This abstract is from the 15th chapter of the Handbook of Cross-Cultural Marketing, which is coauthored by Camille Schuster. It covers the importance of international market research and the extent to which markets should be studied prior to international expansion.
Managers and researchers often fail to comprehend cultural disparities, that customers differ between and within countries, or investigate whether or not a market exists prior to market entry. Insufficient preparation makes cross-cultural business a high-risk activity (Ricks, 2000). However challenging, cross-cultural market understanding is instrumental to success since it permits the firm to benefit from different environments, attitudes, and market conditions. Many firms do little research before entering a foreign market or pay little attention to the diversity of consumers in their home market. Managers often assume that the current methods used in their domestic market are both best and appropriate for all other markets and consumers. Major reasons why managers are reluctant to engage in cross-cultural research are the time, effort, and money required to understand market demand, differences in culture, and consumer tastes (Craig and Douglas, 1999). Despite such reservations, research is as important when doing business internationally as it is in the domestic market. Firms need to learn what consumers want, why they want it, and how they satisfy their wants and needs. Knowing who to ask, what to ask, and selecting the appropriate methodology to the task at hand are critical steps. Developing an understanding of international markets, consumers, competitors, and governments paves the way to success.