defining a problem statement

Defining the Problem and Determining Research Objectives

Xiao Xiang

Business School, Hunan Normal University

[email protected]

Chapter 4

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The Importance of Properly Defining the Problem

• Properly defining the problem is the most important step in the marketing research process.

• If the wrong problem is defined, all the remaining steps in the marketing research process are wrong.

• Two sources of problems:– A problem exists when a gap exists between what was

supposed to happen and what did happen, i.e., failure to meet an objective.

– An opportunity occurs when there is a gap between what didhappen and what could have happened…called an opportunity.

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To recognize a problem, managers must be knowledgeable of objectives and actual performance.

To be aware of opportunities, managers must have a process for monitoring opportunities

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The Role of Symptoms in Problem Recognition

• Managers must be careful to avoid confusing symptoms with problems.– “We have a problem … we are losing money”

• Symptoms are changes in the level of some key monitor that measures the achievement of an objective.

• The role of the symptom is to alert management to a problem; there is a gap between what should be happening and what is happening.

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The Role of the Researcher in Problem Definition

• Researchers should ensure managers are defining the problem correctly.

• This is particularly true when the manager has already defined the problem in very specific terms.

• Researchers sometimes take additional investigations, known as a “situation analysis,” to ensure the problem is adequately defined.

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Impediments to Problem Definition

• Failure to change behavior for problem definition situations– Managers deal with outside suppliers efficiently with little

interaction.– Marketing research requires a great deal of interaction and

communication.

• There are differences between managers’ and researchers’ backgrounds.– Traditionally researchers were technicians and managers were

trained in general decision making. – Today managers are much more aware of technical software

such as using your SPSS.

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• A Process:– There is no universally accepted, step-by-step

approach used by marketing researchers to define the problem and establish research objectives.

• “Defining problems accurately is more an art than a science.” – Lawrence D. Gibson

Defining the Problem & Establishing Research Objectives

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Assess the Background and the Manager’s Situation

• The researcher should first understand the industry, the competitors, and the company.

• The researcher must understand the manager’s unique situation…– Does the manager have a particular objective?– What constraints is the manager operating under?

• The researcher must understand the control system and determine what symptoms are being identified by the system.

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Pinpoint Suspected Causes of the Symptom

• There’s always some cause or causes for a change.

• It is important to determine all possible causes.

• Researchers should narrow possible causes to a small set of probable causes.

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Wait! You give it a try.

University Estates （Case Study）

• Situation: Last year, University Estates (which targets mainly university students) experienced a decline in its occupancy rate from 100% to 80%.

• Manager & Researcher brainstorm a list of POSSIBLE CAUSES

• What are some possible cases for University Estates’ Occupancy Decline?

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4.4

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• Something that changed just before or at the same time as the symptom(s).

• If it did not change, how could it cause the symptom?

1. Competitor’s Actions Basic Cable TV

2. Consumers (Student Renters) No change3. University Estates Itself No change4. The Environment No change

What is/are the probable cause(s) for University Estates Occupancy Rate Decline?

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What can University Estates do?

• Add Satellite TV– （150 channels /4 Premium channels/Pay-for-view）

• Specify Possible Solutions that May Alleviate the Symptoms– Possible solutions include any marketing action that the marketing

manager thinks may solve the problem, such as price changes, product modification, etc.

• Speculate on Anticipated Consequences of the Solutions– What if” questions should be made regarding possible consequences

of each marketing action being considered.

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• Assumptions are assertions that certain conditions exist or certain reactions will take place if considered solutions are implemented.

• If the manager is completely certain of assumptions there is no need for research.

• For those uncertain assumptions, research will eliminate a manager’s uncertainty and therefore aid in decision making.

Identify Manager’s Assumptions about Solutions’ Consequences

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The Role of Hypotheses in Defining the Problem

• Hypotheses are statements that are taken for true for the purposes of argument or investigation.

• Assumptions about the consequences of solutions are hypotheses.

• When a manager makes a statement or an assumption that he/she believes to be true and wants research to determine if there is support for that statement, we call this statement a hypothesis.

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Assess the Adequacy of Information on Hand

• To specify research objectives– The information state should be assessed.– The information state refers to the quantity and quality of

evidence a manager possesses for each of his or her assumptions.

– Information gaps are discrepancies between the current information level and the desired information level.

– Information gaps are the basis for establishing research objectives.

– Research objectives are set to gather the specific bits of knowledge that need to be gathered in order to close the information gaps.

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Information Gap/Question Research Objective(s)How will prospective residents react to the inclusion of the satellite television programming package with the base apartment?

To what extent do prospective student residents want satellite television?

Will University Estates be more competitive if it adds a satellite television package?

Will University Estates be more attractive than competing apartment complexes if it has the satellite television programming package?

Information Gaps (Management Questions) and Research Objectives for University Estates

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How to get research objectives from management questions

• State the marketing management question.

• List the specific pieces of information needed to answer the question.

• Do this for each and every management question.

Review:

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The Marketing Research Proposal

• Three functions:– It states the problem.– It specifies the research objectives.– It details the research method proposed.

• Proposals also contain a timetable and a budget.

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Research Objectives

• Precise• Detailed• Clear• Operational

– Operational definitions describe the operations to be carried out in order for constructs to be measured.

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The Role of ITBs and RFPs

• ITBs are Invitations to Bid.• RFPs are Requests for Proposals.• When ITBs and RFPs are issued management has

already defined the problem.• Phony ITBs and RFPs present an ethical problem in the

marketing research industry.

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The Role of Constructs

• A construct is an abstract idea inferred from specific instances that are thought to be related.

• Typical marketing constructs are brand loyalty, satisfaction, preference, awareness, knowledge.

• Research objectives typically call for the measurement of constructs.

• There are customary methods for defining and measuring constructs.

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Constructs

CONSTRUCTBrand awareness

Recall, recognition of advertising

Knowledge of product features

Brand familiarity

Comprehension of product benefits

OPERATIONAL DEFINITIONQuestion: Have you heard of Brand A? ____ Yes ____ NoMeasure: Percentage of respondents having heard of the brand

Question: Do you recall seeing an advertisement for Brand A?Measure: Percentage who remember seeing a specific ad

Question: Indicate which of Brand A’s features you know about.Measure: Percentage who know about each feature

Question: Are you “unfamiliar,” “somewhat familiar,” or “very familiar” with Brand A?Measure: Percentage for each familiarity category

Question: For each product benefit statement, indicate if you agree or disagree.Measure: Percentage who agree with each benefit statement

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Constructs

CONSTRUCTAttitudes, feelings toward brand

Intentions to purchase

Past purchase or use

Brand loyalty

Satisfaction

OPERATIONAL DEFINITIONQuestion: Rate Brand A on a 1–5 scale, where 1 = “poor” and 5 = “excellent”Measure: Average rating

Question: What is the probability that you will buy Brand A the next time you purchasethis product?Measure: Average probability

Question: Have you used Brand A in the past three months?Measure: Percentage who have used it

Question: With your last five purchases of the product, how many times did you buy Brand A?Measure: Percentage of times

Question: Rate Brand A on a 1–5 scale, where 1 = “unsatisfied” and 5 = “very satisfied”Measure: Average rating

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model

• A model is a logical arrangement of constructs and relationships based on theory or experience

• Hierarchy of Effects– Unaware-Aware-Knowledge-Liking-Intention-Purchase-Loyalty

• Importance-Performance Model– Importance: Performance on attributes

• Segmentation Model– Divide up the market based on demographics, etc.

• Company Performance Model– Sum of evaluations on various attributes

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HIERARCHY STAGE DESCRIPTION RESEARCH QUESTION (University Estates Example)

Unawareness Not aware of your brand What percentage of prospective student residents are unaware of satellite television?

Awareness Aware of your brand What percentage of prospective student residents are aware of satellite television?

Knowledge Know something about your brand

What percentage of prospective student residents who are aware of it know that satellite television (1) has 150 channels, (2) premium channels, and (3) pay-for-view?

Liking Have a positive feeling about your brand

What percentage of prospective student residents who know something about satellite television feel negatively, positively, or neutral about having it in their apartment?

Intention Intend to buy your brand next

What percentage of prospective student residents who are positive about having satellite television in their apartment intend to rent an apartment with it?

Purchase* Have purchased your brand in the past

What percentage of the market purchased (tried) your brand in the past?

Repurchase/Loyalty*

Purchase your brand regularly

What percentage of the market has purchased your brand more than other brands in the last five purchases?

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HIERARCHY STAGE

Repurchase/Loyalty（再购买/忠诚度）

Purchase（购买）

Intention（购买意向）

Liking（喜爱）

Knowledge（了解）

Awareness（知晓）

Unawareness（不知晓）

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4.8

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• Marketing management problem营销管理问题

• Opportunity identification机会识别

• Marketing research objective营销调研目标

• Background背景

• Manager’s objective经理目标

• Symptoms问题症状

• Iceberg phenomenon冰山现象

关键术语（Key terms）

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• Cause原因

• Possible cause可能的原因

• Probable cause最有可能的原因

• Solutions解决方法

• Consequences预期结果

• Assumptions假设

• Information state信息状况


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• Information gaps信息缺口

• Research objective调研目标

• Marketing research proposal营销调研方案

• Construct构念

• Operational definition可操作定义

• Relationship关联

• Model模型


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Case The Hobbit’s Choice Restaurant

• For each of the management problem items specified in Table 4.8 identify a corresponding research objective.

• For each of your research objectives, identify relevant constructs and possible ways to measure each construct.

Problem Item Description/Research Objectives

Will the restaurant be successful?

Will a sufficient number of people patronize it?What percent of people want to dine in an upscale restaurant?How often will those who want to, do so?

How to design the restaurant?

What about décor, atmosphere, specialty entrees and deserts, wait staff uniforms, reservations, special seating, and so forth.What are the preferences of those who want to dine in an upscale restaurant with respect to… (each of the above)?

What should be the average price of entrees?

How much are patrons willing to pay for the “standard” entrees as well as for the “house specials”?What do they expect to pay for: (1) standard entrees and (2) house specials?

Problem Item Description/Research Objectives

What is the optimum location?

How far from patrons homes are they willing to drive, and are there any special location features (such as waterfront, ample parking, etc.) to take into consideration?What is the distance (in miles or minutes) that those who would patronize an upscale restaurant will drive to patronize it?Are they willing to drive a greater distance with each special location feature, and if so, how far?

What is the profile of target market?

What are the demographic and/or life style profiles of those who are going to patronize The Hobbit’s Choice?What demographic characteristics and/or life style differences are specific to those who would patronize the restaurant?

What are the best promotional media?

What advertising media should be used to best reach the target market?What are the media usage patterns that are specific to those who would patronize the restaurant?

Research Objectives Construct and Measurement

What percent of people want to dine in an upscale restaurant?How often will those who want to, do so?

Likelihood of using – unlikely to very likely

Frequency of patronage – number of times per month

What are the preferences of those who want to dine in an upscale restaurant with respect to… (each of the above)?

Desirability scale – undesirable to very desirable for each item

What do they expect to pay for: (1) standard entrees and (2) house specials?

Dollar amount they expect to pay for standard entrees and for specials

Research Objectives Construct and Measurement

What is the distance (in miles or minutes) that those who would patronize an upscale restaurant will drive to patronize it?Are they willing to drive a greater distance with each special location feature, and if so, how far?

Estimated driving distance (from home) Additional driving distance they would travel for each special location feature

What demographic characteristics and/or life style differences are specific to those who would patronize the restaurant?

Use standard demographics from Census – age, education, income, family size, and so on.Use life style inventory (this is the standard way to measure life style)

What are the media usage patterns that are specific to those who would patronize the restaurant?

Frequency (never to very often) of viewing, listening, reading (whatever is appropriate) for each local media option, such as TV station programs, radio stations, newspaper, and so on by time of day

defining a problem statement

Documents

prospective student residents

life style differences

special location feature

operational definition question

marketing research process

marketing action

satellite television

research objectives