1. Copyright © 2008 by Nelson, a division of Thomson Canada Limited DEFINING MARKETING PROBLEMS OR OPPORTUNITIES AND THE RESEARCH PROCESS Chapter 4 Part 1 Introduction to Marketing Research Process

2. LEARNING OBJECTIVES 1.To discuss the nature of decision makers’ objectives and their role in formulating the research problem or opportunity 2.To understand that proper problem or opportunity formulation is essential for effective marketing research 3.To explain the iceberg principle 4.To understand the importance of identifying key variables 5.To discuss how formulation of research questions and hypotheses clarifies problem or opportunity formulation What you will learn in this chapter Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–1

3. LEARNING OBJECTIVES (cont’d) 6.To discuss the influence of the statement of the marketing problem or opportunity on the specific research objectives 7.To state research problems in terms of clear and precise research objectives 8.To explain the purpose of the research proposal 9.To outline the research proposal What you will learn in this chapter Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–2

4. Most marketing decisions fall between the two extremes of complete certainty or absolute ambiguityMost marketing decisions fall between the two extremes of complete certainty or absolute ambiguity Ambiguity or uncertainty needs to be cleared before making a formal statement of the marketing problemAmbiguity or uncertainty needs to be cleared before making a formal statement of the marketing problem The Nature of Marketing Problems and Opportunities Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–3

5. The formal quantitative research process should not begin until the problem or the opportunity has been clearly definedThe formal quantitative research process should not begin until the problem or the opportunity has been clearly defined  Examples: R. J. Reynolds and Coca-Cola The Importance of Proper Problem or Opportunity Formulation Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–4

6. Problem or Opportunity FormulationProblem or Opportunity Formulation  The crucial first stage in the research process— determining the problem to be solved or the opportunity to be studied and the objectives of the research The Process of Problem or Opportunity Formulation Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–5

7.  The process of defining the problem involves six interrelated steps: 1. Ascertain the decision makers’ objectives 2. Understand the background of the problem 3. Isolate and identify the problem, not the symptoms 4. Determine the unit of analysis 5. Determine the relevant variables 6. State the research questions (hypotheses) and research objectives The Process of Problem or Opportunity Formulation (cont’d) Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–6

8. Ascertain the Decision Makers’ ObjectivesAscertain the Decision Makers’ Objectives  Decision Makers’ Objectives  Managerial goals expressed in measurable terms  Iceberg Principle  The idea that the dangerous part of many marketing problems is neither visible to nor understood by marketing managers The Process of Problem or Opportunity Formulation (cont’d) Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–7

9. Understand the Background of the ProblemUnderstand the Background of the Problem  Situation Analysis:  A preliminary investigation or informal gathering of background information to familiarize researchers or managers with the decision area The Process of Problem or Opportunity Formulation (cont’d) Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–8

10. Isolate and Identify the Problem, Not the SymptomsIsolate and Identify the Problem, Not the Symptoms  Certain occurrences that appear to be the problem may only be symptoms of a deeper problem  Good researchers must be creative in developing problem or opportunity formulations by investigating situations in new ways The Process of Problem or Opportunity Formulation (cont’d) Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–9

11. Determine the Unit of AnalysisDetermine the Unit of Analysis  The researcher must specify whether the investigation will collect data about individuals, households, organizations, departments, geographical areas, or objects The Process of Problem or Opportunity Formulation (cont’d) Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–10

12. Determine the Relevant VariablesDetermine the Relevant Variables  Variable:  Anything that may assume different numerical or categorical values  Types of variables:  Categorical variable  Continuous variable  Dependent variable  Independent variable The Process of Problem or Opportunity Formulation Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–11

13. State the Research Questions and Research ObjectivesState the Research Questions and Research Objectives  At the end of the problem or opportunity formulation stage, the researcher should prepare a written statement that clarifies any ambiguity about what the researcher hopes to accomplish The Process of Problem or Opportunity Formulation Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–12

14. Clarity in Research Questions and Hypotheses HypothesisHypothesis  An unproven proposition or supposition that tentatively explains certain facts or phenomena; a probable answer to a research question Research ObjectiveResearch Objective  The researcher’s version of the marketing problem; it explains the purpose of the research in measurable terms and defines standards for what the research should accomplish Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–13

15.  Research objectives are derived from the problem or opportunity formulation  Research objectives explain the purpose of the research in measurable terms and define standards for what the research should accomplish  Research objectives must specify the information needed to make a decision  Research objectives should be limited to a manageable number Decision-Oriented Research Objectives Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–14

16.  Budget constraints influence the amount of effort that will be spent on defining the problem  The importance of the decision faced by management will dictate the amount of resources to be allocated toward problem definition.  The time taken to identify the correct problem is usually time well spent How Much Time Should Be Spent Defining the Problem? Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–16

17. The Research Proposal Research ProposalResearch Proposal  A written statement of the research design that includes a statement explaining the purpose of the study and a detailed, systematic outline of procedures associated with a particular research methodology  The research proposal must communicate exactly what information will be obtained, where it will be obtained, and how it will be obtained Copyright © 2008 by Nelson, a division of Thomson Canada Limited 4–17