Problem s in Export Marketing Research

These are special problems and conditions in export marketing research which differentiate it from the domestic marketing research.

First, marketing researcher may have to analyse several national markets instead of a single national market, if the company wants to be well informed. Since each of the national markets has unique characteristics, the marketing researcher has to bring them out distinctly in his analysis. As small markets may have low profit potential, it may be advisable to undertake marketing research and the amount to be spent on such research would involve the same approach.

Second, the problem of reliability of secondary data available in the concerned country/ countries becomes extremely relevant. AT times it is felt that the statistics available in developing countries are not realistic and they are manipulated in order to show a rosy or gloomy picture on account of political and other considerations.

Third, if research involves the collection of primary data through a survey in a foreign country, the export marketing research may sometimes find it difficult to collect such data. This may be on account of the reluctance of respondents to give the required information to foreigners who are strangers. This problem is further accentuated especially in rural areas which account for a sizeable proportion of total population and where the level of education is very low.

Fourth, when a survey is to cover two or more countries, differences in economic and social environment, demographic aspect, physical distribution facilities, legal constraints, etc., would affect the comparability of data.

Fifth, the availability of media may also affect the comparability of data for two or more countries. In most of the developing countries, for instance, telephonic interviewing would be quite inappropriate as a large proportion of households do not own telephones. Further, as a vast majority of households do not own TV sets in developing countries, the effect of TV advertising may not be comparable with that in advanced countries where TV sets are owned by a good majority of households. Finally, religious and cultural customs vary from country to country. These may pose obstacles to marketing researchers particularly when they undertake field surveys. For example, in the Middle East, interviewing housewives may pose a problem on account of the purdah system.

In view of these special difficulties in export marketing research, one has to be extremely careful in conducting such a study, particularly, if it is to be based on field survey.

Organising Export Marketing Research: A Company intending to enter overseas markets for its products has to ensure that marketing research is organised on sound lines. There are several methods that may be used in organizing an export marketing research study. The company has to know their strengths and limitations so that it can make a judicious choice. In this context, the alternative methods for conducting research are, using

  • Own staff:
  • Importing agents:
  • Research agencies in overseas markets:
  • A domestic marketing research agency along with the services of a consultancy firm in the importing country: and
  • The services of a consortium of research agencies

Each of these methods has some advantages and limitations. As regards the use of own staff, it may be pointed out that it would be very expensive. As such, only large companies can afford to use this method. Most of the multinational companies use this method.

Using the services of importing agents may not give an objective assessment of the market as they may have other interests. This apart, as research is a highly specialized job, it is doubtful whether importing agents can give adequate information with absolute objectivity.

As regards the use of a research agency in overseas markets, its major advantage is that it will be very well informed of its home market. However, it may be difficult to select the right marketing research agency as complete information about different agencies may not be available to the exporting company. It is because of this reason; there is an element of risk in choosing an overseas marketing research agency.

Perhaps, the fourth method, viz. using a domestic marketing research agency along with the locally based consultancy firm offers some advantages over the preceding method. The method is, however, complicated on account of the difficulty in ensuring a meaningful link between the two organizations. Small and medium-sized companies which do not have their own trained research staff may find this method quite suitable.

An exporting company may hire the services of a consortium of research agencies. Apart from being expensive, the quality of service may considerably vary amongst the member firms. If the exporting company can ensure proper coordination amongst the member firms of the consortium, the method may be extremely useful in having adequate and reliable information of overseas markets.

In India, export marketing research is undertaken at different levels. First, there are several specialized corporations such as the State Trading Corporation, the MMTC, etc. Second, we have industry-wise export promotion councils for major industries. Third, there are specialized institutions such as the Indian Institute of Foreign Trade, the India Trade Promotion Organisation that are engaged in export marketing research. Fourth, there are consulting firms specializing in marketing research which may take up export marketing research on behalf of the sponsoring firm. Finally, large companies both in the public and the private sector too undertake such research on their own depending on their individual requirements.

As was mentioned earlier, it may perhaps be more appropriate for the above-mentioned agencies to seek the help of an overseas agency when research involves a field survey. Such collaboration will improve the quality and comparability of primary data. When two or more countries are involved in the survey

Scope of Export Marketing Research: The scope of any given export marketing research will depend on the following considerations:

  • The objective of the proposed research;
  • The nature of the product, its market and marketing arrangements, and the availability of relevant data about them;
  • The availability of financial resources and time; and the competence, experience and training of the marketing researcher

It may also be noted that in most of the cases, marketing research agencies will indicate a compromise between the information desirable to obtain and the information possible to obtain given the factors listed in (ii), (iii) and (iv) above

The marketing researcher has to organize his research in such a w2ay that the study is completed within the stipulated time and budgetary allocation. He has to decide how much and what type of secondary data is to be used and how primary data, if necessary, are to be collected. Finally, he has to decide on the methods of analyzing data. To a great extent, the quality of research will depend on the competence, experience and organizing ability of the marketing researcher himself. The discussion that follows first specifies information requirements for international marketers and then deals with the secondary data. Finally, it deals with the collection of primary data through a field survey.

Information Requirements of International Marketers: Although the nature of marketing decisions does not differ from country to country, on account of environmental differences, information needs may vary from one country to another. A company intending to do business abroad may undertake studies in different spheres such as markets, promotion, distribution, price or products. Information requirement in each of these spheres will vary as will be evident from the discussion that follows:

Market Information: When a company intends to test a market before entering it or even when giving it up, it needs information market performance, market share, and sales analysis and forecasting. This information can be obtained through market research.

Product Information: A company operating in foreign countries has to decide which product line it should add, which it should discontinue, and which needs to be strengthened. In order to take a sound decision on these issues, the company requires a good deal of information. Apart from product line information, the company may need information on individual products. For example, it may like to know the behaviour of product life cycles in different countries in respect of one or more of its products.

Promotional Information: Marketing research can provide information on promotional activities of the company, i.e. advertising and direct selling. The company may have to decide how much expenditure on advertising is to be made, what media are to be used for advertising, which copy is to be used so that the best possible results can be obtained, etc. Likewise, marketing research can be helpful in taking decisions on personal selling such as number of salespersons to be appointed, there remuneration, formation of sales territories and the allocation of salespersons to these territories.

Distribution Information: Marketing research can be helpful in providing information on the availability of channels and their relative desirability. Again, requisite information on warehousing, inventory, and transportation can be collected through proper marketing research studies.

Price Information: Pricing a product is a crucial problem before a company. It may like to know what price is to be fixed for its product so that it can maximize its profit. The effect of price on the demand for its product has to be ascertained. Here, too, marketing research can find out the consumers’ perception in respect of a given product’s quality and price.

Environment Information: Regardless of the nature of international marketing study, it is necessary that marketing researchers take into account different types of environment in a foreign country of interest. This means that they scan the economic, political, social, cultural and legal environments so that marketing strategies can be decided in the light of special features obtained in these environments.

General Research Information

The foregoing discussion briefly indicated the type of information needed in specific area. However, in any overseas marketing research study, some general information is needed. This is spelt out below:

  • General information about
    • Community-type conditions such as elections, cultural events, religious celebrations, etc.
    • Business conditions such as business ethics and traditional associations
    • Lifestyles and living conditions, i.e. social and cultural customs and taboos and
    • General economic conditions such as the standard of living of various groups of people and the economic infrastructure such as transportation, power supply, and communication.
  • Industry information: government policies affecting industry, availability of land and labour current or potential competitors, local companies as also third country companies etc.
  • Study-related information: collateral data generated to complete a particular marketing research study. This information will vary on account of the nature of study. For example, if a study relates to the introduction of a new product in a foreign market, it may need information on the existing products, technology available in the country, sources or raw materials, and possibilities of setting up joint ventures.
Export Marketing Research Why Export?
Use of Secondary Data (Or Desk Research)

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