Doing good doesn’t have to be at odds with profit. Organisations focused on their triple line in today’s marketplace will outperform their less socially conscious competitors. 

So what is the triple line? And what does Corporate Social Responsibility (CSR) entail?

In economics, the triple bottom line (TBL) explains how organisations should commit to focusing on social and environmental welfare as much as they do on profits. 

The triple bottom line theory asserts there should be three bottom lines: profit, people, and the planet. A TBL measures a corporation’s commitment to Corporate Social Responsibility (CSR), a self-regulating business model aimed at helping a brand become socially accountable to itself, its stakeholders, the public, and its environmental impact over time.

Reducing carbon footprints to avert the climate crisis, improving labour policies, adding employee welfare programs, embracing fair trade, and incorporating charitable giving are examples of ways brands can support CSR initiatives.

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Why is CSR important in your brand strategy?

The idea behind social responsibility is based on the concept of businesses doing good and balancing their profit goals with initiatives that benefit society and the environment. 

Social responsibility is also good for business. Many brands focus on local, national, and even global philanthropic initiatives to attract consumers, making social responsibility a means of growing the brand. 

Customers like to do business with socially responsible organisations and enhance brand equity by boosting their sales, profits, and goodwill. CSR activities allow companies to improve their reputation, positively impacting brand equity and value.

CSR also helps an organisation internally. Research led by Verizon and the Campbell Soup Company quantified the advantages of being socially responsible. The study showed how CSR lowers turnover by up to 50 percent, boosts team productivity by up to 13 percent, and enhances employee satisfaction by up to 7.5 percent. 

Millennials and Gen Zers demand social responsibility from the brands they interact with

A survey of 30,000 consumers in 60 countries found that 66 percent of consumers were willing to pay more for brands with CSR initiatives that resonated with them or aligned with their values and beliefs. 

Another study revealed that 87 percent of Americans would purchase a product based on the advocacy of an issue that resonates with them. 

This is especially true of the younger generations, including millennials and Gen Z. In our recent report on Gen Z —the definitive guide, there are several examples of brands demonstrating social responsibility to attract this cohort of consumers who demand social and environmental responsibility from brands. 

Why does this matter?

In 2020, there were 1.8 billion millennials worldwide, making them the largest generation cohort in recent times. Furthermore, with most of them employed, their spending power has dramatically increased over the past few years. 

In 2021, overall spending by Millenials had also considerably increased because most wanted to make up for the time lost during the pandemic. This cohort is a self-indulgent group that also cares deeply about society and the environment. 

According to a Deloitte survey in 2020, 60 percent of Millennials said they would be willing to support a business that takes care of its employees and positively impacts society. 

It’s not just societal impact but also an organisation’s impact on the environment that matters to the younger Millennial and Gen Z cohorts.

Another critical factor is how brands lead diversity and inclusion. As detailed in our exhaustive Gen Z report on emerging beauty trends, today’s consumers, especially younger generations, demand brands to be diverse and inclusive. 

It is worth noting that brands cannot mislead consumers and send out a social message that is not executed because these discerning consumers also expect authenticity. 

Greenwashing, for instance, is a term that has gained prominence in recent times. The term refers to brands and organisations that say they are environmentally friendly, but in practice, they do nothing to protect the environment or actually harm the environment. 

Marrying profits with purpose

Gone are the days when profit and doing good were mutually exclusive. Today, corporations are increasingly incorporating purpose into their brand strategy. Having a cause attached to an organisation is not just nice to have but a necessity. Governments worldwide have established mandates to ensure that big corporations are socially responsible. 

In Asia, CSR-related investment is conspicuous in the major economies. While we see a global trend with businesses taking a more significant share of responsibility for social and environmental good, different nations approach CSR with varying levels of vigour and pace.

Let’s look at the American, European, and Asia Pacific countries where we have a presence to see how they approach CSR and corporate citizenship. 

CSR initiatives are part of company law in China

A worldwide survey on millennials revealed that 83 percent wanted businesses to address social issues. In China, this percentage was higher at 92 percent. 

Typically, CSR is considered a voluntary initiative; yet in the past few decades, we have seen the rise of CSR mandates worldwide that explicitly target corporations to include CSR programs. 

One such country is China, where CSR initiatives are in Article 5 of the 2006 Chinese Company Law and explicitly require all Chinese companies to be socially responsible. 

The Chinese government incentivises companies to incorporate social responsibility into their business practices. 

In 2014, Coca-Cola launched a socially conscious bottled water brand called Ice Dew “Chun Yue,” or Pure Joy in China. This was the company’s first socially conscious brand. Although priced slightly higher than competing brands, this bottled water targeted Millennials who care about social issues and are more likely to pay more for an environmentally conscious brand.

With the fitting tagline, “Drink Good, Do Good, Feel Good,” the brand claimed it would set aside funds to develop safe drinking water sources for schoolchildren in rural provinces such as Yunnan and Sichuan.

Japanese brands face pressure to get involved in CSR activities.

Japanese culture is all about relationships, and giving money to unknown people or charity has never been common practice. Until recent years, the Japanese considered social responsibility mainly the government’s job.

However, this has changed recently as issues such as the climate crisis, human rights, women’s equality, and poverty have come into the forefront of mass consciousness. 

The Japanese understand the adverse impact of poverty, social injustice, well-being, and the environment on society and realise the extent to which individual companies and people can help promote a better community. 

As a result, Japanese corporations face pressure to do more “good” and be responsible for their actions.

CSR in a net zero U.K.

One of the world’s largest automotive companies, Japanese automaker Toyota now faces increased international scrutiny as its growth continues.

In 1989, the company set up its Corporate Citizenship Activity Committee, and in 1995 it established the Basic Principles of Social Contribution Activities. In 2006, the company launched the Corporate Citizenship Division to consolidate all its social responsibility functions globally and become more strategic. In 2009, it opened the Toyomori Institute of Sustainable Living. 

Balancing the amount of greenhouse gases we put into the atmosphere with the amount we remove to tackle the climate crisis is called ‘net zero.’

The U.K. government has urged more businesses to pledge to this net zero target by 2050. In an industrialised world, reaching this goal is challenging and requires massive efforts from governments, corporations, and societies worldwide. 

Various countries and organisations have now adopted the target of ‘net-zero emissions by 2050,’ and about one-third of the largest U.K. businesses, representing a £650 billion market capital, have pledged to eliminate their carbon emissions by 2050. 

One such brand is luxury automaker Rolls-Royce, which is committed to net zero greenhouse gas emissions associated with its operations and facilities by 2030. 

U.K. pharmaceutical brand AstraZeneca has also committed to achieving zero carbon emissions by 2025 and becoming carbon negative across its value chain by 2030. 

Not mandatory in The U.S., but consumers expect brands to incorporate CSR.

From how we grow our food and how we deal with the climate crisis to how we treat our labour force, consumers in the U.S. are increasingly demanding accountability from corporations and organisations.

While CSR is not required by U.S. statute or regulations, it is somewhat soft law as consumers demand social responsibility from the brands they use.

In recent years, there has been a growth in CSR initiatives in the U.S., and major corporations have made massive strides in improving their environmental disclosure through annual sustainability reports.

Driven by its mission, Tom shoes is top-of-the-mind for social responsibility in the U.S. 

Toms shoes are likely the first brand that comes to mind when discussing corporate social responsibility. And for good reason —the brand’s CSR initiative is intertwined with its mission statement. 

In 2006, TOMS launched with the mission “to match every pair of shoes purchased with a pair of new shoes for a child in need.” During its first year, TOMS sold 10,000 pairs of shoes, and today, it has partnered with social organisations in more than 50 countries worldwide. 

The company’s social efforts focus on improving environmental and social issues and are seen globally in every aspect of its operations. The brand is an excellent example of authentic social responsibility.

CSR focuses on labour welfare and environmental consciousness in Indonesia.

Indonesian company law states that “companies with an impact on natural resources must implement CSR, and the same must be budgeted as a cost.” 

Recently, issues concerning worker abuse, severe climate, and environmental concerns have heightened interest in CSR. 

For example, Indonesia Eximbank’s Corporate Social Responsibility (CSR) encompasses four areas: environmental responsibility, responsibility towards social and community development, labour and workplace health and safety responsibilities, and responsibility to their customers. 

CSR is a complementary approach to doing business in Singapore

Singapore is among the world’s fastest-growing economies and is in tune with the sustainability trend. 

The climate crisis and societal issues have propelled social responsibility and sustainable business practices to the forefront. A growing population demanding brand corporate responsibility has turned “doing good” into a winning business strategy. 

In Singapore, most CSR initiatives are handled by the state in partnership with employers and labour unions, making the government a key driver of CSR in the island state. 

The Singaporean code of governance urges domestic companies to follow high standards, and while the code is not mandatory, listed companies are required to disclose their corporate governance practices and explain any deviations from the code in their annual reports.  

In Singapore, Yakult, a probiotic beverage brand, stopped using plastic straws in its efforts to be environmentally conscious. 

Additionally, Yakult has partnered with many non-profit organisations in the health arena, sponsoring public projects and health-related events in Singapore. 

CSR is part and parcel of doing business in Thailand

The fundamental concepts of the Thai way of life and religious beliefs are centred around doing good deeds for others without any selfish motives. This thought process has seeped into business life, and Thai businesses accept their social responsibility.

During the 1997-1998 financial crisis in Thailand, His Majesty King Bhumiphol Adulyadej recommended the “Sufficiency Economy” philosophy to guide the Thai people towards a balanced way of life. 

Wonderland products, a manufacturer of wooden toys in Thailand, enforces CSR initiatives internally by ensuring the quality of life and humane labour practices and externally by supporting environmental protection. Its plants reuse and recycle waste for environmental reasons. 

What the world can learn from India about CSR implementation

Corporate social responsibility is a practice in which businesses voluntarily contribute positively to social and environmental projects. However, in the Indian context, the phrase takes on a different meaning. 

While organisations voluntarily participate in CSR in the rest of the world, it is not the case in India. As the world’s fastest-growing economy, India requires companies to have a CSR policy. 

In 2014, with the implementation of the new company law on April 1, India became the only country in the world with legislated corporate social responsibility (CSR) and a spending threshold of up to INR 15,000 crore (USD 2.5 billion). 

The new law mandates that “all companies, including foreign firms, with a minimum net worth of Rs 500 crore, turnover of Rs. 1,000 crores, and net profit of at least Rs 5 crore, spend at least two percent of their profit on CSR.”

In India, CSR is approached with a stringency not found anywhere else in the world. 

The law requires three Board directors to form a CSR committee to enforce the organisation’s CSR policy. The law also dictates that the CSR policy be elaborate and the money spent audited. Organisations must also detail their CSR policy in their annual reports and websites. 

For example, Coca-Cola’s 2015 “Support My School” campaign was one of India’s most extensive CSR campaigns ever undertaken. The viral campaign earned Coca-Cola media exposure to an extent even the most planned marketing campaigns cannot replicate.

It is well established worldwide that businesses cannot progress at the cost of society or the environment. Most nations are on board with Corporate Social Responsibility initiatives that are good for the employees, consumers, businesses, and society. Brands are integrating societal and environmental goals into their operations to help reduce waste, enhance reputation and identity, attract top talent, and increase their bottom line. 

For international brands entering new markets, CSR provides a remarkable branding opportunity and helps them build their reputation locally as socially responsible brands.

The phrase “Never judge a book by its cover” does not apply to product packaging design. When package design is the only reference a consumer has, he is bound to go for the most appealing option. Years of market research have established that what’s outside the package is as important as what’s inside it. How else will a product stand out in a sea of competing brands? Yes, brand loyalty, ingredients, and other factors can make a difference, but in the end, most of it comes down to consumer psychology. 

In a store, the package design is the gateway to the product. Successful brands use psychology in their product design and packaging, driving sales and brand loyalty. Consumers often perceive a product’s function and worth based on its packaging and design.

Product packaging is primarily dictated by the target audience and what they want. For brands targeting a younger demographic, for instance, it is essential to add personalization and brighter colours and fonts that appeal to the youth. 

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This can change when catering to the same demographic in different countries. For instance, the environmental impact of packaging is a relatively less critical purchase factor for Japanese consumers, yet 80 percent of the respondents in India factor the environmental impact of packaging into their purchase decisions.

Understanding Consumer Psychology

Any buying decision involves consumers going through several cognitive stages when looking for a product actively. Their perceptions and opinions are based on what they see during this stage. After they select and purchase a product, they continue to evaluate their decision based on the product’s performance and experience. 

When a product’s perceived value is high, consumers are less impulsive than when the value is lower. This explains why over 70 percent of supermarket purchases are not planned. Shoppers in supermarkets and grocery stores rely primarily on the instinctive cues they get from package design as they browse stores. These help them make quick judgments about the product’s quality and value and can be why they add it to their carts (or not). 

Choosing the right colours

Research shows that colour is one of the first things our brains see when they come across a brand and is often the first thing that pulls consumers in. 

Do you feel calm in a blue room, and does yellow make you anxious?

Pablo Picasso once said, “Colors like features, follow the changes of the emotions.” Colour is known to change emotions, moods, and feelings dramatically. Colours can have different meanings from culture to culture, as the idea of colour is deeply rooted in our experiences. 

Colour psychology is a hot topic in marketing, branding, and graphic design because colours play a huge role in brand perception and image. 

When selecting colours, it is imperative to look into the cultural significance of each colour. This becomes necessary for brands planning international market entry, as different cultures have different connotations and emotions attached to specific colours. For instance, while green is a colour of prosperity in many Muslim nations, it is a colour associated with illness and death in some South American cultures. 

It is also essential to consider how your brand colours align with your brand and its identity. Other considerations are whether these colours stand out in a crowded marketplace and how they would work for those who are colourblind. 

Format and materials

The format or shape of the packaging is often based on whether the package will be used or discarded. In case it’s part of the product, like a milk carton, the quality, materials, and function are important considerations. For instance, a square or rectangular base is better so it can fit in the refrigerator more efficiently, and an easy-to-pour spout enhances convenience and functionality.

Packaging design depends on many other factors as well. For instance. a luxury product needs to be packaged in a way that reflects the high price of the product. In recent years, sustainability has also become a huge factor in selecting packaging materials, and an exciting product design may encourage consumers to post the packaging or unboxing online.

Typography and labels 

Typography is the art of placing text to make the copy clear, legible, and visually attractive. It utilises font style, size, and structure to evoke feelings and emotions and convey a message. It also helps balance the graphics on a package. 

The font styles and sizes you use on your packaging play a huge role in the overall design and how consumers perceive your brand. The logo, typography, and fonts allow your brand to stand out from the competition. The typography helps catch your target audience’s attention and conveys the brand’s messaging. It also helps establish consistency, a vital aspect of brand identity. 

For a successful packaging design that quickly moves the product off the shelves, brands need to know their target audience and stay abreast with the latest trends. The typesetting, fonts, and styles you use, just like the graphic and colour choices, are based on your target market —factors such as age, gender, language, culture, and preferences influence the typography of a product’s package design. 

By providing invaluable information regarding current market trends and the unique wants and needs of a brand’s consumer base, market research helps a brand develop its business and marketing strategy. Market research benefits many different facets of business, including product design and packaging. 

Brands need to have complete knowledge of consumer desires and the effect of specific product packaging on purchasing patterns and preferences. In market research, there are many different means for gathering this data, each with its own set of advantages. In most cases, it is best to use a combination of methodologies to understand the effectiveness of your packaging design and labels. 

Market research allows brands to tap into the psyche of their target markets to gain a deeper understanding of how a package design impacts purchasing decisions. 

This can be done in many ways by gathering data, each method with distinct advantages. 

Some common forms of gathering data:

1. Focus groups 

Market researchers often use focus groups and show them labels and packages to gauge their first reactions to the design, colours, typography, offers, and form. The focus group participants sample the product and look at the packaging and label to provide insights into what part of the packaging would influence their purchase decision. 

2. Interviews and discussions

Many brands conduct interviews with consumers as they browse competing products in a store setting. Questions like, “what made you add a product to your cart?” can uncover purchase decisions and the effectiveness of your product packaging. You may also interview employees from different departments who know the product well.

3. Surveys

Online surveys are a quick and easy way to conduct a survey. These can be carried out for in-store and online purchases on eCommerce sites and allow for anonymity, providing information and insights into purchase decisions and behaviour. A well-designed survey employs a rating scale and asks open-ended questions. 

4. Observation 

Market researchers often use direct observation by visiting the store and observing how the products on the shelf move. In this manner, it is possible to see how the placement of items in a store affects sales. It also allows brands to look closely at the competition to see what graphics, colours, and other visual elements affect purchase decisions. How would your product look in comparison to competing brands? Does it blend in or stand out? Does it stand out in a good way? Making frequent visits to stores can provide a window of opportunity and is a powerful way to conduct market research. 

Market research provides invaluable insights into market trends, consumer psychology, and behavior. It can help formulate the right business and marketing strategy for businesses, including package design. 

Package design research is more critical now than ever. In many cases, the retail package design is the only advertisement for the brand. The brand’s packaging has a few seconds to draw consumers to the product and evoke purchase intent. 

While brands use many quantitative and tried and tested package designs, they often tend to overlook the subjective side of research, which requires qualitative research methods and tools—knowing the “why” behind purchase decisions and consumer motivations can provide the essential piece in understanding the effectiveness of a new package design or redesign. 

With a GDP of $5.15 trillion, Japan is well-positioned for international expansion and offers substantial business opportunities for brands in various industries. 

The country has dramatically bounced back from the disruption caused by the 2011 natural disasters, like the earthquake and the Tsunami.

Japanese motor vehicles and electronics are prevalent globally. It is also among the world’s largest producers of steel. 

The country is among the world’s largest exporters of motor vehicles and electronic equipment. The service sector makes up the highest percentage of the economy in terms of gross domestic product and employment.

Major Industries in Japan

Japan’s five largest companies by market capitalization are Toyota, Sony, Keyence, Recruit Holdings, and SoftBank Group. Sony’s portfolio includes a distinctly non-Japanese Hollywood movie and music business originally acquired through a merger and acquisition over 30 years ago. SoftBank, in recent years, has morphed into a massive tech fund run by foreign fund managers invested almost entirely in non-Japanese startups. Recruit’s new CEO spent ten years acquiring and growing recruitment businesses in the U.S. before his promotion earlier in 2022.

Japan is focused on manufacturing precision and technology products such as hybrid vehicles, robotics, and optical instruments.

Other industries prominent in Japan are agriculture, fishing, and tourism. 

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What makes Japan an excellent choice for international expansion

Large World economy

The third-largest economy in the world, after the United States and China, and the fourth largest importer of U.S. products, Japan is open for international business. It is also one of the world’s most literate and technically advanced nations.

Robust Consumer Economy

Japan has a robust consumer economy with a per capita income of $42,197 and is a haven for brands that want to expand internationally. Japan’s massive consumer economy, in which consumers with considerable purchasing power seek high-quality and innovative goods and services. 

Protections and Compliance

An essential member of the international trade system, Japan complies with the law, and its efforts to maintain the rule of law is one of the pillars of its foreign policy. It also provides intellectual property protection and rights. 

Easy and inexpensive to set up an office 

According to the World Bank’s “Ease of Doing Business” report, it takes about 11 days to incorporate. It costs 0.7 percent or JPY 60,000, (approximately USD 470 million), whichever is higher, and registration and seal fees. For companies that want to set up a branch office, the costs are low and procedures simple. Co-working spaces are also an option in bigger cities. 

Rapidly Aging Population

Japan is ageing fast. One in three people is estimated to be 65 years and older by 2036, conferring the title of the world’s leading “super-aged society.”



While the nation’s rapidly ageing and declining population pose risks of an economic crisis, it also presents massive opportunities. As a result of the declining population, individual income has risen, surpassing U.S. citizens.

Fewer people in Japan mean larger living spaces, more arable land capital, more disposable income, and higher quality of living. This fuels the growth in several industries, such as pharmaceuticals, healthcare, franchising, and real estate, to name a few.

Seniors in Japan are financially secure and healthy overall and big consumers of various products and services. 

Innovation and Research 

Japan reigns supreme in research as a nation with a large senior population. It has a goldmine of data on ageing, medical data, and medical assessments—these datasets are beneficial for local governments worldwide. The nation ushers innovation and technological advancement in many sectors. 

Just as countries can look up to Japan to help their ageing population and fill technological gaps, foreign brands can view this as a great time to expand and invest in such fields.

Significant obstacles to consider before entering the Japanese market

Entering the Japanese market is lucrative and full of opportunities, but it is not without many obstacles and challenges. It is noteworthy here that Japan is one of the few Asian countries that never had a western country rule over them, and this is because of Japanese are strong-willed and are rooted in tradition. 

Although tariffs are generally low, Japan has other barriers to entering the market that may hinder foreign products’ importation into the country. 

It is essential to factor in some of the most significant obstacles before entering the Japanese market. These hurdles can be measured against the brand and company goals to make the right decision and market entry plan. 

  1. Japan’s size makes it essential for brands to invest substantially, increasing risks.
  2. Japan is a highly competitive market, and domestic brands have a strong presence. Therefore, it is not easy to compete with local Japanese companies. However, thorough market research before creating the market entry plan can help brands overcome the challenge of competing with local companies.
  3. Japanese are discerning and look for value for money and high quality when making purchase decisions. Additionally, the Japanese culture and tastes are very different from the Western world. Therefore, brands have to redesign and redevelop their products and services to tailor them to local tastes and preferences in most cases. Market research and product testing methodologies can help brands create and tweak products to fit the Japanese lifestyle and culture.
  4. Japan has very little foreign investment for an advanced nation, keeping the Japanese business sector isolated. As a result, only about 3-5 percent of Japanese speak good English, which can be a barrier for some countries.
  5. Japan has a strong network of regulations, permissions, and extensive procedures as a bureaucratic country. These strict regulations keep new entrants from competing with established industries. However, these regulations are being slowly relaxed.
  6. Management and H.R. policies are very different in Japan, and organizations entering the country must consider and adapt to the management style in Japan, because failing to do so, is a recipe for disaster. 

Marketing to the Japanese consumer

Japan is a unique market, and it is crucial to understand the cultural nuances and the Japanese consumer. You cannot become a Japanese marketing expert overnight, and it is helpful to hire local advertising agencies when marketing in Japan. 

For the same reason as above, it is critical to regionalise everything. Labels on products and marketing and sales materials, digital campaigns, and the website need to be in the Japanese language.

The Pepsiman commercial is an excellent example of regionalizing a brand. When Pepsi’s Japan branch decided to create something regional for Japan, they contacted Travis Charest to create a superhero mascot to promote Pepsi. This faceless superhero managed to get a cult following in the country. They developed an action game for the Playstation and created several successful commercials using Pepsiman. 

Nike’s attempt to extend its marketing message to include social activism in Japan was met with criticism. Nike Japan released a video depicting the struggles of women athletes in Japan that faced bullying and racism, topics that are not openly discussed in the country.

Martin Roll, a business and brand adviser, says that Japanese consumers are not as vocal and will not express dissent unless they feel brands cross a red line. Therefore, it is important to have a deep understanding of the culture, the sentiment of the people, the root of homogeneity in Japan (post-Hiroshima Nagasaki, there was a focus on a homogeneous society), and how to carefully tread the delicate line. 

https://www.youtube.com/watch?v=XkFaQuhHOtw

As in any other new country, it is also essential to have a local marketing plan and calendar.

Distribution and Sales Channels in Japan

The choice of distribution channels depends upon the product. Due to space limitations, small retail stores often stock limited inventory, and wholesalers deliver smaller amounts more frequently. 

Culturally, the Japanese prefer face-to-face interactions and place a high value on building and maintaining business relationships. This distribution system is costly and increases the price of goods. The growth of big box stores and e-commerce is challenging this status quo. 

In 2021, approximately 2.25 million vending machines in Japan were beverage vending machines, selling drinks like cooled beverages or coffee. 

The primary distribution and logistics points are found in the major port cities, like Tokyo, Yokohama, Kobe, Osaka, and Fukuoka.    

Market entry strategy for Japan

Brands need to develop and maintain strong relationships with local partners to gain a foothold and succeed in the Japanese market. The local partner can act as an agent, representative, or distributor and manage a branch office or subsidiary in Japan. 

Since the business culture is unique in Japan, visiting the country several times before entering the market is good. This can help familiarise the organization with the culture and business climate. 

Japan has a stable economy and is a dream destination for foreign investment. The key to successful business entry in Japan is doing the leg work using market research to understand the culture, localise the product and messaging, and find the right partner to expand the given brand in this unique marketplace full of opportunities.

World economists are starting to speculate or predict a pending recession, which often leads to a flow-on effect on company forecasts and budgets. 

In economics, a recession is a contraction in an economy for two consecutive quarters when there is a decline in economic activity. 

During a recession, consumers generally spend less. Recession-challenged consumers become more discerning in where they spend – looking for deals or switching brands. Some buyers even change long-held behaviours and attitudes toward consumption. 

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At the same time, brands, like their consumers, seek to conserve cash and reduce spending, including their market research budgets, during economic downturns. 

One of the many benefits of market research is that it helps mitigate uncertainty and can often reveal opportunities in price, competitor intelligence gathering, new markets, customer satisfaction, product development, target groups, and overall demand.

Price

In market research, understanding consumer price preferences are often revealing no matter the economic condition. Knowing what price a consumer will deter a purchase is essential during a market downturn.

The Price Sensitivity Meter or PSM is a technique in market research to determine the optimal price for goods and services. PSM asks four price-related questions. These standard questions can vary but generally take the following form:

  • At what price point would you consider the product to be so expensive that you would not consider buying it? (Too expensive)
  • At what price point would you consider the product to be priced so low that you would feel there must be a compromise in quality? (Too cheap)
  • At what price point would you consider the product is starting to get expensive, so that it is not out of the question, but you would have to give some thought to buying it? (Expensive/High Side)
  • At what price point would you consider the product to be a bargain— a great buy for the money? (Cheap/Good Value)

Price Sensitivity Meter

The image is taken from a Forbes article, titled “How To Price Your Product: A Guide To The Van Westendorp Pricing Model” by Rebecca Sadwick.

The results are then plotted, and an optimal price range is determined. Depending on the brand strategy, an additional or phase two research study can determine demand by asking:

  • At the <expensive price> how likely are you to purchase the product in the next six months? Scale 1 (unlikely) to 5 (very likely).
  • At the <cheap price> how likely are you to purchase the product in the next six months? Scale 1 (unlikely) to 5 (very likely).

In many categories, price is the most crucial determinant that affects buying decisions. Understanding an upper and lower price point is essential as it can help Product Marketing Managers determine where to price their product based on current economic conditions.

Competitor Intelligence Gathering

When consumers feel the pinch from economic pressures like inflation, high unemployment, or a recession, they start to shop more discriminately. 

Understanding why a customer buys from you is important for any brand to know and understand. Having a deep understanding of why your target audience chooses a competitor brand over yours is equally as important.

Competitive Intelligence or CI research gathers information about your competitors so that brands can improve and make smarter strategic decisions.

When demand is affected by economic conditions outside of your control, having a strategic advantage over your competitors could mean the difference between product success or failure.

The goals of CI research include knowing who your direct and indirect competitors are and discovering where your competitors are doing well (and not so well). It can also gather insights into market share, brand or product recall, and price points.

Brands may have hundreds or even thousands of competitors during a burgeoning economy. When the economy shrinks, so does demand, making the market smaller. Brands that understand how to differentiate themselves from their competitors will be able to withstand economic ups and downs. 

New Markets

The Global Financial Crisis (GFC) in 2007 saw many countries emerging quicker from the impact of this recession than others. As a result, some currencies bounced back faster and stronger.

One way to offset the impact of a contraction in the economy is to develop additional revenue streams and customers in new markets.

When your product or service is available in multiple markets, it can sometimes lessen risk as some countries and currencies emerge quicker or are not affected as your local market.

Knowing when and where is the first question when commissioning a new market entry study. Learn more from our Ultimate Guide to Market Entry here.

Customer Satisfaction

When money is tight, any marketer knows customers become more selective and demanding. There are many measurements available in market research to measure customer satisfaction. This article explores our top five.

Benchmarking your current customer satisfaction levels, and measuring them each year, especially during times of uncertainty, allows brands to see if sentiment is changing and address those reasons for dissatisfaction. Finding new customers always costs more than keeping existing ones, so an in-depth understanding of customer satisfaction is important regardless of economic factors.

Product Development

Even during a recession, new products have an essential place. With their undiminished appetite for goods and experiences, live-for-today customers often appreciate the novelty. 

Other audience segments will embrace new products that offer clear value compared with alternatives. While new product development slows in recessions overall, new product launches during economic downturns can gain greater visibility. Procter & Gamble’s successful introduction of the Swiffer WetJet in 2001 during the Y2K recession established a new product category that eased the chore of mopping floors and weaned consumers away from cheaper alternatives. 

Target Groups

Understanding different buyer personas in your target audience can help marketers use their budgets wisely. New audiences may emerge, such as Gen Z, or an existing persona that is more fickle than others during uncertain times or inflation.

When company CFOs ask their marketing and product development teams to do more with lower budgets, research can help you prioritise target audiences and allow your marketing dollars to go further and have a greater return on investment.

Demand

Lower demand is the visible result of a recession or periods of high inflation. According to the Harvard Business Review, “In frothy periods of national prosperity, marketers may forget that rising sales aren’t caused by clever advertising and appealing products alone. Purchases depend on consumers’ having disposable income, feeling confident about their future, trusting in business and the economy, and embracing lifestyles and values that encourage consumption”.

Whether changing your advertising campaign to reflect consumer sentiment or offering new and relevant product features, knowing what will sway a customer to buy is important to understand.

Market research is about making strategic decisions with confidence backed by data and insight. Whether or not a recession is in our immediate future, having a crystal clear view of the future is essential no matter the economic conditions.

Deciding to enter a new international market is exciting for a brand. Perhaps your product or service has gained enough traction in your existing market that demand is growing organically. You have two options to create additional revenue streams, add more products, or expand into fresh markets.

Having your brand available in multiple overseas markets can also make commercial sense. Your company can benefit from having numerous currency streams and not be beholden to one economy. When the Global Financial Crisis occurred from 2007 to 2009, some economies such as Australia, India, China, and Indonesia were not adversely affected. Brands established in these markets felt fewer shocks from the recession as more robust markets bolstered weaker ones.

Most people would assume that the US dollar is the strongest currency globally. However, nine currencies (in 2022) are valued higher than the US dollar, including the Pound Sterling, the Euro, and Kuwaiti Dinar. Just like economic ups and downs, currencies also fluctuate, and by deriving income from multiple countries, your brand can withstand the ups and downs of money markets. 

Population, particularly when it pertains to your target customer, is another reason to consider entering a new international market. Your current market may have a limited number of potential customers or be oversaturated with competitors, so entering a new market makes sense. Some markets like India and China have an abundance of potential buyers for your product or service.

While all these reasons make sense, entering a new market successfully needs careful consideration and research. You should research and evaluate the eight areas before leaping into a new international market, and build a market entry strategy first.

Also read our blog post, “What are the Four Market Entry Strategies?”

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1) Behaviours of your target audience

Even if your product appeals to Gen Xers in your current market, it does not necessarily mean that it will have the same appeal in a foreign market. Even if the target audience is the same, it does not mean the target audience’s behaviours, wants, and needs will be the same. Even the slightest difference can potentially impact marketing messaging and product packaging.

2) Communication / Marketing Channels available

You may have a predictable marketing and sales model, but it may fall flat in other markets. In Japan, as an example, LinkedIn is not widely used because, culturally, Japanese people do not boast openly about their accomplishments, and the LinkedIn platform was built, in part, to promote career accomplishments. In Germany, LinkedIn is second to Xing. In many countries throughout Asia, WhatsApp and Youtube surpass Facebook and Instagram. In China, Facebook is not available, and WeChat is considered the Chinese version of Facebook.

Using existing marketing material may also be a challenge. While many brands take existing marketing campaigns and translate them into the local language, the marketing can often fall short or even come across as rude when the way locals prefer to communicate is not thoroughly researched and tested before launch.  

3) Cultural and language differences

We are all influenced by the society in which we live. Even in markets that speak the same language, like USA and Canada, Australia and New Zealand, and England and Ireland, the cultural differences can vary.

Cultural differences can influence every part of local life, behaviours, and even tastes. 

Fast-food chain Kentucky Fried Chicken (KFC) got off to a rocky start entering the Chinese market after it translated “finger-lickin’ good” into Chinese characters meaning “eat your fingers off.” It has abandoned the American market model and reflects China’s strong restaurant dining culture. KFC restaurants in China have larger eating areas to accommodate large families and groups. The menus are more prominent with more extensive and localized menu items, such as rice dishes and soy milk drinks. Side dishes like coleslaw and mashed potato proved to be unpopular and replaced with a palatable local fare, such as a salad of shredded carrot, fungus, and bamboo shoots.

Understanding cultural differences, including language and taste profiles, is a critical research phase before entering a market.

4) Regulations

Every country has its regulations, and companies cannot risk non-compliance. An international market may have laws and regulations you have never heard of before and, therefore, might be difficult for you or your team to wrap your head around. 

Companies need to know the regulations and laws around shipping, borders, employment laws, taxes, and other business standards in a foreign country. Navigating a new land can be exhausting. An in-house lawyer or an outside consultancy with experience in this area can be beneficial and might be needed. 

5) Payment methods

Payment methods can be vastly different overseas. Market research helps you identify what payment methods are used in the country you are entering and how you can support those payment methods in your business to grow your brand. If you are not using the popular modes of payment that people are accustomed to, you will lose massive growth opportunities. 

In Indonesia, for example, eWallets are popular, and most people use digital payment methods, with eWallet transactions reaching 18.5 billion in 2021. 

The Government of India launched the Digital India program to transform the country into a paperless, cashless society. 

Therefore, these are important considerations when entering a foreign market. 

6) Costs and Price Parity

In international trade, parity is the exchange rate between the currencies of the countries involved, and the purpose is to make the purchasing power of both currencies as close as possible. Market currency exchange rates allow you to adjust prices across countries. 

The Big Mac Index is a measure of purchasing power parity. Invented by the Economist in 1986, its purpose is to show the concept of purchasing power parity and demonstrates how price needs to be adjusted based on currency exchange rates. Global franchises and multinational corporations widely use the Big Mac Index to understand how to compare the cost of essential goods between countries. The Starbucks Index is another index that allows companies to understand price differences using the price of a Starbucks latte. 

Additionally, the cost of overheads may be very different in other countries. The real estate and rental market and the cost of utilities are a consideration, among other factors. 

Developing a pricing strategy in an international market is a complex project requiring detailed planning. Companies have to deal with currency fluctuations, regulatory issues, and cultural nuances when pricing products and services for international markets. A thorough market research plan is paramount when expanding into an Internationa Market, and it will give a company insights into its pricing strategy. 

7) Competitor landscape

It is critical to understand and analyze the competitive landscape when expanding into any market. Market research helps companies comprehend the potential competition in new, unchartered markets. This knowledge helps them make better decisions about how, when, and where to expand. It is a vital part of their business planning strategy. For instance, if a particular part of the country is already saturated with the given product or service, they can move their focus to a different part of the market. 

Market research can be daunting in the domestic market and becomes even more difficult in international markets. Therefore, it is essential to work with a knowledgeable and experienced market research company to analyze the competition in-depth. This will inform and guide the future of the company in that market. 

8) Market volume and potential growth

A product is as good as its market demand and potential growth. Market research will help you measure the opportunity so companies can understand how many potential customers their product or service will have in any given market. 

It becomes more complex to measure the opportunity in an international market, given the differences in economic conditions, for instance, in developed versus developing countries. 

These steps and considerations help show companies how to calculate market potential and help guide the process of international expansion. However, there might be many more things to consider when entering a new country. Several factors like the company’s growth stage, offering, industry, and business model will likely have unique considerations. 

Entering an international market is not a simple process, and it is essential to do the legwork and thorough market research to inform a well-thought-out market entry framework.  

For more in-depth insights, read our blog post, “The Ultimate Guide to Market Entry.”

Many reputed brands have made costly and avoidable mistakes by not including diversity and inclusion in their product testing and market research. These mistakes usually lead to a backlash from customers and the media, eventually becoming a PR nightmare.

So how can companies prevent this from happening? By ensuring their products and campaigns are diverse, brands can avoid costly mistakes in the first place —and it all starts with diversity and inclusion in market research.

This is because you typically want to hear from as wide a range of people as possible. You want to cast the net wide, gathering ideas from the social, economic, ethnic, and cultural spectrum, helping you gain a rich and complete picture of your market.

However, developing a product or service used by many isn’t always easy. It begins with inclusive research and reaching out to those typically marginalised. When brands consider diversity in gender, sexual orientation, backgrounds, religions, and disabilities, they can create products that work for everyone. This allows brands to craft compelling messages that resonate with their target markets.

Many organisations find it hard to ensure their research is diverse, focusing too much on specific demographics and groups. The result is skewed research with incomplete results, leading to inaccurate conclusions and ultimately harming your growth as a company.

It is somewhat easy to conduct a quantitative research survey asking for a sample of age groups or household income. But if the data comes back skewed heavily to a particular ethnicity, sexual orientation, or gender, it will not be a true reflection of society, which leads to flawed and inaccurate research.

Just how widespread is this lack of diversity? Is it limited to a handful of companies, or is it endemic in market research? In this article, we’ll look at the issue of diversity in market research and how companies can take steps to tackle it and promote more inclusive research methods.

Why is diversity important in market research?

Diversity and inclusion are essential in market research because they allow brands to factor in everyone’s voice and opinions instead of just a homogenous sample. This helps them drive growth and increase usage within their target markets. Furthermore, consumers are very savvy and expect diversity and inclusion in brands. They expect brands to show the diversity and live it through company policy and operations.

Here’s how diversity in market research helps brands create and drive successful brands:

  • It allows you to gather various opinions and perspectives, leading to more valuable insights about your market, company, and products.
  • It helps you connect and communicate with different groups more effectively, improving your marketing and expanding your reach.
  • More diverse research can lead to a broader range of new products and services ideas.
  • It signals that your brand is interested in hearing from a diverse range of people and does not lack cultural and diversity awareness.

Is there a lack of diversity in market research?

While the market research industry has come a long way in recent years when it comes to diversity, there is still clearly substantial work to be done.

While we have seen many strides in representing diversity in advertising, it is still questionable when it comes to authenticity. Market research companies need to look inward first to be fully diverse and inclusive.

3 Ways Market Research is Falling Behind with Diversity

1. Accurate identification.

A study for the Alliance for Inclusive and Multicultural Marketing (AIMM) found that Caucasians were adequately and accurately identified 68 percent of the time in large digital datasets used for target marketing. However, that figure was only 49 percent for Hispanics, for African Americans just 28 percent, and for Asian Americans, 24 percent.

This is a failure on the part of data collection. Researchers need to be more stringent about the data collection sources, their standards for data quality, and the criteria they rely on for every demographic.

2. Market research teams are often too homogenous.

Marketing as an industry is not diverse at all. Looking at the 2020 Marketing Week’s Career and Salary Survey, we can see that 88 percent of people in the marketing industry identify as ‘Caucasian/White,’ compared to just 5 percent ‘Asian,’ 4 percent as ‘Mixed Race,’ and just 2 percent as ‘Black.’

Furthermore, a lack of diversity in senior positions is stifling business and creativity in this industry. According to the same report, of all senior roles (defined as senior managers to a partner or owner), 38.3 percent of marketers are Caucasian, and 49.5 percent are male.

This lack of diversity in market research will likely increase the dangers of underrepresenting certain cultures and ethnicities. Research participants may be less likely to share certain information with someone of a different background. Moderators, for instance, may also miss specific cultural contexts, and research questions may be inadvertently designed to confuse or exclude other ethnic groups.

Hiring more diverse teams and promoting market research as a potential career for people of all backgrounds can help companies conduct more accurate, valuable, and inclusive research that yields better insights.

3. People worry about inaccurate representation.

A U.S. 2019 report by Adobe found that 66 percent of African Americans and 53 percent of Latino and Hispanic Americans felt they were stereotyped in advertisements. In the same report, 61 percent of people said that diversity in advertising was necessary, and 38 percent said they were more likely to trust brands that do an excellent job of showing diversity in their ads.

Some companies fail to give customers what they want —in this case, accurate, authentic representation in advertising, which is ultimately a failure of market research. Companies need to spend more time researching the different demographics that make up their audience to create advertising that talks to everyone and addresses everyone’s problems, not just a select few groups.

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5 Ways Companies can Help Promote Diversity in Market Research:

While there is still more work to be done to promote diversity in market research, the good news is that companies can improve things.

1. Prioritise diversity.

A commitment to diversity and inclusivity should be a central goal for your research team. Make it clear to team members that this is something to focus on, and help people understand how to achieve more diversity and the mistakes they should be avoiding. Educate and hold regular training to cover all the critical information.

2. Work with more diverse teams.

When researching a diverse market, try to use moderators who belong to the same demographics as your participants. This can help avoid cultural misunderstandings, promote better communication, interpret responses more successfully, and make research subjects feel comfortable.

3. Leave assumptions at the door.

Do everything you can to avoid assumptions, biases, and stereotypes creeping into your research. Have multiple people from different groups look over survey questions to ensure they aren’t explicitly targeted at specific demographics or exclude others.

4. Be aware of cultural differences.

Before you begin your research, take some time to educate yourself on the different demographics you’ll have in your study. This way, you’ll be able to conduct more inclusive, helpful research that yields genuinely useful responses from a wide range of groups.

5. Make things accessible.

Work hard to ensure your locations, materials, and schedules are accessible to many people. Be aware that not everyone has a similar schedule or situation. For example, if your research takes place in an area not accessible by public transport, you’re limiting your responses to people who can afford a car and potentially excluding entire socioeconomic groups.

Read this article to dive into how companies can be more inclusive in their market research.

We have to represent the world we live in, and an increasing number of brands are getting it. 34 percent of U.K marketers say they’ve used racially diverse models. (Shutterstock)
Market research is becoming much more diverse, inclusive, and cognisant of different demographics. However, brands can always do more, and those who prioritise diversity will gain a more comprehensive understanding of their market, access more useful data insights, and connect effectively with more customers.

Working with a professional research agency is a great way to ensure your market research is as inclusive, effective, and complete as possible. At Kadence, we work with companies worldwide, helping them get the most out of their study. Contact us to learn more.

Your business likely serves customers across various demographics, income levels, and ethnic groups, and therefore, your research should reflect that. So, how do you ensure your market research is diverse and inclusive enough? 

Many companies fail to achieve diversity in market research. They rely on an overly homogenous group of research participants, drawn from the same places, with roughly similar life experiences, preferences, and biases. The result is preliminary research, with relevant conclusions for only one part of your market. It fails to represent everyone as a whole. 

When companies successfully bring in a diverse range of research subjects, they often fail to make the most of it. They inadvertently create a research environment that benefits particular groups over others, leading to skewed results and frustrated participants.

Therefore, brands should do everything they can to avoid these costly mistakes. They need to ensure their market research targets a wide range of people from diverse backgrounds and is modelled in a way that caters to everyone, not just a select few. This article will look closely at diversity and inclusion in market research, why it’s essential, and how to promote more of it in your organisation.

What is the difference between diversity and inclusion in market research?

Diversity focuses on demographics like age, gender, race, ethnicity, religion, and sexual orientation, to name a few, while inclusion allows diversity to thrive. While the two terms are often used interchangeably, organisations need to understand the difference. 

As diversity and inclusion expert Verna Myers puts it, “Diversity is being invited to a party; inclusion is being asked to dance.”

Diversity brings people from diverse backgrounds and abilities together, and inclusion ensures you value and include everyone’s contributions in your market research. 

Why is it important to have diversity and inclusion in market research?

Brands conduct market research to determine the viability of their products and services, discover their target audience, and uncover what their customers want so they can make better decisions. When you have diversity and inclusion in your market research, everyone’s voice is heard. It allows brands to effectively communicate with their target audience —no matter who they are and where they live. 

It is essential to have diversity and inclusion in your market research efforts more than ever before. Consumers expect to see diversity and inclusion from brands in an authentic way. This is even more true of younger consumers. According to a Deloitte survey of 11,500 global consumers, “the youngest respondents (from 18 to 25 years old) took greater notice of inclusive advertising when making purchase decisions.”

As our world becomes flatter and more diverse, brands must reflect the diversity authentically in their messaging if they expect to connect with a broader audience.  

1. The best research brings diverse perspectives together.

Diversity allows you to notice things, glean insights you might have missed with a less inclusive approach, and access richer and more valuable data. It gives you a complete and accurate understanding of your target market, helping you see the whole picture instead of a narrow and restricted view. A more comprehensive range of diverse perspectives also leads to improved research outcomes.

2. Most research is too narrow.

Around the world, 80 percent of research participants fall into the same rough category. We can define this with the acronym ‘WEIRD’ — white, educated people from industrialised, affluent, democratic societies. You can probably predict the issue with this — despite making up four-fifths of all research subjects, these people are a minority in the world — less than 15 percent.

Focusing on expanding your research to include a broader range of people will improve your results while giving you an edge over competitors who focus primarily on the same groups.

3. Diversity makes your research more credible.

People can see the methodology you used during your research, and they’re likely to question the reliability of a study that focuses too heavily on certain groups. On the other hand, if you can show that your research included a diverse range of people, your conclusions will be more accurate and trustworthy.

4. Diverse research improves communication and avoids blind spots.

Inclusive research listens to everyone and allows you to tailor your products, marketing, and business strategies to improve things for everyone, not just a select few. If you fail to take all voices into account in your research, you risk creating friction and being perceived as ignoring specific segments of your market.

5. Your customers want to see more diversity.

If your research is inclusive, this will reflect positively on your brand — everything from your marketing messaging to the products you sell. In a UK survey, 51 percent of BAME people said brands do not represent their cultures well in their marketing, and 64 percent said they would feel more favourably about a brand that makes an effort to include ethnic cultures.

In other words, taking steps to include a diversity of demographics in your research will pave the way to building a brand that makes more diverse people feel included.

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How to be inclusive and promote diversity in your market research

Inclusion requires the organisation to understand, appreciate, and embrace diversity fully. It is not just about adopting diversity but also committing to it wholeheartedly and without bias. We live in a hyper-connected world with savvy consumers who will quickly call out a brand if its business values go against its brand messaging or promise. Therefore, when conducting market research, brands need to be mindful of how they will approach the issue of diversity and inclusion at every step of the process. 

Here are nine best practises to promote diversity and inclusion in your market search:

1. Build a diverse outreach network.

How do you currently get in touch with potential research participants? Many companies fall short because they rely on the same methods — the same social media pages, established networks of people, local universities, and other such channels.

The result is often a somewhat restrictive pool of people from relatively similar backgrounds and demographics. It would help if you had a more diverse strategy for finding participants for more diverse research.

It would be best to expand your network by recruiting participants from different neighbourhoods, schools, and online spaces. 

2. Make sure your pool of participants reflects your audience.

Even when businesses serve a diverse pool of individuals and are aware of this, they often still erroneously focus their research on just one or two groups. Brands need to know their audience and who is in it — and based on this information, build several buyer personas to cover all the demographics in their market.

When you have a good idea of whom you’re targeting, you’ll be able to construct a much more inclusive research strategy tailored to multiple groups and gather a much richer range of information and insights.

3. Make things as easy as possible for everyone.

It’s easy to inadvertently design a research process that prioritises certain groups over others. Maybe your focus groups take place in an area only reachable by car. Perhaps you conduct questionnaires over Zoom, excluding people with poor internet access. Or perhaps you host interviews in the evening, making it impossible for people who work late shifts.

All these things can hinder the effectiveness of your research by cutting out certain groups and leading to skewed demographics that don’t accurately represent your market. Here’s what you should do instead:

  • Take steps to accommodate different schedules by conducting research activities at different times and in other areas.
  • Help your research participants attend activities. Offer to provide transport, access to any necessary technology, and anything else (within reason) that can make things easier for them.
  • Ensure your research facilities are accessible for disabled people.
  • Compensate your participants. For some people, travelling to a research event can be expensive, and they may have competing obligations. Offer to compensate them for their time, and they will be much more likely to show up.

4. Establish trust when working with vulnerable populations.

Depending on the type of research you’re carrying out, you may need to spend time working with people from vulnerable groups. This could include those with severe mental health issues, victims of serious crimes or abuse, prisoners, or older people.

Getting feedback from these groups can be extremely valuable and provide insights into how the people within them view your brand. It can allow you to develop new products and services that cater to vulnerable groups and create a more accessible and more enjoyable experience for them.

However, this kind of research can present challenges for researchers. For example, people from vulnerable groups may not feel comfortable sharing their thoughts and feelings in a research setting — especially when the questions touch on sensitive topics. Extra care should be taken to ensure your research methods do not cause any distress or discomfort to your participants. Here are some things to consider:

  • Ensure they give consent and be very clear about how you intend to use their data. Aim to obtain explicit, active permission, and give your participants as long as they need to understand this. Don’t rush your participants, and don’t proceed until you’re not sure they know.
  • Establish what to avoid ahead of time and create an environment that will be comfortable, safe, and welcoming for your participants.
  • Be careful not to steer your participants in one direction or another — try to make sure their responses are their own opinions.
  • Make an effort to predict and avoid any potential negative consequences of the research for your participants.

5. Make things as understandable as possible.

Your surveys, interviews, introductions, guidance, and any other communication should be easy to understand for people from every background. The most obvious example here is differences in language. If a large part of your market speaks a language other than English, you’ll need translators to ensure they (and you) understand everything. Here are some examples:

  • If you are interviewing people who speak English as a second language, make sure your materials are simple and easy to understand to minimise confusion and frustration for your subjects.
  • Make sure any examples and cultural references are relevant to the people you’re studying. Even when you share a common language with your participants, misunderstandings can still happen. For example, if your screener uses references specific to a certain demographic, people outside that group may struggle to relate and understand.
  • Make sure any visual materials are easy to see and understand for people who may be visually impaired. The same applies to audio materials.

6. Be aware of how cultural differences impact research.

Different cultural groups respond differently to research. For example, in Japan, focus group participants are typically less willing to go against the group’s consensus, making this research method tricky when weighing individual opinions.

Cultural differences can impact almost every element of your research process. For instance, a time one culture might consider ideal to attend a research event could be highly inconvenient for another.

Take some time to make yourself aware of these cultural differences and how they relate to your research. That way, you can design research methods that are more appealing and welcoming to different cultures, which yields more accurate and valuable results.

7. Work with a diverse range of moderators.

People from minority groups will often feel more comfortable sharing their thoughts and opinions with someone from similar backgrounds. On top of this, moderators from a diverse range of backgrounds may find it easier to connect with these participants and get more helpful responses.

Working with a more diverse team of researchers helps you draw on different experiences to build a more inclusive research process. When groups are too homogenous, it’s easy to fall into assumptions and miss out on certain blind spots, which results in a process that can exclude specific demographics and lead to incomplete results.

8. Don’t make assumptions.

It’s common for researchers to make unconscious assumptions when asking questions and creating hypothetical scenarios in research. For example, a survey question might assume that the participant is from a typical nuclear family, alienating people who don’t fall into that lifestyle category. Take some time to consider if your questions are relatable to a wide range of people and not just your location’s dominant culture or lifestyle.

9. Work with an experienced market research agency.

The best way to ensure diverse, inclusive research and avoid any mistakes is to work with a team of experts who have done it all before. An experienced research agency can help you take all the necessary steps to avoid excluding certain groups, ensure your research process is as diverse as possible, and help you notice any areas you may have overlooked.

At Kadence, we help companies worldwide carry out effective research that connects with a diverse range of participants. Get in touch with us to find out how we can help you do the same.

Entering a domestic market is one thing, but expanding overseas is something else entirely. Moving to a new, international market comes with a range of unique challenges that require a strategic approach with empirical methods.

It’s crucial to understand and anticipate these differences to avoid nasty surprises and give yourself the best chance of success when entering a foreign market. This article will explore the key differences between market research in international and domestic markets.

How are international and domestic market research similar?

While the differences are vast, there are also some areas where domestic market research is similar to its international counterpart.

For example, certain research methods work well in both environments. Interviews, surveys, focus groups, secondary research, and experiments work well domestically and internationally. The way you analyse and process the data you collect will also stay roughly the same.

That said, the actual day-to-day process of market research in an international environment can sometimes be drastically different from what you’re used to back home.

What are the differences between domestic and international market research?

1. It’s a different culture.

No matter how similar, every international market has nuances in its culture. This culture may be akin to your home market, like the US and Canada, or radically different, like the UK and Japan. But even with very similar cultures, there will still be significant differences to consider.

Here are some ways cultural differences can impact market research:

  • Language. Interacting with the people in your market, understanding the culture, and conducting research are all much harder in a foreign language. You’ll often need to hire translators to communicate effectively, and it’s easy for crucial details to get lost in translation. Note – this also includes different dialects within the same language.
  • Expectations and preferences. A product or service that works exceptionally well in your domestic market may fail dismally abroad simply due to different tastes and cultural norms. Understanding this will need to be a key part of your research.
  • Causing offence. It’s essential to respect the local culture in your target market and avoid offending with your research techniques. Everything from linguistic choices to the clothes you wear should be considered and researched beforehand.

Your research must be carefully designed to address these concerns and also work within them — certain types of research may not work very well in an overseas market.

2. There may be infrastructure issues.

If your business is based in a developed, industrialised part of the world, you may take some aspects of market research for granted. Things like reliable postal services, easy access to large venues for focus groups, and widespread internet connectivity are not a given in many parts of the world, which can significantly impact your research.

Working in a new overseas market entails new infrastructure challenges. For example, in a country with poor smartphone coverage, you’re unlikely to have much success with in-app surveys or SMS questionnaires. These challenges can quickly mount up and lead to unexpected delays or setbacks in your research.

3. International market research involves higher risk.

Overseas markets involve more variables than domestic ones, so there is more scope for failure. The good news is that you can tap into more potential growth in an international market, but this extra reward comes at a higher risk.

Many overseas market entry attempts fail because there is so much more to be aware of and so much that can go wrong. Failing to anticipate certain conditions or challenges, like slower transport and shipping, can lead to major delays and significant losses.

You’re entering what might be a completely different market from anything you’ve known before, with a huge amount to prepare and consider. This means research is essential and must be much more rigorous than your home market. It would help if you did everything possible to anticipate risks and minimise your chances of failure.

4. International market research comes with a higher cost.

Conducting market research always costs money, and that cost can be substantially higher in a foreign market than at home. There are several reasons for this:

  • You need to do more research in general to gain a solid understanding of a completely new and different market.
  • You need to hire a range of staff on the ground like translators and people to carry out various research tasks. Unlike in your home market, where you can repurpose some of your employees, you need to vet and hire entirely new people in a new country.
  • You need to hire venues. Again, you can’t just use your premises if you haven’t established a presence in your target market, which means you’ll need to hire and pay for venues like conference centres for research activities like focus groups.
  • You need to build an entirely new research infrastructure from scratch. This includes planning postal campaigns, building software for in-app surveys, collecting email addresses, and much more.
  • Setbacks will happen. Doing anything in a new foreign market is complex, and you’ll encounter many delays, unexpected problems, and barriers at first. These can significantly disrupt your research efforts, costing time and money.

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5. You need to understand your competitors more than ever.

It’s always necessary to understand your competition, which is a key component of any market research process. Unlike a domestic market, many of your competitors may be completely unknown to you in a new international market.

To stand a chance of success in your target market, you need a firm understanding of why your competitors are successful. Who do they appeal to? What needs do they address? What have they done recently? What are their vulnerabilities? And, of course, what can you do better? Understanding your competitors should be a central part of your market research when entering an international market.

One of the most important factors to consider when conducting international market research is the legal framework in your target market. For example, many countries legally require you to have research permits, and going ahead with your research without obtaining the correct permission can lead to costly penalties and setbacks.

In some cases, you may be required to provide a copy of survey questions to governments beforehand. And in many parts of the world, bureaucracy slows things down significantly, and it can take weeks for permits to be approved, which is something you have to anticipate.

7. You need to analyse and process results the right way.

In international market research, it’s not just collecting the data that matters. It’s also essential to process your results correctly, ensuring you draw the right insights and reach accurate conclusions about your target market.

To do this right, you need to understand the cultural context. For example, some cultures like America tend to be more extreme on surveys, gravitating towards one end of the Likert scale. Other cultures like China and Japan tend to prefer more neutral answers.

These differences impact not only the way you design surveys — for example, opting for a four-point scale with no middle option — but also the way you analyse results. A set of results in one culture may have different implications for your business than the same set of results in another part of the world.

8. It’s more important to work with the right research partner.

Research partners are an essential part of all market research. Their teams consist of skilled and experienced professionals with a firm grasp of research and analysis methods and how to apply them to gain valuable insights for your business. In an international market, it’s even more important to select the right research partner who already knows the new market.

Take the time to research all your options. Your chosen partner should have experience working in your target market and should have an in-depth knowledge of the various cultural, economic, legal, and social conditions.

International market research is an entirely different process from the research you’ll do at home. It comes with countless new challenges, hurdles, and risks. If you work with the right people, with the right set of skills and experience, you’ll maximise your chances of success and give your business the best possible chance in your target market.

At Kadence, we have experience doing international market research for clients worldwide. Contact us to find out more about how we can help you. 

Want more information on conducting international research? Read The Essential Guide to Conducting International Research here.

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Market research is an essential activity for companies of all kinds. When entering a new local market or category, it’s crucial to do as much research as possible in a multitude of areas to ensure you’re as prepared as possible to launch a successful entry with minimal risk.

When entering an international market, market research is no less important. In fact, it may be even more important, as the stakes are higher and you’ll be facing entirely new market conditions.

A question we often hear is, “why is it important for marketers to research the competition?” This article will examine international market research, how it typically differs from what you’re used to in your domestic market, and some of the main reasons why companies need to do it.

What is international market research?

International market research is a blanket term for all the research and preparation you do on a new market, usually before entering it. Unlike domestic market research, international market research is focused on an overseas market, often with completely different cultures, business conditions and consumer behaviors.

There are many different methods and stages involved in international market research. In many cases, the individual methods and techniques are the same as domestic market research, but your overall strategy will likely be very different.

What are the objectives of international marketing research?

International market research is a way of understanding a new, overseas market before you launch a product or service there. The main objectives are to understand your target customers, identify any challenges, get familiar with your competitors, and anything else that will boost your chances of success and avoid unpleasant surprises.

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How is international market research different from domestic research?

There are several key differentiating factors between domestic market research and international market research. Here are some of the key differences:

You’re entering a market with social and cultural differences

Domestic market research is already difficult, but the often vast differences between your home country and your target country make international market research much more challenging in many ways.

Often, the reasons for this difficulty are the exact same reasons why you need to do the research in the first place — you need to learn as much as possible about a region and culture that may be entirely unlike your own. 

The differences between countries can create many challenges for researchers. For example, a research method like one-on-one interviews that works extremely well in western countries like the UK and US may fail miserably in other parts of the world where it is treated with suspicion.

There may be more restrictions around research

In addition to cultural and social differences, international markets also come with legal differences. While you might have a good understanding of how the law (as it relates to market research) works at home, the reality abroad may be very different.

This means you’ll need to be aware of an entirely new set of rules in order to avoid breaking them and ending up in legal trouble. One example is the USA’s TCPA, which forbids calling a cellphone using an automated dialing system.

Legal differences make it imperative to conduct legal research and coordinate with lawyers in your target market before beginning any research. Ending up on the wrong side of the law could be catastrophic.

It requires much more investment

Market research on your home soil can often be done relatively cheaply. When doing the same research abroad, however, costs can quickly skyrocket. Seemingly simple things like hiring venues, running telephone interviews, and gathering people to interview can become exponentially more complicated when you’re doing it in a foreign country with people who speak another language.

You may find yourself needing to hire a small army of staff on the ground to help you carry out these tasks. To make things even more frustrating, the cheaper market research methods like email and online surveys don’t work nearly as well in developing countries with less widespread internet access.

8 reasons why companies need to research their international markets

Despite the additional challenges involved, international market research is simply unavoidable if entering a new market overseas. Here are some of the reasons why.

1. Differences in culture

The culture of your overseas target market may be similar to yours, but it could also be completely different. Failing to adequately research the culture of your target market could result in serious blunders, which could seriously harm your market entry and brand reputation.

Cultural differences don’t have to be vast in order to cause major problems. For example, in many African countries containers are labeled with a picture of their contents. When baby nutrition company Gerber entered this market with their jars labeled with photos of babies, the reaction was understandably negative and seriously impacted sales.

2. Differences in laws and regulations

Laws and regulations don’t just have an impact on your market research methods. They can affect every part of your market entry process and how you conduct your business in your new market.

If you enter a new market without a comprehensive understanding of the law and its relation to your activities, you risk ending up in legal trouble.

There are many different potential legal pitfalls to consider when entering a new market. Some examples are environmental regulations, tax laws, and laws that pertain to hiring new staff. On top of this, rules can change quickly, and what was completely legal five years ago might be a huge no-go today. This is one area where one-off research isn’t enough — you’ll have to conduct regular and ongoing research and work with legal experts in your target market.

3. Differences in customer preferences

Customers in one country may have completely different preferences to those in another. This can be due to the cultural issues mentioned earlier, but it can also result from other factors.

When China began allowing its citizens to buy and own homes a few decades ago, US DIY chain Home Depot quickly capitalised on this new opportunity. Six years later, they closed all their Chinese stores, never to return.

The reason — they opened all their stores in the suburbs, but most middle-class Chinese citizens tend to live in apartment blocks in the cities, homes that don’t require or allow much renovation. This simple misunderstanding due to incomplete research led to the complete failure of Home Depot’s market entry attempt.

4. Understand competition

When you enter a new market, you’ll need to compete with the brands that are already there. This is not easy — you’re already at a significant disadvantage compared to companies who have been established in that region for a long time and are well-known to the local consumers.

It’s essential to understand who you are competing against, and — more importantly — how they have been able to succeed. What exactly is it that customers like about your competitors? What keeps them coming back? What has allowed them to gain and maintain a hold in your target market?

Answering these questions through research will give you valuable direction on what your brand has to do to succeed. It will also highlight weaknesses in your competitors that you can address in your marketing.

5. Mitigate risk

Entering any new market is a risky venture, and that risk increases when you expand abroad. According to research by the Harvard Business Review, companies operating abroad faced far lower Return on Assets compared to those in domestic markets. Many of these companies do not survive the attempt.

Market research allows you to mitigate your risk by being as prepared as possible for the myriad challenges involved in entering a foreign market. You’ll better understand your customers and what they want, be more prepared to take on your competition, avoid legal issues, and have a more viable strategy. Entering a new market overseas will never be risk-free, but research allows you to minimise that risk.

6. Logistical challenges

The logistical challenges involved in entering a foreign market can be enormous. You’ll need to do things like select and evaluate suppliers, hire new staff, find appropriate premises, learn about payment procedures and financial infrastructure, find ways to transport your products around your new market, comply with import and export regulations, and much more.

When entering a market in the developing world, these challenges become compounded. Regions without well-established transport infrastructure, financial systems, labour laws, government, and so on can create an endless series of logistical challenges.

To prepare for this, you’ll need to research your new market rigorously. Understand all the potential issues facing you so you have time to prepare and aren’t caught unawares by a problem that might set back your operations by a significant amount.

7. Prepare a solid strategy and budget

A well-established strategy and budget plan is an essential starting point for any market entry process. The only way to do this effectively is through diligent market research.

Market research allows you to understand the costs of your new market, including unexpected costs. It also helps you anticipate obstacles and challenges, and flesh out your strategy in a way that boosts your chances of success.

Suppose you need to win the support of high-level stakeholders in your organisation. In that case, a well-prepared and financed strategy is an excellent way to convince them that your market entry attempt is well-placed to go ahead.

8. Find available marketing channels

Marketing your product in a foreign market comes with a unique set of challenges and considerations. Channels that work well in your home country may fail abroad — for example, digital marketing in a country with poor internet access.

On top of that, your messaging will need to take into account all the cultural and linguistic characteristics of your target market. An advertising campaign that works well at home may very well perform terribly on the other side of the world.

Market research is a great way to identify the marketing channels and approaches that typically work well for similar products in your target market, helping you plan an effective marketing strategy and boost your chances of success from the start.

Market research is an essential and unavoidable task if you want to enter a foreign market successfully. Done right, it can help reduce the many risks involved and give your product the best possible chances of succeeding in a market that may be radically different from the ones you currently operate in.

Contact Kadence to learn more about how we can help you with international market research, along with all other kinds.