Analytic and Strategic Approaches to the Development of International (European) Markets

Beier, Patrizia

Analytic and Strategic Approaches to the Development of International (European) Markets

Taking the Example of the US-Pixel-Magic Imaging Company

von Patrizia Beier (Autor:in)

BWL - Offline-Marketing und Online-Marketing

Zusammenfassung

Inhaltsangabe:Abstract:
The objective of this thesis comprises the analytic and strategic approach to develop new and international markets based on the specific interest for the medium-sized US software company Pixel Magic Imaging, Inc. (PMI).
PMI was in its infancy in terms of going international. In other words, PMI had neither an organized and international marketing conception nor a regular business to foreign customers and markets so far. Aim and object of this project was analyzing marketing opportunities for their product portfolio within different international markets and to approach adequate marketing strategies. Therefore data of international markets must be collected, evaluated and analyzed to put these results in a strategic order. This thesis deals with the development of foreign markets and how market entry could be realized. It focuses on explaining ways how to get there. The aim of this thesis is to prove which strategies are possible and to explain them in a general approach.
The market research and defining the appropriate strategies where focused on the companys product portfolio. The products are digital imaging software and equipment and are placed in the segment for professional photographers, photographic entrepreneurs and retail outlets.
The scope of duties in this thesis consisted in gathering data and compiling reports for international sales opportunities in so far unknown international markets. The study combines the theoretical approach with the know-how of working expierence and expatiated the methodology of international marketing research, designing of an international marketing concept and the implementation of market strategies in describing the theoretical disciplines and to implement these results into the companys strategy focus and product portfolio.
This thesis benefits from the empirical data gained and its success based on an intensive exchange of ideas from theory and practical work experience.

Inhaltsverzeichnis:Table of Contents:
PrefaceIII
Table of ContentsIV
List of AbbreviationsVII
List of IllustrationsIX
List of AppendicesX
1.Representation of Pixel Magic Imaging, Inc.1
1.1History1
1.1.1EPS Photographic1
1.1.2Pixel Magic Imaging, Inc.1
1.2Explanations4
1.2.1Range of products4
1.2.2Technical and branch specific expressions6
1.3Objective8
2.International Marketing Research10
2.1The General Term of Marketing Research10
2.2The Definition of International Marketing […]

Leseprobe

Inhaltsverzeichnis

Patrizia Beier

Analytic and Strategic Approaches to the Development of International (European)

Markets

Taking the Example of the US-Pixel-Magic Imaging Company

ISBN: 978-3-8366-0305-8

Druck Diplomica® Verlag GmbH, Hamburg, 2007

Zugl. Fachhochschule Neu-Ulm, Neu-Ulm, Deutschland, Diplomarbeit, 2000

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http://www.diplom.de, Hamburg 2007

Printed in Germany

C u r r i c u l u m V i t a e - P a t r i z i a B e i e r

Q u a l i f i c a t i o n

C A R E E R S U M M A R Y / W O R K E X P E R I E N C E

Diplom Betriebswirt Business Administration (FH)

* University of Applied Science, Neu-Ulm, Germany

(October 1995 - January 2001)

* specialization in International Marketing

* Degree Thesis "Analysis and Strategic Approaches to the

Development of International (European) Markets" for

Pixel Magic Imaging Inc., Texas/USA

Deutscher Sparkassen Verlag Ltd,

Stuttgart, Germany

Since June 2004

Administrative and strategic position at the Head of Card

Payment Debit and Creditcard System department

* Analyzing of new markets and business opportunities

* Strategic development of new business segments and

markets

* Creating business models and product design concepts

* Quantifying business cases

* Leading interdisciplinary teams for the development of

markets and products

* Developing of strategic partnerships

January 2002 June 2004

Productmanager for Credit-Card-Payment -Systems and

Chiptechnologies for the German Banking Industry

* Implemented creditcard programmes

(MasterCard and VISA) and payment systems

for the German Savings Banks Group

* Implemented the EMV-payment chiptechnology for

creditcards for the German Savings Banks Group

FINsys Software Ltd,. Munich,

Germany

July 2001 December 2001

Financial Controlling and IT-Consultant

* Designed and implemented of customized accounting

systems for the financial industry

I N T E R N A T I O N A L E X P E R I E N C E

P e r s o n a l D e t a i l s

Horváth & Partners Management

Consultants, Stuttgart, Germany

October 2000 July 2001

Productmanager and IT-Consultant at the Competence

Center for IT-Solutions

* Designed and implemented balanced scorecard

strategies and IT-systems for companies in diverse

branches

* Product developing, marketing and mangement of the

balanced scorecard software "Score IT"

DaimlerChrysler Corp.,Italy

(January 2000 - May 2000)

* International Internship at the Departement for Service,

Sales and Marketing

Pixel Magic Inc., San Marcos, TX, USA

(March 1999 - August 1999)

* International Internship at the Marketing Departement

Közgaz-University for Economics, Budapest, Hungary

(September 1997 - Februrary 1998)

* Univ. Semester

Languages

* German (fluent)

* English (very good)

* Spanish (basics)

* Hungarian (basics)

Date and place of birth

* June 10

1974 in Illertissen

III

Preface

The foundations of this thesis were laid during my conversation with the US Pixel Magic

Imaging, Inc. company at the "photokina `98"

in Cologne, where I completed a five month

internship in March 1999. While this conversation, aim and object were crystallized: " To

provide innovative, quality, photographic and imaging equipment, service and education to

professional photographers, photographic entrepreneurs and retail outlets worldwide."

Pixel

Magic Imaging's intentions and long-term strategy, is to realize their Corporate Mission

statement; to spread their business to international markets.

My scope of duties consisted in gathering data and compiling reports for international sales

opportunities in so far unknown international markets. I hope this thesis has contributed to

fulfilling Pixel Magic's strategy and targets in part.

This thesis benefits from the empirical data gained and its success based on an intensive

exchange of ideas from theory and practice.

I want to express my thanks to Dr. Henry and Marian Oles, David and Laura Oles, who made

my internship at Pixel Magic possible, and Jim Hennessee, who helped me out every time I had

problems. Special thanks goes to Laura, who always supported and convinced me about my

work and everybody else at Pixel Magic, who were very helpful whenever I had questions or

problems.

I want to continue my thanks to Mr. Knäpper, who sacrificed a lot of time in giving me the right

directions for this paper. I am very grateful to my parents, who enabled and supported my

studies and to my relations and my friends, who gave me with their "lack of interest" the

necessary calmness for this thesis.

International tradeshow for photography

Corporate Mission Statement of Pixel Magic

Patrizia Beier

Table of Contents

Preface ...III

Table of Contents ... IV

List of Abbreviations ...VII

List of Illustrations ...IX

List of Appendices ...X

Representation of Pixel Magic Imaging, Inc... 1

1.1 History...1

1.1.1 EPS

Photographic...1

1.1.2 Pixel Magic Imaging, Inc. ...1

1.2 Explanations...4

1.2.1 Range of products ...4

1.2.2 Technical and branch specific expressions ...6

1.3 Objective ...8

International Marketing Research... 10

2.1 The General Term of Marketing Research...10

2.2 The Definition of International Marketing Research...10

2.3 Context with Research and the Decision-Making Process...11

2.3.1 Position in the Decision-Making Process ... 11

2.3.2 The Role of Secondary and Primary Data ... 13

Methodology of the International Marketing Research Project ... 15

3.1 Determining Research Project and Objectives...15

3.2 Secondary Data Collection...17

3.2.1 Filter of the Appropriate Data ... 17

3.2.2 Compiling

Data... 18

3.2.3 Data Interpretation and Analysis... 20

3.3 Primary Data Collection...22

3.3.1 The Nature of Primary Research ... 22

3.3.2 Determining Research Objectives... 24

3.3.3 Research

Technique... 24

3.3.4 Interpreting and Analyzing Data ... 25

3.4 Competitor

Research ...27

3.4.1 Secondary Competitor Research... 27

3.4.2 Pre-Results and Effects of the Competitor Research ... 28

3.4.3 Primary Competitor Research ... 29

3.4.4 Pre-Results and Effects of the Primary Competitor Research ... 30

Designing of an International Marketing Concept... 33

4.1 Market

Attractiveness...33

4.1.1 Market

Analysis... 33

4.1.2 Market and Customer Segmentation ... 35

4.1.3 Product Segmentation Matrix ... 36

4.1.4 SWOT-Analysis ... 37

4.2 Assessment of the Market Attractiveness ...39

4.2.1 Portfolio

Technique ... 39

4.2.1.1 The General Electric's Multifactor Portfolio Model ...39

4.2.1.1.1 Ratings...39

4.2.1.1.2 Weights...40

4.2.1.2 The Mc-Kinsey-Matrix ...41

4.3 Positioning

Strategies ...43

4.3.1 Marketing

Mix... 43

4.3.1.1 Product ...44

4.3.1.2 Promotion...45

4.3.1.3 Price...47

4.3.1.4 Place/Distribution ...50

4.3.2 Visualization of the positioning... 53

4.3.2.1 Product Positioning...53

4.3.2.2 Promotion Positioning...54

4.3.2.3 Price Positioning...54

4.3.2.4 Place/Distribution Positioning ...54

Market Implantation Strategies ... 55

5.1 Waterfall vs. Sprinkle Strategy ...55

5.1.1 Waterfall

Strategy ... 55

5.1.2 Sprinkle

Strategy ... 56

5.2 Standardization vs. Adaptation ...57

5.2.1 Product ... 58

5.2.2 Promotion... 58

5.2.3 Price... 59

5.2.4 Place/Distribution... 59

5.3 International Cost vs. Quality Leadership...59

5.3.1 Strategy of the international Cost-Leadership ... 59

5.3.2 Strategy of the international Quality-Leadership ... 60

5.3.3 Outpacing

Strategy ... 60

5.4 Skimming vs. Penetration Strategy...60

5.4.1 Skimming

Strategy ... 60

5.4.2 Penetration

Strategy ... 61

6 Resume... 62

7 Appendix ... 64

8 Author

Index... 148

VII

List of Abbreviations

Digital

Imaging

DM Deutsche

Mark

e. g. for

example

EIS Event

Imaging

System

EPS

Environmental

Projection

Systems

etc.

cetera

European

Union

Foll.

following

GfK

Gesellschaft für Konsumgüterforschung (=German market research

company)

GNP

Gross National Product

i. a.

among

others

i. e.

that

n. a.

not

available

PMA Photo

Marketing

Association

PMI

Pixel Magic Imaging, Inc.

PoS

Point

Sale

R&D

Research

and

Development

VIII

resp.

respectively

UAP Unique

Advertising

Proposition

USA

United States of America

USD

US-Dollar

USP

Unique

Selling

Proposition

vs.

versus

List of Illustrations

Illustration 1: Ranking of a Strategy Conception in the International Marketing ...13

Illustration 2: The Marketing Research Process...15

Illustration 3: GNP per capita ...16

Illustration 4: Information Intelligence ...18

Illustration 5: Corporate Usefulness of Different Types of Research ...23

Illustration 6: Markets and their Characteristics ...29

Illustration 7: Media costs for a four-colored one-page format advertisement...47

Illustration 8: Pattern for a function performance in the channel system for the German

Digital Imaging Market...53

Illustration 9: Need for Adaptation...58

List of Appendices

Appendix 1: European Industry Trend Report 1997-1998...65

Appendix 2: Qualitative Questionnaire ...89

Appendix 3: Summary of the Qualitative Research ...91

Appendix 4: Secondary Competitor Research ...96

Appendix 5: Primary Competitor Research ... 122

Appendix 6: Market Analysis Matrix... 123

Appendix 7: Rank of the Market Analysis ... 124

Appendix 8: US Digital Imaging Market and Customer Segment ... 125

Appendix 9: US vs. European Customer Segment... 126

Appendix 10: Product Segmentation Matrix ... 127

Appendix 11: SWOT-Analysis... 128

Appendix 12: Multifactor Portfolio Model... 137

Appendix 13: MC-Kinsey Matrix ... 141

Appendix 14: Product-Mix Categorization ... 142

Appendix 15: US Product-Mix Calculation... 143

Appendix 16: Pattern for an International Product-Mix Calculation ... 144

Appendix 17: Competitor's Ex-Factory Prices ... 145

Appendix 18: Positioning Model for the Product-Mix ... 147

1 Representation of Pixel Magic Imaging, Inc.

1.1 History

1.1.1 EPS Photographic

The Environmental Projection Systems (later known as EPS Photographic company) success

story began in 1976, when Dr. Henry Oles, the founder and at that time a professional

photographer, published the book " Successful Projected Environmental Photography". This

first book ever written on background projection was a worldwide success, since using

background projection technology was a completely new and revolutionary invention in

photography at that time.

Unsatisfied with the technology used in then available projection systems, Dr. Oles developed

together with a partner the Scene Machine background projection system, which was

introduced in 1981.

Initially as a small family business, EPS grew over the years, manufacturing and distributing

innovative photographic products to professional photographers worldwide.

1.1.2 Pixel Magic Imaging, Inc.

PMI was founded in 1992 by David Oles and father, Dr. Henry Oles. Pixel Magic introduced

the digital imaging technology to retail photofinishers.

1998 EPS and Pixel Magic merged. With this acquisition of EPS Pixel Magic now has a

diverse product line ranging from retail and professional digital imaging products. With "First

Impression", a division of the company, PMI is represented in the field of e-commerce.

PMI's transactions must be described in three areas: It is a high-tech company positioned in the

field of digital imaging technologies by producing highly sophisticated software and Internet

services while combining it with fully equipped devices and studio systems. The devices and

studio systems consist of, according to the corresponding software system, PC, operating

system, which is Windows, photo printer, modem, spotlights, screens and digital camera. The

complete devices were provided by common producers. Their regular customers are

professional photographers, the retail channel, like mini-laboratories and/or photo retailers,

Event-Photographers and the government channel.

PMI's customer segment:

PMI is headquartered in San Marcos, Texas and is a high growth company with a turnover of

about 20 million USD in 1998 and averaging over 40% growth per year since the merger. The

company expanded its business from a regional to a nationwide business and hold a very high

share of the market. PMI is led by David Oles, who serves as both Chief Executive Officer and

Chief Technology Officer and Henry Oles became Chairman of the Board.

x Professional Photographers

¾ Event Photographers

¾ Portrait/Studio /Commercial

Photographers

x Specialty Photo Retailers

¾ Minilabs and/or Portrait Studios

and/or Digital Services

x Retailers

¾ Drug stores, supermarkets,

department stores etc.

x Institutions

¾ Hospital

¾ Government

The company has 6 different departments with over 100 employees:

¾ Management

¾ Sales, Marketing and Customer Service

¾ Finance and Accounting

¾ Engineering

¾ Production, Inventory and Shipping

¾ Technical Service

1.2 Explanations

In order to understand the further procedure better; it is necessary to explain several terms,

which concern products, technical and branch specific expressions.

1.2.1 Range of products

¾ Digital Designer Workstation

The Digital Designer is a photo retouching and enhancement workstation. It utilizes powerful

retouching software to enable any type of photo alteration or enhancement. Main customers are

photo retailers and photographers

¾ Photo Ditto Print and Enhancement Station

The Photo Ditto workstation is a print to print copy station. The easy to use touch screen driven

by a software package allows enhancing images and can be directly used by end users. The

customer segments are photo retailers, supermarkets, department stores, drug stores etc.

¾ Event Imaging System

It is a portable digital photography system. The multi-tasking software allows for simultaneous

acquisition and printing of photos. Once taken, photos can be cropped, color corrected, text can

be added as well as graphical borders. Common uses for this system are all kind of events, like

parties, dances, reunions etc. where photography is requested. The system can produce

immediate prints. Main customers are photographers especially event photographers.

¾ Backlab Scanning and Internet Station

The Backlab system is a high speed scanning station designed for use by one-hour photo labs.

This system creates index prints, puts customer photos on floppy or zip disks, uploads photos

for viewing on the Internet, and can create CD-ROM media with customer photos. Index prints

are now only offered by labs that have the most modern equipment. The Backlab enables any

photo lab to offer this new service without replacing their existing minilab equipment.

Customers are photo retailers and photographers. This product is positioned for photo retailers.

¾ Photo View Sales Preview and Ordering Station

This system is an optional part of the Backlab system. Designed to be in the front of a photo

retailer, the Photo View system allows customers to view their images before they are printed.

For example, a customer brings a roll of film to the lab and when they return, the customer

views their photos on a monitor. Using the touch screen software the customer decides how

many of each image they would like to have printed. The customer can order enlargements and

specify the crop as well. Customers are photo retailers.

¾ First Impressions Systems for Hospitals

This system is used by the First Impressions division of Pixel Magic and acts as a point of sale

system for baby photography. The system incorporates a high resolution digital camera, custom

software and a dye-sublimation printer. The software acts as a point of sale system for baby

photography. The software collects names and addresses, takes photographs and prints the final

order. All photos, were taken are transferred daily to file servers at PMI headquarters. These

images are permanently stored on CD-ROM. It can also be seen as an Internet service and is

especially for hospitals.

¾ Gallery and Portrait View Digital Proofing System

This System is the latest generation of computer based proofing systems. Proofing systems

allow professional photographers to show their customers their just taken photos via a film

camera on a screen, while the customers are still in the studio. The typical customers are

photographers and photo retailers.

¾ Gallery Digital Studio System

This system is identical in features to the normal Gallery Proofing System, however no film

camera is required, feature is a digital camera. Customer segments are photographers and photo

retailers.

¾ Scene Machine

The Scene Machine is a virtual background system used by professional photographers to

project any background behind subjects on a special ultra reflective screen. The system uses

standard slides to the background on a special screen that PMI manufacture. Photographers can

take their own slides or purchase it. Main customers are photographers.

¾ Lab Pro series of package printing equipment

The Lab Pro product line consist of two photographic enlargers that use traditional photo paper

and chemistry. Customers are photo retailers and photographers.

1.2.2 Technical and branch specific expressions

¾ Digital Imaging

The art and science of producing and manipulating digital photographs - photographs that are

represented as bit maps. Digital photographs can be produced in a number of ways:

x Directly with a digital camera

x By capturing a frame from a video

x By scanning a conventional photograph

The biggest advantage of digital imaging compared with conventional photography is, that no

development of films is required anymore.

¾ E-Commerce

"E-Commerce " ("electronic commerce", derived from such terms as "e-mail" and "e-

business") is the conduct of business on the Internet, not only buying and selling but also

servicing customers and collaborating with business partners."

¾ Enhancement

Once an image is in digital format, you can apply a wide variety of special effects. You can

modify images, e. g. setting borders, text, logos or to improve images, e.g. remove scratches,

red-eyes etc.

¾ Event Photography

Event-Photography is an established notion in the photography business. It is taking pictures on

the spot for special occasions, like family and class reunions, sport events, holiday photography

etc..

¾ Mini-Lab

Mini-Lab is an expression for photo labs, which are not just specialized in film developing like

mass photo labs. Their output is smaller and more specialized for special customer's requests.

Most photo-retailers combine a mini-lab with their business.

¾ Print-to-Print

The original image is copied by scanning and printed instantly.

¾ Professional Photographer

Professional Photographer is defined as an event- and/or studio photographer.

Source: http://www.whatis.com, 12/12/99

Source:

http://www.whatis.com

, 12/12/99

¾ Retailer

In general a retailer is defined as one who sells goods to consumers. In terms of photo business,

a retailer sells merchandise, like cameras, frames, albums etc.. A retailer often combines his

business with offering other services, like photo finishing, portrait studio, retouching services

etc.

¾ Touch screen

Screen used as an input device, by identifying where a screen is touched.

1.3 Objective

The actual situation of PMI's international activities is that there already exist some business

relations to international customers, i. e. in South America, Australia and Great Britain, but

concerning these sales the individual customer made a request by himself. In other words, PMI

has neither an organized and international marketing conception nor a regular business to

foreign customers and markets so far.

The motivations for internationalizing and expanding their business to overseas was at the

"photokina `98" in Cologne, an international trade show for professional photographers and the

photograph industry. This show gave insights to foreign markets and especially to European

markets and their potential buyers. It was recognized that there is a demand for PMI's products

especially in the European market.

PMI is in its infancy in terms of "going international". Aim and object of this project was

analyzing marketing opportunities and to approach adequate marketing strategies. Therefore

data of international markets must be collected, evaluated and analyzed to put these results in a

strategic order. This thesis deals with the development of foreign markets and how market entry

could be realized. It focuses on explaining ways how to get there. The aim of this thesis is to

prove which strategies are possible and to explain them in a general approach. It is not the aim

and object to define an obligatory strategy.

2 International Marketing Research

2.1 The General Term of Marketing Research

Marketing research in general "is the systematic gathering, recording, and analyzing of data to

provide information to guide marketing decision making."

The activities in marketing contain besides product development, distribution and pricing also

marketing research.

The essence of marketing consists of making profit from the market, but in the end success

depends on efficiency and well chosen marketing activities.

This asks for an overall view and transparency of the market regarding for example its

structure, potential, attraction etc.. Therefore one of the first tasks, before a specific marketing

activity takes place is to analyze the market and its environment.

In general, this fact applies for each company and it is regardless of whether business takes

place internationally or within national borders.

2.2 The Definition of International Marketing Research

Basically most of the domestic marketing scene is used for international marketing research as

Terpstra (International Dimensions of Marketing, 1993), p. 69

well, like questionnaire design, focus group research, survey techniques etc.. Also a typical

sequence of a multi-country market research process follows the familiar pattern used in

domestic market research.

The actual difference between ordinary marketing research and international marketing

research is the difference of general conditions in other countries and the complexity of data

which is needed.

International marketing research contains the same function but the dimensions are more

complex. The extended task is presented in terms of "gaining of specific, relevant information

for decision-making about concrete foreign markets, especially about the resident consumer

there."

This must be taken into consideration, since in foreign economies many other variables

exists. Facts, which are taken for granted in the home market, like consumer segments and their

behavior or legal systems are changeable and different in each foreign market. Furthermore, the

ethical background of foreign countries has to be taken into consideration. These countries

contain different culture, religion and social facts and thus different ways of life and manners.

In this context, the researcher has to figure out, which of these variables are effective for the

company's marketing plan.

2.3 Context with Research and the Decision-Making Process

2.3.1 Position in the Decision-Making Process

As mentioned in 2.2 marketing research is an important part in the sequence of decision-

making. Research is gathering information and converting it into appropriate data and analysis,

which provides management with facts and ideas to implement marketing strategies. " A

Diller (Marketing-Lexikon,, 1994), p. 54 (emphasized by the author.),

>translated into English@

marketing strategy is to characterize as a conditionally, long-term, global plan of reaction

attainment targets of the company and marketing."

In this context, the international marketing research is one of the first step within the scope of

the process of decision-making. Its purpose is to assist and to support, while searching and

selecting a proper strategy for the development of a market. Explicitly, it can be said that the

gathered information serves the market segmentation, selection of a market and therefore the

formulation for the marketing concept and program, which was attached importance in the

example of PMI. There the compiled data can be used for the development of an international

marketing plan and for the latter for the specific use of marketing instruments.

Illustration 1 demonstrates the logical order of the analysis of foreign markets and the target as

a result from this.

This illustration shows, that the procurement of information is a crucial element in the whole

strategy process, which has to be executed, since it points the way to the formulation of the

strategy. The collected information consists of knowledge, e. g. economic, technological or

political areas. Patterns for a strategy appears by linking these bundles of information.

Meffert (Strategische Unternehmensführung und Marketing, 1988), p. 55,

>translated into English@

Illustration 1: Ranking of a Strategy Conception in the International Marketing

Formulation of the global

company's targets

Collecting of information

Country profiles

SWOT-Analysis from

the company and the

destined country

Arrangement of the basic strategies

to developing foreign countries

Marketing concepts for

the country markets

2.3.2 The Role of Secondary and Primary Data

The nature of information, namely primary and secondary data, has different meanings for the

utilization in strategic marketing and is important for strategic approaches.

Decisions for international market entry are made in the first place by secondary data, while

primary data is used for the selection of suitable market processing strategies, especially for

operational and tactical decisions and for additional information, which could not gathered with

secondary research. For foreign marketing research " ... constitutes secondary research the

Source: Meissner ,,Strategisches internationales Marketing", p. 103,

>translated into English@

essential informative condition to be able to judge the future of markets and the chances and

risks."

The unfamiliarity with foreign markets brings along uncertainty and thus risks as well.

The risks are hidden in the variables, which were already mentioned in 2.2:

¾ market potential, e. g. the demand and consumption in a market

¾ competition, e. g. too much competition affects the attractiveness of a market

¾ political environment, e. g. in terms of trade restrictions or political instability

¾ the consumer, e. g. in terms of the ethical background and social situation

Its task is to observe all the variables and supports the decision-making process by making

better decisions that recognize cross-country similarities and differences in revealing either new

opportunities in sales or that it would be better to remain in the national border of business. In

other words: International marketing research together with its elements of the secondary and

primary data assists marketing management to reduce risks in examining the question "go

international or remain a domestic marketer?"

To weigh this question the company is more

protected to fail in international business and thus more bewared of high investments.

Meissner (Strategisches Marketing, 1995), p. 108,

>translated into English@

Terpstra (International Dimensions of Marketing, 1993), p. 73

3 Methodology of the International Marketing Research Project

The course of the research project took place according of Kotler's description of a marketing

research process. The proceedings you see at illustration 2 will be closer explained next.

Illustration 2: The Marketing Research Process

3.1 Determining Research Project and Objectives

In chapter 2 was discussed relevant information, which is needed for solid decision making. In

the procedure of international marketing research any project begins with a precise definition of

the research problem and research objectives as guidelines, on the one hand to avoid collecting

unnecessary information and on the other hand to keep the research's and thus the strategic

target in mind.

Each company has to figure out its own need for information. In PMI's case the research

problem was described as follows:

Developing new sales opportunities for PMI in Germany or elsewhere in Western Europe.

Since this formulation was too broad, it was downsized into more specific objects:

¾ Constructing a channel of distribution

Source: Kotler " Marketing Management", p. 116

Define the

problem and

research

project

Develop the

research

plan

Collect the

information

Analyze the

information

Present the

findings

¾ Building up an international Marketing plan

¾ Establishing of international sales offices or finding a distributor

¾ Market entry in Europe: How and Where? Focus on Italy, France, Great Britain and

Germany

¾ Finding foreign market/customer segments

In the run-up to determining the research project, it was demarcated, which European countries

should be focused on for the research activities. The reason for choosing these specific

countries (see above) was that they can be rather viewed as equal markets, since these countries

belong to the EU. Therefore certain risks could be excluded and thus certain conditions are facts

in terms of technology development, infrastructure, economic power, tariffs and trades, stable

currency exchange rate and government. Illustration 3 presents partly the economic power of

these four chosen countries in the sense of the GNP per capita. To gather the relevant data the

determined objects can be divided in secondary and primary data research, which will be

discussed next.

Illustration 3: GNP per capita

Country

GNP per capita

in US $

Germany

28,280

France

26,300

Great Britain

20,870

Italy

20,170

Source: http://www.statistik-bund.de/basis/d/ausl.htm, 06/11/99

3.2 Secondary Data Collection

The use of secondary data is a common first step to reduce the gap of uncertainty in the foreign

business. "Secondary research (also known as desk, library or bibliographical research)

involves the location and examination of available, usually published, data of relevance to the

project."

It emphasizes that the collected data contains the specific items for the research

objectives and conveys a general idea, since it was located and examined on focusing the

research problem.

The feature of secondary data is, it is already collected and available from various sources. To

obtain this information is relatively cheap and fast, which is another advantage of secondary

data.

3.2.1 Filter of the Appropriate Data

In 3.1 the core of the research problem was assumed. The next step is to approach the volume

of the research objectives, i. e. to identify the concrete and detailed need of background

information, therefore the information intelligence. The required items were derived from the

research objectives. The items were converted into precise questions, which is helpful to

determine the information requirements. Additionally, the research objectives were summarized

in a checklist with "Key-Headlines". (See Illustration 4). In addition it also has to be

mentioned, that the research problem deals exclusively with capital goods, unlike research into

consumer goods, which goes into the buyer's personal backgrounds, i. e. attitudes concerning

social status and cultural facts, the research context based on the attitudes and behavior of their

work.

Walsh (International Marketing, 1993), p. 57

Illustration 4: Information Intelligence

1. Foreign Market Assessment and

Selection

2. Customer Attitudes/Behavior

¾ Where in one of this single European

country is an appropriate location to

market?

¾ What are their main activities in photography,

photo finishing and retail?/What service do they

offer?

¾ How does the DI market in these countries

look like?

¾ What kind of equipment (PC, photo-devices) is

used by prospects?

¾ How attractive is new technology, like

Internet, DI and PC's among the

prospects?

(Is the market ready?)

¾ What would it take for an European prospect to

get a product by PMI

¾ Who are the major competitors?

¾ What are the European attitudes about our

products?

3. Broad Strategic issues

¾ Who are our present and potential

customers abroad?

¾ What kind of product could be market

there?

¾ What are the costs for transport and

distribution?

3.2.2 Compiling Data

Before obtaining the data, sources have to be identified. For that purpose all imaginable sources

should be taken into consideration. For sources of secondary data there are a lot of possibilities

of publications from institutions, like national and international governments, trade

associations, banks, chamber of commerce etc.. Parallel to identifying sources, attention need to

be paid to which secondary statistical data can be obtained. In the example of PMI, secondary

information of micro issues and specific data were needed. Micro issues include materials on

specific industries in the respective countries and their growth prospects and specific data

which provide with customized information. As a result for this search the sources were

referred to which met these criteria:

¾ International Chamber of Commerce, New York

¾ Gfk, Nuremberg

¾ Internet

¾ PMA Association, MI, Jackson

¾ Central Verband Deutscher Berufsphotographen, Cologne

¾ Statistisches Bundesamt, Wiesbaden

¾ European Union

These organizations were chosen since they provide reliable material. PMA an international

association for professional photographers, photofinishers and retailers provides statistical data

on people, who are involved in the photo business, e. g. about their activities in this business,

the aggregate market, i. e. volume, potential and the market size, present and future trends,

target groups etc.. The advantage of this statistical data is that it concerns PMI's consumer

segments. The GfK, a German market research company supplied suitable information with a

photographic consumer panel. The Internet was helpful to acquire additional and general

material, like computer and Internet usage among the population, which is important, because

all the PMI devices are adaptable for E-Commerce as well. The Chamber of Commerce and the

Central Verband Deutscher Berufsphotographen (a German association for professional

photographers) submitted addresses of other photographic institutions and professional

photographers.

The survey frequency took place in a constantly systematic gathering of information, which had

the advantage that it was possible to assess the research project; to see what further information

was still needed. The information intelligence checklist served as a scale to measure the

projects progress (see Illustration 3). It was ensured that the survey would contain the equal

information for each individual country.

3.2.3 Data Interpretation and Analysis

During the research process it is important to put the gathered material in an order. Subject

areas were formed with subheadings in brief outlines by means of the checklist, which the

information was assigned. The subject areas concerned PMI's product devices and prospective

customer segments.

The subject areas are:

¾ Photofinishers

¾ Digital Imaging

¾ Portrait Studios

¾ Minilab Equipment

¾ Computer and Internet Usage

The subheadings for every subject are:

¾ What kind of services are offered

¾ How many are offering these services

¾ The amount of annual investments

¾ Reasons for investments

¾ What kind of equipment is already used

¾ What kind of equipment is planned to be purchase

¾ The amount of annual profits

The shape of the obtained information were partly reports and statistical data. The reports were

prepared for PMI's need and some facts were represented graphically and interpretive in a

written way. The next step was to document the compiled data. The contents of the subheadings

was put in an order within the subject areas for each individual country: Great Britain, Italy,

Germany and France and combined to a report, the "European Industry Trend Report 1997-

1998". For the detailed report see appendix 1.

Problems while interpreting and analyzing of the data were, that the origin of the sources were

different and thus the sample size was different as well. To deal with the problem with the

comparability and in order not to falsify the results and the gathered data, it was attached

importance to use data and facts from one source for preparing each single graphic. Another

problem was different definitions of the fields of retailers, photographers and photofinishers in

the various markets. In some countries photographers, who offer digital imaging services, come

under the field of "specialty retailer"; another example is with photofinishing, the term

"photophinishing" includes retail shops, mail order and minilabs in some countries, but in other

countries the term "minilab" is a stand alone expression. During structuring this report it was

also necessary, to formulate a phrase which expresses the whole amount of prospective

customers. The phrase "All respondents" contains thus:

¾ Specialty Retailers

¾ Discount Stores

¾ Portrait Studios

¾ Digital Imaging Firms

To mention is the timeliness as well, which was not of very great importance. The "European

Industry Trend Report 1997-1998", contains data from 1997 and 1998, like the title already

expresses, since the research project took place in 1999. In this case care was taken to use data

and facts from one source for preparing each single graphic as well. Fortunately, information

could be utilized mostly from one source and alternative variables as information was used to

fill the gaps in information.

3.3 Primary Data Collection

3.3.1 The Nature of Primary Research

" Primary research (also known as original or field research) involves obtaining information

from informants by observation, interview or mail questionnaire."

Walsh's quotation explains

the feature of primary research, namely that interesting information in the form of a survey and

data is gathered for a specific intention - compared to secondary data research, which is a

collection of existing information - and reflects first hand attitudes and data for research

objectives. Secondary data does not often contain sufficient specific information for the

requirements of the company, therefore obtaining of preliminary data is necessary, since it

supplies the researcher with answers to the specific questions posed, but in international

marketing research primary research has a comparatively low rate of usage, since it is very cost-

intensive. Usually it is used to gain additional information or to complete data.

In general "primary research is essential for the formulation of strategic marketing plans."

Kotler described preliminary data as " ... backbone of later marketing campaigns."

Thus this

already applies for the future marketing instruments. These two statements are faced with a

controversial context, Czinkota emphasized more the strategic feature and Kotler the tactical

respectively the operational feature of primary data. However, these claims must be qualified in

terms of which design for a survey is being used. In the literature, three possible research

objectives can be found: exploratory, descriptive and causal research, which has different

meanings for strategic and tactical marketing. Illustration 5 shows the context for the use of

the survey design. To explain each of these survey designs would go beyond the scope of this

thesis, therefore the three possibilities are explained briefly.

Walsh (International Marketing, 1993), p. 57

Czinkota and Ronkainen (International Marketing, 1993), p. 464

Kotler (Marketing Management, 1997), p. 117

¾ Exploratory Research: " ... is most appropriate when the primary objective is to identify

problems, to define problems more precisely, or to investigate the possibility of new

alternative courses of action."

¾ Descriptive Research: " The aim of descriptive research is to provide a description of

existing market phenomena. For example, market characteristics such as the socio-

economic position of customers or their purchasing intent may be analyzed."

¾ Causal Research: " The aim of causal research is to identify precise cause-and-effect

relationships present in the market. The level of precision is higher than that for other types

of research because reasonably unambiguous conclusions regarding causality must be

presented."

Illustration 5: Corporate Usefulness of Different Types of Research

Czinkota and Ronkainen (International Marketing, 1993), p. 466

Czinkota and Ronkainen (International Marketing, 1993), p. 467

Source: Czinkota and Ronkainen " International Marketing", p. 467

ta (International Marketing), p.467

Source: Czinkota " International Marketing", p. 467 ta (International Marketing), p.467

Exploratory Descriptive Causal

Strategic

Tactical

Details

Seiten
Erscheinungsform: Originalausgabe
Jahr: 2000
ISBN (eBook): 9783956362293
ISBN (Paperback): 9783836603058
Dateigröße: 764 KB
Sprache: Englisch
Institution / Hochschule: Hochschule für Angewandte Wissenschaften Neu-Ulm; früher Fachhochschule Neu-Ulm – Betriebswirtschaftslehre
Erscheinungsdatum: 2007 (Mai)
Note: 1,0
Schlagworte: international marketing development markets strategy market entry research

Autor

Patrizia Beier (Autor:in)