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
IntroductionInternational 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 1Culture 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 2International 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 3International 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 habitsbut 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