Most managers are aware of the need for market research when entering a foreign market. For example, when analyzing the causes of failures in foreign markets, it is often found that the company clearly does not represent the tastes and preferences of consumers, the differences between the external environment, as well as sufficiently familiar with the internal and external sources of information and their use. All this is a result of an insufficient market research because company executives believe that the cost of external market research seems too high in relation to anticipated benefits and, therefore, not worth the investment.
The managers of the company should show that access to foreign market without market research is a risk to lose capital stock and its international activities in general. The American Marketing Association (AMA) defines marketing research as the systematic collection, recording and analysis of data relating to the marketing of goods and services. This is a systematic and objective in the accumulation and systematization of information on marketing products and services for the management decision-making.
Marketing research consists of two parts: a study of the market and exploration of the own potential of the company in comparison to the requirements of the market and potential competitors in the market. Sources of international marketing information are divided into external and internal. For each of the two categories are the primary sources (the necessary information by anyone not previously collected and published in one form or another) and secondary information (any species collected and published in some media). Collection of primary data can be carried out through quantitative or qualitative international marketing research.
Quantitative research can cover a larger number of respondents, but it can illuminate fewer problems than qualitative research. Also, it is applied the parallel use of quantitative and qualitative research methods to solve problems as a triangulation.
Basic methods of marketing research are observation, survey, experiment, interviews, telephone and mail survey. The background of all decisions in international marketing is a knowledge base underlying the marketing research of various depth and breadth coverage. In the future, this information will be detailed and refined, described by an increasing number of parameters. Database marketing information will also be a basis for making operating decisions at the conclusion of specific agreements and contracts.
Before making the decision perform international marketing research, the main aim and purposes of the company should be analyzed and evaluated. The most important thing is to know exactly what goals the company is pursuing and what it wants to achieve. The tasks ought to be properly put before the researchers to formulate the query: results of the study are directly dependent on it. The management of the company needs to know what are the problems for which it is planned to use the study and in what time frame it should be done.
The XYZ Inc. has decided to market the organization’s top-selling product to India. The marketing team should have to do a lot of surveys and analysis before the actual product introduction into the market. First of all, the team is supposed to perform exploratory study – collecting preliminary information to determine the problem or find new customers. This will give its managers appropriate information that is needed for the next marketing researching in this region.
Then, the team should make a descriptive study – defining of the market potential of the product, demographic characteristics and attitudes of the population, or current and future distribution channels. This information will help managers to understand will the product realization in India success or company will have losses. This information is rather useful and needed for making an effective decision in order to be sure that launching this product in India will bring company profit and will not make it bankrupt.
After making the decision that XYZ product launching in India will bring success to the company, it is necessary to concentrate on a study of cause-and-effect relationships. For example, it can be held to test hypotheses about cause-and-effect relationships, such as whether the price changes will lead to increase or decrease of profit.
In order to hold all these studies or researches, company should use the right methods that will bring the most appropriate and useful results. There are three main research methods that can be used with the research of India market: surveys, focus groups, and existed databases. In the first and second stages of the international marketing research holding, the existed databases can be used. These databases are able to give all basic information about the market that the company is interested to come in. They will provide enough information to understand whether the product will be accepted by the people in India, or it can satisfy any of their needs, or enough clients, which are ready to buy XYZ products, will be there. These existed databases can be found in the Internet or bought.
Focus groups are used for the determination how the customers will react on the product, what they like or dislike in it, why they do not like it or like it, and what should be changed to receive more feedback demand for the product. Focus groups will be the best reason for the company’s management to make a decision about the product launching in this actual market.
The surveys will be appropriate to use for determining what demand to expect, what will be the sales rate. As a result, company will have an ability to plan the budget, to build effective marketing campaign, to set appropriate strategic goals in this market. Information obtained from the surveys will help to determine if the product launched in India bring the revenue that will cover all expenses and what will be the profit.
Therefore, marketing research is an effective method to determine all the positive and negative aspects of launching a product and will help the company to save its resources with appropriate decision.