Market research is defined as a “component of marketing research whereby a
a specific market is identified and its size and other characteristics are measured.”
Overseas market research is this process occurring outside of a firm’s home
The country, which can face a new set of boundaries such as language, culture, data collection, networking, and differences in business laws and requirements
For proper market research, an exporter needs to have a basic understanding of all
aspects of the country that may affect the desirability and success of exporting, such
as politics, economics, culture, history, scientific technology, climate, and language.
Based on this basic understanding about the target market, an assessment of the competitors, prices, customers and distribution structures should be made.
If, upon completing scientific research, results show that the product does not
have any advantages over current competitors’ products or that product diversification
is too slender to assure a high possibility of success, the exporter will have to
reassess whether or not the export is viable in its current state. If the export is not
assessed to be viable in the target market, changes will need to be made to the plan.
One of the easiest ways to gain a basic understanding of a country’s import and
export situation is to look at statistical analyses of exports and imports. By
analyzing the records of exports and imports at a country level, one can gain
knowledge as to when items were exported and which countries they were exported
to. Once the proper import countries have been determined, an exporter might be
able to make lists of buyers of specific items, which can become the first procession
for successful product marketing.
International market research can be used to: determine new markets, test products and determine public opinions on certain strategies. Although different, they all follow a basic step-by-step process:
- Define the objective of the research
- Identify the actions needed to collect the research
- Identify how to achieve those actions
- Identify the sources of information needed to achieve your objective
- Determine how to collect data ie. in person, online, in hard copy
- Conduct analysis of the research collected
- Make recommendations based on the information collected
These general stages can be used as a how-to guide in market research. It is recommended that stages one and three should be thoroughly developed and carefully considered. Once the goals, objectives, and actions are defined, and your carefully planned research campaign completed, you will have sufficient data to make correct conclusions and recommendations.
Primary and Secondary Data
There are two types of data to be used in research.
Secondary data (existing data) is information that is easily available on the internet or from governmental sources. It can be valuable information for companies in the beginning stages of market selection. Some examples of secondary data are CIA World Facebook and the Virtual Trade Commissioner. It allows companies to determine where the largest markets are, what countries are growing the fastest, which demographic is the largest, and where the business trends are going.
However, secondary data has its limitations. It can become out-of-date quickly and irrelevant to your research. Also in some developing countries, secondary data is either non-existent or out-of-date.
Meanwhile, primary data is documentation and research that you have created or conducted yourself. Primary data is usually completed through these methods:
- Interviews and surveys
- Behavioral Data
Fresh data can be gathered by observing the relevant factors and setting. If a company wants to enter into Aviation industry the researchers should roam around airports, airline offices, and travel agencies to here how travelers talk about the different carriers. The researcher can fly on different airlines to observe the quality of in-flight service. This exploratory research might yield some useful hypotheses about how travelers choose air carriers.
Focus Group Research:
A focus group is a gathering of six to ten people who are invited to spend a few hours with a skilled moderator on discussing a product, service organization, or other marketing entry. The moderator needs to be objective, knowledgeable on the issue, and skilled in-group dynamics. Participants are normally paid a small sum for attending. The meeting is typically held in pleasant surroundings and refreshments are served.
The moderator might start with a broad question, such as “How do you feel about air travel?” The question then moves to how people regard the different airline, different services, and in-flight telephone service. The moderators encourage free and easy discussion, hoping that the group dynamics will reveal deep feelings and thoughts. At the same time the moderator “focuses” the discussion. The discussion recorded through not taking or on audiotape or videotape is subsequently studied to understand consumer beliefs, attitudes, and behavior.
Surveys are best suited for descriptive research. Companies undertake surveys to learn about people’s knowledge, beliefs preferences, and satisfaction, and to measure these magnitudes in the general population. Aviation company might want to survey how many people know the competitor’s company name, have flown it, prefer it and which other facilities they would like to see in it.
When we were in school, we used to carry out various types of experiments in our classes. The experiments were carried to find out the net results when different elements are mixed together.
It is a systematic and scientific approach to research in which the researcher manipulates one or more variables, and controls and measures any change in other variables.
For example – If a company is into manufacturing of engineering products. However, even though the products are good, the market is not being captured. In the end, the company changes various factors including manufacturing, operations, HR and finally sales. Through different cause and effect experiments, the company finds out that there is a direct co-relation between sales training and market coverage of the product. The better the sales person is trained for the technical product, the more positively the market will respond.
If in a car, there are different variables like car color, engine, comfort, mileage etc, then for all the different type of car manufacturers, experimental research was carried out to target the right customers. In essence, one single factor within the manufacturing unit was changed to find its net effect. If the effect was overall positive, the change was implemented or else it was discarded.
Customers leave traces of their purchasing behavior in store scanning data, catalog purchase records and customer database. Much can be learned by analyzing this data. Customers an actual purchase reflects revolved preferences and often are more reliable than statements they offer to market research.
People often report preferences for popular brands and yet the data show that high-income people do not necessarily buy the more expensive brands, contrary to what they might state in interviews; and many low-income people buy some expensive brands. Clearly, companies can learn many useful things about its passengers by analyzing purchase records.
Sources of Data
- Country reports
- Articles in business newspapers
- Studies by consulting firms
- Trade commissioners’ reports
- Reports by commercial banks or international organizations
- Corporate annual reports
- Records of shareholders meetings
- Corporate websites
- Company product catalogs
- Personal interviews with company executives or with company customers
- Market surveys and focus groups