Defining the Marketing Research Problem and Developing an Approach

The Marketing Research Process 1 • Defining the problem and research objectives: Helps to know what you are looking for! Can be the most difficult step in the process Need to distinguish between symptoms and problems

Defining the Problem and Objectives Process begins with the recognition of a marketing problem or opportunity: Marketing Problem: Set of circumstances in a market and/or in the company that requires modified or new marketing strategy to respond in a way that will maintain or improve performance. Market Opportunity: Set of circumstances in a market that defines a situation in which a company can improve performance by creating modified or new marketing strategy.

Step 1: Define the problem and the research objectives Marketing researcher must be careful not to define the problem too broadly or too narrowly for the marketing research.

Defining the Research Problem Problem definition is a broad statement of the general marketing research problem and identification of its specific components. This process involves the following steps:

The Problem Definition Process Tasks Involved Discussion with Decision Maker(s) Interviews with Experts Secondary Data Analysis Qualitative Research Environmental Context of the Problem Step I: Problem Definition Management Decision Problem Marketing Research Problem Step II: Approach to the Problem Analytical Model: Verbal, Graphical, Mathematical Specification of Information Needed Objective/ Theoretical Foundations Research Hypotheses Questions Step III: Research Design

Process of defining the problem Tasks Involved: Discussion with decision makers Interviews with experts Analysis of secondary data Qualitative research

Problem Definition: Task Involved 1-Discussion with decision makers: The researcher needs to understand the nature of what decision managers face-the management problem- and what they hope to learn from the research.

The Problem Audit The problem audit is a comprehensive examination of a marketing problem with the purpose of understanding its origin and nature. 1. The events that led to the decision that action is needed, or the history of the problem. 2. The alternative courses of action available to the DM. 3. The criteria that will be used to evaluate the alternative courses of action. 4. The potential actions that are likely to be suggested based on the research findings. 5. The information that is needed to answer the DM's questions. 6. The manner in which the DM will use each item of information in making the decision. 7. The corporate culture as it relates to decision making.

Problem Definition: Task Involved 2- Interviews with Industry Experts: Interviews with industry experts, individuals knowledgeable about the firm and the industry, may help formulate the marketing research problem. They can be found inside or outside the firm.

Problem Definition: Task Involved 3- Secondary data analysis: Secondary data are data collected for some purpose other than the problem in hand. They include information made available by business and government sources, commercial marketing research firms and computerized databases. Analysis of available secondary data is an essential step in the problem definition process

Problem Definition: Task Involved 4- Qualitative research It is an unstructured, exploratory research methodology based on small samples intended to provide insight and understanding of the problem setting and may utilize popular qualitative techniques such as focus groups and depth interviews.

Management decision problem and marketing research problem The management decision problem is action oriented. It is concerned with the possible actions the decision-maker can take. How should the loss of market share be arrested? Should the market be segmented differently? Should a new product be introduced?

Management decision problem and marketing research problem The marketing research problem is information oriented. It involves determining what information is needed and how that information can be obtained effectively and efficiently. for example, the loss of market share for a particular product line. The management decision problem is how to recover this loss. Alternative courses of action include: modifying existing products introducing new products changing other elements in the marketing mix.

Management decision problem and marketing research problem Suppose the decision-maker and the researcher believe that the problem is caused by inappropriate segmentation of the market and wanted research to provide information on this issue. The research problem would then become the identification and evaluation of an alternative basis for segmenting the market.

Management Decision Problem Versus the Marketing Research Problem Asks what the decision maker needs to do Asks what information is needed and how it should be obtained Action oriented Information oriented Focuses on symptoms Focuses on the underlying causes

Management Decision Problem Vs. Marketing Research Problem Management Decision Problem Marketing Research Problem Should a new product be To determine consumer preferences Introduced in Foreign market? and purchase intentions for the proposed new product. Should the advertising To determine the effectiveness campaign be changed in foreign market? of the current advertising campaign. Should the price of the To determine the price elasticity brand be increased in Middle East? of demand and the impact on sales and profits of various levels of price changes.

Defining the marketing research problem The general rule to be followed in defining the research problem is that the definition should: Allow the researcher to obtain all the information needed to address the management decision problem Guide the researcher in proceeding with the project.

Proper Definition of the Research Problem Marketing Research Problem Broad Statement Specific Components

Developing an Approach Objective Analytical Model Research Questions Specification of the Information Needed

Models An analytical model is a set of variables and their interrelationships designed to represent, in whole or in part, some real system or process. In verbal models, the variables and their relationships are stated in prose form. Such models may be mere restatements of the main tenets of a theory.

Models Example: Verbal model: A consumer first becomes aware of a our agents. That person then gains an understanding of the product by evaluating the product in terms of the factors making up the choice criteria. Based on the evaluation, the consumer forms a degree of preference for the product. If preference is strong enough, the consumer will take a decision.

Graphical Models Graphical models are visual. They are used to isolate variables and to suggest directions of relationships but are not designed to provide numerical results. Preference Understanding/ evaluation Awareness

Mathematical Models Mathematical models explicitly specify the relationships among variables, usually in equation form. Where y = degree of preference = model parameters to be estimated statistically

Research Questions Research questions (RQs) are refined statements of the specific components of the problem.