The purpose of this paper is to contrast the merits and demerits of finding an overseas market using (a) a methodical research process and (b) using an unstructured approach. Each of these approaches will be evaluated in a separate section of the paper. A brief conclusion will summarize the arguments put forward in the paper. The main thesis defended in the paper is that both the methodical and unstructured approaches have their own advantages and disadvantages; neither method can be described as being innately superior to the other.
Methodical Research Process
A methodical research process can be useful in terms of identifying a foreign market that possesses characteristics that are likely to support a particular good or service. Goods and services can be understood in terms of the 4 Ps of marketing, that is, price, promotion, product, and place; in marketing, these 4 Ps are known as the marketing mix (Papasolomou and Melanthiou, 2012, Mullin, 2014, Lamb et al., 2008). These 4 Ps function in different ways in different foreign markets. For example, countries in Sub-Saharan Africa have very low disposable incomes (Gomanee et al., 2005, Sherbini, 1986, Asiedu, 2014, Collins and Burns, 2013), making these countries ill-suited to products that are very expensive. Without conducting methodical research, a company is likely to lack the kind of information needed to align the 4 Ps with a particular target market.
Another, more obvious example of the usefulness of research has to do with sociocultural characteristics of foreign markets that suit them to the consumption of certain products or services over others. For example, because of religious reasons, pork is not consumed in Muslim-majority countries (Lewis, 1993, Hasnain, 2013), making these countries ill-suited to pork products, or even products (such as certain jellies) that have some ingredients derived from pigs. In Japan, food and drink are not consumed in cars, so cars sold in Japanese markets need not be equipped with drink-holders (Lonien, 2003). However, in the United States, both food and drink are commonly consumed in cars, so automobiles sold in this country would need to reflect this fact in terms of cabin design.
Ultimately, overseas markets reflect differences as well as similarities. Even so-called universal products can be consumed or perceived in different ways depending on the local market. Methodical research is a means of not only identifying which foreign markets are more or less suited but also of drilling down into market dynamics to position a product or service in a better manner. For example, methodical research could demonstrate exactly how much, in terms of local currency, people in a particular country might be willing to pay for fast food. A company whose competitive advantage is based on keeping costs low in order to stimulate demand would need to be able to graph the cost-demand curve for every country in which it operated.
The unstructured approach to finding an overseas market needs to be defined carefully. An unstructured approach does not suggest that no research at all is carried out. Rather, such an approach means that researchers might carry out research without fixed preconceptions or structures (Green and Srinivasan, 1990, Bastos and Levy, 2012, Hill et al., 2014, Proctor, 2014, Mullin, 2014, Lamb et al., 2008).
Consider, for example, the case of a company that wants to sell fast food in a foreign market. A structured approach to researching this market could consist of the following: (a) Carrying out interviews and focus groups in order to construct a cost-demand curve for the product and (b) examining each of the 4 Ps. In other words, in the structured approach, the research process is pre-designed to obtain certain data and conduct certain analyses that are aligned towards specific goals. As discussed in the first section of this paper, the structured approach can be useful in terms of better quantifying the fit between a product or a service and the country in which it is being marketed. However, one of the drawbacks of the structured approach is that, because of its methodical nature, certain kinds of insights are not obtained at all.
In the fast food example, a simple example is that of social taboos against the consumption of certain kinds of food. In an unstructured approach, a company might begin by handing out a sheet to interviewees and focus group members and asking them to list any kinds of thoughts or impressions about fast food. This approach is not methodical in the sense that the company’s data gathering efforts are not driven by a rigid, predefined process designed to yield certain outputs, such as cost-demand curves. However, precisely because the approach is not methodical, it might succeed in identifying insights that are not captured in a methodical approach.
Both the methodical and unstructured approach to identifying foreign markets have advantages as well as disadvantages. The main advantage of the methodical approach is that a company can gather precise data that are likely to be highly relevant to the core concerns of a marketer, especially in terms of cost-setting and demand forecasting. On the other hand, the main advantage of the unstructured approach is that it can succeed in generating insights that might never be generated in a methodical approach, which is conceptually and practically limited by what marketers have already defined to be of interest.
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