbanized
  • Cultural Slavic languages, primarily Eastern
    Orthodox and Muslim
  • Economic more developed, but less than cluster 1

146
Central and Eastern European clusters
  • Cluster 3 High-marketization and
    low-westernization
  • (Bulgaria and Romania)
  • Geographic Balkan peninsula, urbanized to a
    lesser extent than cluster 2
  • Cultural Latin and Slavic languages, Eastern
    Orthodox religion
  • Economic slower in the development process
  • Cluster 4 Low-marketization and
    low-westernization (Albania and Western countries
    of the former Soviet Union)
  • Geographic Less urbanized than cluster 3
  • Cultural Slavic languages (Russian is the
    primary commercial language), Eastern Orthodox
    and Muslim
  • Economic formerly fierce dictatorships, slower
    development

147
Market targeting
  • After identifying different markets and market
    segments, the firm must
  • Evaluate the various segments
  • Decide how many and which ones to target

148
Evaluating the market segments
  • Overall attractiveness of the segment
  • Size, growth, profitability, scale economies, low
    risk…
  • How easy is it to persuade buyers to shift their
    purchases (consumers, relative non-consumers,
    absolute non-consumers)?
  • Brand loyalty vs. dissatisfied buyers
  • Companys objectives and resources
  • Do segments correspond to the companys long-term
    objectives?
  • Does company possess the skills and resources
    needed to succeed in the segment?
  • The company should only enter market segments in
    which it can offer superior value

149
Selecting market segments
  • 5 different target market strategies
  • Single-segment concentration
  • Concentrated marketing
  • Strong knowledge of segments needs
  • Strong market position in segment
  • Economies through specialization high returns
  • Risks are higher than normal
  • Selective specialization
  • Several segments that are objectively attractive
  • Little or no synergy among segments but each is
    profitable
  • Diversification of firms risk

150
Selecting market segments
  • Product specialization
  • Concentrate on certain product to several
    segments
  • Strong reputation in specific product area
  • Risk of technology
  • Market specialization
  • Concentrate on serving many needs of a particular
    customer group
  • Strong reputation with group, channel for all new
    products
  • Risk of decreased buying power in the group
  • Full market coverage
  • Serve all customer groups with all products they
    need
  • Limited to very large firms
  • Undifferentiated ignore segment differences, one
    offer for entire market
  • Differentiated operate in several segments with
    different programs for each

151
Market positioning
  • Market positioning act of designing the
    companys offering and image so that they occupy
    a meaningful and distinctive competitive position
    in the target customers mind refers to the
    cons
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