Export marketing research can be undertaken on the basis of either secondary data or primary data or a combination of both types of data. In the literature on export marketing research, the term ‘desk research’ is used to indicate the collection and analysis of secondary data. Through proper desk research, it is possible to conduct a preliminary screening. This will enable the marketing researcher to identify those export markets which are potentially attractive. This preliminary screening should be reasonably comprehensive so that one may not overlook more prospective export markets. One should not only know the most promising overseas markets but should also know why certain markets do not need any further investigation.
International agencies such as the United Nations, International Monetary Fund, the OECD provide data on such items as population, education, national and per capita income and position with regard to foreign exchange. In particular, the OECD’s World Trade Statistics and the United Nation’s International Trade Statistics are useful sources of secondary data. In addition, national government publications are available on import regulations, customs duties and related legislation affecting marketing. Many countries bring out yearbooks or statistical abstracts that are immensely useful to an exporter.
Sources of Secondary Data in India: A major source of the most authentic data on foreign trade in the Government of India’s publication entitled Monthly Statistics relating to India’s Foreign Trade. These statistics are published in separate volumes for export and import trade. The statistics contained in this publication are quite comprehensive. A potential exporter can know from this source the nature and extent of exports to different countries, the rate of change in exports, etc.
Another source of information on various aspects of export marketing is available in the research studies done by the Indian Institute of Foreign Trade, India Trade Promotion Organisation and Export Promotion Councils.
At times, the financial dailies such The Economic Times bring out special features, each time devoted to a particular country, for different countries. They contain useful and most recent information. Like export statistics, import statistics of the selected importing countries are important. Such statistics may be available in foreign embassies or consulates in India and chambers of commerce. Besides, Indian embassies abroad may furnish some broad information to a potential exporter on request.
Secondary data are becoming more plentiful in quantity. In addition, their quality has improved over the years. Studies based on secondary data are obviously much cheaper. The marketing researcher should, therefore, explore fully the availability of secondary data. However, before using such data, he must ensure their reliability and suitability for the proposed research by evaluating such data.
Collection of Primary Data (Field Survey): Sometimes the information required by an exporting firm is just not available. In such a case, the marketing researcher has to be extremely vigilant in organizing it.
In order to conduct a field survey in a foreign country, the marketing researcher has to follow the same steps that are involved in a domestic survey. However, some additional precautions are needed. For example, when marketing research is to be undertaken in a country where English language is not commonly used, it is necessary to get the questionnaire translated in that foreign language. Proper translation of the questionnaire is very necessary. Again, for conducting the interviews, properly qualified interviewers have to be recruited on an ad-hoc basis for that survey only. It is advisable to hire the services of a professional marketing research agency in the country concerned. This will be extremely helpful to the firm as it will have to faced several difficulties in conducting the field survey in a foreign land. However, it will indeed be quite expensive to avail the services of a professional marketing research agency. Only large firms which are keen to export their products in overseas markets can afford to do so. Even when a company is able to afford large expenditure on marketing research after it has been convinced that it will pay off, it may not be able to do so on account of restrictions on the release of that much of foreign exchange. However, in view of liberalization policy of the government and increase in our foreign exchange resources, the government may release the foreign exchange as needed.
A field survey in a foreign country can be of two types, viz. product-oriented survey and market-oriented survey.
Product-oriented Survey: A firm which is exploring the possibilities of selling its product or products in foreign markets may undertake a product-oriented survey. Keeping in mind its own product, it will try to identify those countries where this product is consumed, the extent and patter of its consumption, price at which it is available in the overseas market, the countries currently exporting it and the magnitude of competition. It has to be a comprehensive survey. Market-oriented Survey In a market-oriented survey, a firm may like to know which product or products can be sold in a particular market. Here, the firm has already identified one or more countries where it would like to export. It will be primarily interested in identifying the products that are currently imported in that market and the possibility of marketing any new product there. Such a survey may be extremely useful to an export organisation or a new unit which is interested in entering the export trade.
Need for Personal Visits: Even when primary data are being collected through a field survey without the visit of the exporter himself, it may be difficult to know the nature and extent of competition in the foreign markets. A personal visit to that country will provide the exporter with an opportunity of having discussions with knowledgeable persons and agencies. It will also enable him to form perceptions of consumption patterns and habits of the population as also of the current business practices in that country. Such information will be immensely useful for a comprehensive and perceptive export marketing study. Further, personal visits to foreign countries may also be helpful in setting up contacts which can be exploited in the subsequent marketing effort. It would be much better if these visits coincide with specific product fairs in the concerned countries.
Major Sources of Error in International Surveys: Since surveys conducted in foreign countries to collect primary data are not so easy as the domestic surveys, certain errors crop up in such surveys. It may, therefore, be worthwhile here to know the major sources of error so that one may avoid them to the extent possible.
Definitional Error: Such an error arises on account of lack of conceptual, definitional, temporal and market structure equivalence. Conceptual differences may arise, for example, in respect of certain food products which are either not known in some countries or are used differently. Definitional equivalence is an offshoot of the conceptual problem. Further, temporal equivalence may be affected if the surveys are not conducted simultaneously in the concerned countries. The comparability of data may be vitiated on account of seasonal factors in some countries while they are non-existent in others.
Instrument Error: An instrument error may arise on account of problems of linguistic equivalence, contextual equivalence, instrument equivalence and response style equivalence. Linguistic equivalence may get distorted while translating a questionnaire in another language. A contextual equivalence may get distorted, for example, in the Middle East where the respondents may resent the visit of the interviewer to their homes on the ground that it is an intrusion into their privacy. As such, they may be reluctant to give the desired information. As regards instrument equivalence, it may not yield representative data for all countries. Finally, response style equivalence deals with the style of people responding to the interviewer. Respondents in some countries may be quite willing and cooperative while in others they may be reluctant and reserved. Between these two extremes, there may be several variations depending on the extent of cooperation.
Frame Error: This type of error arises on account of the varying sampling frames used for different countries. Some sampling fr4ames, on the basis of which a sample is drawn, may be defective in the sense that they account for a relatively small proportion of the population. Further, the definitions of dwelling units and households may be different in different sampling frames.
Selection Error: This type of error arises in the process of selecting respondents in two or more countries. For example, if a study is undertaken to compare consumption behaviour in respect of say, breakfast cereal, in two countries A and B, it may happen that respondents in country A may be comparable with those in country B, except their age. Country A may have proportionately more young respondents than in country B. This may have an impact on the consumer behaviour in the two countries. As a result, their consumer profiles are not strictly comparable.
Non-response Error: On account of the variation in response in two or more countries, the non response error will arise. To a large extent, the magnitude of response will vary on account of educational and cultural differences in the countries covered in the survey.
Sampling Error: This type of error is the only one which is free from cultural differences in different countries. On the basis of statistical principles, the sampling error can be computed. Further, one should note it is extremely difficult that a survey will be completely free form any error. Even in a domestic survey, it is rare that all errors are completely eliminated. In a multinational survey, errors are bound to arise. All the same, the marketing researcher should try to minimize the varying types of errors so that the comparability of data can be maintained.
Analysis And Interpretation of the Data And Preparation Of The Report: When all the data from the secondary sources or/and through a field survey have been collected, it is necessary to process these data. Sometimes it is seen that poor data processing has reduced their utility despite the fact that enormous effort was made as also considerable expenditure was incurred in their collection. Proper processing of data will enable the researcher to have suitable statistical tables.
After the tabulation of data, the researcher has to ensure their analysis. There are different methods of analysis ranging from simple averages and percentages to a host of multivariate techniques. A judicious selection of one or more of these techniques in a given problem has to be made. As many export marketing research studies will be concerned with the export potential and demand forecast of a given product in an overseas market, it is necessary that sound forecasting methods are used. A number of subjective and objective methods of forecasting are available to the researcher. He has to ensure that the method he uses is the best, keeping in view the limitations, if any, of the data collected. As regards interpretation, it may be pointed out that data analysis and interpretation are interlinked. Often analysis of the data and the interpretation of results are done simultaneously. After the data are processed, tabulated, analysed and interpreted, the researcher has to prepare a report on the research study. Needless to say, the report should be objective and reasonably comprehensive. It should be written keeping in mind the objectives of the study. It may be emphasized that writing a good report is not as simple as it might appear before one actually attempts to write. The researcher should particularly indicate the reliability as well as the limitations of the facts presented in the report. In addition, sufficient care must be exercised to ensure that the report enlightens the prospective exporting firm in respect of following questions:
- Will it be profitable for the concerned firm to enter the foreign market under consideration?
- Are the products as currently produced by the firm acceptable in the markets surveyed? If not, what product modifications will be necessary in terms of quality, packaging, presentation and sizes? At what competitive prices can the market potential be gainfully tapped?
- What distributional strategy the firm will need to adopt in the concerned market.
- What publicity and promotion will need to be undertaken by the firm.
- In case an after sales service is needed for the given product, can it be entrusted to an existing local concern? If not, will the firm have to train people for the same?
- Needless to say, if the report on export marketing research fails to provide a clear direction to the prospective exporting firm in respect of the foregoing questions, then all the effort made and money spent on the study will be in vain.
The Role of International Trade Centre
The ITC was established at the request of the developing countries to help them promote their exports. It was set up in 1964 with headquarters in Generva. The ITC assists developing countries in a number of ways, one of which is: Developing a national trade promotion strategy, including export potential, choosing priority markets and setting export targets.
The ITC has developed a detailed methodology in analyzing international demand for a country’s products. Developing countries can approach it to get detailed information on their requirements. An excerpt from an article on this aspect is given. This is followed by another except from an article on determining users’ needs for trade information.
Analyzing International Demand: While participation in international trade is one of the key factors for national economic growth, a major handicap is that information on the export portfolios of many developing countries remains incomplete As a result, policy-makers in those countries are at a loss to know in which product group their country has a competitive advantage on the international market.
In order to get over this deficiency, ITC has developed a methodology whereby one can have an overview of the performance of the leading export products of individual countries and the growth pattern of those exports. The methodology provides information on each country both graphically and in table form. The details give replies to the following questions:
What are the leading export products of the country concerned? How concentrated or diversified is the country’s export portfolio? What are the products in which the country has performed better on the international market than other countries and increased its market share? Which of its export products are falling behind those of competing suppliers?
Which countries are the major competitors for the export products under review?
To what extent are the leading export products being marketed in expanding or shrinking markets?
For which products does the country have a revealed comparative advantage?
In what market segments by unit value are the leading export products found?
For which product has the country been particularly successful in South-South trade?
The ITC methodology is based on trade data reported by 76 countries and territories to the “Comtrade” database of the UN Statistical Office. These reporting countries account for more than 90% of world trade.
In overseas marketing research, the need for comprehensive information is imperative. In this respect a Trade Information Service (TIS) can play its role effectively only when it provides information useful to exporters, which is not available from any other source. As the international trading environment is rapidly changing, it is necessary to undertake TIS on a continuing basis.
A number of techniques can be used to assess the information needs of the clients of TIS. These techniques are mail surveys, interviews, users’ meetings and everyday contact of the TIS staff.
As assessment of users’ needs should not be looked upon as a one-time exercise Instead, it should be a continuous effort. Preferably, a special unit within the trade information service should be set up to determine the users’ needs on a regular basis. Finally, the analysis of needs should be followed by effectiveness of providing each type of information service requested and, last but not least, the availability of the requested services in other organizations of the country. The TIS can then set priorities for its services in the future.
