Marketing research of European Union countries' markets

Marketing research of world macro-regions has its own characteristics that should be taken into account when preparing and conducting the research.

Marketing research of export markets is a complex task that can only be successfully solved with proper preparation and systematic work during the process. Not only the product itself is important, but also the specific geographic market. Of course, the importance of the geographic factor can vary significantly for different product markets; for B2B it is generally less significant than for B2C. But in any case, from the perspective of a Russian entrepreneur, analyzing the markets of neighboring countries with a shared history and established economic ties (like Kazakhstani or Tajikistani) is much easier than analyzing Pacific or African markets. Regarding EU countries, there is often a misconception that conducting marketing research for them, which can become the basis for a successful export project, is simple. This is not entirely true.

About the common market of EU countries and how it affects marketing research

When we talk about preparing marketing research for a specific territory, the question always arises about the correct formulation of tasks and writing the terms of reference regarding the justification of the geographic boundaries within which this research will be conducted.

For the markets of the European Union countries, this question is particularly important because there are few examples of how deeply integrated and truly unified the market of almost thirty countries is.

When a company initiates a marketing research of a foreign market or markets, there are generally two situations.

In the first case, there is a clear justification that this particular geographic market is of priority interest to the company, so the goal of the marketing research is to provide the most detailed information about it to justify management decisions on market entry or deepening presence. This situation is less common than the second.

The second case describes numerous scenarios where the enterprise generally does not have a clear understanding of which geographic market or markets are most promising for it.

The motives for choosing the object of marketing research can be very diverse but are rarely based on real facts and observations. Often these are simply wishes, albeit good ones. In such a case, an unjustified choice of a country (or group of countries) for analytical marketing work can become a very costly mistake. Not only money but also time will be lost. Therefore, sensible management of business structures sets the task (for in-house specialists, but more often for outsourcing companies) to conduct marketing research in stages - first select country priorities, and only then delve into the analysis of specific geographic markets.

Then you need to look at the situation. Sometimes it is advisable to consider the global market as a whole; more often, you can start with a specific macro-region (on a global scale). If the company has never worked with EU countries, or supplies were episodic, then it is extremely difficult to clearly establish even not one, but 2-3 countries for which marketing research should be conducted first. A more reasonable and effective option would be to conduct an assessment of the European Union market as a whole and identify those priority country markets within it that should be analyzed in detail.

In the practice of marketing agencies, cases where a request comes for a commercial proposal for researching an export market, the logic of whose choice is extremely difficult to understand, are quite common. Often such works do not start at all. As for the European Union countries, if there is no clear understanding of priorities within it, then it is worth considering the possibility of first conducting an express assessment of the potential of all countries included in it, and then, having selected the top 3 or top 5, or possibly the single most preferred market, conduct an in-depth marketing research.

It is for the European Union that this approach to organizing work seems most correct, given the harmonized rules of economic activity, which predetermines practically identical entry barriers regardless of the specific country through which the product enters the single European market.

If, within the framework of this introductory assessment, it is established that the existing barriers have not been overcome by the company and cannot be "taken" within reasonable time limits, then perhaps at this stage it is not worth deepening the market research, but rather focus on specifying the market entry obstacles in order to work them out.

At the same time, the presence of barriers not yet overcome does not at all mean that marketing research should definitely not be conducted. It can be done for the future, for example, taking into account the long lag of production and sales. But in any case, it must be established that the barriers can be overcome by the company and this will not lead to a negative "economy" of the export project.

Let me give a specific example. A Russian company had an idea to enter the European market with a chemical product used as raw material for further production. The question arose about choosing a priority country to start work. Before starting to study the potential of individual country markets, the main barriers were analyzed - the requirements of European directives for the import of such products into the EU territory.

In order to import chemical substances into the countries of the European Union, it is necessary to obtain special permits for them. The cost of obtaining a package of such documents and the time for their processing were roughly calculated. Then these costs were compared with the possible profit, taking into account production constraints. It was concluded that entering the EU market with the existing production capacities was economically impractical, since almost all expected profit would be spent on overcoming formal barriers - directive requirements.

The considered example clearly demonstrates the importance of studying barriers to entry into a foreign market, which should precede the analysis of the market as such. The market of the European Union countries is quite homogeneous in terms of state regulation measures, and therefore it makes sense to consider it as a whole. If the barriers are not a problem for the company, then you can proceed to the selection of the most interesting entry points. And the way information on the European Union countries is aggregated allows us to conclude about the effectiveness of a comparative analysis of the markets of all countries before starting work on in-depth marketing research of the markets of individual states.

Features of information collection for conducting research on EU country markets

As is known, marketing research of a market can include both desk and field parts. When studying foreign markets, the desk part of the research is the base. This is logical due to the high cost of field work abroad, especially if there is more than one country and geographic markets need to be prioritized.

In this sense, desk research of the EU market in the context of individual countries seems to be quite comfortable work for a marketer if they are well oriented in the main sources of open data and have a good command of English (as well as any other language of the European Union, the list of which does not include Russian).

What do marketing agencies mainly use? First of all, this is the Eurostat website. The database available in the public domain significantly surpasses in volume and quality what can be found on the Rosstat website. But to work effectively with this data, knowledge of statistical terms, methods of calculating indicators, and skills in quickly searching for the necessary data are needed. An unprepared user in this regard may experience certain difficulties, which will affect the quality of the research. Moreover, it is no secret that marketers in Russian companies are often very poorly trained in working with statistical series (especially not in the Russian statistical accounting system), and the absence of a Russian translation of the Eurostat website exacerbates the problem.

Also, when conducting marketing research, international databases on foreign trade between countries are actively used. The information aggregated by them from the customs authorities of the world's countries provides rich food for thought for a qualified analyst. For the European Union, this is especially important, since the flows of exports and imports between individual countries are very intensive.

Additionally, data, and not only statistical, from government bodies and public organizations of the European Union countries are used. The list of such sources depends on the topic of the research.

All together - this is a fairly substantial amount of data that can form the basis of the research. But all this, at the same time, does not matter at all if the marketer has not built an adequate model for assessing the prospects or potentials of the markets that are being compared. Such work requires, on the one hand, experience and skills in conducting such research, and on the other hand, a certain level of creativity and broad outlook to select for the model those factors that are significant but can be quantitatively assessed, preferably by reliable statistically significant data series.

The field part is advisable to use at the stage of in-depth research of those countries whose choice was previously justified. Field research in EU countries is quite expensive, regardless of whether it is carried out on their own or by attracted local companies. This increases the importance of desk work when working hypotheses are formed.

Thus, conducting marketing research of the European Union countries is a task whose solution presupposes the presence of certain theoretical and practical training of the performers, primarily in terms of the functioning of markets and the use of a wide array of generally accessible, but specific for a Russian marketer, information.

On the importance of the marketing mix based on the results of marketing research

As noted above, the market of the EU countries is distinguished, on the one hand, by a high degree of integration of norms and rules of functioning (and, consequently, barriers for potential exporters), and on the other hand, by the remaining regionality and peculiarities of consumer behavior in different countries. In such a situation, it is important that the conducted marketing research not only states certain factors and patterns but also interprets them. It is even better if such interpretation is tied to specific management decisions that the company can implement, thereby increasing the efficiency of commercial activities in export markets.

In Russian practice of conducting foreign market research, it is not common to include in the terms of reference a mandatory section on the interpretation of the results obtained by the contractor. In our opinion, this is a serious omission that reduces the effectiveness of the work. When, based on the results of the conducted research, a marketing mix is formed, even if it has already become a classic but has not yet lost its relevance, both the quality of the marketing research as such and the likelihood of implementing the ideas embedded in it through their clear articulation increase.

If marketing research is only analysis (with conclusions) without translation into practical steps, then it relaxes the performer, whether it is an outsourcer or a full-time employee (or teams). The data itself certainly has value, but it is intermediate. Decisions based on them are important. If there is no justification for specific decisions, then there is no responsibility for the presented data.

The second point is the difficulties of interpretation. A marketing analyst in the process of conducting research forms his vision of the situation. If it is not formulated clearly, but is "embedded" in statistical series and diagrams, then it can be understood completely differently by the commercial director who will build work with the export market. Especially since these people often speak different languages and see the world through their own "lenses".

Thirdly, it is better to discuss specific measures and proposals. The clash of points of view and discussions give new growth points, but for the discussion to be effective, its subject must be clearly formulated. For the purposes of formalizing the subject of discussion, the marketing mix is quite suitable.

Finally, it is necessary to clearly realize that many customers of marketing research on foreign markets without experience in regular export activities may incorrectly and simply misinterpret primary information due to an insufficiently high level of competence. The task of the performer is to clearly and clearly explain the results and give suggestions. They may not be accepted by the company, that is its right, but the performer must work out his task in full, not limited to the transfer of a formal report. Therefore, a defense of the work results is highly desirable, at least in the format of an online conference. The value of such work in the eyes of the customer and the likelihood of implementing the export project will increase significantly.