Considerations for hiring Outside Marketing Research Agencies

There are several dimensions which need to be kept in view while selecting an outside agency for conducting Marketing Research.

These considerations may be enumerated as below:

1. Technical Expertise 

The marketing researcher should know who is to undertake the study and what is his proficiency in marketing research.

The client firm may find that a research agency is good at basic studies but is not competent enough to undertake complex studies.

Some research agencies are poorly staffed and as such they should be avoided.

2. Objectivity 

The question of objectivity is very important. Outside agencies should be reputable for their objective approach in research projects.

3. Confidentiality 

The client firm must ensure that the research agency maintains strict confidentiality regarding the project.

4. Economic Factors 

A client firm may invite research proposals from more than one agency.

In such a case, it would choose the most economical agency.

However, client firms should not overlook the fact that some agencies are very economical, but at the same time their quality is also poor. Quality should not be compromised.

5. Timely submission of reports 

The client firm should enquire about the reputation of the research agency especially in relation to its timely submission of reports.

Sometimes, outside agencies are quick in taking up assignments from clients but are not so prompt in carrying out the task.

6. Experience of The Supplier

The client firm should ascertain the standing of the agency. While general experience is very important, relevant and specific research experience is what should be looked for. 

7. Reputation of the agency 

It is necessary to ensure that the agency has a good reputation. 

This consideration is important for lending credibility to the research findings. 

This is of special importance particularly when the client firm intends to use the study for creating an impact. 

Since no single agency is likely to be strong on all these considerations, it is necessary that the client firm adopt a reasonable approach in this regard. 

It should ascertain which of the above criteria are crucial for its research project and then to select an agency

How Attracting Customers Made Me A Better Salesperson

Note the words that are emphasized in the paragraphs that follow.

I once had a friend from Colombia who wanted to sell coffee from his country in the Washington, D.C., area but didn’t know how to get into the market.

Finally, he succeeded on the basis of service and distribution.

He began importing coffee from Colombia and freestanding espresso machines from Italy, placed the machines in high-traffic locations, and stocked them with his Colombian coffee.

 More recently, I worked with an organization in Brazil that wanted to sell frozen açaí pulp in the United States.

Açaí is a “superfood” berry grown mainly in the Amazon region of Brazil and is very high in antioxidants.

About the time I started working with this product, early in 1996, some firms that marketed açaí products managed to have articles published in magazines, and one company arranged to have it featured on The Oprah Winfrey Show.

After that publicity, sales shot up and buyers were actually competing for the frozen pulp.

Goldman Jewelry, a company based in Israel, exports jewelry from the United States to numerous other countries.

The company’s secret is to make the product available everywhere by putting it on an online auction site.

Because Goldman’s overhead is low and its methods of promotion (eBay) and distribution (basically mail) are economical, it can offer lower prices than most of its competitors.

It nearly always helps to have the lowest prices, although this is hard for independent exporters to do

After the events of September 11, 2001, the demand for security equipment began expanding worldwide. A U.S. Department of Commerce study identified 44 ports, 47 airports, and other facilities that needed this kind of equipment just in the country of Spain.

Large and small exporters began vying for the business, and several were successful because they had products that were urgently in demand. Of course, pricing was important but not nearly so much as having products that would do the job well.

At this point I should say a word about bribery, which is an all-too-common way of influencing buyers of products and services.

It is so pervasive in many countries that the U.S. government has listed it as a barrier to trade.

I suggest avoiding this kind of activity, even if you lose the business.

First, you may be in violation of U.S. law, depending on whom you bribe and how you do it.

There is more information about antibribery legislation in the section on export regulations.

Second, if you are a beginner, you won’t know how to play the game and will probably make mistakes.

Anyone can ask you for money or favors and say that he or she can arrange for your offer to be accepted, but not everyone has the power or influence to make good on such a promise.

I suspect there are people who make their living by offering to arrange sales in return for money or other compensation and then simply say that such and such happened and they couldn’t get it done.

Third, if you pay a bribe and make a sale, you will find it very hard to avoid making similar payments on future sales to the same customer.

Once you start to give something, it’s hard to stoping it.

Of course, it is common in most businesses to pay commissions on sales.

Unlike a bribe, a commission is usually on top of (not under) the table.

Everyone knows it is being paid and accepts it as a legal and ethical cost of doing business.

Adverse effects of foreign trade on the National Economies

It has often been argued that international trade has a strong backwash effect as less developed countries i.e. its operations are fundamentally biased in favour of the richer and progressive regions and is in disfavour of less developed countries. It has also been pointed out by the economists that international trade leads to international transfer of income from poor to rich countries. The UN report (1998) on human resource indicators shows a widened gap in the living standards of the people of rich and poor nations. This widening of gap has increased in the last decade ever since globalization of the world economies started. Also, international trade can adversely affect the process of capital formation in underdeveloped countries.

However, there is still a lack of empirical evidence to prove that the development of export sector has been at the cost of domestic sector. Foreign trade has not always stood in the way of domestic investment. The adverse effects seem to have been exaggerated. It may be mentioned that in today’s environment, globalization is a reality and it is important to accept it in the right perspective instead of nurturing the old protectionist beliefs.

Importance of International Marketing Part - 2

Part 2 Part 1

Microlevel effects of International Business :

An individual firm can reap several benefits by resorting to international marketing and international business.

1. Growth : By all standards, domestic markets have a limitation of growth potential. After a particular level, it is very difficult for a firm to achieve growth. So, it is left with the option of either product innovation or extending operations to other markets.The latter option is a better way of sustaining growth as the product life can increase significantly when it is sold into the world markets.
2. Fighting Competition : As the protectionist measures by nations are being reduced, firms operating in domestic market only are facing increased levels of competition. Instead of utilizing their resources in fighting competitions, firms continue to look at markets in other countries to cope up with domestic competition. Hence, international business operations provide avenues for both survival and growth.
3. Increased efficiency : By operating on global scale, a firm can select for its expansion lucrative opportunities. Also, it can reduce its product costs through global sourcing and utilise world level technology and talent for business operations. All this makes the business operations more efficient and as a result it can realise higher return per unit investment. This boosts up shareholder’s value and the company image.
4. Scale economics : Higher level operations on account of international operations produce benefits of scale and thus enhance the profitability of firm.
5. Innovation : By operating in large markets, companies can afford to invest in research and technology development. It is established that compared to traditional and mind set firms, innovation driven firms can compete effectively.
6. Risk Cover : By operating on global scale, the fluctuations of demand levels in an individual country does not make much difference on the aggregate sales. Consequently, the uncertainties arising out of risk factors on the operations localized to a country are reduced. Even the financial risks, physical risks, politico-legal risks etc. can be managed more effectively by virtue of global operations.

Part 1

Importance of International Marketing Part - 1

Part 1 Part 2

Macro level benefits in national perspective: International trade results in macro-economic effects for each economy. The imports and exports influence the employment, national income and technology. The direct and indirect benefits emanating from international business are listed below:

1. Increase in national Income : A country’s export activity promotes industrial and trade activity that generates employment and income for various sections of society. The multiplier effect of income increases the level of output and growth rate of economy. Especially the export of wage-goods can help a developing country to break the vicious circle of poverty and raise the real income of the country. 
2. Efficiency : While exporting, the countries try to attain specialization in production of goods. In this process, there is optimum and efficient utilization of the resources. The limited domestic market may act as a deterrent to the growth of industry and a resultant under-utilization of resources. The international trade can help industry grow and achieve scale and experience economies
3. Employment generation : Exports constitute a significant portion of different nations and breed opportunities for more and gainful employment. In addition to reducing direct unemployment, foreign trade reduces underemployment, e.g. exports of Swiss watches engages the farmers in the watch industry during their free time resulting into gainful utilisation of their skills.
4. Increased linkages : The staple theory of economic growth recognizes that foreign trade results into increased backward and forward linkages with other sectors of the economy. The industrial and trade linkages cause the development of new industries and enhance efficiency of existing indutries.
5. Optimal utilization of resources : International business makes possible the utilisation of agricultural resources as the farmers get a greater access to the overseas markets. This transforms even the subsistence sector into monetized sector raising the standards of living of rural populations. The strengths of Indian (12) agriculture are likely to open new vistas of business opportunities in the days to come as the world trade is likely to become more liberalised as a result of WTO provisions.
6. Promotes Foreign Direct Investment : The level of international business of a country often becomes a basis for the flow of foreign direct investment in a country. In today’s economic environment, it is difficult to grow in absence of FDI. Several economies have grown following the heavy investments from other parts of the world
7. Stimulates Competition : International business fosters healthy competition and helps in checking inefficient monopolies. It is established that growth of competitive economies is higher than the growth rate of protective economies. In recent times, the nations have realized the benefits of healthy competition. Several developing and erstwhile communist countries are promoting the same. Switching over to market-led growth which invokes substantially international operations in business, services and technology
8. Technology Sourcing : In today’s rapidly changing world, it is important to keep pace with the changing technology. This is possible only when there exist linkages with other national economies through international trade and business. The technologydriven industries such as information technology telecommunications, automobiles derive immense synergy by their participation in trade across the world.

Importance of International Marketing Part - 1

Approaches to International Marketing/ International Business

The differences in international orientation and approach can be used to categorize the international marketing into different forms. A domestic company may initially start with ethnically close markets and extend its operations across the world in its final stage.

• Domestic marketing extension (Ethno-centric) concept
• Multi domestic market (Poly-centric) concept
• Global marketing (Regio-centric) concept

Domestic Marketing Extension (Ethnocentric) concept :

The companies guided by this are casual players in overseas markets. For them the overseas markets serve as conduits for directing surplus production. They use overseas markets as a buffer for checking the demand fluctuations in the domestic market. The main focus of the company remains domestic markets. This concept is usually preferred by small companies, or even by large companies operating in a competitive industry. The overseas operations of such companies are usually restricted to exports in certain niches such as approach is also known as ethnocentric in the EPRG schema.

Multi domestic marketing (polycentric) concept : 

 As the overseas operations of the companies grow, they recognize the need for a different approach to international marketing. The operations (10) of companies can acquire forms of overseas joint ventures, licensing agreements, overseas manufacturing and marketing. The subsidiaries operating in overseas markets are recognized as independent business units with autonomy to operate in their markets. Within their respective markets, the subsidiaries behave as domestic companies, deriving only strategic guidelines from their head offices. The companies usually become multinational corporations at this stage. The controls are decentralized to facilitate local operations under the EPRG schema, such firms are classified as polycentric.

Global Marketing (Regiocentric) Concept :

As the companies direct their approach to become a global company, they acquire a global perspective in their operations. Such companies look for lucrative business and investment opportunities on global basis. They derive synergy by sourcing the resources from across the globe by selecting those markets which can provide the inputs to business in most cost-effective manner. Such companies do not treat the SBUs operating in different markets as totally independent entities, but as the SBUs which are contributing towards the growth of the company as a whole. Certain degree of the controls and policy matters may extend to all the SBUs, although allowances may be made to accommodate regional diversities. Under the EPRG schema, global companies are often classified as regiocentric or geocentric companies.

Multinational Corporation

Historically, international trade simply involved export or import of goods across national boundaries. The production took (8) place in the country of exporter. The advent of multinational corporations has led to structural changes in the way business operations take place. The MNCs set up their own production facilities in other countries and cater the domestic markets.

Some of the characteristics of a multinational company are:

1. An MNC operates in a number of countries.
2. An MNC has global orientation in investment and profit making
3. An MNC essentially thrives on managerial, technical and financial resources from more than one country
4. The top management of an MNC may have a multicultural composition.
5. The MNCs derive synergies from global sourcing of inputs.
6. The MNCs may create oligopolistic competition in particular industries and thus operate as a predominant seller in selected markets.
7. The MNCs have originated in developed and free market economies though a few companies from developing countries have also assumed the MNC status.
8. Historically, MNCs have been engaged in extractive industries involving exploitation of the natural resources and consumer goods. Recently, MNCs are making a dent in tertiary sector also..
9. Instead of being factor driven, the MNCs are predominantly innovation and investment driven enterprises.
10. The MNCs exercise market power by virtue of their enormous size and resources.
11. The MNCs have predominantly concentrated on building strengths around their core businesses. Even where diversification has been practiced, it has been done into the areas where the existing resources can be used
12. The MNCs have been actively instrumental in the process of liberalization and globalization of world economy, that has relegated the concept of centrally planned economy to a great extent.

Comparing domestic and international business

Though, fundamentally international business operations look like domestic business operations, yet some important distinctions can be perceived following an indepth insight. The firms having an experience of domestic business can probably have an edge while diversifying into international operations. Keeping this in mind, a (7) leading management guru, Micheal E. Porter has observed that firms aspiring to be successful globally must attempt at being successful in the domestic market first. Most firms like IBM, Coca Cola, Unilever, Proctor and Gamble, Suzuki, Sony operating globally infact started initially as domestic companies. As the magnitude of their operations grew, they found it profitable to venture abroad by setting up manufacturing and distribution centres in other countries. Some of the points of difference between international and domestic marketing are:

1. Process of marketing : The marketing is deemed to involve two processes viz., technical and social. The technical process essentially comprises of non human factors such as product, price, cost, brand. But, the social process takes care of human behaviour, customs, attitudes, values etc. The latter is unique to a national market. Hence, this shows that international marketing is different from domestic marketing. Accordingly, sociological & cultural factors predominate the decision making with regard to marketing mix
2. Marketing environment : The environmental and operational variables also assume a different structure in international business. The environmental factors such as economic, politico legal, geographic, cultural and competition are much more dynamic and uncontrollable in foreign markets as compared to domestic markets. Different countries have different currencies, accounting practices, legislation, interest rates, inflation etc. So, the controllable factors of a firm (marketing mix) have to be redesigned according to the needs of individual countries. The very complexity of exchange transactions across nations makes it significantly different from domestic business operations.

International Trade vs International Business

International trade is a term that basically deals with the movement of goods and services between countries distinct from normal corporate transactions involving buyers and sellers in different countries. The international trade primarily reflects macro or aggregate supplies and demand in different countries. The global trade, thus, involves major policy decisions by governments of nations with regards to imports and exports as also national economic development. These days, the trend is towards globalization of trade. This has resulted in regional as well multilateral global agreements. A predominant role has been accorded to WTO while determining trade policy by each nation

International business may be defined as those business transactions among individuals, firms or corporate entities in private or public sector that result in movement of goods or services across national boundaries. The business activity can take any of the form: import, export of different goods services, the investment of capital; and transactions in intangible assets (e.g. trademarks, patents are the licensing of manufacturing technology).

The field of international business is a broad area of study that covers a wide range of activities. The execution of business activities between sovereign nations takes place within specific environments, and pose challenges with which a firm in international business must deal. Dealing with these problems requires an understanding of the environmental variables that affect international business. These variables are economic, political, legal, sociocultural, technological and geographic. Although such environmental variables are often beyond control of an individual firm, the consideration and recognition of such factors enables the managers to work more effectively within the constraints posed by these variables. In order to incorporate the probable effects of external environment, a working knowledge of relevant descriptions such as economics, political science, history, geography, law, and anthropology is desirable.

The scope of international business can be divided into two categories-real and financial.

1.  The real or non financial side of the theory of international business studies trade theories, theory of the multinational enterprises including the reasons for choice of entry mode.
2. The financial side of the theory covers study of environmental factors affecting the multinational enterprises such as foreign exchange rates, the balance of payments and international marketing systems. It also involves the study of internal decisions affecting the MNE, such as its appropriate cost of capital and the opportunities of international diversification.

Since international business deals across nations , the role of governments and their relationships with MNEs also comes under the scope of study of international business