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Changes in the domestic and international market

101 Comments · Marketing Research

Boundaries between domestic and international markets are becoming less relevant as firms increase their profiles abroad.

In Europe, North America and Asia, international competition has intensified, precipitating the following changes in global marketing research.

Changes in the international market focus
In the 1970s and 1980s the country was typically used as the unit of analysis for research design, for developing the sampling frame, and data collection.

Owing to economic, political, linguistic and cultural barriers, the country was the focal point of entry decisions.

Equally, the firm’s international operations were often organized by country. Marketing research agencies were also typically national organizations, with relatively few having the capability to conduct research across several countries.

However, the issues facing companies in the 1990s have changed dramatically, as have research and information needs.

In industrialized regions, such as North America, Europe and Japan, regional market integration and the removal of trade barriers, the growth of a regional and global market infrastructure as well as increased mobility of consumers have created pressures to consolidate and integrate marketing strategies across countries.

Changes in communication technology
Developments in mass communications technology and global and regional media, have created certain segments of the population worldwide with a common set of expectations, familiarity with a common set of symbols, similar preferences for products and services, and an overall desire to improve their standard of living.

Market segments such as teenagers share common interests in clothing, music, films and sports, as trends and related products are rapidly spread through global media.

Increasing discretionary spending also expands choice and increases the role of services in consumer decisions.

This trend, coupled with the multiplicity of shopping modes available, results in more emphasis on examining the role of the shopping environment on choice behaviour.

Situational and contextual variables, such as the effect of store ambience on shopping mood have to be considered.

Dramatic changes in the global environment, coupled with technological advances in data collection, analysis and dissemination, imply that researchers need to broaden their capabilities in order to design, implement and interpret research.

New tools need to be mastered and creative approaches to understanding behaviour in differing cultural contexts developed.

The ability to interpret and integrate complex data from diverse sources and environments will also be critical to providing meaningful recommendations for a company’s global marketing strategy.

In emerging markets, conditions not only are changing rapidly, but are also different from those in industrialized countries.

Not only are consumer standards of living and purchasing power much lower, but attitudes towards foreign products are often extremely complex, sometimes ambivalent and difficult to predict.

This, coupled with the lack of a research or technological infrastructure to collect and analyze data, poses a challenge not only in designing research, but also in developing and implementing the collection of data.

This in turn adds to the complexity of conducting marketing research as the range and nature of research contexts become increasingly heterogeneous.

As a result of these trends, more timely and relevant information is essential for day to-day decision-making as well as to chart a firm’s path in an increasingly turbulent and competitive environment.

The speed of business, the flood of information provided by the new technologies, and flatter organizational structures are driving this trend.

In short, managers need help in processing more issues without the help of mid-level managers.

The marketing researcher is accessible and is informed about these issues; therefore managers increasingly involve them in decision-making.

Managers want well-reasoned recommendations, not just information about the issue or descriptions of possible courses of action.

Information needs are changing in both developed and developing countries. Established markets are becoming more geographically integrated, as direct vertical links and information flows are established between customers, retailers, and suppliers.

As a result, there is a growing need for research spanning country boundaries, in order to identify regional or global market segments, or to examine opportunities for integrating and co-coordinating strategies across borders.

At the same time, speed in collection and interpretation of results from multiple and geographically diverse sources becomes imperative.

As firms push the geographic frontiers of their operations, they need to collect information from a broader and more diverse range of markets.

Increasingly, this entails conducting research in unfamiliar and distant markets. This poses challenges, not only in collecting accurate and reliable information on existing behaviour in an expeditious and cost-effective way, but also in predicting responses to new and unfamiliar stimuli, and interpreting the implications for marketing strategy.

Advances in technology both facilitate and at the same time render more complexity in the collection of global data.

Better communications enable faster data collection on a much broader and diverse geographic scale.

Yet, at the same time, managers have to master these tools and understand their inherent limitations and implicit biases.

In addition to these trends, two main reasons are cited for the growth of marketing research.

First, the speed of doing business has increased due to the diffusion of information technologies, enabling firms to be more responsive to customers through flexible manufacturing, and reduced cycle times in channel operations.

Instant communication has become a prerequisite to developing viable markets. Marketing has assumed a new significance, as the costs of misreading signals from the marketplace become higher.

As the interpreter of signals and clues from the marketplace, marketing research has a critical role in providing “the voice of the customer” to managers. Advances in technology have enhanced the scope, effectiveness, and efficiency of marketing research leading to its increased use.

One of the first academics to identify the challenges and opportunities of globalization was Theodore Levitt (1983) with his seminal article “The globalization of markets.”

No doubt, the homogenization of consumer habits and lifestyles, caused by the tremendous progress of communications technology and worldwide tourism, came true.

Moreover, intensified competition and growing investments in research and development seem to force companies to operate globally, enforcing the marketing of global products, services, and brands.

Implementing a pure global strategy does not only mean offering and marketing products or services that are standardized.

A global strategy includes linking the dispersed units of the globalization firm plus addressing all functions of the value chain, especially marketing, distribution and the design of products or services, which can also demonstrate the limits of globalization.

As differences between products and services in any given industry are vanishing and global standards become the rule, consumers will appreciate the value of offers specific to a country.

Keywords: regional market, Market segments, marketing research, global market, communication technology, globalization,


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