Why is it important to do market research, and why may it be even more important when trying to penetrate an international marketplace such as Germany or England?
Market research helps a firm identify effective business strategies it needs to use to satisfy customers’ needs and expectations in a given market. A business firm that seeks to enter an international market needs to understand customer attitudes and lifestyles. It needs to understand their needs before it sells them particular products and services. For instance, German consumers are not receptive to new products. This makes them unresponsive to new ideas in the market which they are not accustomed to (Hisrich, 2010, p. 122). Therefore, the firm needs to find out the lifestyles of different consumer segments in the country to understand their needs and expectations.
England is a very multicultural country and the firm needs to appeal to the cultural habits of different consumer segments in the country. A good number of British consumers are receptive to new products in the market. They are also more likely to use new technologies. Therefore, the firm’s market research needs to focus on how it can build strong customer relationship management strategies.
These strategies enable a firm to open up channels of communication to reach out to more consumers in the market (Hisrich, 2010, p. 145). This makes them more loyal to the firm and its products in the market. A considerable number of young adults still live with their parents and as such, the firm needs to appeal to this unique factor to sell its products.
Make a list of at least 10 questions you would ask about market research of your likely target market before finalizing the design specification about this new electrical kitchen appliance. How might the answers you get from your research be different in the United States, Germany, and England?
- Which specific qualities do you look for before purchasing a kitchen appliance?
- What are your energy consumption needs?
- Do you live alone or with your family?
- What is your average annual income?
- Do you feel that current kitchen appliance models satisfy your needs?
- How often do you cook or use other kitchen appliances?
- Which specific attributes do you look for before purchasing a kitchen appliance?
- Have you heard of this product before?
- Which is your favorite shopping method?
- Do you think it is necessary for the firm to provide other support services to you?
Answers obtained from U.S. consumers are likely to be more direct because Americans are usually interested in products that make their lives more comfortable and enjoyable. In England and Germany, some customers may not give direct answers to various questions, if they do not have enough information about the product. Some customers in these countries may choose to look at the unique qualities of the product and how it compares with other substitutes in the market. In Germany, customers do not accept new ideas readily and this may have an impact on the way they perceive the product (Hitt, Ireland & Hoskisson, 2012, p. 76).
Research and describe real examples of changes in the U.S. marketplace, economy, and culture that contributed to the downfall of a well-known U.S. product or service company
Pan American Airways was an American airline company that collapsed in 1991 as a result of various unfavorable conditions in the market. The firm was disadvantaged by new laws that allowed other airlines to compete with it on various domestic and global travel routes which it had dominated in the past. The deregulation of the airline industry by the government in the late 1970s made it difficult for the firm to stay ahead of its competitors. The firm’s operations were inefficient because it had purchased high capacity carriers which traveled with empty passenger seats to various destinations. The oil crisis of the 1970s affected the firm adversely because it incurred a lot of losses related to high fuel costs (Campbell, Stonehouse & Houston, 2002, p. 67).
The firm also failed to take note of changing customer preferences and habits in the market. Many customers preferred moving in modern aircraft and the failure by the firm to invest in a modern fleet of aircraft affected its financial performance. Pan Am was also affected by aggressive lobbying practices in Congress by other airlines. Congress enacted laws restricting it from operating in the US because the airline would have enjoyed a monopolistic market environment. Economic problems that were experienced in the US in the 1980’s reduced traveler numbers in the global aviation industry and this led the firm to be declared bankrupt (Campbell, Stonehouse & Houston, 2002, p. 75).
What could be a likely chance that would make market research for your kitchen appliance turn out to be obsolete in Germany or England?
A reduction in incomes would have an adverse effect on market research for the kitchen appliance in both Germany and England. During times of low economic growth, consumers get discouraged to spend on products they do not consider to be necessities. This reduction in spending reduces the viability of a firm’s operations because it may take a long time before it realizes a positive return on investment. Results obtained from market research in an economy with limited growth prospects are likely to be discouraging (Kolb, 2008, p. 67). In such economies, potential customers are likely to be more interested in looking for ways to survive harsh economic conditions.
Low economic growth reduces the number of disposable income consumers has in the market. Therefore, they are likely to have an indifferent attitude towards new products that seek to penetrate the market. Some prospective consumers may provide misleading information that cannot be relied upon by the firm to conduct effective marketing initiatives. Therefore, information obtained from a particular market study may not be reliable.
References
Campbell, D., Stonehouse, G., & Houston B. (2002). Business strategy. New York, NY: Elsevier Science.
Hisrich, R.D. (2010). International entrepreneurship: Starting, developing, and managing a global venture. London, UK: Sage Publications.
Hitt, M.A., Ireland, D., & Hoskisson, R.E. (2012). Strategic management cases: Competitiveness and globalization. Mason, OH: Cengage Learning.
Kolb, B. (2008). Marketing research: A practical approach. London: Sage Publications.