Global marketing research is meant to provide adequate data and cogent analysis for effective decision making on a global scale. The analytic research techniques practiced by domestic businesses can be applied to international marketing projects. The key difference is in the complexity of assignments because of the additional variables that international researchers must take into account. Global marketers have to judge the comparability of their data across a number of markets and are frequently faced with making decisions based on the basis of limited data. Because of this, the researcher must approach the research task with flexibility, resourcefulness, and ingenuity.
Traditionally, marketing research has been charged with the following three broad areas of responsibility:
Environmental studies. Given the added environmental complexity of global marketing, managers need timely input on various national environments.
Market studies. One of the tasks that researchers most frequently face is to determine the size of a market and the needs of potential customers.
Competitive studies. Another important task for the international marketing researcher is to provide insights about competitors, both domestic and foreign.
The rapidly changing nature of the international political scene is evident to anyone who regularly reads, listens to, or watches the various news media. Political upheavals and changes in government policy occur daily and can have an enormous impact on international business. For the executive, this means constant adjustments to exploit new opportunities and minimize losses.
Besides the international company, the principal players in the political arena are the host country governments and the home country governments. Sometimes transnational bodies or agencies such as the European Union (EU) or the World Trade Organization (WTO) can be involved. Within a national market, the interactions of all these groups result in a political climate that may positively or negatively affect the operations of an international business. The difficulty for the global company stems from the firm being subject to all these forces at the same time. The situation is further complicated by the fact that companies maintain operations in many countries and hence must simultaneously manage many sets of political relationships.
Host country a country that contains an operational unit (marketing, sales, manufacturing, finance, or R&D) of an international company. Any country that contains an operational unit (marketing, sales, manufacturing, finance, or research and development) of an international company can be defined as a host country. International companies deal with many different host countries, each with its own political climate. These political climates are largely determined by the motivations and actions of host country governments and local interest groups.
Both Japan and South Korea saw their products rise in esteem over a relatively short period of time. Now Japanese products score higher than U.S. or German products in some countries, including China and Saudi Arabia. In recent years, a number of countries, including Portugal, Estonia, and Poland, have employed branding experts to help them project a better image. Finland even undertook a campaign to enhance its image as a center of high-tech innovation, hoping that a better national image would help its high-tech companies in the U.S. market. But countries must realize branding is more than hype, it must be backed by reality. Consequently, major changes in country brand image can take 20 years to achieve.
Firms that suffer from a negative country of origin commonly settle for lower prices to offset perceptions of lower quality. However, there are a number of strategies that can improve buyer perception of the quality of products that suffer from a negative country-of-origin effect:
Production may be moved to a country with a positive country-of-origin effect. If this is too difficult, key parts can be sourced from such countries. Kia’s Sor-ento is assembled in Korea but relies on high-profile brand-name components from European and U.S. suppliers to boost its image overseas.
A negative country-of-origin bias may be offset by using a channel that distributes already accepted complimentary products. A study determined that consumers dining in a Mexican-themed restaurant were significantly more likely to buy Mexican wine than were consumers in other restaurants.
Communication and persistence can eventually pay off. When Arçelik attempted to introduce its Beko brand washing machines to the French furniture chain Conforama, the French sales staff objected to displaying the Turkish product. Then Valerie Lubineau, Beko’s head of marketing in France, revealed that the firm had been manufacturing Conforama’s respected in-house brand for years. Eight months later, the new Beko machines were outselling their European rivals. Firms that consistently provide good products and service can even change buyers’ attitudes toward their country of origin. A study showed industrial buyers who were experienced with suppliers from Latin America rated these countries higher than buyers who had had no such business dealings.
A country’s self-preservation is most threatened when its national sovereignty is at stake. Sovereignty is the complete control exercised within a given geographic area, including the ability to pass laws and regulations and the power to enforce them. Governments or countries frequently view the existence of sovereignty as critical to achieving the goal of self-preservation. Although sovereignty may be threatened by a number of factors, it is the relationship between a government’s attempt to protect its sovereignty and a company’s efforts to achieve its own goals that are of primary interest to us.
Sovereignty supremacy of authority or rule free from external control
Subsidiaries or branch offices of international companies can be controlled or influenced by decisions made at headquarters, beyond the physical or legal control of the host government. Therefore, foreign companies are frequently viewed as a threat to the host country’s national sovereignty.
(It is important to recognize in this context that perceptions on the part of host countries are typically more important than actual facts.)
Many attempts at restricting foreign firms are now discouraged under agreements established by the WTO. Still, these agreements exclude a number of sensitive areas. Countries often limit foreign ownership of newspapers, television, and radio stations for reasons of preserving national sovereignty. They fear that if a foreign company controlled these media, it could influence public opinion and limit national sovereignty. Internet businesses can be especially vulnerable to government censorship. Google’s YouTube has been banned or temporarily blocked in China, Turkey, and Thailand in response to postings deemed insulting or threatening by the national governments of those countries. Google concedes that balancing free expression and local laws is a delicate task.
Michael R. Czinkota and Ilkka A. Ronkainen for www.ama.org
Companies that have adopted this approach have incorporated the following four dimensions into their organizations.
Building a Shared Vision
The first dimension relates to a clear and consistent long-term corporate mission that guides individuals wherever they work in the organization. Examples of this are Johnson & Johnson’s corporate credo of customer focus; Coca-Cola’s mission of leveraging global beverage brand leadership “to refresh the world, inspire moments of optimism and happiness, create value and make a difference”; Nestlé’s vision to make the company the “reference for nutrition, health and wellness”; and Samsung’s mission to “create superior products and services, thereby contributing to a better global society.” But formulating and communicating a vision or mission cannot succeed unless individual employees understand and accept the company’s stated goals and objectives.
This relates to the development of a cooperative mindset among region or country organizations to ensure the effective implementation of global strategies. Managers may believe that global strategies are intrusions on their operations if they do not have an understanding of the corporate vision, if they have not contributed to the global corporate agenda, if they are not given direct responsibility for its implementation or if there is no reward for their cooperation.
The third component in the “glocal” approach is making use of representatives from different countries, regions, and cultures. Organizationally, the forces of globalization are changing the country manager’s role significantly. With profit-and-loss responsibility, oversight of multiple functions, and the benefits (and drawbacks) of distance from headquarters, country managers enjoyed considerable decision-making autonomy, as well as entrepreneurial initiative. Today, however, many companies have to emphasize the product dimension of the product-geography matrix, which means that power has to shift at least to some extent from country managers to worldwide strategic business unit and product line managers. Many of the previously local decisions are now subordinated to global strategic moves.
In today’s environment, the global business entity can be successful only if it is able to move intellectual capital within the organization—that is, to transmit ideas and information in real time. If there are impediments to the free flow of information across organizational boundaries, important updates about changes in the competitive environment might not be communicated in a timely fashion to those tasked with incorporating them into the strategy.