Defining MR Problem
Transcript of Defining MR Problem
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The Management Problemversus
he Marketing Research Proble
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What is Marketing Research?
Why do Organizations Need Market Research?
What sort of information is needed generally?
Why and When does Marketing Research Work?
What is the Marketing Research Process
Recap
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The Marketing Research Process
Step 1: Identify and define the Management Problem
Step 2: Define the Marketing Research Problem
Step 3: Establish Research Objectives
Step 4: Specify the Research Design
Step 5: Develop the Data Collection Procedure
Step 5: Design the Sampling Procedure
Step 6: Collect the Data
Step 7: Process and Analyze the Data
Step 8: Present the Results
Step 9: Follow-up
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The Management Problemversus
he Marketing Research Proble
A distinction must be made between the managementproblem
or opportunity and the marketing researchproblem.
Management ProblemManagement Problem Marketing ResearchMarketing Research
ProblemsProblemsFocus on symptoms
Action oriented
Focus on causes
Data oriented
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Step 1: Identify the Management Problem or
Opportunity
Moti Italian restaurant sales are low (the symptom) and if they
remain at current levels the restaurant will soon go out of business.
What broadly is the management decision problem?
What Question Does the Management decision Problem ask?
What should the decision maker do?
What should the restaurant do to improve sales?
Is this enough?
Situation arises, management needs to make a decision. Simply a
statement of the issue that management is dealing with that
requires research, starts the research process
Must discover the problem
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distinguish between the symptom and the problem
History of the problem what is the business issue prompting the
research
Ask: What caused this to occur. Why are sales low?
What will the information be used for what decisions made?
Environment in which it is being made (eg legal, competitive,
economic, financial, social) situation analysis
What alternative courses of action are there?
What criteria should we use to decide between alternatives
(e.g. sales targets, market share, profitability, ROI)
Constraints, e.g.. timing, monetary
Who are the decision makers and what are their purposes?
why is the information is being sought
What do we need to know to identify or
define the problem? The problem audit
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Why is it important to clearly define the
management decision problem?
The problem definition process provides guidelines on how
to correctly define the marketing research problem
Because problem definition sets the course of the entire
project Because the client is paying for the research so both need to
know what to expect
Because mistakes made at this level grow into larger, more
expensive mistakes later on.
All the effort, time and money spent from this point on will
be wasted if the problem is not properly defined.
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Step 2: Define the Marketing Research Problem
A statement of the information needed by a decision maker to
help solve a management decision problem.
Marketing research problem has to be narrowly defined
Whats wrong with these statements?
1. Develop a marketing strategy for the brand.
2. Improve the competitive position of the firm
3. Improve the companys image
Whats wrong with this statement?
1. How should the company adjust its pricing given that
a major competitor has initiated price changes?
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Tips for Accurately Defining
Research Problems
Find out why the information is being sought.
Determine whether the information already exists.
Determine whether the question really can/should be
answered.Use exploratory research to define background of
the problem
Situation analysis
The iceberg principle
Determine relevant variables
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Management Decision Problem:What should Moti restaurant do to improve sales?
Marketing Research Problem:
Why are Sales low?
What factors influence people to spend money in
restaurants and to what extent does Moti meet their
needs?
What information is needed to answer this question?
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What can we say about restaurant patrons that makes
them go out to dinner to an Italian restaurant and
spend money? I.e. whats our theory?
People who go out to restaurants like a wide menu
selection at a convenient location and demand good
tasting food, good service, at a reasonable price.
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A Local health food store is interested in opening a branch
near the SAIT campus.
1. What is your management problem?
2. What is the Research Problem?
3. What information would be needed
4. What Secondary sources of information are available to
help you decide whether to open such a store
5. Summarize the data that would bear on their decisionon whether or not to open such a store.
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Step 3 Definition of Research Objectives
Marketing Research Objectives: the specific bits of knowledge
that need to be gathered to close the information gaps highlighted
in the research problem.
Stated in action terms
Serve as a standard to evaluate the quality and value of theresearch
Objectives should be specific and unambiguous Examples:
To measure the number of marketing majors at the Calgarycampus
To assess viewer recall of our ad campaign To describe the segments of the marketplace
To determine the impact on sales and profits at various pricelevels
To determine the needs of product users and the extent towhich the needs are being met by the market.
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1. What needs do restaurant goers seek to satisfy.Hypotheses?
2. How well does Moti Italian restaurant meet these needs?
Hypotheses?
3. What are the psychographic and demographic
characteristics of the restaurant goers? Hypotheses?
4. Does Moti Italian restaurant cater to this segment?
Hypotheses?
Research Objectives and Hypotheses
make a list of the information that should be collected for each
research question and hypothesis
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Putting It All Together Management Problem
The U of L Placement office has noticed, while major companies make
annual recruiting visits to campus for engineers, few local companiesformally recruit business management majors through the placement
office
What should the Placement office do get local companies to hire business
management majors ?
Marketing Research Problem
Why are companies not taking advantage of the resources that the
placement service offers?
Hypotheses
Companies are going around the service
Companies are unaware of the U of L placement service?
Companies are unaware of the reputation of the U of L FOM
Companies use other recruitment methods
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To determine to what extent companies are aware of the U of L placement
service
Determine whether companies, especially locals, are aware of the strong
reputation of the U of L FOM Business School
Marketing Research Objectives
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Another Example
Management Problem
What price should we charge for our new product?
Research Problem
What are our costs of production and marketing (COGS)?
What are our pricing objectives and position in the market?
What price does similar types of products sell for?
What is the perceived value of our product in the marketplace?
Are there any norms or conventional practices in the marketplace(e.g., customary prices, continual discounting)
Research Objectives
To assess the costs involved in producing and selling our product
To determine corporate objectives and their implications for pricing
To examine current prices for direct and indirect competition
To determine potential customer reaction to various prices and theirperception of the benefits of owning the product
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Practice, Practice
For the following management problems, identify
the underlying research problems and a couple ofresearch objectives.
Should our retail chain offer online shopping?
What advertising media should we use to reach
our market?
How do we get more people to attend our
outdoor festival/event?
Should we buy a new cube van to deal with ourincreased demand?
How can we increase customer retention?
Should the amount of in-store promotion for an
existing product line be increased?
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Marketing Decision Problem Marketing Research Problem
Should a new product be To determine consumer preferences
introduced? and purchase intentions for the
proposed new product.
Should the advertising To determine the effectiveness
campaign be changed? of the current advertising
campaign among the target audience.
Should the price of the To determine the price elasticity
brand be increased? of demand and the impact on sales
and profits of various levels
of price changes.
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In 2002, Westjet added service to two new Ontario destinations,
London and Toronto. As Westjet expanded into Eastern Canada it
began to run into competition from Montreal-based discount
carrier Jetsgo, which started in 2002 (and ended March 2005).
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In 2003 Jetsgo expanded into Western Canada to competedirectly on flights between Calgary and Toronto and Montreal.
In the first six months of 2004, Westjets net earnings were $8.0
million compared to $15.5 million during the first six months of
2003. Both Jetsgo and Westjet modeled themselves on the highly
successful US Carrier Southwest Airlines. Both airlines offered
the same schedules, the same service, and the same fares. With
little to differentiate the two airlines Westjet began to look at a
way to increase passenger loyalty especially on the longer haul
domestic flights.
M t d i i bl
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Exploratory research revealed that the consumers choice of an
airline is influenced by safety, ticket price, frequent flyer
program, convenience of scheduling and brand name.
A theoretical model stipulated that consumers evaluate competing
airlines based on factors of the choice criteria to select a preferred
airline. Since both airlines offer the same schedules, same service,
and fares Westjet had to find a way to differentiate itself.
Identify the factors that influence
loyalty of airline passengers
Management decision problem
How to attract more loyal
customers
Marketing Research Problem
Marketing Research Objective
How to differentiate Westjet from
the competition.
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Food turns out to be the solution.
Secondary data, like the J. D. Power and Associates survey on
current and future trends in the airline food industry indicated
that food service is a major contributor to customer loyalty.
This survey also emphasized the importance of food brands.
Westjet then conducted a survey to evaluate the importance of food
service to its customers
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The following research questions and hypothesis may be posed
RQ1 How important is food for the airline customers?
H1 Food is an important factor for airline travelers
H2 Travelers value branded food
H3 Travelers prefer larger food portions, but with consistent quality
H4. Travelers prefer exotic food.
Characteristics which influence the research design will include the
identification of competing airlines, factors of the choice criteria(already identified) measurement of airline travel loyalty.
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This kind of research helped Westjet to define their marketing
research problem and approach. Focus groups and surveys were
conducted to check customers perceptions of food in Westjet aircraft.The results provided support for all the hypotheses.
Westjet Airlines then made a few changes: new culinary menus
larger portions of food, new coffee and branded products, eg. Bernard
Callebaut chocolates.. This has resulted in better service increasing
customer satisfaction fostering loyalty.
The survey conducted by Westjet told them that customers
wanted more varied and up-to-date food
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Defining the marketing/management problem
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Problem Formulation and Approach
Understand and define the managerial
decision problem/opportunity
Translate into research objective(s) (what
information is needed)
Pose the right research questions
State questions in terms ofhypotheses
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The management decision problem asks what the DM needs to do
The marketing research problem asks what information is needed
and how it can be obtained effectively and efficiently.
The marketing research objective is a restatement, in general terms,
of what management needs to know to make a decision