. Problems of gathering primary data in international marketing research

1. No officialy recognized census of population2. Thelack of available demographic data3. Incomplete and out of data telephone directories-

no accurate maps of population census4. Language and compensation the most universal

surbey research problem in foreign countires is the language barriers,differences in terms and the difficulty of exact transaltion create problems in collecting the specific information desired and in interpreting the respondents answers. Equivalent consepts may not exist in all languages.

Marketors may use 3 different techniques in order to aoid language problems:

1. Back transation – the quiestionnaires is translated from one language to another than a second person translates it back to the original language. This process shows the misunderstand and misinterpretations before they reach the public.

2. Parallel translation – ( back translation may not always ensure an accurate transaltion because of commmonl used terms in boh languages. Parallel translation is used toovercome this problem. In this process more than 2 translations are used for back translation. The results are compared differences are discussed and themost appropriate translation selected.

3. Decentering – is a hybrid of bacj translation ,it is a subsesive process of translation and retranslation of a quiestionnire each time by a different translator. The process continues to be repetead until theoriginal and the final versions do not have differences.

12. International research on Internet: a new opportunity for marketers

A new opportunity for conducting international marketing research is using the internet techniques. For many companies the internet rovides a new and increasingly important way for conducting a variety of international marketing research.

New product consets and advertising messages can be tested over the internet for immediate feedback.

Worldwide consumer panels may be created to help o test marketing programs across international samples. The following types of researches on the internet may be used.

1. Online surneys2. Online focus group vis askype3. Web visitor tracking 4. Advertising measurement5. Email marketing lists6. Customer identification system

13. New product development process I.New product development strategy in

international marketingNew poductdevelopment process includes the

development of regional products,product improvements,produc modifications and new brands through the cmpanes research and development efforts. Given the rapid changes in consumer preferences tehnology,and competition,companies must develop a nig number of new products and services.

A firm can obtain new products in two ways:1. Through acquisition – buying a whole company a

patent or a license. To produce someone else product2. Through new product developmet process

Innovation process can be very risky. New products continue to fail at increasing scale,marketers estimate that new consumer packaged goods fail at a rate of 80%. Another study suggested that from 25000 new consumer food,beverage and beauty products,that are launched on the market each year,only 40 % will be after 5 years on the market.Future rate for industrial products may be as higher as 90%.

There are several reasons of new products failure:1. The market size may be overestimated

2. The new product has not distinguished as well as it should have been

3. The new product may be incorrectly positioned on the market

4. New product is priced too high5. New product may be poorely advertised

To create successful new products a company must understand its consumer markets and competitors,and develop products that deliver by value to consumer., The solution of this problem lays in strong new product palnning and in setting up a systematic new product development process. Usually,this process includes the following stages:

1. Idea generation is the systematic search for new product ideas,a company typically has to generate many ideas in order to find a few good ones. New product ideas may be collected from internal sources such as sales personnel. Company’s executives,engineers,manufacturing stuff on research and development department. For the purpose the company may use brainstorming on focus groups.

2. External sources may be obtained:CompetitorCustomers – the company may analyze customer

question and complaints to find new products that better deserve consumer problems,it can conduct surveys and focus group to learn about consumer needs and wants ,and to get ideas for product improvements.

Distributors and suppliers – they can tell the company about new concepts,techniques and materials that can be used to develop a new product resellers are also close to the market and they can offer information about consumers’ problems and new products possibilities.

Other sources such as – trade magazines,seminars,government agencies, new product consulting firms,advertising agencies,reasons ,companies,investors and universities.

Top management may install an idea management system that directs the flow of new ideas to a deparment,where they are collected and evaluated, in setting up such a system the company can do the following :

1. Idea generation- Appoint a respected person to be company’s idea

manager- Create an idea manager committee consisting of

people from different departments. They should meet regularly and evaluate new product and subways ideas.

- Encourage all the company state holders to send their ideas to ideas manager

2. Ideac screening – the purpose of idea generation is to create a large number of ideas,the purpose of idea and drop poor once as soon as possible. Product development costs rise in later stages. So the company wants to continue only with the product ideas that may become profitable products. Many companies require theexecutives form that can be analyzed by new product committee.

3. Concept development and testing – product concept is a detailed version of the new product idea stated in consumer terms. It’s important to distinguish that a product idea,product concept and product image. A product idea is an idea for possible product that a vompany can offer on the market.

A product image – is the way consumer perceive of the product potential that will be lauched in the future.

Prodict concept- is a detailed description of the product potential that will be launched in the future.

The concept testing – refers to the testing of new product concepts with groups of forget consumers.This stage is done in order to find out the consumers’opinions and preferences for new product. The concept may be presented through a word or picture description.

4. Marketing strategy development- includes an initial marketing strategy for few products based on the product concept. Marketing strategy statements consists of the following:

- The first part decribes the target market,the planned product positioning sales and market shares,and profit goals for the first few years.

- The second part outlines the products planned price,distribution and promotion budget for the first year.

- Thelast part of the marketing strategy describes the planned long-run sales,profit goals and marketing mix strategy.

5. Business analysis involves a review of the sales,costs,and profits estimations for few product to find out whether they satisfy the company’s objectives. If they do,the product can move to the products development stage.

To estimate sales a company might look at the sales history of similar products and conduct surveys of market opinions,it can than estimate min and max sales to assess the range of risk.

6. Product development – so far many new product concepts have existed as a word description,if the product concept passes the business first if moves into product development will design a prototype that will satisfy consumers and that can be produced quickly and with low cost.

7. Test marketing-,if a product passes functional and consumer test the next step is test marketing at which the product and marketing program are introduced in more realistic marketing settings. Test marketing the produced before going to the full production. It allows the company test the product and its entire marketing program,positioning strategy,advertising distribution,pricing and packaging devisions.

Test marketing costs can be very high and it takes long time that may allow competitors to gain advantages,that’s why when the costs of developing and introducing the product are low or when management is aleready confident about the new product. The company may do little or no-test marketing at all.

14. Idea generation stage and the problems of new products failure.

There are several reasons of new products failure:6. The market size may be overestimated7. The new product has not distinguished as well as

it should have been8. The new product may be incorrectly positioned on

the market9. New product is priced too high10. New product may be poorely advertised

To create successful new products a company must understand its consumer markets and competitors,and develop products that deliver by value to consumer., The solution of this problem lays in strong new product palnning and in setting up a systematic new product development process. Usually,this process includes the following stages:

3. Idea generation is the systematic search for new product ideas,a company typically has to generate many ideas in order to find a few good ones. New product ideas may be collected from internal sources such as sales personnel. Company’s executives,engineers,manufacturing stuff on research and development department. For the purpose the company may use brainstorming on focus groups.

15. Test marketing stage and its types8. Test marketing-,if a product passes functional and

consumer test the next step is test marketing at which the product and marketing program are introduced in more realistic marketing settings. Test marketing the produced before going to the full production. It allows the company test the product and its entire marketing program,positioning strategy,advertising distribution,pricing and packaging devisions.

Test marketing costs can be very high and it takes long time that may allow competitors to gain advantages,that’s why when the costs of developing and introducing the product are low or when management is aleready confident about the new product. The company may do little or no-test marketing at all.

Companies may use the following types of test:1. Standard tets market – company finds a small

number of representatives test retires conduct full marketing campaign in these cities and uses consumer and distributors surveys to analyze product performance. The result are used to forecast national sales and profits.

Standard test have some disadvantages :- They can be very costly- They may take long-time- Competitors can monitor test market results and

interfere in launching a new product2. Control test market – several research compaingn

keep controlled panels of stores that have agreed to carry out new products for a fee. Control test markets usually cost less thatn standard test and they may be done much more quicker,but as in standard test controlled test allow competitors to get a look at the company’s new products.

3. Stimulated test markets – companies can also test new products in a si,mulated shop, environment. The company can research different promotions and can offer them to a sample of consumers,including the new product being tested. It may give consumers a small amount of money and invite them to a real or laboratory store,where they may keep the money or use it to buy items. The marketers analyze how many consumers buy the new product and competing brands.

Advantages:- Cost less- It takes short time- Keep infor out of competitors

9. Commercialization – introducing of the new product into the real market and possing to the full production.

16. Problem of language for primary data sources. Methods of avoiding this problem

Marketors may use 3 different techniques in order to aoid language problems:

4. Back transation – the quiestionnaires is translated from one language to another than a second person translates it back to the original language. This process shows the misunderstand and misinterpretations before they reach the public.

5. Parallel translation – ( back translation may not always ensure an accurate transaltion because of commmonl used terms in boh languages. Parallel translation is used toovercome this problem. In this process more than 2 translations are used for back translation. The results are compared differences are discussed and themost appropriate translation selected.

6. Decentering – is a hybrid of bacj translation ,it is a subsesive process of translation and retranslation of a quiestionnire each time by a different translator. The process continues to be repetead until theoriginal and the final versions do not have differences.

17. Standardization versus adaptation strategies in international marketing

There is a serious discussion around the product development process, which focuses on the two alternatives at their disposal firms, standardization and adaptation. According to some opinions, the activity in global markets should be one oriented by the unit cost which supports standardization, others say an adaptation of the product for each market.

The arguments offered by those who support the standardization process of homogenization targeting the needs, tastes and values, which is an effect of global communication and social forces that manifest throughout the world. So is assisting in the development of global markets, which manifests similar needs for products with reasonable prices and quality.

Thus, product policy, international entrepreneur must make fundamental decision, namely to produce a standard product for all markets or adapt the product to the specific needs of each market. Standardization involves providing the same product both at home and abroad, while adaptation involves making changes to the product, in order to meet specific requirements. Although

standardization is very tempting for any company, it can not always be achieved. In many cases, it is necessary to adapt the product. Companies like Coca-Cola or Colgate recognized for their standardization strategy of production and marketing and selling their products in over 160 countries of the world, have had to adapt to local conditions. The Coca-Cola company has only three standardized brand and one of them has a different formula Sprite in Japan. In addition, she had to change the brand name in Light Coke Diet Coke when he entered the Japanese market, as Japanese women do not like to say dieting. This is one of many examples that can be cited to support the hypothesis of adaptation to local products.

It can be said that there is a growing trend of incorporating different regional characteristics into a global product. However, it can not be considered a pure standard. Companies like Ford and Nissan develops global models, but adapts to local products when needed. Although the automotive industry is a certain convergence of tastes in terms of size and style of car, how a car is perceived differs, however.

Factors that encourage standardization of products are:

a) economies of scale in productionb) economies of scale in research and development

expenses;c) cost savings in marketing;d) consumer mobility;e) image of the country of origin;f) industrial products;g) activation exports;h) recovery of investments;i) management of the company;j) converging tastes.18. Pricing Policy in international marketing:

objectives, and pricing approachesIn general,price decisions are viewed in two ways

pricing as an active instrument of accomplishing marketing objectives,or pricing as a static element in a business decision. If prices are viewed as an active instrument,the company uses price to achieve a specific objectives,whether a targeted return on profit,a targeted market share,or some other specific goal. The company that follows the seconf approach,pricng as a static element,probably exports only excess inventory,places a low priority on foreign business,and views its export sales as passive contributors to sales volume. Profit is by far the most importan pricing objective. When U.S and Canadian intemational businesses were asked to rate,on a scale of one to five,several factors important in price setting,total profits received an average rating of 4.7 ,followed by return on investment,market share,and total sales volume. Liquidity ranked the lowest. The more control a company has over the final selling price of a product,the better it is able to achieve its marketing goals. However,it is not always possible to control end prices. The broader the product line and the larger number of countries involved,the more complex the process of controlling prices to the end user.

Approaches:Both cost and market considerations are important,a

company cannot sell goods below cost of production and remain in buisness for very long,and neither can it sell goods unacceptable in the marketplace. Firms unfamiliar with ovearses marketing and firms producing industrial goods orient their pricing solely on a cost basis. Firms that employ pricing as part of the strategic mix,however,are aware of such alternatives as market segmentation from country to country or market to market,competitive pricing in the marketplace,and other market oriented pricing factors.Full-cost versus variable-cost. Firms that orient their price thinking around cost must determine wheter to use variable cost or full cost in pricing their goods. In the variable-ost pricing the firm is concerned with the marginal or incremental cost of producing goods to be sold in overseas markets. Such firms regard foreign sales as bonus sales and assume that any return over thei variable cost makesa contribution to net profit. Tush,variable or marginal pricing is a practical approach to pricing when company has high fixed cost and unused production capacity. Any contribution to

fixed cost after variable cost are covered is profit to the company.

Skimming versus penetration pricing. Firms must also decide when to follow a skimming or a penetration pricing policy. Traditionally,the decision of which policy to follow depends on the level of competition,the innovativeness of the product,and market characteristics.

A company uses skimming when the objective is to reach a segment of the market that is relatively price-insensitive and thus willing to pay apremium price for the value received. If limited supply exists,a company may follow a skimming approach in order to maximize revenue and to match demand and supply. When a company is the only seller of a new or innovative product,a askimming price may be used to maximize profits until competition forces lower price. Skimming often is used int hose markets where there rae only two income levels,the wealthy and the poor. Costs prohibit setting a price that will be attractive to the lower-income market,so the marketer chargs a premium price and directs the product to the high-income,relatively price-inelastic segment.Apparently this was the policy of Johnsons and Johnsons pricing of diapers in brazil before the arrival of F and G. Today,such opportunities are falling away as the disparity in income levels is giving away to growing middle-income market segment. The existence of larger markets attracts competition and,as is often the case,the emergence of ultiple product lines,thus price competition.

A penetration pricing policy is used to stimulate market growth and capture market share by deliberatly offering products at low prices. Penetration pricng most often is used to acquire and hold of market as a competitive maneuver.However,in country markets experiencing rapid and sustained economic growth. And where large shares of the population move into middle-income classes,penetration pricing may be used to stimulate market growth even with minimum competition. Penetration pricing may be a more profitable strategy tahn skimming if it maximizez revenues and builds market share as a base for the competition that is sure to come.