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Sabrina Dobney

Steppingstones
Introduction
The world is flat is a metaphor for viewing the world as a level playing field in term so commerce, where all players
and competitors have an equal opportunity.

When distances (geographic, cultural, administrate/political and economic) increase, cross-border trade decreases.
But the global strategy must be based not on the elimination of differences and distances among people, cultures and
placed but on an understanding of them.

Definitions
• Market: people or organization with similar preferences that are both able and willing to buy
• Marketing can be defined as the activity, set of institutions, and processes for creating, communicating, delivering,
and exchanging offerings that have value for customers, clients, partners, and society at large. It’s consists in
understanding needs and develop solutions to satisfy them: this creates value.
• Decisions: systematic managerial decisions made by marketing managers.
• The marketing mix comprises a contemporary marketer’s primary tools. It looks at product, price, place and
promotion. Marketing can also be understood as the set of activities to create (product), communicate (promote),
deliver (place) and exchange (price) offerings that have value for customer needs.
• An organization that engages in global marketing focuses its resources and competencies on global market
opportunities and threats. A company that engages in global marketing conducts important business activities
outside the home-country market. Companies that engage in global marketing frequently encounter unique or
unfamiliar features in specific countries or regions of the world.
• Globalization is the development and selling of products or services intended for the global market, by adapted
to suit local culture and behaviour. Done through dynamic interdependence between headquarters and
subsidiaries, ensuring local flexibility and ensuring worldwide diffusion of innovation. The value chain function
should be carried out where there is the highest competence and greatest cost-effectiveness.
• Economic globalization constitutes integration of national economies into the international economy through
trade, direct foreign investment, short-term flows, international flows of workers and humanity generally, and
flows of technology.
• Global industry is one in which competitive advantage can be achieved by integrating and leveraging operations
on a worldwide scale. An industry is global to the extent that a company’s industry position in one country is
interdependent with its industry position in other countries

Principles of Marketing
Needs
Marketing satisfies needs. There are different types of needs:
• Basic needs can’t be created. Basic needs are physiological
and safety needs. Once they are satisfied we start caring
about other needs.
• Self-fulfilment and psychological needs can be created.

A product can satisfy various needs simultaneously. You needs to identify needs. You can do that with market research.

Value
The essence of marketing is to surpass the competition at the task at crating perceived value. The Value equation is:
𝐵𝑒𝑛𝑒𝑓𝑖𝑡𝑠
𝑉𝑎𝑙𝑢𝑒 =
𝑃𝑟𝑖𝑐𝑒
Value is created with differentiation, which is needed as a result of competition.
We generate value to create a competitive value, you want a competitive advantage, creating more value than the
competitors. Value, as a customer perceives it, can be increased in two basic ways: an improved bundle of benefits or
lower prices. What you do depends on customer needs and preferences, as customer are heterogenous.
NOTE: when you lower nonmonetary price, you can increase costs.
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Benefits
Benefits are a combination of the product, promotion and distribution, and partly comes from the price.
Benefits include quality. There are two types of quality:
• Performance quality: it’s objective and testable and can be associate with certificates. E.g. speed, safety…
• Perceived quality: subjective quality attributed by the customer. E.g. image, packaging, texture, colour…
The types of quality aren’t independent. They are positively correlated, but not causal. E.g. packing doesnt0 affect
performance quality, but good performance may improve perceived quality.

Costs
Costs include the price. Price has two elements: a monetary component and a non-monetary component (opportunity
cost, uncertainty…).

Nonmonetary costs are also a factor, and marketers may be able to decrease the time and effort that customer must
expend to learn about or seek out the product.
To achieve market success a product or brand must measure up to a threshold of acceptable quality and be consistent
with buyer behaviour, expectations and preferences.

Product orientation vs marketing orientation

• Product orientation: focus on improving your offering within the firm. “We sell what we make”. You produce a
product and find a market for it
• Marketing orientation: you find a need and satisfy it.

The orientation you take depends on the number of players in the market.
• Low competition: when supply < demand, you should go for product orientation
• High competition: when supply > demand, you should go for marketing orientation
Competition varies across time and industries.

Strategy: plan chosen to bring about a desired future. It answers these key questions:
• What are our objectives?
• Where of we compete?: where are we, what customers are we targeting, what technology do we use…
• How do we compete?: how do we create value, what are our key competitive advantages
• With whom do we want to develop relationships?: cooperation strategies.

Competitive advantage
The purpose of the marketing plan is to create sustainable competitive advantages in the global marketplace.

When a company succeeds in creating more value for customers than its competitors, that company is said to enjoy a
competitive advantage in an industry. Competitive advantage is measured relative to rivals in a given industry.

• Economies of scale: accumulated volume in product and sales results in lower cost price per unit, due to
experience curve effects and increased efficiency in production, marketing… Larger scale will create a competitive
advantage only if the company coverts scale into economies of scale.
• Economies of scope: reusing a resource form one business/country in additional businesses/countries. Economies
of scope at a global level lies in being responsive to the tension between the need for central coordination and the
need for local autonomy in the actual delivery of products and services.

Global marketing
A marketing approach that has proven successful in one country will not necessarily succeed in another country.
Customer preferences, competitors, channels of distribution and communication media may differ. An important
managerial task is learning to recognize the extent to which it is possible to extend marketing plans and programs
worldwide as well as the extent to which adaptation is required.

Global marketing consists on finding and satisfying global customers’ needs better than the competition and
coordination marketing activities within the constraints of the global environment. A firm needs to balance tensions
in adapting to different demands from customers in divergent markets, while attempting to transfer knowledge and
learning between the established markets and these new markets.
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Global marketing is defined as the firm’s commitment to coordinate its marketing activities across national
boundaries to find and satisfy global customer needs better than the competition. This implies that the firm can:
• Develop a global marketing strategy, based on similarities and differences between markets;
• Exploit the knowledge on the headquarters (home organization) through worldwide diffusion (learning) and
adaptations
• Transfer knowledge and best practices form nay of tis markets and use them in other international markets.

To concentrate on the highlighted parts of the definition:

• Coordinate its marketing activities: coordinating and integration marketing strategies and implementing them
across global markets
• Find global customer needs: this involves carrying out international marketing research and analysing market
segments
• Satisfy global customers: by adapting products, services and elements of the marketing mix to the customer needs
across countries
• Being better than the competition: assessing, monitoring and responding to global competition by offering better
value or lower costs

Companies that understand and engaged in global marketing can offer more overall value to customers that
companies that do not have the understanding

The knowledge developed and used in one cultural context in not always easily transferred to another. The ability to
manage the global knowledge engine to achieve a competitive edge in today’s knowledge-intensive economy in one
of the keys to sustainable competitiveness. In the context of global marketing the management of knowledge is de
facto a cross-cultural activity.

Why do firms go global?

There are benefits of going global and costs associated to not going global:
• Seek new demand
• Survival: global plays will enter your home market, and if you aren’t global you may be pushed out of the market
• Economies of scale
• Higher bargaining power, as firms have access to more suppliers
• Resources: better access to resources
• Knowledge & learning: they go through a learning process each time they enter a market: they’re better equipped.

Management orientations of global marketing

The form and substance of a company’s response to global market opportunities depend greatly on management’s
assumptions or beliefs. The world view of a firm’s business activities can be described within the EPRG framework:
• Ethnocentric: the needs of the home country are the most relevant. It’s associate with attitude of national
arrogance or assumptions of national superiority. It can manifest itself as indifference to marketing opportunities
outside the home country. They assume that products and practices in the home country will be successful
anywhere. This leads to a standardized or extension approach, where products can be sold everywhere without
adaptation. Foreign operations or markets are typically view as being secondary or subordinate to domestic ones.
In today’s world it’s a major internal weakness and must be overcome if a company is to transform itself into an
effective global competitor. This includes domestic and international companies.
• Polycentric: each country is unique and should therefore be targeted in a different way. Each subsidiary develops
their own unique business and marketing strategies: it a multinational company. They use an adaptation or
localized approach which assumes that products must be adapted in response to different market conditions.
• Regiocentric: the world consists of regions. Managements goal is to develop an integrated regional strategy. Such
a company can be viewed as a variance of the multinational model.
• Geocentric: the world is getting smaller and smaller. Think global, act local. They view the entire world as a
potential market and strive to develop integrated global strategies. They are global or transnational companies.
o Global company: pursues either a strategy of serving world markets from a single country or one that sources
globally to focus on select countries markets. They retain their association with a particular headquarters.
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o Transnational company: service global markets and use global supply chains. Management uses a combination
of standardised and localized elements.
At global and transitional companies, decisions regarding extension and adaptation are not based on assumptions,
rather decisions are made on the basis of ongoing research into market needs and wants. It’s a worldview that
sees similarities and differences in markets and countries and seeks to create a global strategy that is fully
responsive to local needs and wants

The regio- and geocentric firms seeks to organize and integrate production and marketing on a regional or global scale.

Global marketing strategy

In a single-country marketing strategy development addresses two fundamental issues: choosing a target market and
developing a marketing mix.

The Global marketing strategy (GMS) includes the following dimensions:

• Global market participation: the extent to which a company has operations in major worlds markets
• Standardisation vs adaptation: the extent to which the marketing mix element is standardized or adapted in
various country markets.
• Coordination of marketing activities: extent to which activities related to the marketing mix are planned and
executed interdependently around the global.
• Concentration of marketing activities: extent to which activities related to the marketing mix are performed in
one or a few country locations
• Integration of competitive moves: extent to which a firm’s competitive marketing tactics in different parts of the
world are interdependent.

Adaptation vs standardization
Global brands are better at predicting future demand, so they have better market response.
Local players have a better understanding on complex cultural issues: is there a convergence in taste?

When going global we need to find the balance between adaptation and standardization:
• Standardization: consists in replicating a model in domestic markets abroad. It allows you to take advantage of
economies of scale.
• Adaptation: you are responsive to the market cultural differences.
You generally should choose a middle ground between globalization (standardization) and localization (adaptation)

Glocalization
Glocalization tries to optimize the balance between standardization and adaptation of the firm’s international
marketing activities. Think globally and act locally

The essence of being a global company is to maintain a kind of tension with the organization without being undone by
it. Some companies say the new world requires homogeneous products everywhere: one size fits all. Others say that
the world requires endless customization: special products for each region. The best global companies understand it’s
neither or it’s both. They keep the two perspectives in mind simultaneously.

Should a company internationalize?

There are different models of growth:
• Product development • Market development
• Product penetration • Diversification
What you do depends on the industry (external factors) and the preparedness (internal factors)

The decision to enter one or more particular markets outside the home country depends on a company’s resources,
its managerial mind-set and the nature of opportunities and threats. The particular approach to global marketing a
company adopts depends on industry conditions and its resources or sources of competitive advantage.

Industry globalism
In principle, a firm cannot influence the degree of industry globalism. You look at:
• Degree of competition and the trend (is it increasing or decreasing) • Supply chain
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• Entry barriers • Customers…

• A high degree of globalism means that they are many

interdependences between markets, customers and suppliers, and
the industry has a few large power players. Regional economic
agreements, converging market needs, technology advances,
pressure to cut costs, pressure to improve quality, improvements
in communication and transportation technology, global economic
growth and opportunities for leverage all represent important
driving forces, any industry subject to these forces is a candidate
for globalization.
• A low degree of globalism represents a multidomestic market
environment where markets exist independently of one another.

Preparedness for internationalization

This is determined by the firm and is dependent on the firm’s ability to carry out strategies in the international
marketplace. These resources include:
• Skills • International experience • Organizational structure
• Financial resources • Brand heritage • Systematic process
• Human resources • Learning capabilities • Knowledge
To what extent should we globalize?
There are actors that motive use to increase our extent of internationalization:
• Tax benefits: both local and global tax benefits
• Demand in foreign markets (proactive motive): is demand growing? Is it a seasonal demand?
• Survival (reactive motive): responding to external pressures such as competition
• Develop a global brand image: reduces the nonmonetary price, as the uncertainty surrounding your product will
decrease
• Diversify or mitigate risk: but this can also be a force against internationalization.

Factors that limit internationalization

• Financial resources: can we afford to internationalize?
• Deglobalization
• Operations, product capacity
• Adaptation: is the culture similar? Do we need to adapt the product? This may add complexity to the marketing
activities, which you may not be able to coordinate
• Global network: connection its suppliers, strategic alliances

The barriers are different when you internationalize to the first countries that when you internationalize to more.
When you are further internationalizing you need to consider:

• Risk: political risk, commercial risk, marketing conditions, complexity in coordination of activities…

You need to balance motives and barriers to determine the optimal extent of globalization. You don’t won’t to over-
internationalize (when the barriers are larger than the motives to internationalize). As motives and barriers change
over time, so does the optimal extent of internationalization, so you may have to de-internationalize.

Global integration and market responsiveness

Forces for global coordination/integration (Standardization)
Greater importance will be attached to transnational similarities, and less on cross-national differences. The major
drives for the shift is:
• Removal of trade barriers: multilateral trade agreements reduce the time, cost and complexity involved in trading
across boundaries. The worldwide movement toward free markets, deregulation and privatization is a driving
force. The trend toward privatization is opening up formerly closed markets, so tremendous opportunities are
being created as a result.
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• Global accounts/customers: as customers become global, they demand that suppliers provide them with global
services to meeting their unique global needs. Global delivery of products, assured supply and service systems,
uniform characteristics, and global pricing.
• Relationship management/network organization: it’s becoming increasingly necessary to rely on a network of
relationships with external organisations. Alliance and network relationships help to reduce market uncertainties.
• Standardized worldwide technology: today the desire for gaining scale and scope in production is so high that
worldwide availability of products and services should escalate.
• Worldwide markets: they are likely to develop because they can rely on world demographics. The economy
growth in key developing countries creates market opportunities that provide a major incentive for companies to
expand globally. Economy growth has reduced resistance that might have developed in response to the entry of
foreign forms into domestic economies.
• Global village: this refers to the phenomenon in which the world’s population shares commonly recognized
cultural symbols. This implies the potential for worldwide convergence of markets and the emergence of a global
marketplace. The common elements in human nature provide an underlying basis for the opportunity to create
and serve global markets. Most global markets don’t exit so marketing efforts must create them.
• Worldwide communication: the new Internet-based low-cost communication. Time and cost barriers associate
with distance have fallen tremendously over the last 100 years.
• Global cost drivers, leverage: leverage means some type of advantage that a company enjoy by virtue of the fact
that it has experience in more than one country. Leverage allows a company to conserve resources when pursuing
opportunities in new geographical markets. Leverage enables a company to expend less time and less effort or
less money.
o Economies of scale
o Economies of scope
o Experience transfers: the global company can leverage its experience in any market in the world. It can draw
upon management practices, strategies, products, advertising appeals or sales or promotional ideas that have
been tested in one country or region and apply them into comparable markets.
o Resource utilization: companies can san the entire world to identify people, money and raw materials that
will enable them to compete most effectively in world markets.
o Global strategy: a global strategy is built on an information system that scans the world business environment
to identify opportunities, trends, threats, and resources. When opportunities are identified the global
company adheres to there practices identified earlier: leverage skills and focus its resources to create superior
perceived value for customers and achieve a larger competitive advantage. The global strategy is a design to
create a winning offering on a global scale. It is no guarantee of ongoing organization success. Companies
that cannot formulate or successfully implement a coherent global strategy may lose their independence.
• Product development costs: the pressure for globalization is intense when new products require major
investments and long periods of development time.
• Quality: global companies raise the bar for all competitors in an industry. When a global company establishes a
benchmark in quality, competitors must quickly make their own improvements and come up to par.

Forces for market responsiveness (adaptation)

Several restraining forces may slow a company’s efforts to engage in global marketing. In today’s world, though, driving
forces predominate over the restraining forces.
• Cultural differences: cultural diversity clearly continues to exit. They often pose major difficulties in international
negotiations and marketing management. Markets are people, not products. There may be global products, but
there are not global people.
• Regionalism/protectionism: regional trading blocs, which may represent a significant barrier to globalization since
regional trade is often seen as incompatible with global trade. Protectionism reappears around regions rather than
individual countries. Every country protects the commercial interests of local enterprises by maintaining control
over market access and entry into both low- and high-tech industries. Nontariff barriers are nonmonetary
restrictions on cross-border trade, and have the potential to make it difficult for companies to gain access to some
individual country and regional markets.
• Deglobalization trend: moving away from the globalization trends and regarding each market as special with its
own economy, culture, and religion. Everyone believes their native customs and religion are the best. There could
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be a return to old values, promoting barriers to the further success of globalization. Globaphobia is used to
describe the hostility toward trade agreements, global brands or company policies that appear to result in hardship
for some individuals or countries while benefit others.
• Management myopia and organizational culture: in many cases, management simply ignores opportunities to
pursue global marketing. A company that is near-sighted and ethnocentric will not expand geographically. Global
marketing doesn’t work without a strong local team that can provide information about local market conditions.
Successful global companies have learned how to integrate global vision and perspective with local market
initiative and input.

Global experimental marketing

A Customer experience occurs when a company intentionally uses products in combination with services to engage
individual customers in a way that creates a memorable event.

B2C business
We should thank about experiences across two constructs:
• Involvement/participation: the level of interactivity between the supplier and the customer
• Intensity/connection: strength of feeling towards the interaction

B2B businesses
They need to continuously innovate how they attract, engage and excite customers.

Mass customizing a product automatically turns it into a service. Part of the mass customization process is the
intangible service of helping customers figure out exactly what is it they want. Mass customizing a service turns it into
an experience.

Experiential marketing is recognized as an important means of creating value for the end consumer, who will be
motivated to make faster and more positive purchasing decisions.

Traditional marketing frameworks view consumers as rational decision-makers focused on the functional features and
benefits of products, experiential marketing views consumers as emotional beings, focused on achieving memorable
experiences.
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Identifying unmet needs

Introduction
Market research refers to gathering, analysing, and presenting information related to a well-defined problem.
Generally the problem is the needs and preference of the consumers. The role of international market research is
primarily to act as an aid to the decision-market, as it can help reduce the risk in decision-making cause by the
environmental uncertainties.

Information is processed data. With information you can get insights on the problem you have defined.

A major reason firms are reluctant to engage in global marketing research is a lack of sensitivity to cross-cultural tastes
and preferences. Firm internal (firm-specific) and external (market) data are needed.

• Primary data: information that is collected first-hand, generated by original research tailor-made to answer
specific current research questions. The information is specific (fine-grained), relevant and up to date. It has high
costs and amount of time associated with its collection.
• Secondary data: information that has already been collected for other purposes and is thus readily available. Often
it’s more general and coarse-grained in nature. It has lower costs and amount of time associated with its collection.

No primary research should be done without first searching for relevant secondary information, and secondary data
should be used whenever available and appropriate. Secondary data often helps to define problems and research
objectives.

Secondary research
Advantages of secondary data Disadvantages of secondary data
• Low level of commitment to • Non-availability of data in some countries
possible projects • Reliability of data: political considerations may affect the reliability
• Objectivity • Data classification: sometimes the data reported is too broadly classified for
use at the macro level
• Comparability of data: secondary data obtainable form different countries is
not readily comparable because national definitions of statistical
phenomena differ from one country to another.
Internal data sources
The global marketing and sales departments are the main points of commercial interaction between an organization
and its foreign customers. Consequently, a great deal of information should be available, including:
• Total sales • Sales by product • Sales volume by type of distribution
• Sales by country • Communication mix information channel
• Pricing information • Sales representative’ records & reports • Sales volume by market segment
Secondary data used for the estimation of foreign market potential
Secondary data are often used to estimate the size of potential foreign markets. Despite limitations, there are
approaches to forecasting future demand in a market with a minimum of information.

• Proxy indicators: indirect variables that serve as a surrogate or proxy. This method can provide robust estimation
and is relatively inexpensive and convenient to implement, but the use of proxy variables can also cause validity
problems. The degree of precision depends on the choice of proxy variable.
• Chain ration method: is a simple arithmetic technique where ratios are sued to reduce a base population. The
purpose of the reduction technique is to derive a realistic demand. Though robust, the method can offer estimates
that are close to real data. It is relatively inexpensive and convenient to implement.
• Lead-lag analysis: based on the use of time-series data from one country to project sales in other countries. It
assumes that the determinants of demand in the two countries are the same, and that only time separates them.
This requires that the diffusion process, and specifically the rate of diffusion, is the same in all countries. There is
a problem of identifying the relevant time-lag and the range of factors that have an impact on future demand.
• Estimation by analogy: a single-factor index with a correlation value obtained in one applied to a target
international market. First a relationship (correlation) is established between the demand to be estimated and the
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factor which is to serve as the basis for the analogy. Once the known relationship is established, the correlation
value then attempts to draw an analogy between the known situation and the market demand in question.
The method assumes that factors other than the correlation factors used are similar in both countries, and we can
use them to project our findings in the other country.

Primary research
Problems with using primary research
Most problems stem from cultural differences among countries.
• Sampling in field surveys: the greatest problem is the lack of adequate demographic data form which to draw a
meaningful sample
• Non-response: non-response is the inability to reach selected elements in the sample frame error. The two main
reasons are: the respondent isn’t at home; or, because they refuse to respond, normally due to cultural habits.
• Language barriers: includes the difficulty of exact translation, which creates problems in eliciting the specific
information desired and in interpreting respondents’ answers. May also have barriers due to low literacy rates or
problems with dialects and different languages. To find possible translation errors we can use back-translation:
the questionnaire is translated form one language to another, and then back again into the original language.

Qualitative & Quantitative research

Quantitative research Qualitative research
Objective To quantify the data and generalize the results To gain an initial and qualitative understanding
from the sample to the population of interest of the underlying reasons and motives
Type of research Descriptive and/or causal Exploratory
Flexibility in Low, because of the standardized and structured High, because of the personal interview, where
design questionnaire: one-way communication the interviewer can change questions during the
interview: two-way communication
Sample size Large Small
Choice of Representative sample of the population People with considerable knowledge of the
respondents problem
Information per Low High
respondent
Data analysis Statistical summary Subjective, interpretative
Ability to replicate High Low
Interviewer No specific skills required Special skills required: an understanding of the
requirements interaction between interviewer and
respondent
Time • Design phase: high, as the formulation of the • Design phase: low, as no exact questions are
consumption questions must be correct required before the interview
• Analysis phase: low, as the answers to the • Analysis phase: high, as the result of many
questions can be coded soft data
Techniques • Experiments • Interviews
• Surveys • Experiments
• Focus groups
• Projective techniques
• Observations

• Quantitative data: involves getting data from a large, representative group of respondents.
Data retrieval and analysis of quantitative respondent data are based on a comparison of data between all
respondents. This places heavy demands on the measuring instrument, which must be well structured and tested
before the survey takes place. All respondents are given identical stimuli. The respondent group is homogenous.
If it’s a heterogenous group of respondents, its possible that the same question will be understood in different
ways. The techniques are characterized by a certain degree of distance

• Qualitative data: The objective is to give a holistic view of a research problem. These techniques must have a large
number of variables and few respondents
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Data retrieval and analysis of qualitative data is characterized by a high degree of flexibility and adaptation to the
individual respondent. The techniques are characterized by proximity to the source data, with interaction between
the interview and the respondent.

Triangulation
Qualitative and quantitative research methods often complement each other. Triangulation can enrich our
understanding of a research in question before a structured and formalized questionnaire is designed.

Research process
Research design
The primary research process should begin with a definition of the research problem and the establishment of specific
objectives. The major difficulty here is translating the business problem into a research problem with a set of specific
researchable objectives. The better defined the research objective is, the better the researcher will be able to
determine the information requirement.

Research approaches
• Observation: based on watching and sometimes recording the market-related behaviour. This is more suited to
investigate what people do rather than why they do it. We can obtain information that people are unwilling or
unable to provide consciously. Long-term and infrequent behaviour is difficult to observe.
• Experiments: experiments gather causal information. They involve selecting matched groups of subjects, giving
them different treatments, controlling unrelated factors and checking for differences in the group responses. It
tries to explain cause-effect relationships. It is necessary to used relatively self-contained marketing areas as test
markets. Experiments are difficult to implement in global market research
• Surveys: easement technique based on the questioning of respondents. It represents, in both volume and value
terms, perhaps the most important method of collecting data. The questioning is structured. The aim is generating
descriptive rather than causal data. It usually involves the respondent. The survey method used in each country
doesn’t have the be the same, if it’s reliable and value. The method of survey chosen is a balance between speed,
degree of accuracy and cost.
o Mail: it’s the least expensive. It allows respondents to answer at their leisure. It takes longer than most kinds.
o Internet/e-mail: it can collect a large amount of data. It’s very economically and fast. When a wide audience
is targeted, the survey can be designed as a pop-up survey. It is appropriate for a wide audience, where all
visitors to certain websites have an equal chance to enter the survey.
o Telephone interviews: the response rate is higher than mail questionnaires but lower than face-to-face
interviews, their cost is usually less than with personal interviews, and they allow a degree of flexibility when
interviewing.
o Personal interviews: participants are usually paid a small sum for attending. It’s quite flexible and can collect
large amounts of information. It has high costs and sampling problems. There is a larger risk of interview bias.
▪ Individual interviewing involves talking with people in their homes or offices.
▪ Group interviewing (focus-groups) consists in inviting six to ten people to gather for a few hours with a
trained moderator to talk about a product, service or organization.

Sampling
• Sample frame: total number of consumers who could be interviewed
• Sample: the number of people who are actually interviewed

There are different sampling procedures:

• Probability sampling: specify in advance the chance of each element of the population of being included in sample
• Non-probability sampling: it’s not possible to determine the above-mentioned probability or to estimate the
sampling error. You rely on the personal judgement of the researcher. The results are not projectable to the total
population and example errors cannot be computed. They are less costly, are useful when accuracy isn’t critical.
They can be conducted more quickly and if executed properly, can produce samples of the population that are
reasonably representative.

The large the sample, the smaller the sampling error but the larger the cost. The cost of larger samples tends to
increase on a linear basis while the level of sampling error decreases at a rate only equal to the square root of the
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relative increase in sample size. The greater the number of subgroups that need to be analysed the larger the required
total sampling size.

Ideally a researcher wants to use the same sampling method for all countries in order to maintain consistency.

Designing the questionnaire

A good questionnaire cannot be designed until the precise information requirements are known. The type of
information sought, and the type of respondents to be researched, will have a bearing upon the contact method to be
used, and this in turn will influence whether the questionnaire is relatively unstructured, aimed at depth interviewing
or relatively structured.

In cross-cultural studies, open-ended questions appear useful because they may help to identify the frame or reference
of the respondents. The researcher must be sure that the questions are culturally acceptable. There are four general
guidelines which are useful to bear in mind during the wording of questions:
• The wording must be clear
• Select words so as to avoid biases
• Consider the ability of the respondent to answer the question, time periods should be relatively short.
• Consider the willingness of the respondent to answer the question. Ask the question in the third person or state
that the behaviour or attitude isn’t unusual prior to asking the question

Ensure that the potential for miss understanding and misinterpretations of spoken or written worlds is minimized

Pretesting
Pretesting is carried out within a subset of the population under study. It should at least be conducted with
knowledgeable experts and/or individuals. It should also be conducted in the same mode as the final interview. The
risks of poor research are too great for this process to be omitted.

Data collection
Researchers must check that the data is gathered correctly, efficiently and at a reasonable cost

Data analysis and interpretation

The final steps are the analysis and interpretation of the findings in the light of the stated problem. The quality of the
data must be matched by the quality of the research tools

Measurement
A measurement method that works satisfactorily in one culture may fail to achieve the indented purpose in another
country. We need to ensure:
• Reliability, which comes from how we measure the data. If we measure the same phenomenon repeatedly with
the same measurement device and get similar results then the method is reliable.
• Validity, which comes from what we measure. Are we measuring what we intended to measure?
o Construct validity established correct operational measure for the concepts being studied.
o Internal validity establishes a causal relationship, whereby certain conditions are shown to lead to other
conditions
o External validity is concerned with the possible generalization of research results to other populations. You
need a representative sample to make the data externally valid.

If a measurement is not reliable, there are no circumstances under which it can be valid. However, just because an
instrument is reliable it doesn’t mean it’s automatically valid. An instrument proven to be reliable and valid in one
country may not be so in another.

Self-reference criteria
The Self-reference criteria (SRC) is a bias in the interpretation of the results, where you interpret the results thought
he lends out our own culture.

There are two views of culture:

• Emic view of culture, where you interpret a culture form within it’s idiosyncratic features
• Etic view of culture, where you have an outside perspective, which allows you to compare cultures
©A. Sabrina Dobney

How do we establish data equivalence?

We need to establish data equivalence to compare findings across countries. It has 3 main dimensions:
• Construct: you need to make sure the construct is the same across countries: You are talking about the same:
o Concepts and that the concepts mean the same in all cultures.
o Categories, as products may have different uses, substitutes, complements…
o Functional equivalence, are the products used for the same things?
• Sampling: there should be equivalence in samples. That means looking at the key decision markets are and
gathering a representative sample.
• Metrics: different countries use different measures and they need to be equivalent.

To achieve equivalence, we can use measure proxies which are related, but not exactly the concept. You can also test
equivalence (e.g. with the CFA), as a marketing manager you should demand these tests.

Other types of market research

• Ad hoc research: focuses on a specific marketing problem and collects data at one point in time from a sample of
respondents
• Custom-design studies: based on the specific needs of a client. It can be expensive
• Multi-client studies: relatively low-cost. They can be independent studies, which are carried out totally
independently by research companies and then offered for sale. Or omnibus studies where a research agency will
target specified segments in a particular foreign market and companies will buy questions in a survey. In the latter
type, the researcher must have clearly defined research needs and a corresponding target segment in order to
obtain meaningful information
• Delphi studies: aims at qualitative measures by aggregating the information of a group of exports. It seeks to
obtain answers from those who possess particular in-depth expertise instead of seeking the average response of
many with only limited knowledge. Typically, 10 – 30 key respondents are selected and ask to identify major issues
in the area of concern.
• Continuous research: a sample or panel remains the same over time. A longitudinal study provides a series of
pictures that give an in-depth view of developments taking place. Sample respondents agree to provide
information at specified intervals. There are two kinds of panels:
o Customer panels: they provide information on purchases over time
o Retailer panels: cooperating with retail outlets, sales of brands can be measured by laser scanning barcodes
on goods as they pass through the checkout
• Sales forecasting: forecasting market sales and then determining what share of this will accrue to the company,
or directly forecasting sales. We have short, mid and long-term forecasts. This technique suffers because down-
turns and up-turns cannot be predicted.
• Scenario planning: scenarios are stores about plausible alternative futures. They explore possible futures rather
than predict a single point future. Diverging and converging factors need to be balanced. It allows us to consider
a range of alternative futures, each of which is dramatically different from the other and from the current
operating environment. It is possible to contrast and compare alternatives opinions on how your industry may
evolve. Because it’s externally oriented, it’s very effective at identifying growth strategies for the company was
well as potential threats.

Establishing an international marketing information system

You should incorporate this information into management decision-making. The trick is to transform the data into
information which is useful to the organization’s marketing decision-markers.

International marketing information system is an interacting organization of people, systems and processes devised
to create a regular, continuous and orderly flow of information essential to the marketer’s problem-solving and
decision-making activities. It’s a four-stage process, consisting of locating, gathering, processing and utilizing
information.
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Segmentation, targeting and positioning

Markets are heterogenous, so we need to balance the cost of adaptation and the benefits of specific targeting.

• Market segmentation: represents the effort to identify and categorize groups of customers and countries
according to common characteristics.
o Segmentation basis: set of variables or characterises used to assign potential customers to homogenous
groups.
• Targeting is the process of evaluating the segments and focusing marketing efforts on a country, region or group
of people that has significant potential to respond.
• Positioning is required to differentiate the product or brand in the mind of target customers

Global marketing segmentation

Global marketing segmentation is the process of identifying specific segments of potential customers with
homogeneous attributes who are likely to exhibit similar responses to a company’s marketing mix. The more you
segment a market the more:
• Heterogeneity within the group decreases
• Complexity and number of groups increases
• Heterogeneity between groups increases.

Consumers in different countries increasingly seek variety and the same new segments are likely to show up in multiple
national markets. This trend, known variously as the pluralization of consumption and segment simultaneity, provides
an opportunity for marketers to pursue one or more segments on a global scale.

Global market segmentation is based on the premise that companies should attempt to identify consumers in different
countries who share similar needs and desires. By performing market segmentation, marketers can generate the
insights needed to devise the most effective approach. The process beings with the choice of one or more variables to
sue as a basis for grouping customers.

Effective segmentation scheme criteria

The effective segmentation scheme criteria is used to compare segmentation approaches.

• Is the segmentation measurable? The variable used to segment must be measurable

• Is the segment accessible? Can you reach the segment?
• Is the segment substantial? Is the segment reasonably large?
• Is the segment differential? Do they respond differently?
• Is the segment actionable? Can effective programs be launched?
• Is the segment stable? You want the segment to be stable in the mid-long term.

Segmentation methods
The relative variable of segmentation depends on the objective (Action or response you want to elicit). The
segmentation approach can be:
• Identified approach: segment by factors
• Response based

Geographic segmentation
Group different countries into segments, such that similar countries are put together. (e.g. EU, USCAD, Middle east…)

Advantages of secondary data Disadvantages of secondary data

• It considers a lot of relevant factors: culture, language… • Heterogeneity within the country
• It’s simple and easy to measure • Possible global convergence of tasts
Demographic segmentation
Based on measurable characteristics of populations, such as age, education, GDP, GNI, age distribution within a
country, inequality, population size... Demographic changes can create opportunities for marketing innovation.
©A. Sabrina Dobney

• Segmentation by income and population, we often find that income is a valuable segmentation variable, as a
market consists of those who are willing and able to buy. The concentration of income in the high-income and
large-population countries means that a company can be global by targeting buyers in 10 or fewer countries.
• Age segmentation: e.g. global teens
• Gender segmentation

Advantages of secondary data Disadvantages of secondary data

• Global convergence worldwide due to globalization • People don’t respond equally to marketing actions
• Easily measurable and simple
Psychographic segmentation
Grouping people in terms of their attitudes, values and lifestyles. People of the same age don’t necessarily have the
same attributes. So, sometimes it’s preferable to market to a mind-set rather than a particular age group.

Psychographic variables shape preferences and influence the responses to marketing programs

Advantages of secondary data Disadvantages of secondary data

• Transcend national borders • Difficult to measure
• Very useful if you can get the right insights • Self-referencing criteria bias
Behaviour segmentation
Focuses on whether people buy and uses a product, as well as how often and how much they use or consume.
Consumers can be categorized in terms of:
• Usage rates: heavy, medium, light or non-user
• User status: potential, non-users, ex-users, regulars, first-timers or users of competition

You are classifying them based on the response to marketing actions, purchasing behaviour…

Benefit segmentation
This approach is based on marketers’ superior understanding of the problem a product solves, the benefit it offers or
the issue it addresses, regardless of geography. People buy according to the benefit they are looking for (e.g. safety)

Ethnic segmentation
Can be segmented by language, or place of origin…

Other segmentation basis

General Product-specific
Observable cultural, geographic, demographic and social- user status, usage frequency, store loyalty and
economic variables patronage, situations
Unobservable Psycographics, values, personality and psychographics, benefits, perceptions,
lifestyles elasticities, attributes, preferences, intention
Targeting
The next step is to assess the attractiveness of the identified segments. Global marketers should be mindful of several
potential pitfalls associated with the market segmentation process:
• There is a tendency to overstate he size and short-term attractiveness of individual country markets.
• Another trap is to target a country because share-holders or competitors exert pressure on management not to
miss out on strategic opportunities.
• There is a danger that management’s network of contacts will emerge as a primary criterion for targeting. The
result can be market entry based on convenience rather than rigorous market analysis.

There are 3 approaches to targeting:

• Treat countries as segments
• Evaluate segments withing countries. You find segments which are unique to a country. But this is complex in the
international context
• Evaluation global segments, to avoid complexity and help coordinate international marketing strategies

We can utilize three basic criteria for assessing opportunity in global target markets: current size of the segment and
anticipated growth potential; competition; and, compatibility with the company’s overall objectives.
©A. Sabrina Dobney

Current segment and growth potential

Is the market segment currently large enough to present the company with the opportunity to make a profit? If the
answer is “no” today, does it have significant growth potential to make it attractive in terms of the company’s long-
term strategy?

One of the advantages of targeting a market segment globally is that although the segment in a single-country market
might be small, even narrow segment, can be served profitably if the segment exists in several countries.

Potential competition
A market segment or country market characterized by strong competition may be a segment to avoid. However, if the
competition is vulnerable in terms of price or quality disadvantages, it is possible for a market newcomer to make
significant inroads.

Feasibility and compatibly

• Whether a company can and should target the market.
• Whether targeting a particular segment is compatible with the company’s overall goals, its brand image, or
established sources of competitive advantage.

Framework for selecting target markets

• Marketing model drivers: key elements or factors required for a business to take root and grow in a particular
country market environment.
• Enabling conditions: structural market characteristics whose presence or absence can determine whether the
marketing model can succeed.
• Estimated costs: we should estimate the costs associated with entering and serving the market with potential
short- and long-term revenue streams
• Frist-mover advantage: the first company to enter the market has the best chance of becoming the market leader.
There are disadvantages, like the substantial investments in marketing only to find that a late-arriving competitor
reaps some of the benefits. Late entrants into global markets can also achieve success. Once way they do this is
by benchmarking established companies and then outmanoeuvring them. Late movers can also succeed by
developing innovative business models.

One way to determine the drivers and enabling conditions is to create a product-market profile. You can also use the
net promoter score = Promoters – Detractors. On a scale from 1 to 10 you ask people how likely they are to promote
your brand.
• Promoters: promote the brand to friends
• Detractors: avoid the brand and talk badly about it.
You can estimate the NPS and use it as a proxy for market attractiveness. You can also add elements, such as
profitability.

Product-market decisions
A company review of current and potential product offerings in term of their suitability for the country market or
segment. By creating a product-market grid that maps markets as horizontal rows and products as vertical columns.

Targeting and target market strategy options

The three basic categories of target marketing strategies are standardized marketing, concentrated marketing and
differential marketing.

Standardized global marketing

Standardized global marketing is analogous to mass marketing in a single country. It involves creating the same
marketing mix for a broad mass market of potential buyers. It’s also known as undifferentiated target marketing,
based on the premise that a mass market exists around the world. Product adaptation is minimized, and a strategy of
intensive distribution ensured that the product is available in the maximum number of retail outlets. It also lowers
production costs.
©A. Sabrina Dobney

Concentrated global marketing

Concentrated target marketing involves devising a marketing mix to reach a niche. A niche is simply a single segment
of the global market.

Differentiated global marketing

Also known as multi-segment targeting, this approach entails targeting two or more distinct market segments with
multiple marketing mix offerings. It allows a company to achieve wider market coverage.

Positioning
Position refers to the act of differentiating a brand in customers’ mind in relation to competitors in terms of attributes
and benefits that the brand does and does not offer. Positioning is the process of developing strategies for staking out
turf or filling a slot in the mind of target customers.

Positioning is frequently used in conjunction with the segmentation variables and targeting strategies discussed
previously. It includes positioning by:
• Attributes or benefits • Competitors • Use or users • Quality and price

Recent research has identified three additional positioning strategies that are particular useful in global marketing:
global positing culture, local consumer culture positing and foreign consumer culture positioning.

Attribute or benefit
Exploits a particular product attribute, benefit or feature. In global marketing, it may be deemed important to
communicate the fact that a brand is imported. This approach is Foreign consumer culture positioning (FCCP).

Quality and price

This strategy can be thought of in terms of a continuum from high fashion/quality/ and high price to good value (rather
than low quality) at a reasonable price.

Use or user
Represents how a product is used or associates the brand with a user or class of users. You position yourself according
to the usage context (e.g. cooking chocolate) or user image (who is the typical user of the brand)

Competition
Implicit or explicit reference to competitors can provide the basis for an effective positing strategy.

Global consumer culture positioning

Global consumer culture positioning is a strategy that can be used to target various segments associated with the
emerging global consumer culture. It’s defined as a strategy that identified the brand as a symbol of a particular culture
or segments. You make your brand a symbol of a global culture. This is especially relevant for high-tech.

• High-tech products: sophisticated, technologically complex, and/or difficult to explain or understand. When
shopping for them, consumers often have specialized needs or interests and rational buying motives.
• High-touch products: consumers are generally energized by emotional rather than rational motives.
• Bipolar strategy: you target both the emotional and rational part of the target user.

A brands GCCP can be reinforced by the careful selection of the thematic, verbal or visual components that are
incorporated into advertising and other communications. They can also reinforce a GCCP by using brand symbols
whose interpretation defies association with a specific country culture.

Foreign consumer culture positioning

Foreign consumer culture positioning associates the brand’s users, use occasions, or production origins with a foreign
country or culture.

Local consumer culture positioning

Local consumer culture positioning, a strategy that associates the brand with local cultural meanings, reflects the local
culture’s norm, portrays the brand as consumed by local people in the national culture, or depicts the product as
locally produced for local consumers.
©A. Sabrina Dobney

International marketing environment

Cultural environment
First, marketers must study and understand the country culture in which they will be doing business. Second, they
must incorporate this understanding into the marketing planning process.

Culture is a pervasive influence which underlies all facets of social behaviour and interaction. Culture is a complex
whole which includes knowledge, belief, art, morals, law, custom and any other capabilities and habits acquired by
man as a member of the society.

Culture doesn’t stand still, rather, it changes over time. A culture must have three characteristics:
• It’s learned
• It’s interrelated, one part of a culture is deeply connected with another part
• It’s shared

Culture can be though of as having three other levels:

• Visible daily behaviour. Tangible aspects which you can see, hear smell, tase or touch are the artefacts or
manifestations of underlying values and assumptions that a group of people share.
• Values and social morals. The daily behaviours influenced by values and social morals that work closer to the
surface than the basic cultural assumptions. They hep people make adjustments to their short-term daily
behaviour. They change over shorter periods of time. They are attributes, patterns of friendship, which you learn
when you integrate into a culture
• Basic cultural assumptions: national identity, deep religious beliefs… they are persistent and take a long-time to
change

We can define culture as the learned ways in which a society understands, decides and communicates.

The cultural environment is useful to understand our customers, in international negotiations and in designing the
organisational culture.

Layers of culture
The different levels of culture are looked at from a nesting perspective, the levels being nested into each other in order
to grasp the cultural interplay between them.
• National culture: gives the overall framework
• Business/industry culture: Industry is very much related to a branch of industry, and this culture of business
behaviour and ethics is similar across borders
• Company culture (organizational culture): functional culture, expressed through shared values, beliefs, meanings
and behaviours of the members of a function within an organization.
• Individual behaviour

High-context and low context cultures

• Low-context cultures, rely on spoken and written language for meaning
• High-context cultures, use and interpret more of the elements surrounding the message. The social importance
and knowledge of the person and the social setting add extra information.

Low context High context

Communication
and language
Explicit, direct Implicit, indirect
Sense of self and
space
Informal handshakes Formal hugs, bows and handshakes
Dress and
appearance
Dress for individual success, wide variety Indication of position in society, religious rule
Food and eating
habits
Eating is a necessity, fast food Eating is a social event
Time- Linear, exact, promptness is valued. Elastic, relative, time spent on enjoyment.
consciousness Time = money Time = relationships
©A. Sabrina Dobney

Family and Extended family, other oriented, loyalty and

Nuclear family, self-oriented, value youth
friends responsibility, respect for old age
Values and normsIndependence, confrontation of conflict Group conformity, harmony
Beliefs and Equalitarian, challenge authority, individuals Hierarchical, respect for authority, individuals
attitudes control their destiny, gender equality accept destiny, gender roles.
mental process Lateral, holistic, simultaneous, accepting life’s
Linear, logical, sequential, problem-solving
and learning difficulties
business/work Deal-oriented (quickly getting down to Relationship-oriented (first you make a friend,
habits business), rewards based on achievement, then you make a deal), rewards based on
work has value seniority, work is a necessity.
Elements of culture
• Language. Language is key to culture and can be described as the mirror of culture.
o Verbal language: important for information-gather and evaluation efforts, provides access to local society, and
is increasing important in company communications. It provides more than the ability to communicate it
extends beyond mechanics to the interpretation of contexts.
▪ Explicit-language cultures: managers are taught that to communicate effectivity you should say what you
mean and mean what you say. Vague directives and instructions are a sign of poor communication abilities.
▪ Implicit-language cultures: the assumption is that the speaker and listener both share the burden of
effective communication. Implicit communication also helps avoid unpleasant and direct confrontations and
disagreements.
o Non-verbal communication: more important in high-context cultures.
• Manners and customs: changes occurring in manners and customs must be carefully monitored, especially in cases
that seem to indicate a narrowing of culture differences between peoples
• Technology and material culture: material culture results from technology and is directly related to how a society
organizes its economic activity. It is manifested in the availability and adequacy of the basic economic, social,
financial and marketing infrastructure.
• Social institutions: social institutions - business, political, family or class related – influence the behaviour of
people and the ways in which people related to each other.
o Reference groups: these groups provide the values and attitudes that become influential in shaping behaviour.
Primary reference groups include family, co-workers and other intimate groupings. Secondary groups are social
organizations in which less continuous interaction takes place
• Education: includes the process of transmitting skills, ideas and attitudes, as well as training in particular
disciplines. One function of education is the transmission of existing culture and traditions to the next generations.
However, education can also be used for cultural exchange.
• Values, beliefs and attitudes: our values and attitudes help to determine what we think is right and appropriate,
which is important and what is desirable. The more rooted values and attitudes are in central beliefs (such as
religion), the more cautiously the global marketing managers has to move.
o Attitude: leaned tendency to respond in a consistent way to a given object or entity
o Belief: organised pattern of knowledge that an individual holds to be true about the world
o Value: enduring belief or feeling that a specific mode of conduct is personally or socially preferable to another
mode of conduct.
• Aesthetics: refers to attitudes towards beauty and good dates in the art, music, folklore and drama of a culture.
• Religion: it’s an important source of values, attitudes and beliefs. religion holidays vary greatly among countries.
Consumption patterns may be affected by religious requirements or taboos. The economic role of a women varies
from culture to culture and religious beliefs are an important cause.
• Dietary preferences: solid understanding of food-related cultural preferences is important for any company that
markets foods or beverage products globally. Although some foods preferences remain deeply embedded in
culture, plenty of evidence suggests that global dietary preferences are converging (e.g. fast food). As cultural
©A. Sabrina Dobney
differences become less relevant, convince products will be purchased in any country where consumers’
disposable incomes are high enough.
Hofstede’s model
One approach to identifying the pervasive fundamental differences of national cultures is provided by Hofstede.

• Power distance refers to the degree of inequality between people in physical and education terms. In high-power
distance societies, power is concentrated among few people at the top who make all the decisions.
• Uncertainty avoidance concerns the degree to which people in a country prefer formal rules and fixed patters of
life, such as career structures and laws, as means of enhancing society. An important dimension is risk-taking: high
uncertainty avoidance is probably associated with risk aversion.
• Individualism denotes the degree to which people in a country lean to act as individuals rather than a members
of groups. In collectivistic societies, members have a group mentality
• Masculinity relates to the degree to which masculine values such as achievement, performance, success, money
and competition, prevail over other feminine values, such as quality of life, maintaining warm personal
relationships, service, care for the week, preserving the environment and solidarity.
• Time perspective is defined as the way members in an organization exhibit pragmatic future-oriented perspective
rather than a conventional history or short-term point of view. Long-term values include perseverance, the general
tenacity in the pursuit of a goal.

Self-reference criterion
A person’s perspective of markets needs is framed by his or her own cultural experiences. The unconscious reference
to one’s own culture values is the Self-references criterion (SRC).

The SRC can be a powerful negative force in global business and forgetting to check for it can lead to misunderstanding
and failure. Avoiding the SRC requires a person to suspend assumptions based on prior experience and success and be
prepared to acquire new knowledge about human behaviour and motivation.