Problem Definition and The Research Process

Critical Importance of Correctly Defining the Problem

Recognize the Problem/Opportunity

• Changes occur in the firm’s external environment:– Should we change the existing marketing mix?– If so, How?

• Marketing research may be used to evaluate the products and services, promotion, distribution, and pricing alternatives.

• In addition it may be used to find and evaluate new opportunities, in the process called “opportunity identification”

Example of Opportunity Identification

• In 1990, there have been over 30 million babies born in the United States. They represent the largest generation since baby boomers.

• Because of that increase in single-parent and dual earner households, kids are making shopping decisions once left to mom.

• With their allowance, earnings, and gifts, children 14 and under will spend an estimated $20 billion a year, and they will influence another $200 billion in purchases.

Example of Opportunity Identification

• These statistics represent an opportunity.

• Walt Disney, for example, launched a 24-hour kids’ radio network based on its marketing research.

• General Motors did an analysis on backseat consumers that is children between 5-15 years. GM purchased the inside cover of Sports Illustrated for Kids (a mag. targeted to boys from 8-14 years) for the ad on the Chevy Venture minivan.

Recognize Problem

• Managers may want to know:– Why are we losing marketing share?– What should we do about our competitor

lowering its prices by 10 percent?

• In this instances, marketing researchers can help managers solve problems

Find Out Why the Information Is Being Sought

• Managers may not have a clear idea of what they want, therefore marketing researchers often find the following helpful:– Discuss what the info. will be used for and what decisions

might be made as a result of the research.– Try to get the client/manager to prioritize their questions.– Create sample data and ask if such a data would help

answer the questions. Simulate the decision process.

Understand the Decision-Making Environment

• The better the marketing researcher understands the decision-making environment, including the industry, the firm, its products or services, and the target market, the more likely it is that the problem will be defined correctly.

• This step may be referred to as conducting a situation analysis. That is studying the decision-making environment within which the marketing research will take place.

Understand the Decision-Making Environment

• Sometimes informed discussions with managers and suppliers and on-site visits aren’t enough.

• Exploratory research which is a preliminary research may be conducted to obtain greater understanding of a concept, to clarify the exact nature of the problem to be solved, or to identify important variables to be studied. It can take several forms: pilot studies, experience surveys, secondary data analysis, and case analysis.

Exploratory Research• Pilot studies: surveys using a limited number of respondents

and often employing less rigorous sampling techniques than are employed in large, quantitative studies.

• Experience surveys: discussions with knowledgeable individuals, both inside and outside the organization, who may provide insights into the problem. (not with the formal questionnaire)

• Case analysis: reviewing info. from situations that are similar to the current one.

Use of the Symptoms to Clarify the Problem

• A symptom is a phenomenon that occurs because of existence of something else.

• Example: problem of poor sales, declining profits, increased customer complaints, or defecting customers. each of these is a symptom of a deeper problem. That is , something is causing a company’s customers to leave.

Use of the Symptoms to Clarify the Problem

• Focusing on symptoms and not the true problem is often referred to as the iceberg principle.

• Approx. 10% of iceberg rises out of the ocean; the remaining 90% is below the surface.

• Preoccupied with the obstacle they can see, managers may fail to comprehend and confront the deeper problem, which remain submerged.

Iceberg Principle

Translate the Management Problem into a Marketing Research Problem

• Management decision problem: a statement specifying the type of managerial action required to solve the problem.

• Once it has been identified, it must be converted into a marketing research problem.

• The marketing research problem specifies what info. is

needed to solve the problem and how that info. can be obtained efficiently and effectively.

Determine Whether the Information Already Exists

• Using existing data can save managers time and money if such data can answer the research question.

Determine Whether the Question Can Be Answered

• When marketing researchers promise more than they can deliver, they hurt the credibility of marketing research.

• It is extremely important for the researchers to avoid being impelled into an effort that they know has a limited probability of success.

State the Research Objectives

• The climax of the problem definition is a statement of the research objectives.

• These are stated in terms of the precise info. necessary to address the marketing research problem/opportunity.

• Research objectives must be specific and unambiguous as possible.

Marketing Research Process

2. Creating Research Design

• Research design: the plan to be followed to answer the marketing research objectives.

• There is no single best design. Instead, different designs offer array of choices, with certain advantages and disadvantages.

• First, the researchers need to decide whether the research will be descriptive or causal.

Descriptive and Causal Studies

• Descriptive studies: research studies that answer the questions who, what, when, where, and how. It primarily describe what is going on/ what exists.

• Implicit descriptive research is the fact that management already knows/understands the underlying relationships among the variables in the problem.– Variable: a symbol/concept that can assume any one of a

set values.

Descriptive and Causal Studies

• Causal studies: research that examine whether the value of one variable causes or determines the value of another variable. – Dependent variable: a symbol/concept expected to

be explained or influenced by independent variable.– Independent variable: a symbol/concept over

which the researcher has some control and that is hypothesized to cause or influence the dependent variable.

3. Choosing a Basic Method of Research

1. Survey research: research in which an interviewer interacts with respondents to obtain facts, opinion, and attitudes.

2. Observation research: descriptive research that monitors respondents’ actions without direct interaction.

3. Experiment research: research to measure causality, in which the researcher changes one or more variables and observes the effect of the changes on another variable.

4. Selecting the Sampling Procedure

• A sample is subset from a larger population.

• Several questions must be answered before a sampling procedure is selected.1. The population/universe of interest must be

defined2. Whether to use a probability sample or

nonprobability sample (more details will be in the sampling topic)

5. Collecting Data

• Interview-based data collection is done by marketing research field services.

• To ensure that all subcontractors do everything exactly the same way, detailed field instructions should be developed to every job.

6. Analyzing the Data

• The purpose of this analysis is to interpret and draw conclusions from mass of collected data.

• The marketing researcher may use a variety of techniques for the analysis.

7. Writing and Presenting the Report

• The researcher must prepare the report and communicate the conclusions and recommendations to management in both written and oral reports.

• This is a key step in the process because a marketing researcher who wants project conclusions acted on must convince the manager that the results are credible and justified by the data collected.

8. Following Up

• It is important that the research finding be used.

• Management should determine whether the recommendations were followed and, if not, why not.

MANAGING THE RESEARCH PROCESS

Managing Research Process

• The Research Request• Request for Proposal• What to Look for in a Marketing Research

Supplier

Managing Research Process

The Research Request•An internal document used by large organizations that describes a potential research project, its benefits to the organization, and estimated costs; it must be formally approved before a research project can begin.

The Research Request• The sections of a formal research request are as follows:

– Action: actions to be taken on the basis of research– Origin: events led to a need for decision– Information: list the questions that needs to have answered to

take action– Use: how each piece of info. will be used to help make the actual

decision– Target groups and subgroups– Logistics: approximation of the available budget and time– Comments: other comments relevant to the research project

Managing Research ProcessRequest for Proposal (RFP)•A solicitation sent to marketing research suppliers inviting them to submit a formal proposal, including a bid.

•A typical RFP provides background data on why a study is to be conducted, outlines the research objectives, describes a methodology, and suggests a time frame.

•Most of RFPs also ask for (1) detailed cost breakdown, (2) the supplier’s experience in relevant area, and (3) references

Managing Research ProcessWhat to Look for in a Marketing Research Supplier

•Top 10 list of desirable qualities in marketing researchers:1. Maintains client confidentiality2. Is honest3. Is punctual4. Is flexible5. Delivers against project specifications6. Provides high-quality output7. Is responsive to the client’s needs8. Has high quality control standards9. Is customer-oriented in interactions with client10. Keeps the client informed throughout a project

1st Part of Group Project (10 out of 30 points)

• Group of 6 members (8 groups)• Presentation on the selected topic• Start your presentation from next week (1 group/ class)

1. Exploratory research and qualitative analysis (Tong)2. Digital research using secondary data (Kloster)3. Survey research (Eyes)4. Observation (Pim)5. Experimental research and test marketing (Jeerapa)6. Measurement (Phitpawee)7. Questionnaire design (May)8. Sampling: sample design and sample size (Zinn)