Prepared By: Prepared By: Mir Hossain EkramMir Hossain Ekram

ID # 0030152ID # 0030152

Chapter 2: Defining the Marketing Chapter 2: Defining the Marketing Research problem and developing Research problem and developing

an approachan approach

Defining the Marketing Defining the Marketing Research problemResearch problem

Defining the market research Defining the market research problem is the most important step problem is the most important step in a research project. It is a difficult in a research project. It is a difficult step, because frequently manage step, because frequently manage and it has not determined the actual and it has not determined the actual problem. The researchers role is to problem. The researchers role is to help management identify and help management identify and isolate the problemisolate the problem

Only when the marketing research problem has been clearly Only when the marketing research problem has been clearly defined then research can be designed and conducted properly.defined then research can be designed and conducted properly.

All effort, time and money spent will be wasted if the problem All effort, time and money spent will be wasted if the problem is misunderstood.is misunderstood.

Inadequate problem definition is a leading cause of failure of Inadequate problem definition is a leading cause of failure of marketing research projects.marketing research projects.

Better communication and more involvement in problem Better communication and more involvement in problem definition are the most frequently mentioned ways of definition are the most frequently mentioned ways of improving the usefulness of research.improving the usefulness of research.

Importance and the process of defining Importance and the process of defining the problem & Developing an approachthe problem & Developing an approach

The Problem Definition and Approach Development ProcessThe Problem Definition and Approach Development Process

Tasks Involved

Qualitative Research

Discussions with Decision Makers

Interviews withExperts

Secondary DataAnalysis

Environmental Context of the Problem

Step 1: Problem Definition

Management Decision Problem

Marketing Research Problem

Step 2: Approach to the Problem

Step 3: Research Design

ResearchQuestions and Hypotheses

Analytical Framework and Models

Specification of

Information Needed

Tasks InvolvedTasks Involved

Discussions with Decision Makers:Discussions with Decision Makers:

Problem Audit:Problem Audit: A comprehensive examination of a A comprehensive examination of a marketing problem to understand its origin and nature.marketing problem to understand its origin and nature.

Problem Audit involves discussions with the DM on the Problem Audit involves discussions with the DM on the following issues.following issues.

1.1. The events that led to the decision that action is needed:The events that led to the decision that action is needed: Competitors (of Competitors (of Walton Walton 's) such as Transcom was 's) such as Transcom was grabbing market share as they launched new models of TV grabbing market share as they launched new models of TV and aggressive promotional campaigns.and aggressive promotional campaigns.

2.2. The Alternative course of action available to the DMThe Alternative course of action available to the DM. Introducing new . Introducing new models, reducing prices, opening more distributor, launching special models, reducing prices, opening more distributor, launching special promotions, and increasing advertising.promotions, and increasing advertising.

3.3. The criteria that will be used to evaluate the alternative course of action:The criteria that will be used to evaluate the alternative course of action: new products offerings might be evaluated on the basis of sales, market new products offerings might be evaluated on the basis of sales, market share, profitability etc.share, profitability etc.

4.4. The potential actions that are likely to be suggested based on research The potential actions that are likely to be suggested based on research findings:findings: Strategic marketing response. Strategic marketing response.

5.5. Information needed to answer DM’s questions:Information needed to answer DM’s questions: comparison will comparison will competitors products on all the elements of product mix.competitors products on all the elements of product mix.

6.6. Manner in which DM will use each item of information in making the Manner in which DM will use each item of information in making the decision:decision: Based on research findings and judgements. Based on research findings and judgements.

7.7. The corporate culture as it related to decision making:The corporate culture as it related to decision making: In some firms the In some firms the decision making process is dominant, in others the personality of DM is decision making process is dominant, in others the personality of DM is more important.more important.

The Seven Cs of Interaction:The Seven Cs of Interaction:

The interaction between the DM and the The interaction between the DM and the researcher should be characterized by the seven researcher should be characterized by the seven Cs:Cs:

Communication Communication CooperationCooperation Confidence Confidence Candor (frankness)Candor (frankness) ClosenessCloseness ContinuityContinuity Creativity Creativity

Interviews with Industry expertsInterviews with Industry experts

These can be both inside and out side the firm.These can be both inside and out side the firm.

Unstructured personal interview.Unstructured personal interview.

Two potential problems may arise while seeking experts Two potential problems may arise while seeking experts advice.advice.

1.1. Some individuals who claim to be knowledgeable are ready Some individuals who claim to be knowledgeable are ready to participate may not have expertise.to participate may not have expertise.

2.2. It may be difficult to locate and obtain the help from experts It may be difficult to locate and obtain the help from experts who are outside the client organisation.who are outside the client organisation.

Secondary Data Analysis and Secondary Data Analysis and Qualitative ResearchQualitative Research

Secondary data: Secondary data: Data collected for some Data collected for some purpose other than the problem at hand.purpose other than the problem at hand.

Primary data: Primary data: Data originated by the researcher Data originated by the researcher specifically to address the research problem.specifically to address the research problem.

Qualitative research: Qualitative research: An unstructured, An unstructured, exploratory research methodology based on small exploratory research methodology based on small samples intended to provide insight and samples intended to provide insight and understanding of the problem setting.understanding of the problem setting.

Environmental Context of the Environmental Context of the ProblemProblem

1.1. Past information and forecastsPast information and forecasts

2.2. Resources and ConstraintsResources and Constraints

3.3. ObjectivesObjectives

4.4. Buyer behaviourBuyer behaviour

5.5. Legal environmentLegal environment

6.6. Economic EnvironmentEconomic Environment

7.7. Marketing and Technological SkillsMarketing and Technological Skills

Problem definition:Problem definition:Management decision problem and Management decision problem and

marketing research problemmarketing research problem Management decision problem: Management decision problem:

The problem face the decision The problem face the decision maker. It asks what the decision maker. It asks what the decision maker needs to do.maker needs to do.

Marketing research problem:Marketing research problem: A A problem that involve determining problem that involve determining what information is needed and what information is needed and how it can be obtained in the most how it can be obtained in the most feasible way.feasible way.

Management decision Management decision problemproblem

Marketing research Marketing research problemproblem

Asks what the Asks what the decision maker needs decision maker needs to doto do

Asks what Asks what information is needed information is needed and how it should be and how it should be obtainedobtained

Action orientedAction oriented Information orientedInformation oriented

Focuses on symptomsFocuses on symptoms Focuses on the Focuses on the underlying causesunderlying causes

Management decision problemManagement decision problem Marketing research problemMarketing research problem

Should a new product be introduced? Should a new product be introduced? To determine consumer preferences To determine consumer preferences and purchase intentions for the and purchase intentions for the proposed new productproposed new product

Should the advertising campaign be Should the advertising campaign be changed? changed?

To determine the effectiveness of the To determine the effectiveness of the current advertising campaign current advertising campaign

Should the price of the brand be Should the price of the brand be increased? increased?

To determine the price elasticity of To determine the price elasticity of demand and the impact on sales and demand and the impact on sales and profits of various level of price profits of various level of price changes. changes.

Defining the marketing research Defining the marketing research problemproblem

1.1. Allow a researcher to obtain all the Allow a researcher to obtain all the information needed to address the information needed to address the management decision problemmanagement decision problem

1.1. Guide the researcher in proceeding with the Guide the researcher in proceeding with the project.project.

Researcher makes two errors. First when the research problem Researcher makes two errors. First when the research problem is defined too broadly. Secondly when it is defined too is defined too broadly. Secondly when it is defined too narrowly.narrowly.

Common Errors

Problem Definition is too Broad

• Does Not Provide Guidelines for Subsequent Steps

• e.g., Improving the Company’s Image

Problem Definition is too Narrow

• May Miss Some Important Components of the Problem

• e.g. Changing Prices in Response to a Competitor’s Price Change.

Components of an approachComponents of an approach Objective / Theoretical FrameworkObjective / Theoretical Framework

In general research should be based on objective evidence and In general research should be based on objective evidence and supported by theory.supported by theory.

Theory:Theory: A conceptual scheme based on foundational A conceptual scheme based on foundational statements that are assumed to be true.statements that are assumed to be true.

Objective evidence:Objective evidence: Unbiased evidence that is supported by Unbiased evidence that is supported by empirical findings. It is gathered by compiling relevant empirical findings. It is gathered by compiling relevant findings from secondary sources.findings from secondary sources.

Analytical modelAnalytical model Analytical model:Analytical model: An explicit specification of a set of An explicit specification of a set of

variables and their interrelationships designed to represent variables and their interrelationships designed to represent some real system or process in whole or in part.some real system or process in whole or in part.

Verbal models:Verbal models: Analytical models that provide a written Analytical models that provide a written representation of the relationships between variables.representation of the relationships between variables.

Graphical models:Graphical models: Analytical models that provide a visual Analytical models that provide a visual picture of the relationships between variables.picture of the relationships between variables.

Mathematical models:Mathematical models: analytical models that clearly describe analytical models that clearly describe the relationships between variables, usually in equation form.the relationships between variables, usually in equation form.

Research QuestionsResearch Questions Research questions are refined statements of the specific Research questions are refined statements of the specific

components of the problem.components of the problem.

Each component may have to be broken down into Each component may have to be broken down into subcomponents or research questions.subcomponents or research questions.

Information required with respect to the problem component.Information required with respect to the problem component.

Theoretical framework and the analytical model play a Theoretical framework and the analytical model play a significant role in the operationalization and measurement of significant role in the operationalization and measurement of variables specified by the research question.variables specified by the research question.

HypothesisHypothesis An unproven statement.An unproven statement.

Often, a hypothesis is a possible answer to the research Often, a hypothesis is a possible answer to the research question.question.

They go beyond research questions because they are They go beyond research questions because they are statements or relationships or propositions rather than merely statements or relationships or propositions rather than merely questions to which answers are required.questions to which answers are required.

Important role is to suggest variables to be included in the Important role is to suggest variables to be included in the research design.research design.

Walton Walton : :

• Management decision problems was: Should Management decision problems was: Should WaltonWalton invest more to produce more TV?invest more to produce more TV?

• Marketing Research problems was : Determine if Marketing Research problems was : Determine if customers would be loyal buyers of customers would be loyal buyers of WaltonWalton in the in the long term.long term.

Example Example

Example Example

The research had to address the following components:The research had to address the following components:

1.1. Who are the customers? What are their demographic Who are the customers? What are their demographic and psychographic characteristics?and psychographic characteristics?

2.2. Can different type of customers be distinguished? Is it Can different type of customers be distinguished? Is it possible to segment the market in a meaningful way?possible to segment the market in a meaningful way?

3.3. How do customers feel regarding their How do customers feel regarding their Walton TVWalton TV? ? Are all customers motivated by the same appeal?Are all customers motivated by the same appeal?

4.4. Are the customers loyal to Are the customers loyal to Walton TVWalton TV? What is the ? What is the extent of brand loyalty?extent of brand loyalty?

Example Example One of the research question (RQs) examined and the One of the research question (RQs) examined and the

associated hypothesis (Hs) were:associated hypothesis (Hs) were:

RQ: Can the TV buyers be segmented based on RQ: Can the TV buyers be segmented based on psychographic characteristics?psychographic characteristics?

H1: There are different segments of TV buyers.H1: There are different segments of TV buyers.

H2: Each segment is motivated to own a H2: Each segment is motivated to own a Walton TVWalton TV for a for a different reason.different reason.

H3: Brand loyalty is high among H3: Brand loyalty is high among Walton Walton customers in all customers in all segmentssegments

International marketing researchInternational marketing research

Precise definition of the marketing research is more Precise definition of the marketing research is more difficult in international marketing research rather difficult in international marketing research rather than in domestic market research.than in domestic market research.

Unfamiliarity with the environmental factors of the Unfamiliarity with the environmental factors of the country where the research is being conducted country where the research is being conducted

Ethics in marketing researchEthics in marketing research

Ethical issues arise if the process of defining Ethical issues arise if the process of defining the problem and developing an approach is the problem and developing an approach is compromised by the personal agendas of compromised by the personal agendas of clients.clients.

Researcher is ethically bound to define the Researcher is ethically bound to define the problem so as to further the best interest of the problem so as to further the best interest of the client, rather than the interest of the research client, rather than the interest of the research firm.firm.

Internet and computer applicationInternet and computer application

Discussions with decision makers:Discussions with decision makers: email… secure chat rooms. email… secure chat rooms.

Interviews with industry experts:Interviews with industry experts: search engines to locate industry experts. search engines to locate industry experts. Secondary data analysis and qualitative research:Secondary data analysis and qualitative research: again search engines.. again search engines..

Also chat rooms in providing exploratory data .Also chat rooms in providing exploratory data .

Environmental context of the problem:Environmental context of the problem: past information and forecasts of past information and forecasts of trends can be found using search engines.trends can be found using search engines.

Company home page for specific information.Company home page for specific information.

There have many website to download the reports of a public company. There have many website to download the reports of a public company. Like Like www.freeedgar.com

Thank YouThank You