Lecture on Global Market

7/30/2019 Lecture on Global Market

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Global Marketing

Lecture 5

Part One: International Positioning

Copyright 2012, SAGE Publications, Inc.


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Learning Objectives

1. the two primary elements shape a products positioning in theglobal marketplace

2. the main approaches to international product positioning

3. How a products position become an asset in an internationalmarketing effort

4. additional challenges that affect international product

positioning programs

5. the steps and tactics are used to establish positioning,evaluate positioning, and conduct repositioning in internationalmarkets?



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The Nature of

International Product Positioning Product position summarizes consumer opinions

regarding the specific features of the product. Productposition represents what currently exists.

Product positioning states the goal that marketershave in mind.

Marketing activities can be designed to shape a productsposition over time.

Two key elements of product position:

The way customers view the product

The products standing relative to competitors



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Positioning Statements

and Approaches

Positioning statement:

A one- or two-sentence summary of acompanys positioning strategy.

Nike will provide authentic, innovative products

that improve athletic performance.



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International Positioning Objectives:

Differentiation Differentiation results from emphasizing a unique

benefit or component of a product that separates

it from competitors.

This represents something different from the STP(segment, target, position) process.

Differentiation notes the specific benefit orattribute that makes the product unique whencompared to competitors. This typically applies across various target markets.



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International Positioning Objectives:

Brand Equity Brand equity is the unique benefits that a product

enjoys due solely to its brand name. The sources of brand equity are the strong, favorable, and

unique associations consumers have with the brand.

The benefits of brand equity include: The ability to charge a higher price

Increased consumer loyalty Higher stock price

Brand parity exists when brands within one productcategory are viewed as similar or undifferentiated.



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Global Product Positioning Challenges

Changes in Technology

The Digital Divide

Consumer Reluctance

Country-of-Origin Effects

the response a consumer has to a product due to the

country that is the source (in the consumers mind) ofthe product.

can drastically alter the position of the product in theminds of consumers.



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Sources of Country-of-Origin

Positioning Effects



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Country Image

Country-of-origineffects are often basedon stereotyped

conceptions consumershave about countries orthe countrys image.

Country image consistsof the attitudes andknowledge consumershave about a country.



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Religions in Select Countries



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Positioning Challenges and Regulation Regulations

may keep a company from positioning a product in terms of a new benefit or attribute

May (in some cases) prevent a company from entering

a market at all.

Each countrys government has sovereignty overbusiness activities within national boundaries. Sovereignty means that the government has authority

or control within its state.

Foreign businesses must respect this sovereignty andfollow the regulations and rules within the country.



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Packaging and Labels

A key regulatory issue is packaging and labels

regulations.



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Steps for International Positioning



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Different Types of Competition

Product versus Product

Product Line versus Product Line

A product line consists of similar products within aparticular category.

Brand versus Brand

Company versus Company

Industry versus Industry



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Identifying Points-of-Difference

Tangible product benefits are the value drawnfrom the physical components of the product.

Intangible product benefits are the value drawnfrom the social, emotional, and nonphysicalaspects of consumption.

Positioning maps are tools used to map thecompany and its competitors in terms ofconsumer attitudes or perceptions.



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Example of Positioning Maps



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Share of Mind and Share of Heart

Share of mind refers to the products position in terms of brandawareness. A product with low share of mind is not readily recalled when a

consumer considers brands in a product category.

A brand with high share of mind will immediately come to mind whena consumer thinks about the same category.

Share of heart focuses more on the emotional components of theconsumer attitudes and includes the ways consumers experiencethe product and its social context.

Share of heart suggests that relationships, emotions, and experiencesare part of a products position.

A product exhibiting high share of mind combined with high shareof heart holds a strong marketing advantage.



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Enhancing Position

Enhancing position involves all standard and non-traditionalmarketing approaches.

A brand featuring a unique product attribute will be marketed witha strong emphasis on the feature.

Positioning based on competitors, as part of an internationalprogram, will likely focus on local competitors and the product willbe differentiated in some way, typically avoiding denigrating the

competition so as not to offend locals.

Enhancing use or application positioning constitutes a relativelystraightforward process. It can be accomplished through thetraining of salespeople to emphasize various product uses.



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Enhancing Position (Cont.)

Price-quality relationship positioning may be emphasized through varioustactics aimed at the position chosen. A high price and implies high quality, premium programs allow the marketing

team to offer a sales enticement without reducing the price.

At the low-price extreme, a continuing emphasis on price remains the primarymarketing tactic.

For those products of medium price and quality, the approach features valueas the primary selling point.

Product userpositioning in international marketing may center onpsychological, sociological, or spiritual values held by potential consumers.

Product class international positioning may rely on a universalendorsement, such as ISO (International Organization for Standardization)9000 or 14000 standards.

Cultural symbolpositioning may be based on a local icon.



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Repositioning

Repositioning is the process of changingconsumer perceptions of a brand relative tocompetitors.

Involves a sweeping process that must beimplemented at the strategic level, thereby affectingevery part of the company.

Not a quick and easy fix. Some evidence suggests that it can take up to six years

for consumer perceptions of quality to shift.



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Positioning and Bottom-of-the-

Pyramid Consumers Positioning within the bottom-of-the-pyramid markets can be

complicated. Awareness of the product and its benefits typically already exists.

The challenge is not differentiation.

The concern becomes shifting the companys focus, particularly forhigh-quality positioned brands.

The position may signal a high price deterring consumer interest.

Positioning in the bottom-of-the-pyramid involves educating

consumers about the steps the company has taken to adapt to theconsumers level of income.

Repositioning the product or brand as being attainable in terms ofprice without losing the differentiation in terms of quality or productfeatures.

It may entail the introduction of a new brand.



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Sustainability and International

Positioning Positioning a company, business practice, and

product as being more environmentally consciousallows the organization to occupy a unique space

in the minds of consumers. Sustainable business practices have become popular

around the world.

The potential benefits have led to greenwashing,or the practice of exaggerating or even fabricatingthe degree of the sustainable or green activitiestaking place in the organization.



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Greenwashing Sins



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Ethical Issues in International

Positioning Positioning plays a role in encouraging

consumption. May drive consumers to purchase things they do not

need or to envy those who can afford the product

Positioning often seems to promise that theconsumer will become younger, prettier, or more

popular. Body image and self-image concerns

Positioning based on social status has been criticizedas unethical and a driver of low self-esteem.



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Part Two

Market Research in

the International Environment



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Learning Objectives

1. How market researchers effectively employ the scientificmethod to improve the quality of a marketing program

2. What the steps of the marketing research process

3. the roles do primary data, secondary data, validity, andreliability play in the process of designing an internationalmarketing research program

4. the techniques used when developing samples and collectingdata for international marketing research

5. factors which complicate the analysis and interpretation ofdata in international marketing research



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Market Research

Market research is the systematic gathering,storing, and analyzing ofmarketplaceinformation for use in strategic decisionmaking. The market research process links the

organization with various constituent groups.

The Scientific Method

How researchers use observations, empiricalevidence, and knowledge to objectively studyvarious phenomena



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Components of the Scientific Method

Objectivity

Researchers try to remain objective

One factor that affects objectivity, the self-reference criterion

occurs when someone applies his or her own cultural

values and background to the assessment of the

behaviors of others.



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Types of International

Market Research



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The International

Market Research Process



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Step 1. Define the

Problem or Situation Defining the problem or situation that an organization faces

constitutes the first step in the market research process.

An inadequately or hastily defined problem or situation can lead toflawed data and conclusions.

Researchers take cultural differences into account early in theprocess.

A problem in one culture may simply not exist in another.

Marketers can define and assess a problem by asking if the problemas stated represents the actual issue or merely a symptom of theproblem. Example: Declining sales may be the symptom of a larger problem

such as negative publicity, a design defect in the product, or aninnovation by a competitor.



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Step 2. Complete a

Cost/Benefit Analysis The costs and benefits of engaging in international

market research are assessed early in the process.

Making the decision to proceed with researchrequires the marketing team to compare theimportance of obtaining the required informationand the time frame within which the information

will be collected, against the value of the benefitsof acquiring the information and the overalldifficulty in obtaining the data. The availability and type of data needed to address

the problem can drive up costs.Copyright 2012, SAGE Publications, Inc.


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Secondary Data

Secondary data - collected by an outside

agency and are made available free of charge

or for a fee.

Marketers may struggle to find details regarding

the collection of data for government statistics.

When examining international markets, it can be

difficult to compare data and information fromone country to another.



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Secondary Sources of

International Market Research



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Primary Data Primary data are gathered

by the researcher or

research team.

They are collected in the

form chosen by the

researcher and can be

gathered in practically any

region of the world.



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Reliability and Validity

Reliability refers to the degree to which theitems used to measure a concept areinternally consistent with each other and the

extent to which the findings are repeatableover time.

Validity refers to the extent to which

responses to a measure reflect the actualdifferences in the concept found acrossrespondents, or the overall level of accuracyof the measure itself.



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Types of Validity

Internal validity results when cause-and-

effect relationships have been correctly

identified by the research.

External validity means that the

statement of cause and effect would

apply to other situations or settings.



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Macro-Level Analysis

and Political Risk Macro-level analysis often occurs at the

country level.

Political risk, or the potential for politicalforces and governmental activities to

hamper and harm business activitieswithin a country, is a key component ofthis analysis.



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Assessing Political Risk



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Legal Risk

Legal risks are those associated with the laws

present in a country, and the enforcement of

those laws.

The extent to which patents, copyrights, and

intellectual property rights is an important

component. Many countries do not offer these protections.

Others have such laws but fail to enforce them.



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Step 3. Develop a Research Design



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Qualitative Research

The focus is on obtaining information withoutrelying on numerical expressions or measurements. A small number of respondents are typically used.

This approach is researcher dependent. The researcher subjectively analyzes the information

that has been collected.

Cultural norms can preclude the use of manyqualitative research designs. In some cultures, consumers are hesitant to express

their opinions in front of others.



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Qualitative Research Methods

Ethnographic Research Design

The researcher studies respondents in theirnative environment by living or interactingwith them.

Observational Studies

The researcher watches consumers as theyexhibit a marketing behavior, such asshopping and making purchases.

Cultural norms may make observational studiesdifficult.



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Qualitative Research Methods (Cont.)

Focus Groups Semistructured or unstructured group discussions that generally

take place in groups of eight to twelve.

Personal Interviews

One-on-one discussions between a researcher and a respondent

Cultural nuances make the above far more difficult to dointernationally.

Delphi Technique Involves a market researcher who assembles a panel or group of

experts on the topic of interest.

The experts answer a series of questions, typically questionsforecasting or predicting future behavior.



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Quantitative Research Methods ---

Surveys Surveys are sets of questions asked in various

settings.

Survey instruments can usually be given to large

numbers of consumers with relative ease. Administering surveys can be more challenging in

international settings, partially due to illiteracy anddifficulty in distributing surveys.

Conceptual equivalence problems create additionaldifficulties. These occur when a concept in onecountry has a different meaning in another.

The word household, for example, has different meaningsin various countries.



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Translation Back translation is a process in which a survey is

translated from an original language into a targetedlanguagefor example, from Italian to Portugueseand then back into the original language by a

different translator. The second translated document is then compared to the

original version to check for accuracy and meaning.

Parallel translation is a process in which two or moretranslators are used for each step of the backtranslation process. If different translations result, the research team

discusses the results and selects one final translation.



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Experiments Experiments are research techniques that allow researchers to

discover cause-and-effect relationships by manipulating certainvariables and controlling others.

Researchers seek to identify the effect of independent variables on adependent variable.

Advertisements and marketing materials are tested usingportfoliotechniques.

Consumers are exposed to a series of commercials, then researchers test tosee if the ad achieved its desired effect.

A test market is a special type of experiment that is constructedwithin realistic marketplace conditions.

In essence, results from an experiment in a small area, such as a smalltownship in South Africa, are used to predict what would happen in alarger area, including all small townships or the entire country.



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Online Research: A Hybrid Approach

Exciting growth area for marketing research Several problems have been associated with

Internet market research programs: Lack of Internet capabilities and high illiteracy rates

in some countries Survey must be constructed to meet the cultural

norms of the target audience.

Careful translation will be necessary.

The Internet offers several online sources ofsecondary data: Can be combined with primary online research to

gain a better understanding of a target market.



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Step 4. Develop a Sample Sampling is a process wherein members of a

population are selected for inclusion in a researchstudy because they will be representative of thelarger group.

Sampling techniques can be used to survey a smallsubgroup rather than the entire population, but atthe same time draw inferences about the entirepopulation based on the results.

Statistical inference means that the researchresults obtained from a sample apply to the largerpopulation, a common objective in internationalmarketing research projects.



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Probability Sampling Researchers generally choose between probability

and nonprobability sampling methods. A probability sample is one in which each element in

the population has a known, nonzero probability ofbeing selected for a study.

A random sample is a type of probability sample inwhich each element has an equal chance of beingselected for study.

Simple examples of random selection include pickinga name out of a hat or choosing the short straw.Researchers can use computer programs to generaterandom numbers as the basis for random selection.



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Nonprobability Sample

A nonprobability sample is one in which theprobability of an element of the population beingincluded in a sample is unknown, which means arandom sample cannot be used. The goal remains to make the sample as

representative of the larger population as possible.

Various tactics may be used: Snowball techniques are nonprobability techniques

in which one respondent refers the researcher to thenext respondent, and so on.

A convenience sample is a nonprobability techniquein which researchers sample the respondents whoare the easiest to reach.



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Sampling Issues in

International Research International sampling introduces several difficulties for the

international market researcher. One issue pertains to the lackof availability of accurate demographic information. For many

countries, such lists, or sample frames, are not available. Less-developed countries often do not keep valid demographicinformation. Collection methods can be severely limited ordeliberately altered by the ruling government.

Obtaining a true probability or random sample in mostinternational settings will be difficult, because methods used toreach people create biases. Some citizens do not owntelephones, others do not have access to the Internet, andothers still are illiterate and cannot read mail.


M th d I i


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Method Issues in

International Research The descriptive research method allows the researcher to

examine attitudes and behaviors that are relevant to onespecific country.

Comparative research takes place when the researchers

examine differences between cultures or countries.

Contextual research may be performed when the researchattempts to study cross-national groups and how consumersbehave in a selected context.

The focus with contextual research is on how consumers think oract within a specific context.

Theoretical research examines the extent to which a theorygarners support across cultures and national boundaries.

The type of research chosen will be based on a specific academic

research question.Copyright 2012, SAGE Publications, Inc.


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Calculating Sample Size



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Confidence Interval Formula



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Step 5. Collecting Data The ability to collect data depends on local customs and technological

infrastructure. The proliferation of telephone and Internet communications has changed the

landscape of data collection in many countries, but usage rates still vary widely.

The recent growth of mobile phone usage in some countries may lead tonew marketing research opportunities. On the African continent, more than 280.7 million subscribers, or about 30.4% of the

overall African market, had signed up for service by 2007.

Internet access also varies worldwide. In Latin American countries, only 30% of consumers have access.

In African countries, only 7% of residents enjoy Internet access.

Another difficulty occurs when attempting to use maps to find addresses. Some Western cities, such as London, are famous for being difficult to navigate, even

with a map.

In less-developed countries, the maps themselves may be outdated and incorrect.



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Step 6. Analyze and Interpret Data

Linguistic problems, or those associated withdifferent meanings for terms, oftencomplicate international market research.

Frequently used concepts such as satisfactionand feelings should be carefully examined tounderstand how these terms might differ acrosscultures.

Any research questions related to time andpunctuality in other countries require carefulconsideration by the marketing team.



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Step 6. Analyze and

Interpret Data (Cont.) Metric equivalence issues arise when respondentsfrom different countries systematically scoreinterview or survey questions differently.

Cultural differences in response styles can greatly

affect research results. In a culture with strong tendencies toward humane

orientation, respondents may be much more likely tooffer favorable answers to questions, always grantingthe benefit of the doubt.

American consumers are willing to express extremepositions on measurement scales, which may not bethe case for consumers in other cultures.

In collectivist societies, consumers are less willing toexpress extreme attitudes.



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Step 6. Analyze and Interpret Data

(Cont.) Socially desirable responses are an additional problem. This occurs

when respondents bias their opinions by what they believe are themost culturally acceptable ways in which to respond to a question.

One problem for data analysis, then, is that even when theresearcher selects the proper sample size for a proposed standarddeviation level in the population, the true score on the statistic maystill deviate from the actual opinions of the respondents, which inturn, would affect any analysis of the data.

Consequently, the use of multiple methods, including bothqualitative and quantitative techniques, becomes critical whenperforming international market research. Monitoring cultural differences to the various research approaches

generates results of a better quality.



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Step 7. Formulating Conclusions

and Writing Reports The final step in the international market research process is

formulating conclusions and writing the research report.

The research report should be written in a direct andinformative way that assists the international marketing inmaking decisions.

The conclusions presented in international market researchreports should be both complete and concise.

In an international context, this step poses the samecommunication issues that have been part of the entireprocess.

Often, one of the difficulties is in re-creating an environment thatmany of the readers of the report will never have visited.

Those readers may be initially reluctant to accept the findings.Copyright 2012, SAGE Publications, Inc.


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Ethics and International

Market Research Researchers who are ethical protect the rights and privacy of

research participants. Keep confidential information from being leaked to outside parties.

Researchers who engage in experimentation focus on protecting thesafety and well-being of research subjects and ensure that no one isharmed in any way by the research project.

Ethical researchers also make certain that research activities are notmisrepresented in any harmful way.

One unethical tactic is to engage in sugging or selling under theguise of research. A researcher who suggs begins asking a respondent questions and then

attempt to sell the person a product.



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Bottom-of-the-Pyramid and

International Market Research International market researchers seek to gather the opinions of bottom-of-the-pyramid consumers

so that the findings can be incorporated in various marketing efforts. Many of these consumers maybe unable to respond to surveys or Internet research programs, because they do not have access tocomputers, and many more may be illiterate. Data collection techniques may be adapted, relyingmore on qualitative methods such as personal interviews or ethnographic methods to tap theattitudes and behaviors of this segment.

Pricing research takes on a new meaning when researching bottom-of-the-pyramid consumers.Rather than studying the effect of a pricing change on purchasing behaviors, researchers shouldinstead seek to identify what price consumers are actually able to pay for a particular product orservice.

Product research may focus on finding/gauging consumer responses to cost-saving changes toproduct design, and may explore differences in purchasing frequency. Smaller quantities perpurchase may result in more frequent purchasing of the item. Instead of buying a six-month supplyof soap, market research may find that bottom-of-the-pyramid consumers prefer buying single-usesachets as needed.

Distribution and promotion research also varies in context for bottom-of-the-pyramid consumers.Many bottom-of-the-pyramid consumers are rural; research should highlight how the consumersaccess the product. Promotion research in these countries should examine the effectiveness ofword-of-mouth efforts rather than advertising, mass media, or Internet marketing campaignapproaches.



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Control of the International

Market Research Process Should an organization conduct all international

research activities from a centralized location, orshould the efforts be decentralized? A centralized structure brings the management of these

tasks in house to a corporate headquarters location. A decentralized structure allows research tasks to be

managed in offices in, or near, the foreign region underinvestigation.

The main advantage of the decentralized method is that theresearcher will be closer to the subjects being studied and maybe more sensitive to market-specific issues.

Another alternative for the international marketresearcher is to hire an external research firm toconduct research.



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Major Market Research Firms

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Lecture on Global Market