JOURNAL of INTERNATIONAL MARKETING and MARKETING RESEARCH EUROPEAN MARKETING ASSOCIATION Vol. 21 No. 3 October 1996 CONTENTS COMMISSION INTERNATIONALE DE MARKETING Marketing in Islamic Countries: Iran's Case Study ........................ by Ali Sanaie & B. Ranjbarian Unveiling the Marketing Scene i n Saudi Arabia From Sellers' to Buyers' Conditions Dr. L. C. Leonidou ................................. Marketing Research i n Vietnam ..................... by Tran Dang V u & Dr. M . Speece Journal of International Selling & Sales Management ................................. Contents: Vols 1 & 2 European College of Marketing & Marketing Research ......... Foundation Course i n Industrial Marketing Research ............ Editorial Office: 18 St. Peters Steps Brixham Devon England Book Reviews: The Marketing Planning Workbook The Export Pocketbook ..... Index to Volumes 1 - 21 Published: February, June & October Annual Subscription: Sfr. 135 (£65) (USS110) @ Copyright European M a r k e t i n g A s s o c i a t i o n 1996 ; ? JlMMR Vol. 21 No. 3 1 15 123 145 122 162 164 ........................ ......................... 166 166 .............................. 167 M A R K E T I N G RESEARCH I N V I E T N A M Tran Dang V u & Dr. Mark Speece Abstract Vietnam has attracted a large amount of foreign investment in recent years, and even more foreign products are imported. Foreign companies operating i n this rapidly developing market have a huge need for reliable marketing information, and the marketing research industry has taken off since 1992. There are only a few full-service type research suppliers, all foreign, but there are over 30 suppliers of various specialized services. Many suppliers are local, with some of their own clients, but also subcontracting with foreign research suppliers for local fieldwork. To local companies, marketing research usually means simply calling up connections and asking them for their opinion, or talking to one's distributors. They use such information for background knowledge, not for decisions about marketing. Foreign companies are leading the development of demand for modern marketing research. They conduct or commission modern marketing research projects, and they use the results to help them decide how to structure their marketing activities. On both the supply and demand side then, the rapid growth of the marketing research industry is currently being driven by foreign companies. However, some local companies are learning fast, and certainly all of the local employees in foreign and joint venture companies have absorbed the concepts of using and doing modern marketing research. The industry looks set to continue its rapid growth and broaden its base i n the years immediately ahead. Introduction Marketing research is a very pervasive activity i n most economies where free markets and an active private sector prevail. Although the majority of marketing research spending is still i n the developed world (North America, Europe and Japan), it is becoming common even i n developing countries such as the dynamic Southeast Asia region. In these areas, it is often the multinational corporations bringing i n international brands who spur the growth of the marketing research industry. Many local managers i n developing countries refuse to accept marketing research as a useful management tool (Kindra 1985). Vietnam is a case in point. Local companies i n this newly reforming socialist economy are not familiar w i t h competing i n an uncontrolled market, and are not accustomed to the use of information about the market to gain competitive edge. They do, of course, gather much information about things such as product movement and channel operations. However, conspicuously absent JlMMR Vol. 21 No. 3 from traditional market intelligence i n Vietnam is any attempt to get information from consumers. In the relatively young marketing research industry in Vietnam, modern marketing research services are used almost exclusively by foreign-Vietnamese joint ventures, or by the foreign multinationals directly. Many local companies say they use marketing research. but close examination reveals that they have somewhat different conceptions about exactly what marketing research is than do the foreign companies. I n fact, Vietnam is characterized by almost total lack of any reliable data on nearly any aspect of doing business. Local companies i n the past simply followed orders i n implementing the state plan, so they did not care whether they had information or not. Foreign companies, used to having information upon which to base decisions, have used marketing research quite a lot to try to fill the many gaps i n their information. As foreign investment has grown rapidly i n Vietnam over the past several years, the marketing research industry has grown also. However, there is still a huge gap between foreign and local companies i n how marketing research is perceived and used. Business Environment In 1989, about the only foreign invested projects were i n tourist services (especially hotels), plus a few oil and gas projects. Since then, foreign investment has increased sharply, as foreign companies have been attracted to annual growth rates of over 8% since 1992. In 1992, 203 projects were contracted, for a total of US$ 2.66 billion. In 1995, a total of US$ 6.68 billion was committed for 41 1 projects. Cumulative investment committed by March 1996 stood at US$ 19.3 billion in, nearly 1400 projects. About one-third of this approved investment is in Hochiminh City, and another 21% is in Hanoi. Of course. some investment seeks to use Vietnam's low labor costs to produce for export and is not oriented toward the local market. However, much investment i n consumer industries is for the local market, and this investment began to rise rapidly about 1991. In additions, many consumer products companies simply export to Vietnam, and do not yet manufacture there. Imports have risen from about US$ 2.34 billion i n 1991 to US$ 7.5 billion i n 1995. Again, not all imports are consumer products. but the trends follow the overall patterns. However they enter Vietnam, many foreign brands are selling well as consumer spending is booming (VET March 1996a; VET April, 1996a. 1996b). The Consumer Market US$ 150 per month when unofficial sources of income are counted, and about 16% may make US$ 300, or annual incomes of over US$ 3600. Perhaps onethird of the population in cities such as Hanoi or Cantho have monthly incomes over US$ 150 (VET April 1996a). Thlr boomlng consumer market of up to 20 million has shown strong preference for foreign brands, and i t is developing a high degree of quality consclousners. Companier Fannot compete purely on price and hope to attract Vietnam's modern urban consumer; rather, they must position their products based on superior attributes and image. While Hanoi consumers have somewhat less money than those i n HCMC, some observers believe that many of them are even more oriented toward conspicuous consumption to show off that they have high spending power. Many companies also have a long term strategy of building strong brand images now, even though the market is still relatively small. They expect the market to become large quickly (Shultz, Ardrey & Pecotich 1995; VET 1996a). Infrastructure Support for Marketing Research lnfrastructure to suport marketing research is rudimentary i n Vietnam. There are no lists of residents to work from, so random sampling must be done doorto-door, using some version of geographic sampling. Telephones are rare; the government development plans hope to reach a telephone density of 3% by the year 2000. Hochiminh City officials were aiming at 3.77% i n 1995, and want 8.8% by 2000. Although mobile phones will speed up telephone penetration, they are currently too expensive to make a major impact on overall access to telephones. Clearly, some common forms of interviewing and sampling are simply not feaslbie i n Vietnam, even i n the major cities. Most products move through small traditional retail outlets, and distribution channels consist of small traditional wholesalers. All of these channel members move relatively small volumes (Ha 1995; Hoang 1996; Nguyen 1995). This makes the widespread adoption of modern technology in marketing channels unlikely. A few scanner systems have been tried, but most observers estimate that there will not be much use of retail scanners and bar code technology until at leaat the year 2000. Similarly, computers are beginning to become common in Vietnam (Nguyen 1995; VT 1995; VBJ April 1996), but they are not used much yet in retailing or marketing channels. Marketing research will not find scanners and computer systems to support collection of primary data. Vietnam has a population of about 7 4 million, an average annual per capita income around only US$ 225, and about 77% of the population lives i n rural areas. While these statistics may not look promising for consumer products companies, the consumer market is actually growing rapidly. It is focused on the cities, i n particular Hochiminh City, and to some extent. Hanoi and several other regional cities. One estimate places annual per capita incomes in HCMC at up to US$ 1200. Over half of the population i n HCMC probably makes over However, the government and some private companies are currently investigating use of computer networks, including the internet, to link secondary data sources and provide better access to Gecondary data. Private providers keep a low profile, since free-flowing information tends to make the government uneasy. The government is, howbver, pushing a plan to develop the IT industry in Vietnam, and some observers expect a nationwide network to be operational by the end of the century. This would have a major impact on many marketing research activities. 146 JlMMR Vol. 21 No. 3 JlMMR Vol. 2 1 No. 3 147 Marketing Research Suppliers i n Vietnam Though there are no definitive figures, veterans i n Vietnam's marketing research industry estimate that it has been growing at an annual rate of over 40% since 1993. In 1990, there were only five agencies offering marketing research services, by 1995 there were about thirty. This rapid growth is expected to remain very strong through the end of this century. Among the establishments offering marketing research services, only a small number of foreign agencies currently offer a full range of services. These are referred to as General Research Agencies (GAS)below. The rest, including some foreign firms and all local research agencies provide only some types of research services, and are referred to as Specialized Research Agencies (SAs) below. These include Government agencies and institutes, universities/colleges, consulting firms, advertising agencies. Foreign Research Suppliers Most of the foreign agencies, both GAS and SAs, followed their international clients into Vietnam as foreign investment rose during the 1990s. Industry insiders estimate that about 90% of formal marketing research is conducted by GAS. There are four main general research agencies who were fairly active by early 1995: Acorn, Frank Small. MBL and SRG Vietnam. They have been active since the early 1990s, and it was usually the Hong Kong or Bangkok office which led movement into Vietnam. Until 1995, fieldwork was usually conducted in cooperation with a local agency, and the data was sent back to the foreign office for processing, analysis and reporting. Formally, foreign research agencies (like advertising agencies) are only allowed to operate representative offices, but not actually conduct business i n .Vietnam. There are no joint ventures or wholly owned foreign operations. However, with a representative office, foreign agencies are, in practice, beginning to do more of the work in Vietnam, though they still rely on local cooperation (subcontracting) for fieldwork. SRG Vietnam, MBL and Acorn, which probably have the biggest shares of the marketing research market, were granted government approval for representative offices located i n Hochiminh City in 1995. Frank Small, though it has also been fairly active, has been somewhat slower to move toward a formal presence. Foreign companies in the specialized agencies category include advertising agencies, where specific departments offer advertising research as well as consumer behavior and attitude studies mainly focused on advertising related issues. The main agencies include Bates Vietnam, McCann Erickson, Ogilvy & Mather, FCB, J. Walter Thompson, Leo Brunet, D&YB. As with research agencies, foreign advertising agencies can only open representative offices (To 1996). Bates Worldwide became the first multinational advertising agency to open a representative office i n Vietnam, and the Ministry of Commerce quickly issued three more licenses to Ogilvy & Mather, McCann Erickson and Prakit FCB. 148 JlMMR Vol. 21 No. 3 I i Formally, as with research agencies, no advertising agency can conduct business in Vietnam, but they usually get around this through cooperation with local agencies, both i n advertising and i n their research operations. Recently, however, ad agencies have faced considerable restriction on their operations during the campaign against cultural pollution (FEER June 6, 1996; VET March 1996b), which may have weakened their research competitiveness relative to foreign GAS. (Marketing research companies are regulated by the Ministry of Trade. Advertising agencies fall under the regulation of the Ministry of Culture and Information, which is usually more conservative.) Finally, a small amount of marketing research is conducted by foreign consulting firms. Local Research Suppliers There is a wide range of local research suppliers in Vietnam, but most of them do not provide much primary research. Largely, they provide secondary data based on statistics from some government department. This can be valuable background information (keeping in mind the level of reliability of government statistical data in Vietnam), but it will usually not address specific issues of interest to a foreign company. Table 1 is not a complete list, but it does give an idea of the range of local suppliers and include most of the major suppliers. As among foreign research suppliers, some local SAs are actually advertising agencies or consulting firms which also do some marketing research. They do provide some primary research, mostly on advertising issues. There are also many local consulting firms which claim to provide research, Usually this research is actually data on building connections with key people in government and industry. This is very important for getting things done in Vietnam, but it is hot really marketing research in the sense that most foreign companies would use it. Government agencies and institutes are very important sources of information i n Vietnam, as are universities and colleges. However, most of them supply secondary data, but do not conduct much primary research. The Department of Statistics, College of Marketing and CESAIS are the main exceptions which often carry out projects to gather primary data. The Department of Statistics end CESAIS era about the only local suppliers capable of mounting nationwide consumer surveys. CESAIS and the College of Marketing can carry out customized local research projects quite well. Local suppliers face a general perception that the quality of their work is not as good as that of the foreign suppliers. Often, but not always, this is true. At any rate, they often compete on price to overcome the (perceived) quality differential. It is likely that some universities will get mote involved i n primary marketing research i n the near future, since the business faculty is being rapidly upgraded. For example, the Asian Institute of Technology i n Bangkok operates a major program to train Vietnamese business faculty. By 1996, 5 0 had already JlMMR Vol. 21 No. 3 149 graduated and returned to their universities i n Vietnam. In early 1997, another 25 w i l l graduate. Many of these have focused o n marketing and marketing research. Currently, the largest concentration of these M B A s w h o get involved i n marketing research are at CESAIS, which is a business subsidiary of the HCMC University of Economics. Research Capabilities Industry insiders estimate that multinational clients, usually i n consumer products, accounted for about 95% of total demand for formal marketing research. Approximately 60% of t h e total expenditure is probably directed to consumer and market studies. Within the consumer research field, the studies on fast moving goods are most prominent, followed by advertising and media surveys. More than half of expenditure is devoted t o customized research rather than continuous or syndicated. Perhaps 40% of studies are quantitative i n nature, 55% is qualitative research, and 5% is desk research. These figures, of course, do not include informal research (or even a small amount of formal studies) conducted in-house by companies operating i n Vietnam. the number of interviewers can mount to 1 0 0 or more. I n some large-scale fieldwork, a project may have 5 0 interviewers i n Hochiminh City, 3 0 i n Hanoi and 1 0 each i n several other small cities. The agencies usually keep a pool of interviewers o n the books w h i c h i s much larger than the number they w i l l likely need at one time. Some part-time interviewers do not always want t o work at the time the project Is needed. I Facilities and Scope of Operations Foreign GAS w i t h licensed representative offices have relatively good facilities. These include sufficient office space, computer networks of 6 t o 1 0 workstations, and focus group rooms w i t h one-way mirrors end recording systems. Specialized hardware and software also help individual GAS differentiate themselves from each other. Most local SAs have relatively poor facilities for marketing research. Often marketing research services are supplementary to their main work. Thus, they do not know techniques well, or do not want t o invest much. They only have a f e w regular and occasional clients; in fact, much of their marketing research work is fieldwork subcontracted from the GAS. A f e w are mastering marketing research techniques through this association w i t h GAS, and a f e w are beginning to invest i n better facilities. So far, though, their client base is usually too small for the investment to be adequately paid back. Personnel Officially, foreign GAS have relatively small staffs, due t o regulations on numbers of employees and compensation. Usually around 4 to 5 people are on the staff, including 2 to 3 foreigners or overseas Vietnamese. Informally, several other foreigners and overseas Vietnamese are usually associated w i t h the offices, though formally they may be attached t o offices i n other countries of t h e region. These people, official and otherwise, form the core of the Vietnam offices, and act as project managers, i n charge of data analysis, report writing and presentation, and management of part-time staff. Supervisors, quality control and data processing personnel, and interviewers are usually part-time staff w i t h graduate certificate or lower. Foreign advertising and consulting firms organize their marketing research division similarly t o the GAS. I n local SAs, there is also usually one division responsible for marketing research services. The size of the division varies from 5 to 5 0 full-time employees. Government agencies and institutes have relatively small divisions ( i n terms of full time employees), responsible for marketing research. A f e w universities have major operations w i t h up to 5 0 full time employees. I n all of these local research suppliers, senior officers function as project managers. They are usually university graduates, sometimes w i t h specialized training relevant to research operations. In big SAs, supervisors, quality control and data processing personnel are also full time staff. Many of t h e m also have university degrees or some other form of certification. There are no foreigners i n these agencies. Hochiminh City (Saigon) i n the south, w i t h its population of over six million and its booming economy, is usually considered the top priority by clients, as well as by agencies operating i n Vietnam. This is where the main offices of most clients are located, as w e l l as most representative offices of research and advertising agencies. Hanoi, t h e capital w i t h a population approaching four million, is considered the key location i n the North. These t w o cities contain the majority of purchasing power in Vietnam, and usually set the trends for the rest of the country. Several other cities are considered second priority if nationwide research is needed. These include Haiphong (north), Danang, Hue, Nhatran (central) and Cantho, Long-an (south). 1 I 1 ' The foreign GAS can cover the whole country, but usually only do their o w n field work i n Hochiminh City. Elsewhere, they subcontract to local agencies. I n practice, only rarely is a study so wide i n scope that any but the t w o largest cities would be included. Aside from the fact that most of the market for most foreign goods i s concentrated in the t w o main cities, f e w local agencies have nationwide capabilities. Furthermore, the level of professionalism among local subcontractors declines substantially outside Hochiminh City and Hanoi. The Department of Statistics, CESAIS end, sometimes, the College of Marketing are about the only local agencies able t o conduct fairly professional fieldwork o n a nationwide level. In all types of research, supplier interviewers are usually recruited from highschools, universities or free-lance (such as housewives) and are part-time staff. Depending on the area-coverage, sample size and required time of fieldwork, 150 JlMMR Vol. 21 No. 3 JlMMR Val. 21 No. 3 Use o f Merketing Research Our overview of h o w marketing research is used currently i n Vietnam comes from in-depth interviews w i t h 4 0 companies operating i n HoChiMinh City, which i s the economic powerhouse of Vietnam's rapidly growing economy. O f these, 2 0 were medium and large size local companies. The other 2 0 were foreign invested comapnies, consisting of joint ventures, branch or representative offices, and wholly owned subsidiaries of foreign multinational corporations. They were chosen from the city directory of business, based on judgement that they are very active i n the local consumer market. W e interviewed marketing managers and marketing research managers w h e n these positions existed. Otherwise, the interviews were w i t h general managers or similar positions. The Role of Merketing Research in the Company The placement of marketing research w i t h i n t h e company is itself one indication of marketing research's status i n local vs. foreign companies. I n 80% of the local companies interviewed, marketing research responsibilities fell under a general business department. Only 20% of local companies had sufficient specialisation of function to allocate marketing research to a marketing department. Companies w i t h foreign involvement showed m u c h more specialisation. Only 40% of them placed marketing research under a general business department. Another 35% put it under the marketing department. One quarter of them had their o w n marketing research departments which handled marketing research duties. However, these marketing research departments were i n t h e parent multinational corporations, not i n foreign-Vietnamese joint ventures. Local managers are often not used to marketing research. M a n y of them do not consider marketing research a strategic tool for their marketing and business decisions. Because of this, marketing research i s less likely t o have consistent direct access to top levels of management than i n companies w i t h foreign participation. I n local companies, marketing research sometimes reported directly to the general manager i n 8 0 % of the companies. However, it 81so often reported to lower level company officials i n three-fourths of t h e local companies. In t h e joint ventures, representative offices, and foreign subsidiaries, marketing research reported directly to the general manager i n 90% of companies, and only rarely to lower positions. about it. Also, as noted below, many local managers have perceptions of marketing research w h i c h ere very different from h o w modern marketing research i s actually practiced. Most Common Merketing Reseerch Methods Among survey methods, three-fourths of each local and foreign participation companies said that they use door-to-door interviews. 60% of local respondents said they use telephone interviews, and 40% reported using mail surveys. Foreign participation companies trust these methods much less; only 35% use telephone interviewing, and only 15% use mail. They do not trust t h e ability of these t w o methods t o get reliable data very much, because of t h e infrastructure deficiencies noted above. O n t h e surface, i t might appear that local companies have more trust i n them. However, i n depth discussion w i t h local managers revealed that their telephone and mail techniques are not really modern survey research methodology. For example, local managers very commonly call u p someone such as colleagues, clients or agents and discuss t h e market situation informally. This i s a "telephone interview" to them. Similarly, a n exchange of letters about some market aspect i s a "mail interview". I n fact, door-to-door personal interviews are sometimes m u c h the same thing. Modern quantitative survey methods do not seem to have penetrated into local firms t o any great extent. The international firms, however, were clearly talking about quantitative survey research w h e n they discussed using these methods. In-depth and focus group interviews, t h e main qualitative methods, are each used by about half of t h e foreign participation companies. To the foreign participation respondents, in-depth interviews or focus groups are used to explore qualitative aspects of marketing problems and to develop deeper understanding. Then, building o n the ideas developed through these methods, quantitative surveys and/or observation is used t o gain a broader, quantitative, overview of t h e problem. Few of t h e local firms use focus groups, while threefourths use in-depth interviewing. However, w h e n asked to describe the qualitative methods they use, most local respondents were not talking about t h e probing, guiding, in-depth interviewing techniques of modern qualitative research. Vietnemese Style Merketing Research Commitment of management to the results of marketing research is strikingly different. Nearly all managers i n companies w i t h foreign participation reported using results i n their decision-making. Only 40% of local managers said that they consider marketing research results i n making specific decisions. To most local managers, marketing research is simply for background information. Partly, this is because they do not trust t h e information, considering marketing research results to be biased and unreliable. They do not believe that someone (a marketing researcher) w h o is not i n the business can possibly know anything Of course, local managers w a n t accurate and useful information about their markets as m u c h as foreign companies, but they go about it differently. Local executives p u t much more faith i n information from wholesalers and retailers, and they may track w h a t i s happening among channel members o n a monthly, weekly and sometimes daily basis. Local managers pointed out that they can get any information they w a n t by visiting wholesalers and retailers w h o carry their products. Therefore, it i s not necessary to conduct much marketing research w i t h t h e techniques considered common i n modern practice. Few 152 JlMMR Vol. 21 No. 3 JlMMR Vol. 21 No. 3 local managers employ consumer surveys or other quantitative research tools. Usually, general managers solicit ideas from business department or marketing department heads. These officials are used to gather data or market signals f r o m employees, clients, agents, friends and connections. I n addition, some marketing information i s collected by salespeople. Both "qualitative" and "quantitative" research to local managers refers primarily to this channels research. Vietnamese style market research relies heavily on "qualitative" data obtained through visits to dealers and other channel members. It also makes heavy use of "quantitative" data about shipments, inventory levels, distribution coverage, retail sales and turnover rates. This also comes from channel members, as well as from special relationships w i t h officials i n customs, ports and even competing firms. This approach appears to lack the methodological rigor of modern market research, and it certainly leaves local managers w i t h a more superficial understanding of consumer buying behavior than many of their foreign competitors have. O n the other hand, the Vietnamese approach allows a more detailed knowledge of channel structure and relationships, as well as product movement. Furthermore, frequent visits for gathering information contribute to building long-term channel relationships, w h i c h is also a n important competitive advantage. Frequent visits help manufacturers address problems i n channels before they escalate and damage sales or relationships. Both foreign and local firms make use of secondary sources also. I n fact, 60% of local clients preferred to use secondary research, but the ratio was reversed for foreign companies, w i t h more preferring to get primary data. Secondary research is not quite as simple as i n more developed countries. A s noted above, there are not many highly reliable secondary sources. The local press i s an important source of information, especially for local managers. It is usually well informed about government policy (because much of it is close to the government), w h i c h is important i n a country where the government can intervene i n business activities at any time and can shift policy daily. Some large foreign operations among our respondents have set u p systematic scanning of the local press and a n organized documetation system, to keep track of every bit of market and trade information, as well as current government policy. Over half of the foreign participation firms also purchase syndicated research, but f e w local firms do. Use of Research Suppliers The majority of both local and foreign participation firms cited needs for a wide variety of types of research. However, local firms generally regarded research o n aspects of product as most important. Comparative testing against competing products, testing for acceptance and improvement, analyzing market potential for existing or n e w products are some of the most common answers mentioned related to product. These kinds of things become very important where firms develop and introduce products first, then find out later if 154 JlMMR Vol. 21 No. 3 customers w a n t them. Concept testing and screening n e w product ideas, brand and packaging tests, and testing preferences for features were not mentioned as often. Among foreign firms, the most important types of research were more focused on issues associated w i t h consumer behavior and markets and competition (Table 2). 1 1 1 Pricing research w a s rarely considered to be of critical importance among local firms. Partly, this i s because pricing had little to do w i t h actual market conditions i n the traditional state economy. Partly it is because many local managers a priori assume that all customers are price conscious, so pricing is just a matter of matching or undercutting competitors. Promotion was not ranked as top importance by very many foreign firms. Here, they sometimes seem to be a little bit overconfident that they know h o w to communicate to Vietnamese consumers because they have experience i n other Southeast Asian countries. But much of this l o w rating reflects the fact that they are likely to rely upon their advertising agency to worry about whether advertising research is needed. Criteria for Choosing Outside Research Suppliers Despite the fact that most respondents, local and foreign, cited very broad needs for research, much data gathering is done i n house. Among local companies, only 15% said that they had hired outside agencies t o do the work. 60% of foreign participation companies had gone outside. (These figures do not include purchase of syndicated research from research suppliers.) However, most local and foreign companies said they would consider hiring outside research suppliers i n the future, even if they had not yet done so. Foreign participation firms have a somewhat broader range of important concerns w h e n choosing a marketing research supplier, as might be expected given their greater experience i n using outside suppliers. For both local and foreign firms, technical expertise w a s a top criteria. However, it stands well above other criteria for local companies, but is one of several important criteria for the foreign firms. They also frequently look for high-caliber executives i n the research supplier, especially the executives w h o will oversee their project. Foreign firms often consider long-term competitive price. It seems that local companies do not really consider marketing research as a consistent. recurring activity, so this is not much of a n issue to them. Among local firms, experience i n the research buyer's industry, accuracy of information, nationwide coverage. product knowledge and consulting advice along w i t h research results also are, or would be, important criteria. The consulting advice w a s needed particularly because they are not very used to using research results to aid i n decision making, and wanted some guidance o n h o w to do this. Only a f e w other criteria receive any mention. Foreign companies often wanted to see a n established reputation i n marketing research. similarly they wanted accurate information, experience i n the JlMMR Vol. 21 No. 3 projects among foreign firms, who are more likely to commission projects. The press (20%) and sales materials (20%) such as brochures also played a role. Foreign companies mentioned that some local research suppliers make sales calls. though this was not usually the means by which the foreign company first became aware of the supplier. Some foreign companies use these sales calls to identify local suppliers who can do some of the very standard types of research at a lower cost. They would then rely on their foreign research supplier mainly for more exacting or more specialized research. industry, and product knowledge. Some of them were also concerned about interviewing skills. Foreign companies had a much wider set of criteria that were also occasionally mentioned as most important (Table 3). Most of the criteria listed in Table 3 were mentioned by many firms, even though they may not have ranked them among the top i n importance. Types of Supplier There was a difference of opinion between local and foreign firms about choosing a specialized vs. a general research supplier. 80% of local firms interviewed preferred specialized firms, those which provided only very specific research i n a particular industry. However. 55% of foreign participation firms would rather work with general agencies, ones which could provide a wide range of types of research and services. Half of local firms said that they would rather hire a local research agency, the others would rather use a foreign agency. Only 30% of foreign participation firms would choose a local agency most of the time. Most of those who were skeptical of local agencies said that the local agencies do not seem very experienced i n marketing research, or lack technical expertise. The major reason cited for wanting to use local agencies was for situations when local knowledge was very important. However, lower price quotations for projects was also a factor among some. Local firms are most likely to choose a marketing research agency (55%) or an academic institute as a marketing research supplier (40%). They rarely mentioned using advertising firms, government departments, or press and press agencies to conduct research. Foreign firms had broader choice of suppliers. Marketing research agencies were most often mentioned as a major source (65%), but half also would use the research capabilities of advertising firms. 40% use government departments and information centres, and 35% hire or would hire the press and press agencies to collect data. However, few foreign firms mentioned using universities or academic institutes. I 1 1 I i Knowledge and Decision about Research Suppliers Respondents became aware of marketing research suppliers through a variety of means. Most common, among both local and foreign participation firms. is word-of-mouth, which is how about half of each learn of research suppliers. Among the local firms i n the sample, the press was also a major source of information (35%). and sales calls by research suppliers (25%) and government authorities (20%) were also cited by some. Government authorities usually meant that local suppliers had sufficiently good connections that government officials would introduce the supplier to local firms. Among foreign companies, i n addition to word-of-mouth, prior relationships with the research supplier i n other countries was often a source of awareness (35%). Thus, multinational research suppliers have an advantage in soliciting JlMMR Vol. 2 1 No. 3 1 A wareness of Individual Suppliers Local companies are not very well informed about the availability of marketing research services. More than half of local respondents even claimed that there are no companies i n Vietnam which provide marketing research services. Most do not know anything about the foreign agencies i n the market. Only 20% had heard of SRG Vietnam, which is probably the best known foreign marketing research supplier, and they had not heard of any of the other foreign companies. HoirJever, some local companies did know of some foreign consulting companies. Among local suppliers, Hochiminh City University of Economics, the Department of Statistics and Youth Advertising House were known to nearly everyone. The Institute of Economics, VINAXAD, Saigon Advertising Company, Saigon Information, Exhibition & Advertising Centre, and College of Marketing also had quite high levels of awareness. However. not all of the companies who were aware of these organizations know that they offer some type of marketing research service. Usually. local companies go to most of these organizations for some other kind of service, though Hochiminh City University of Economics and the Department of Statistics are considered important sources of secondary data. In contrast to local clients, foreign clients seem to be more aware of foreign and equally aware of local suppliers. Awareness of Frank Small and MBL was still quite low, but Frank Small did not actually have a permanent office incountry at the time of research, and MBL was quite new know about almost all agencies. Foreign companies often have some type of contact w i t h a variety of agencies across ell categories of research supplier. Contact with many local agencies is often indirect, coming through subcontracts to the local agency by the foreign company's research supplier. Nevertheless, awareness levels of key government institutes and universities is as high as among local companies. And foreign participant companies are more likely to k n ~ w ~ s ~ e c i f i c about ally what kinds of marketing research services these organizations offer. Decision Makers and Influences I n local companies, the general manager nearly always makes final decisions on use of marketing research, even though, as noted above, marketing research JlMMR Vol. 2 1 No. 3 157 Universities and Colleges College of Marketing University of Economics University of Hochiminh City Consulting Firms FlSC IMC INVESTCONSULT References University of Technology University of Finance and Accounting INVESCOM Investment Consultancy and Industrial Property Co. I Others Center for Economic Study and Application (CESAIS) Information and Marketing Center SCANVIET Saigon Consultants Company No. 1 various free-lance individuals i 1 II TABLE 2: PERCENTAGE RATING RESEARCH TOPICS TOP I N IMPORTANCE Local Product Market €4 competition Consumer behavior Promotion Place Government regulations Price Foreign 75 Consumer behavior 45 Market & competition 40 Place 35 Price 25 Product 15 Promotion 10 Government regulations Note: Respondents could choose more than one. 75 70 40 40 35 10 0 \ ! I I i I TABLE 3: PERCENTAGE RATING SUPPLIER CHOICE CRITERIATOP I N IMPORTANCE Criteria Local Foreign Technical expertise 55 Technical expertise 4.0 Experience i n industry 30 High caliber executives 40 Accuracy of information 25 Long-term competitive price 35 Nation-wide coverage 25 Corporate reputation 30 Product knowledge 20 Accuracy of information 25 20 Experience i n industry Marketing advice 20 Quality control/monitoring 10 Product knowledge 20 Experience throughout Asia 10 Highly skilled interviewers 20 High caliber executives 5 Meet deadlines 15 Local consumer knowledge 5 Local consumer knowledge 10 Lor'ig-term competitive price 0 Famous name 10 0 Data processing capability Corporate reputation 10 0 Questionnaire design . Highly skilled interviewers 10 0 International operations Meet deadlines 10 Famous name 0 Clients are major companies 10 Data processing capability 0 Quality control/monitoring 10 Questionnaire design 0 Nation-wide coverage 5 International operations 0 Variety of research types 5 Clients are major companies 0 Anonymity and security 5 Variety of research types 0 Marketing advice 0 Anonymity and security 0 Experience throughout Asia 0 Notes: Respondents could choose more than one. .. Figures include those who use and those w h o would consider using outside research suppliers. 1 I 1 i 1 r Far Eastern Economic Review (FEER), June 6, 1996. Advertising: Get M y Censor Sensor, p. 61. Ha Ngoc Linh, (1995). Distribution and Logistics System i n Laundry and Personal Care Products: A n Exploratory Study Conducted i n Vietnam, Thailand and the Philippines. Unpublished MBA Thesis, Asian Institute of Technology, Bangkok. Thailand. April 1995. Hoang Thi Phuong Thao, (1 996). Market Conditions for Chain Members and the Buying Behavior of End Users of Oil Lubricants: The Case of the Shell Co. Unpublished M B A Thesis, Asian lnstitute of Technology, Bangkok. Thailand, April 1996. Kindra. G. S., ed., (1983). Marketing i n Developing Countries. New York: St. M a r t ~ n ' s Press. Nguyen Duc Tri, (1995). The Impact of Personal Selling, Store Service, and Sales Credit on Strengthening Relationship Between Soft Drink Retailers and their Trade Customers i n Hochiminh Citv. Vietnam. Unoublished M B A Thesis. Asian lnstitute of Technology. Bangkok. ~ h a i k n d April , 1995. Nguyen Le Tin, (1995). A n Assessment of the Computer Industry i n Vietnam. Unpublished MBA Thesis. Asian Institute of Technology, Bangkok, Thailand, April 1995. ~ i u y e \n/ a " ~ s i & M. SpebMj (i995); Markrjting Conflicts i n Joint Ventures i n Vietnam. In: ~rocO$dl'fi&s~'~@.~thu 1@fdcbrif&f#"b bfi JGiiit VBhtures i n East Asia. Hochiminh City. Decembet~l99&.%ki@&~~&i!~%~,~hiii&si~, Kellstadt Centre for Marketing Planning and bnalysis. pp. 1 :it,. ~&cotlch. (1995). American Involvement i n Vietnam, Shultz, C. J.'II,W: J. B~fiRhirf iH B Ndw Era. Business Horizons, March-April. pp. 21 Part II: P r o s ~ e c t sfor U.S. . . ,- 1 . . : . .. . , 27. To Ngoc Huong. (1996). A n ln'vestigation of Consumers' and Managers' Attitudes toward Advertising i n Vietnam. Unpublished M B A Thesis, Asian lnstitute of Technology, Bangkok, Thailand, April 1,998;,. iG r i l 1196. Technology: Finding Your Computer. pp. 24"i& . Vietnam ~ " ~ illabffi& ik??$ k!:b&i; !I ; y : p ; p $ ~ ; ~ ~ ~ : ! 26. Vietnam Ecbd6&ii March 1996a. (Cover story on investment): Over? We're Just Genlng StbhM, pp. 18-19; Policy Matters, pp. 20-21; Back to the Future, pp. 22-23. Vietnam Time$ &T), March 1996b. Defining Social Evils, pp. 24-25; For Better or Worm, p. 27. Vietnam Economic T imes (VFT), April 1996a (Cover story on consumer market): Cashing i n on Consumer Trends. pp. 16-18; Ruling the Airwaves, pp. 20-21; Hey, Big Spenderl. p. +f~&#'&m). keno+ 23. Vietnam Economic Times (VFT), April 1 9 9 6 b Foreign Investment, pp. 12-13; Favorable Investment Environment, pp. 16-17. Vietnam Today (VT). 1995, lnformation Technology Development i n Vietnam, VT 4 (6). pp. 6-10. Mr. 7ren Oeng Vu is at the Centre for Economic Studies end Applications. HoChiMinh City University of Economics. HoChiMinh City, Vietnam endDr. MerkSpeeceis at theSchoolofMenagement, Asian lnsriture of Technology, Bangkok, Theilend ~ J l M M R Vol. 21 No. 3 J l M M R Vol. 21 No. 3