Reducing the Risks Associated with Marketing Decision Making in Newly Industrialized Countries

Reducing the risks associated with marketing decision making in newly industrialized countries

Contents

1. Introduction        

2. Challenges of marketing research in emerging markets        

2.1 Cultural challenges:        

2.2 Lack of qualified and reliable researchers        

2.3 Lack of technological infrastructure        

3. Conclusion        

4. Reference list        

1. Introduction

Emerging markets are playing an increasingly important role in the global economy since they offer significant growth opportunities for multi-national companies (MNCs) (Baack & Boggs 2008). In the Asia-Pacific (except Japan), there has been a fast growing ‘new middle class’ consumers whose disposable income is on the rise, with expected spending in 2020 to account for 40 percent of the global middle class spending (Kharas 2010).

It is difficult to conduct reliable consumer research in these markets due to their complex social structures (Greenland & Kwansah-Aidoo, 2012). This paper aims to use relevant marketing literature to discuss three significant barriers for MNCs in conducting international marketing research, which are cultural differences; the lack of experienced researchers, and the lack of marketing research technology. Examples will be given to describe the risks involved, followed by the suggestion of marketing strategies to avoid and alleviate the risks.

2. Challenges of marketing research in emerging markets

2.1 Cultural challenges:

Culture is universally acknowledged as one of the underlying drivers of consumer behaviour, and it is an important element to examine while conducting marketing research. Culture can be in the form of beliefs, values and customs (Schiffman et al. 2014), which manifests in why, when, where, how, etc consumers select certain products and services. In emerging markets, marketers confront with a wide range of unfamiliar culture related situations and problems which can affect the validity of the information obtained from the research. In most cases, it is neither appropriate nor practical to apply marketing framework formulated within developed markets to emerging markets, or even from one emerging market to the other, due to possible culture differences. For example, response bias (when respondents misrepresent the truth, consciously or not) might occur in focus group interview consisting of consumers from emerging countries with high level of ‘collectivism’ as opposed to ‘individualism’ (Hofstede 1991). These respondents tend to use mid-point or agree with the interviewers to indicate neutral view thus avoid being seen as controversial (Zikmund et al. 2011). On the other hand, in conservative societies like China, female respondents may refuse or be reluctant to answer male researchers in face-to-face interviews; and most of the time males have strongest influence and are decision makers in important purchases within the household.