Conducting research outside the United States: a primer

Editor's note: Jacqueline Arsivaud is principal, MDI Research, Inc., Carlsbad, Calif.

You just received the results of a major research study you conducted in the U.S., and you are presenting the recommendations to your executive team. Seemingly out of left field your V.P. of marketing asks: "Do those results apply outside the U.S.? Aren't we selling 40 to 50 percent of our widgets outside the United States borders? Then how come we don't know?"

After the requisite period of scrambling for suppliers and approaches, you find out what kept you from doing research internationally to begin with:

• Your preferred suppliers either don't do research internationally or merely subcontract the work to a foreign research company, which you are not comfortable with.
• Few if any U.S.-based companies specialize in international research and have their own company-owned offices in the key strategic geographies you want to survey.
• You've heard it before: "It costs twice as much and takes twice as long."
• Where do you begin to select a foreign-based research company? Let's assume your company will not fly you around the world so you can personally meet the staff and visit their operations. Do you go by references only? Do you start in a directory? Do you select a different firm in each country or in each region (for example Europe and the Pacific Rim)? How do you know they are any good, and that they will deliver what you need?

If you have ever been in a situation like the scenario sketched above, and maybe if you fear you might find yourself in that situation soon, then read on. We have distilled here decades of experience using and conducting international research to help you answer some key questions:

• Should your company extend its research efforts outside the U.S.? Can't you assume results would be similar? Is it worth it?
• Assuming you (or your management) decides to venture outside the U.S. borders, what are the options at your disposal to find a vendor? What are the pros and cons of each approach?
• Once you decide on a vendor, how do you evaluate them fairly? How can you guarantee the outcome of the study will meet your internal clients' needs?
• What can you as the client provide the research vendor to maximize the chances of a successful international project once you have launched the study?
• Finally, what are the critical success factors in international research?

Step 1: Should we bother with international research?

The answer to this question of course should be dependent on your overall marketing strategy. The only purpose of research is to provide footing to make business decisions by building a framework of understanding on specific issues. Your marketing plan may not call for international research specifically, but ask yourself (and your product marketing team) the following questions:

• Do international sales represent at least 20 percent of our overall revenue?
• Are international markets growing at a faster rate than the U.S. market?
• Do we have the same competitive situation outside the U.S. in terms of players, relative share, relative positioning, as on the home court?
• Are any of our key competitors based outside the U.S.? Do they enjoy a home court advantage in a key foreign market which they could use as a test market to come after us here in the U.S.? Is a defensive strategy in order?
• Are we market share leaders in the U.S.? Have we reached a point in the domestic market where we have exhausted the avenues for further growth? In addition to or instead of looking at growing revenues through new product lines or lines of business, could we sell our current products in different regions?
• Do we know that our customers' fundamental user needs, or key purchase factors, are the same outside the U.S. as they are here? Are they more price sensitive or less price sensitive? Do they value certain features more than their U.S. counterparts, which could lead to more profitable differentiated products in certain key geographies?

Do we need to re-examine our distribution strategy in those markets where there may be a different local structure or preference?

If the answer to any of these questions is "yes" or "we really don't know," then it would probably behoove your company to broaden its marketing focus from the U.S. exclusively to the rest of its current and potential markets.

Step 2: O.K., we'll try it. Now what are our options to conduct market research outside the U.S.?
Option A: Your current supplier(s)

Assuming that you already conduct research in the U.S., the typical first place to look is one of your preferred current suppliers. If they have a partnering relationship with you, they already understand your business, your markets, your business objectives, and the best way to design research studies that will meet the needs of your internal clients. They already know, for example, that complex multivariate methodologies like conjoint are disliked by your V.P. of sales, and that the best way to present the results of a study is to first do a dry run of the results with your product marketing manager. You know your vendors are reliable and that you can depend on the quality of their results. Those are hopefully the reasons why you are doing business with them already.

Does that imply they are the best choice to conduct a study in Germany or Singapore? Maybe, maybe not. Here are some questions to use in determining whether or not to use their services for research outside the U.S.

• What percentage of their business does international research represent? It should be significant enough to warrant having expertise on staff beyond knowing which subcontractor to pass your RFP to.
• What type of international projects have they conducted? Firms that have merely subcontracted focus groups in the U.K. may be ill-prepared to handle your quantitative segmentation project in four different languages.
• What structure do they utilize for projects outside the U.S.? Do they own offices outside the U.S. staffed by their own people who hopefully follow similar processes and procedures? Do they subcontract to foreign vendors? If so, do they use one principally with whom they have a long track record for a variety of projects, or are they going to be looking in a directory of research firms for a new supplier to handle your next project? You may choose not to be the guinea pig on which this new vendor will be tested.
• If they have their own offices, make sure you understand exactly who would be working on your project. The world is full of empty offices with a sign on the door, maybe even an answering service, without any legitimate research staff in place to actually conduct your projects. Many times a subcontractor is hired on a project-by-project basis, without the level of consistency and adherence to standards that are critical in global projects. This can be true of even the largest market research firms in countries like China, so make sure you ask for biographies on the key staff that will be involved with your project.

Option B: Locate a U.S.-based firm to conduct international research

There is a definite comfort level with hiring a U.S.-based company staffed with people who you know understand the project's objectives. Also, depending on location, you may be able to visit and check out the prospective vendor staff and facilities first-hand. Because international research can be pricey, and the stakes can be higher than for some domestic projects, vendor selection becomes correspondingly critical. The same questions would apply here as when probing about your current vendor's level of international expertise, with of course the other steps you would normally take when dealing with a vendor you have not worked with before: ask for specific relevant references, check their standing with industry associations, and follow whatever other procedures your company normally follows.

The new vendor you are considering will basically approach data collection in one of three ways:

1. Subcontract data collection to local "field and tab" type companies.

2. Have their own local data collection staff.

3. Have their own data collection staff in the U.S. calling around the clock and around the world.

Our advice in general - although, of course, rules are full of exceptions - is to stay away from companies you don't have personal experience with that merely subcontract the work to another firm. All you wind up doing is paying two profit margins with little value added from the U.S. firm if they are not already familiar with your company and its markets.

A U.S.-based company with its own staff locally can often be the best solution for the following reasons:

• You still have the advantage of American English speaking professionals hopefully only two or three time zones away, which makes communication easier and troubleshooting more effective.
• For multi-country studies, you are assured of consistency across interviewing teams in terms of training and internal processes. They probably hire the same caliber of interviewers across the board, which further increases likelihood of truly comparable results. When inexpensive, part-time interviewers are used in one country, they tend to get higher refusal rates especially in business-to-business studies and therefore results skewed from the non-response bias, whereas a better team in a different country may be reaching more of the target sample.

Centralized multinational teams are the best way to insure consistency across countries being surveyed:

• Training is centralized, all interviewers hear the same thing.
• Interaction between interviewers and with the overall project manager ensures true homogeneity of results.
• There is no methodological deviation between countries in terms of questionnaire development and administration.
• If changes are needed once the project starts, they can be implemented in a matter of hours instead of days.
• Quality control is uniform.

Local native interviewers are important in any study, especially with hard to reach audiences such as MIS directors. If they live in their home country, they may be more abreast of the latest expressions or jargon used in industries such as the computer business for example, where the local language evolves quite fluidly between English and local vocabulary. Somebody who has been away from their country of origin for several years may not be attuned to some of these subtleties.

Many companies have had good success with using U.S.-based research companies with an international staff of native speakers calling around the globe back into their own country. The same benefits apply as those discussed above with a local staff, with the caveat that for high-tech research in particular, it is helpful to have interviewers who have kept abreast of the latest vocabulary in their country of origin. That can be helped by providing them with trade publications serving your industry in the languages you plan to conduct research in.

If you are interviewing a U.S.-based company, make sure they are using native speakers, that is, for example, a French born citizen recently emigrating to the U.S., as opposed to an American who has learned French in school, even if he has visited France or lived there. It is a matter of courtesy to the local respondents for them to be able to speak with an individual totally fluent in their language, and many nationalities (such as the French) will be put off by a foreigner calling them to conduct research when it is obvious they are not native themselves.

Option C: Locate one or several suppliers outside the U.S.

Well, your current suppliers don't conduct international research, and you haven't found a U.S.-based company that you feel comfortable would do a good job for you overseas. What next? Time to look in situ for the right partner organization.

If you are going to be conducting research in a single market, such as the U.K. or Singapore, you may find very qualified locally owned firms to do business with. Ask your trade organizations, and the editorial staff of trade magazines published in those countries (such as PC Week in the computer industry) for references or leads for reputable local firms. The American Chamber of Commerce and the International Trade Administration of the Department of Commerce may also be sources for potential local leads. When you approach them, do so in writing at first by fax or mail to minimize misunderstandings due to language barriers. When speaking on the phone, avoid American expressions, do not call people by their first names as you would in the U.S. - most would be offended - and speak slowly without being demeaning.

The key benefit of using local firms is that they will be closest to the local culture. If they specialize in your industry, they may also have list sources not readily available to you.

If however you are planning to conduct international research across several countries or regions, we strongly recommend you hire a supplier with centralized data collection capabilities, whether here or overseas.

Step 3: How do I evaluate this vendor to have confidence they will deliver on time and on budget?

Ask for references specifically for the type of project and/or geographies you are planning to survey. If relevant or important to you, ask for references within or related to your industry. A firm doing primarily consumer research for example may be ill-prepared to have its interviewers survey LAN managers in Fortune 500 type companies.

Step 4: What can I do to help my research vendor conduct a successful international study?

Provide relevant research as background, especially if you are extending a project that has already been done in the U.S. Be sure to clarify what you do or don't want to compare between the U.S. study and the international version. Share whatever secondary or primary data you have on the topic at hand: the more the vendor understands your market, your competition, the better they will be able to deliver meaningful conclusions and recommendations from the study.

Step 5: What are the critical success factors in conducting research internationally?

The key success factors can be summarized as follows:

• Consistency across markets.
• Adherence to the same standards across geographies.
• Understanding that the translated surveys do not need to be exactly the same as U.S. surveys. You must decide if you want the answers or the questions to be comparable. It may be mutually exclusive in certain cultures.
• Native speakers as interviewers. Don't settle for French natives who've learned German or English, it will increase your refusal rate and you may compromise quality of answers.
• A centrally managed team that fully understands the objectives of the study and how results will be used can make the right trade-offs in translation and interview supervision.
• Data collection supervisors that speak the languages interviews are being conducted in. This may seem obvious, but ask how many research suppliers have Mandarin speaking or French speaking phone supervisors.

International research is really less daunting than it may first appear. As in most marketing endeavors, the actual implementation of the strategy and the understanding of the subtleties is what makes for superior results. Once you find the right partner organization, you are likely to gain a competitive advantage that will make you even more valuable to your company.