International Market Research in Vietnam for Australian Firms

Introduction

In an increasingly globalized marketplace, it is vitally important for enterprises of all types to have reliable and timely information concerning the markets in which they compete. Moreover, for companies seeking to expand their operations into foreign countries, obtaining market research data is absolutely essential. Things have changed from years past, and many companies may be tempted to use the vast array of market data readily available on the internet or through domestic sources such as university and public libraries or trade journals. Furthermore, many countries seeking additional foreign investment have established trade offices that provide prospective investors with market-related data free of charge.

Nevertheless, it is reasonable to assume that obtaining real-world, real-time information about a particular country — especially in developing nations where corruption, piracy, or other illegal trade practices are rampant but might not be readily discernible from an outsider's perspective — will play a crucial role in an international venture. To this end, this paper provides a critical review of the peer-reviewed and scholarly literature to determine the best approach to conducting market research in emerging economies such as Vietnam, including whether to use an Australian or locally based research firm to conduct market research for a given product or service. A summary of the research and salient findings are provided in the conclusion.

According to Oxford University Press's Dictionary of Business (1996), marketing research can be defined as:

"The systematic collection and analysis of data to resolve problems concerning marketing, undertaken to reduce the risk of inappropriate marketing activity. Data is almost always collected from a sample of the target market, by such methods as observation, interviews, and audit of shop sales. Interviews are the most common technique, and can be carried out face-to-face, by telephone, or by post. When the results have been analysed (usually by computer), recommendations regarding the original problem can be made. Market research, which is often used synonymously with the preferred term 'marketing research,' is also sometimes used to refer to techniques with the restricted objective of discovering the size of the market for a particular brand or product." (p. 313)

Today, businesses have a number of options available when conducting market research in other countries, but some approaches are more appropriate than others, depending on what information is needed, what product or service is involved, and what in-house resources are available. Some authorities suggest that almost every company can benefit from some level of marketing research for their various products or services. In this regard, Duboff and Spaeth (2000) report that "what's needed to take companies to the next level before the competition gets there is the ability to strategically anticipate what's coming while continuing to efficiently manage the business on a day-to-day basis" (p. 16). There are an increasing number of market research firms that specialize in international analyses, and many companies are already using these services to good effect. According to Gerbetz and Scalea (2001), "Among corporations who hire professional services firms for strategic planning, the skills of consultants are much more important than the reputation of the firm. The majority of executives interviewed said they would be more likely to hire a professional services firm with people possessing the global business credential" (p. 65).

The importance of recent trends in international marketing research is also reflected in the development of new research areas concerning market globalization and collaborative business arrangements, including in-country strategic alliances (Brewer & Rugman 2001). According to these authors, "These trends have imparted added importance to research in international marketing, but it is not clear how research in the field has coped with this broadened responsibility in a fast-changing environment. Past reviews of international marketing research highlighted deficiencies of the discipline in two aspects: that international marketing research was fragmentary and exploratory without a strong theoretical framework, and that it lacked the methodological rigor compared to the generic (or domestic) research in marketing" (Brewer & Rugman 2001, p. 458).

While there are proven approaches for domestic or international market research, the question of whether to conduct such research in-house or outsource it to a third-party provider in the host country does not have an easy answer, as a number of factors must be taken into account. For example, if a company outsources its market research needs to an in-country provider, there may be fundamental communication issues that adversely affect the value of that research. According to a study by Scipione (1995), descriptive words and phrases can play a crucial role in creating magnitude or value impressions in the minds of those who read market research reports and then make business decisions based on them. "This finding is made all the more important by the related finding that those persons who only read (but do not write) research reports tend to have many different word-value perceptions than those persons who write (and usually also read) research reports" (Scipione 1995, p. 36).

This means that absent a native speaker of the commissioning company's language, managers run a real risk of paying for market research data they will not be able to use effectively — or at all. Furthermore, Wilkinson (2006) reports that "the market-based view posits that a market-knowledge gap exists between home country firms, which lack specific resources and capabilities needed in particular overseas markets, and host country firms, which possess those resources and capabilities because of their knowledge about local market conditions" (p. 99).

This information gap can be overcome by ensuring that in-house marketing staff have the requisite linguistic capability — there is a small contingent of Vietnamese expatriates living in Australia that could be used for this purpose — or by establishing strategic partnerships with entities already operating in the host country. This gap can also decrease over time as the exporter learns more about the host-country market (Wilkinson 2006). Many companies, however, may not have the luxury of learning about a host country gradually and will need to understand their potential customers — who they are, what they want and need, and how they routinely go about getting it — from the outset.