Research plays the same important role in the development of international advertising and promotion programs that it does domestically—helping managers make better, more informed decisions. However, many companies do not conduct advertising research in international markets. Probably the main reason for this is the high cost of conducting research in foreign markets, coupled with the limited budgets many firms have for international advertising and promotion. When international markets represent a small percentage of overall sales, investments in research are difficult to justify. Rather than quality marketing information, generalizations based on casual observations of foreign markets have guided the promotional process.
As companies increase their investment in international marketing, they are recognizing the importance of conducting marketing and advertising research to better understand the characteristics and subtleties of consumers in foreign markets. There are a number of areas where research on foreign markets can help firms make better advertising decisions:
• Information on demographic characteristics of markets.
• Information on cultural differences such as norms, lifestyles, and values.
• Information on consumers' product usage, brand attitudes, and media preferences.
• Information on media usage and audience size.
• Copy testing to determine reactions to different types of advertising appeals and executions.
• Research on the effectiveness of advertising and promotional programs in foreign markets.
A great deal of information on international markets is available through secondary sources. One of the most valuable sources of information for companies based in this country is the U.S. Department of Commerce, which works closely with American companies to help them sell their products overseas through its International Trade Administration (ITA) division. The ITA publishes a series of Overseas Business Reports that provide valuable information on most major world markets, including economic and marketing data as well as laws and regulations. Information on markets is sometimes available from other countries' government agencies, embassies, or consulates. The ITA also publishes Export America, which is a monthly magazine that provides valuable information on foreign markets and issue related to global business. The Central Intelligence Agency (CIA) publishes the World Fact Book, which contains information on more than 250 countries in eight categories, including geography, population, economy, government, communications, transportation, military, and transnational issues (Exhibit 20-14). The information includes data on telephones, radios, television sets, and communication-satellite use for nearly every country in the world and is usually updated annually. Circulation figures for the world's newspapers are also published every year.
The United Nations Statistical Yearbook, which is published annually, provides demographic and economic data on more than 200 countries. Yearbooks and other reports are also available for regions such as Latin America, Europe, and Asia. Other international organizations that can provide valuable information on world markets include the International Monetary Fund and regional organizations like the Japanese External Trade Organization and the European Union. The World Bank's annual World Development Reports has many national statistics including per capita incomes, literacy rates, imports, exports, and a variety of other information.
Information on product and brand attitudes, usage patterns, and media habits is generally more difficult to find, particularly in developing countries. However, more information is becoming available. A. C. Nielsen Worldwide Consumer Panel Services provides marketers with key consumer insights for 18 countries around the world. The company tracks consumer purchases in nearly 125,000 households using scanning technology or, in some markets, more traditional purchase diaries. Information from the panels is useful for understanding purchase behavior and shopping patterns for different segments of the population across various retail outlets. NCH Nu World Marketing Limited now collects information on coupon distribution and redemption patterns in the United States and a number of European countries. Data on media usage in European countries have increased tremendously over the past decade. However, information on TV audiences is still lacking in many countries.
Much of the information advertisers need must be gathered from research generated by the company and/or ad agency. Consumer needs and wants, purchase motives, and usage patterns often vary from one country to another, and research is needed to understand these differences. Some companies and their agencies conduct psycho-graphic research in foreign markets to determine activities, interests, and opinions as well as product usage patterns.
Advertisers should also research consumers' reactions to the advertising appeal and execution style they plan to use in foreign markets. One agency researcher recommends testing the basic premise and/or selling idea to be used in a global campaign first to be sure it is relevant to the target audiences in the markets where it will appear.81
Exhibit 20-14 The World Fact Book is a valuable source of information on different countries
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Co-op Mailing means that two or more businesses share in the cost and distribution of a direct mail campaign. It's kind of like having you and another non-competing business split the cost of printing, assembling and mailing an advertising flyer to a shared same market base.