Marketing research
PART SIX THE COUNTRY NOTEBOOK OUTLINE Cultural Analysis Economic Analysis Market Audit and Competitive Market Analysis Preliminary Marketing Plan Country Notebook THE COUNTRY NOTEBOOK—A GUIDE FOR DEVELOPING A MARKETING PLAN cat29974_cn_593-601.indd 593cat29974_cn_593-601.indd 593 22/08/12 11:00 PM22/08/12 11:00 PM 594 Part 6 Supplementary Material The first stage in the planning process is a preliminary country analysis. The marketer needs basic information to evaluate a coun- try market’s potential, identify problems that would eliminate a country from further consideration, identify aspects of the coun- try’s environment that need further study, evaluate the components of the marketing mix for possible adaptation, and develop a strate- gic marketing plan. One further use of the information collected in the preliminary analysis is as a basis for a country notebook.
Many companies, large and small, have a country notebook for each country in which they do business. The country notebook contains information a marketer should be aware of when making decisions involving a specific country market. As new information is collected, the country notebook is continually updated by the country or product manager. Whenever a marketing decision is made involving a country, the country notebook is the first data- base consulted. New-product introductions, changes in advertis- ing programs, and other marketing program decisions begin with the country notebook. It also serves as a quick introduction for new personnel assuming responsibility for a country market.
This section presents four separate guidelines for collection and analysis of market data and preparation of a country notebook:
(1) guideline for cultural analysis, (2) guideline for economic analysis, (3) guideline for market audit and competitive analysis, and (4) guideline for preliminary marketing plan. These guidelines suggest the kinds of information a marketer can gather to enhance planning.
The points in each of the guidelines are general. They are de- signed to provide direction to areas to explore for relevant data. In each guideline, specific points must be adapted to reflect a company’s products and/or services. The decision as to the appro- priateness of specific data and the depth of coverage depends on company objectives, product characteristics, and the country mar- ket. Some points in the guidelines are unimportant for some coun- tries or some products and should be ignored. Preceding chapters of this book provide specific content suggestions for the topics in each guideline. I. CULTURAL ANALYSIS The data suggested in the cultural analysis include information that helps the marketer make market planning decisions. However, its application extends beyond product and market analysis to being an important source of information for someone interested in understanding business customs and other important cultural features of the country.
The information in this analysis must be more than a collection of facts. Whoever is responsible for the preparation of this material should attempt to interpret the meaning of cultural information.
That is, how does the information help in understanding the effect on the market? For example, the fact that almost all the popula- tions of Italy and Mexico are Catholic is an interesting statistic but not nearly as useful as understanding the effect of Catholicism on values, beliefs, and other aspects of market behavior. Furthermore, even though both countries are predominantly Catholic, the influ- ence of their individual and unique interpretation and practice of Catholicism can result in important differences in market behavior. I. Introduction Include short profiles of the company, the product to be exported, and the country with which you wish to trade. II. Brief discussion of the country’s relevant history III. Geographical setting A. Location B. Climate C . T o p o g r a p h y IV. Social institutions A. Family 1. The nuclear family 2. The extended family 3. Dynamics of the family a. Parental roles b. Marriage and courtship 4. Female/male roles (changing or static?) B. Education 1. The role of education in society a. Primary education (quality, levels of development, etc.) b. Secondary education (quality, levels of development, etc.) c. Higher education (quality, levels of development, etc.) 2. Literacy rates C. Political system 1. Political structure 2. Political parties 3. Stability of government 4. Special taxes 5. Role of local government Guideline cat29974_cn_593-601.indd 594cat29974_cn_593-601.indd 594 22/08/12 11:00 PM22/08/12 11:00 PM Country Notebook A Guide for Developing a Marketing Plan 595 D. Legal system 1. Organization of the judiciary system 2. Code, common, socialist, or Islamic-law country? 3. Participation in patents, trademarks, and other conventions E. Social organizations 1. Group behavior 2. Social classes 3. Clubs, other organizations 4. Race, ethnicity, and subcultures F. Business customs and practices V. Religion and aesthetics A. Religion and other belief systems 1. Orthodox doctrines and structures 2. Relationship with the people 3. Which religions are prominent? 4. Membership of each religion 5. Any powerful or influential cults? B. Aesthetics 1. Visual arts (fine arts, plastics, graphics, public art, colors, etc.) 2. Music 3. Drama, ballet, and other performing arts 4. Folklore and relevant symbols VI. Living conditions A. Diet and nutrition 1. Meat and vegetable consumption rates 2. Typical meals 3. Malnutrition rates 4. Foods available B. Housing 1. Types of housing available 2. Do most people own or rent? 3. Do most people live in one-family dwellings or with other families? C. Clothing 1. National dress 2. Types of clothing worn at work D. Recreation, sports, and other leisure activities 1. Types available and in demand 2. Percentage of income spent on such activities E. Social security F . H e a l t h c a r e VII. Language A. Official language(s) B. Spoken versus written language(s) C. Dialects VIII. A Briefing on Negotiation Style (ours and theirs) IX. Executive summary After completing all of the other sections, prepare a two-page (maximum length) summary of the major points and place it at the front of the report. The purpose of an executive summary is to give the reader a brief glance at the critical points of your report. Those aspects of the culture a reader should know to do business in the country but would not be expected to know or would find different based on his or her SRC should be included in this summary. X. Sources of information XI. Appendixes cat29974_cn_593-601.indd 595cat29974_cn_593-601.indd 595 22/08/12 11:00 PM22/08/12 11:00 PM 596 Part 6 Supplementary Material II. ECONOMIC ANALYSIS The reader may find the data collected for the economic analysis guideline are more straightforward than for the cultural analysis guideline. There are two broad categories of information in this guideline: general economic data that serve as a basis for an evalu- ation of the economic soundness of a country, and information on channels of distribution and media availability. As mentioned pre- viously, the guideline focuses only on broad categories of data and must be adapted to particular company and product needs. I . I n t r o d u c t i o n II. Population A. Total 1. Growth rates 2. Number of live births 3. Birthrates B. Distribution of population 1. Age 2. Sex 3. Geographic areas (urban, suburban, and rural density and concentration) 4. Migration rates and patterns 5. Ethnic groups III. Economic statistics and activity A. Gross national product (GNP or GDP) 1. Total 2. Rate of growth (real GNP or GDP) B. Personal income per capita C. Average family income D. Distribution of wealth 1. Income classes 2. Proportion of the population in each class 3. Is the distribution distorted? E. Minerals and resources F. Surface transportation 1. Modes 2. Availability 3. Usage rates 4. Ports G. Communication systems 1. Types 2. Availability 3. Usage rates H. Working conditions 1. Employer–employee relations 2. Employee participation 3. Salaries and benefits I. Principal industries 1. What proportion of the GNP does each industry contribute? 2. Ratio of private to publicly owned industries J. Foreign investment 1. Opportunities? 2. Which industries? K. International trade statistics 1. Major exports a. Dollar value b . T r e n d s 2. Major imports a. Dollar value b . T r e n d s Guideline cat29974_cn_593-601.indd 596cat29974_cn_593-601.indd 596 22/08/12 11:00 PM22/08/12 11:00 PM Country Notebook A Guide for Developing a Marketing Plan 597 3. Balance-of-payments situation a. Surplus or deficit? b. Recent trends 4. Exchange rates a. Single or multiple exchange rates? b. Current rate of exchange c . T r e n d s L. Trade restrictions 1. Embargoes 2. Quotas 3. Import taxes 4. Tariffs 5. Licensing 6. Customs duties M. Extent of economic activity not included in cash income activities 1. Countertrades a. Products generally offered for countertrading b. Types of countertrades requested (barter, counterpurchase, etc.) 2. Foreign aid received N. Labor force 1. Size 2. Unemployment rates O. Inflation rates IV. Developments in science and technology A. Current technology available (computers, machinery, tools, etc.) B. Percentage of GNP invested in research and development C. Technological skills of the labor force and general population V. Channels of distribution (macro analysis) This section reports data on all channel middlemen available within the market.
Later, you will select a specific channel as part of your distribution strategy.
A. Retailers 1. Number of retailers 2. Typical size of retail outlets 3. Customary markup for various classes of goods 4. Methods of operation (cash/credit) 5. Scale of operation (large/small) 6. Role of chain stores, department stores, and specialty shops B. Wholesale middlemen 1. Number and size 2. Customary markup for various classes of goods 3. Method of operation (cash/credit) C. Import/export agents D. Warehousing E. Penetration of urban and rural markets VI. Media This section reports data on all media available within the country or market.
Later, you will select specific media as part of the promotional mix and strategy. A. Availability of media B. Costs 1. Television 2. Radio 3. Print 4. Internet 5. Other media (cinema, outdoor, etc.) C. Agency assistance cat29974_cn_593-601.indd 597cat29974_cn_593-601.indd 597 22/08/12 11:00 PM22/08/12 11:00 PM 598 Part 6 Supplementary Material D. Coverage of various media E. Percentage of population reached by each medium VII. Executive summary After completing the research for this report, prepare a two-page (maximum) summary of the major economic points and place it at the front VIII. Sources of information IX. Appendixes III. MARKET AUDIT AND COMPETITIVE MARKET ANALYSIS Of the guidelines presented, this is the most product or brand specific. Information in the other guidelines is general in nature, focusing on product categories, whereas data in this guideline are brand specific and are used to determine competitive market con- ditions and market potential.
Two different components of the planning process are reflected in this guideline. Information in Parts I and II, Cultural Analysis and Economic Analysis, serve as the basis for an evaluation of the product or brand in a specific country market. Information in this guideline provides an estimate of market potential and an evaluation of the strengths and weaknesses of competitive marketing efforts.
The data generated in this step are used to determine the extent of adaptation of the company’s marketing mix necessary for successful market entry and to develop the final step, the action plan.
The detailed information needed to complete this guideline is not necessarily available without conducting a thorough market- ing research investigation. Thus another purpose of this part of the country notebook is to identify the correct questions to ask in a formal market study. I . I n t r o d u c t i o n II. The product A. Evaluate the product as an innovation as it is perceived by the intended market 1. Relative advantage 2. Compatibility 3. Complexity 4. Trialability 5. Observability B. Major problems and resistances to product acceptance based on the preceding evaluation III. The market A. Describe the market(s) in which the product is to be sold 1. Geographical region(s) 2. Forms of transportation and communication available in that (those) region(s) 3. Consumer buying habits a. Product-use patterns b. Product feature preferences c. Shopping habits 4. Distribution of the product a. Typical retail outlets b. Product sales by other middlemen 5. Advertising and promotion a. Advertising media usually used to reach your target market(s) b. Sales promotions customarily used (sampling, coupons, etc.) 6. Pricing strategy a. Customary markups b. Types of discounts available B. Compare and contrast your product and the competition’s product(s) 1. Competitors’ product(s) a. Brand name b. Features c. Package 2. Competitors’ prices Guideline cat29974_cn_593-601.indd 598cat29974_cn_593-601.indd 598 22/08/12 11:00 PM22/08/12 11:00 PM Country Notebook A Guide for Developing a Marketing Plan 599 3. Competitors’ promotion and advertising methods 4. Competitors’ distribution channels C. Market size 1. Estimated industry sales for the planning year 2. Estimated sales for your company for the planning year D. Government participation in the marketplace 1. Agencies that can help you 2. Regulations you must follow IV. Executive summary Based on your analysis of the market, briefly summarize (two-page maximum) the major problems and opportunities requiring attention in your marketing mix, and place the summary at the front of the report. V. Sources of information VI. Appendixes IV. PRELIMINARY MARKETING PLAN Information gathered in Guidelines I through III serves as the basis for developing a marketing plan for your product or brand in a target market. How the problems and opportunities that sur- faced in the preceding steps are overcome or exploited to produce maximum sales and profits are presented here. The action plan reflects, in your judgment, the most effective means of marketing your product in a country market. Budgets, expected profits and losses, and additional resources necessary to implement the pro- posed plan are also presented. I. The marketing plan A. Marketing objectives 1. Target market(s) (specific description of the market) 2. Sales forecast years 1–5 3. Profit forecast years 1–5 4. Market penetration and coverage B. SWOT Analysis 1. Strengths 2. Weaknesses 3. Opportunities 4. Threats C. Product adaptation or modification—Using the product component model as your guide, indicate how your product can be adapted for the market.
1. Core component 2. Packaging component 3. Support services component D. Promotion mix 1. Advertising a. Objectives b. Media mix c. Message d . C o s t s 2. Sales promotions a. Objectives b. Coupons c. Premiums d . C o s t s 3. Personal selling 4. Other promotional methods E. Distribution: From origin to destination 1. Port selection a. Origin port b. Destination port Guideline cat29974_cn_593-601.indd 599cat29974_cn_593-601.indd 599 22/08/12 11:00 PM22/08/12 11:00 PM 600 Part 6 Supplementary Material 2. Mode selection: Advantages/disadvantages of each mode a. Railroads b. Air carriers c. Ocean carriers d. Motor carriers 3. Packing a. Marking and labeling regulations b. Containerization c. Costs 4. Documentation required a. Bill of lading b. Dock receipt c. Air bill d. Commercial invoice e. Pro forma invoice f. Shipper’s export declaration g. Statement of origin h. Special documentation 5. Insurance claims 6. Freight forwarder. If your company does not have a transportation or traffic management department, then consider using a freight forwarder. There are distinct advantages and disadvantages to hiring one. F. Channels of distribution (micro analysis). This section presents details about the specific types of distribution in your marketing plan.
1. Retailers a. Type and number of retail stores b. Retail markups for products in each type of retail store c. Methods of operation for each type (cash/credit) d. Scale of operation for each type (small/large) 2. Wholesale middlemen a. Type and number of wholesale middlemen b. Markup for class of products by each type c. Methods of operation for each type (cash/credit) d. Scale of operation (small/large) 3. Import/export agents 4. Warehousing a . T y p e b . L o c a t i o n G. Price determination 1. Cost of the shipment of goods 2. Transportation costs 3. Handling expenses a. Pier charges b. Wharfage fees c. Loading and unloading charges 4. Insurance costs 5. Customs duties 6. Import taxes and value-added tax 7. Wholesale and retail markups and discounts 8. Company’s gross margins 9. Retail price H. Terms of sale 1. EX works, FOB, FAS, C&F, CIF 2. Advantages/disadvantages of each cat29974_cn_593-601.indd 600cat29974_cn_593-601.indd 600 22/08/12 11:00 PM22/08/12 11:00 PM Country Notebook A Guide for Developing a Marketing Plan 601 I. Methods of payment 1. Cash in advance 2. Open accounts 3. Consignment sales 4. Sight, time, or date drafts 5. Letters of credit II. Pro forma financial statements and budgets A. Marketing budget 1. Selling expense 2. Advertising/promotion expense 3. Distribution expense 4. Product cost 5. Other costs B. Pro forma annual profit and loss statement (first year through fifth year) III. Resource requirements A. Finances B. Personnel C. Production capacity IV. Executive summary After completing the research for this report, prepare a two-page (maximum) summary of the major points of your successful marketing plan, and place it at the front of the report. V. Sources of information VI. Appendixes The intricacies of international operations and the complexity of the environment within which the international marketer must operate create an extraordinary demand for information. When operating in foreign markets, the need for thorough information as a substitute for uninformed opinion is equally important as it is in domestic marketing. Sources of information needed to develop the country notebook and answer other marketing questions are discussed in Chapter 8 and its appendix. Summary Market-oriented firms build strategic market plans around com- pany objectives, markets, and the competitive environment. Plan- ning for marketing can be complicated even for one country, but when a company is doing business internationally, the problems are multiplied. Company objectives may vary from market to mar- ket and from time to time; the structure of international markets also changes periodically and from country to country; and the competitive, governmental, and economic parameters affecting market planning are in a constant state of flux. These variations require international marketing executives to be especially flexible and creative in their approach to strategic marketing planning. cat29974_cn_593-601.indd 601cat29974_cn_593-601.indd 601 22/08/12 11:00 PM22/08/12 11:00 PM
