International Market Research

International market research deals with how business organizations engaged in interna­tional trade make decisions that lead to the allocation of resources in markets with the greatest potential for sales (Ball et al., 2013). This process of market screening helps to maxi­mize sales and profits by identifying and selecting the most desirable markets.

Why Conduct International Market Research?

International market research is needed because export/investment decisions are often made without a careful and objective assessment of foreign markets and with a limited appre­ciation for different environments abroad. This is often a result of the perception of other markets as an extension of the domestic market and the belief that methods/ practices which work at home also work abroad. The cost of conducting international research is seen as pro­hibitively high, and managers make export decisions on the basis of short-term and changing market needs (reactive approach). Environmental scanning is viewed as a prerequisite for the successful alignment of competitive strategies (Beal, 2000; Subramanian, Fernandes and Harper, 1993).

The purpose of international marketing research is to (1) identify, evaluate, and compare the size and potential of various markets and select the most desirable market(s) for a given product or service, and (2) reassess market changes that may require a change in a company’s strategy. A firm may research a market by using either primary- or secondary-data sources.

Primary research (using primary data) is conducted by collecting data directly from the foreign marketplace through interviews, focus groups, observation, surveys, and experimen­tation with representatives and/or potential buyers. It attempts to answer certain questions about specific markets such as sales potential or pricing. Primary research has the advantage of being tailored to the company’s market and therefore provides specific information. How­ever, collection of such data is often expensive and time consuming.

Secondary market research is based on data previously collected and assembled for a certain project other than the one at hand. Such information can often be found inside the company or in the library, or it can be purchased from public or private organizations that specialize in providing information, such as overseas market studies, country market surveys, export statistics profiles, foreign trade reports, or competitive assessments of specific indus­tries. Although such data are readily available and inexpensive, certain limitations apply to using secondary sources:

1. The information often does not meet one’s specific needs. Because these materials are collected by others for their own purpose, they may be too broad or too narrow in terms of their scope of coverage as to be of much value for the research at hand. Also, such in­formation is often out of date.
2. There could be differences in definition of terms or units of measure that make it difficult to categorize or compare the research data.
3. It is difficult to assess the accuracy of the information because little is known about the research design or techniques used to gather the data.

Source: Seyoum Belay (2014), Export-import theory, practices, and procedures, Routledge; 3rd edition.