A cost-effective means of surveying foreign markets is to use secondary research that is relevant to the firm's operations.
Insufficient knowledge is the single biggest reason for failure in the international marketplace. When we analyze global failures, we often find that critical errors could have been avoided if only the firm and its managers had known more about the business environment they were entering. Why didn't the marketers do the necessary research? The answer is usually simple. They thought it would be too expensive, or they didn't know how to do it.
Don't sail into the treacherous waters of the marketing world without a chart. You can build a low-cost research program that will assess potential target markets, spot the pitfalls and lay the groundwork for an effective marketing effort.
The key to creating a cost-effective way of surveying foreign markets is to climb on the shoulders of those who have gone before, i.e. make intelligent use of secondary research. In many cases the information you need is there for the taking. You just have to know where to look.
Here are the nine steps in the preliminary research process:
1. Understand the need for research.
2. Overcome objections and win support for research.
3. Determine research objectives.
4. Determine information requirements.
5. Identify sources of information.
6. Evaluate information source, quality and compatibility.
7. Obtain the information.
8. Interpret and analyze the information.
9. Present research results.
After completing these nine steps, you'll have a broad base of information from which to make the major decisions involved in going global.
Need for research
Many companies neglect to conduct adequate research before entering the global marketing arena. This neglect exposes the firm to serious business risks, such as the following:
* Loss of market penetration effectiveness.
* Incitement of ill will that precludes further efforts.
* Damage to the company's overall image.
* Erosion of confidence in the financial markets.
A well thought-out research program will not be as expensive and difficult as some may predict. Nevertheless, it will take money, time and resources. If management honestly considers the costs of not conducting decent research, it will pay the price.
Some managers are misled into skimping on the research function because they are already selling overseas. They carry on a certain amount of export business - not through any planned undertaking, but because it "just happened." Some international orders came in over the transom, so the firm has continued to sell there. Or the firm was contacted by a distributor abroad and has maintained the relationship without really thinking much about it.
The fact that you're doing some business in a particular foreign market doesn't necessarily mean that this is the only or the best foreign market for your products or services. A logical research program lets you evaluate what you're doing now as well as figure out what you should be doing.
The objectives of international marketing research are the same as those of domestic marketing research. However, the following environmental factors mean that the research might have to be executed quite differently: new parameters, new cultures, risk of overload and a broader definition of competition.
We become so used to the parameters of doing business in our own country that we take them for granted, like the walls of the office. We may chafe at regulations. We may protest, with good reason, various reporting requirements. But we are accustomed to these things. They may change as the political winds blow, but their general outlines remain the same.
When we start to do business in another country, we're prepared to cope …