Marketing Research

Inadequate international marketing research can cause costly mistakes

Without adequate information, marketers cannot develop effective marketing strategies. Information is critical, whether a firm is just entering international markets, expanding its international operations, or attempting to rationalize its global activities. As the following examples illustrate, many mistakes occur because companies ignore the need for information.

After learning that ketchup was not available in Japan, a US company is reported to have shipped the Japanese a large quantity of its popular brand-name ketchup. Unfortunately, the firm did not first determine why ketchup was not already marketed in Japan. The large affluent Japanese market was so tempting that the company feared that any delay would permit its competition to spot the ‘opportunity’ and capture the market. A market test would have revealed the reason behind the lack of availability of ketchup; soy sauce was the preferred condiment there. The company involved, however, was able to purchase Japanese soy sauce for profitable resale in the United States.

Kentucky Fried Chicken reportedly found itself in a similar situation when it attempted to enter the Brazilian market. Hoping to eventually open 100 stores, the company began with two operations in Sao Paolo. Sales, though, were unexpectedly low. Why? The firm had not thoroughly researched possible competition. A local variety of low-prized charcoal-broiled chicken was available on almost every corner of the city. Because the locals considered this chicken tastier than the Colonel’s recipe, Kentucky Fried Chicken hastily revised its plans and began offering hamburgers, Mexican tacos and enchiladas. The company’s troubles were not over, however, for these food products were practically unknown in Brazil and met with little customer interest.

A well-known US soft drink company predicted the existence of a large Indonesian market for its product, but the prediction was...