Chapter 2Problem definition and the research process

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CASE 1

• MAZDA IS RELEASING A NEW SPORTS CAR IN THE ASIA – PACIFIC REGION. WHAT TYPES OF QUESTIONS A MARKETING RESEARCHER WORKING FOR MAZDA COULD ASK IN RELATION TO THE MARKETING MIX.

2

Question?

• What type of MR would the following organisations be interested in?

• Hospital• Manufacturer of breakfast cereal• A computer software company

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The nature of marketing problems

• Managers usually grasp the general nature of the objectives they wish to achieve, but often remain uncertain about the full details of the problem.

• Ambiguity needs to be cleared up before making a formal statement of the marketing problem.

4

What are some of the business issues that can be addressed by

tracking research?

William Burlace, Director, Media Services

Roy Morgan Research

The Marketing Research Process

The Importance of theProblem Definition

• Critical first step in research process• Can be a problem or an opportunity• If problem definition is not correct,

research will be wasted regardless of how well research is conducted

• Often requires some preliminary research to help define the problem

“Can I get a new Coke, please!” • Coca-Cola conducted blind taste tests in the

early 1980s to determine consumer taste preferences.

• Results indicated that consumers preferred a sweeter product, similar to Pepsi Cola. Coca-Cola introduced the new taste Coke and named it “New Coke” and discontinued the original Coke.

• In less than 3 months, New Coke was discontinued after customer outrage over the removal of the original Coke.

• It has been suggested that Coca-Cola narrowly defined the research problem.

• Coca-Cola failed to measure the emotional attachment and loyalty to the existing brand name and its effect on subsequent purchase and consumption behaviour.

In using tracking monitors, what are clients

generally tracking?

William Burlace

Director, Media Services

Roy Morgan Research

Steps in Defining the Problem

Estimate the value of information

Define the MR question

Define the Management Problem

Identify the Background Issues

Identify the Background Issues

• Past information and forecasts• Resources and constraints• Objectives• Buyer behaviour• Legal environment• Economic environment

What are the background

issues that are relevant to

your research project?

How has market research been used to maximise the success of

The Story Bridge Adventure Climb?

Bruce White

Director of Marketing

Story Bridge Adventure Climb

Identify the Background Issues cont.

• In summary:

– How and why has the problem come to notice?

– What are the symptoms? see ice-berg diagram

– Often requires some preliminary research, particularly secondary data

Ice-berg Principle

Symptoms

Possible causes

Example: OPSM

• OPSM is the leading provider of eyecare/wear in Australia and New Zealand.

• The company has over 300 stores in Australia and New Zealand

• In recent times the company has notice a decline in sales.

• What are some possible background issues that may have affected sales?

The use of market research at Virgin Blue.

Darren Wright, National Marketing Manager Virgin Blue Australia

MMIS and DSS• Marketing Management Information

System

– A formalised set of procedures for generating, analysing, storing, and distributing information to marketing decision makers on an ongoing basis.

• Decision Support Systems– Integrated system including hardware,

communications network, database, model base, software base

Marketing Management Information System

Source: Kotler, P., Armstrong, G., Brown, L., and Adam, S (1998) Marketing, 4th

ed., Prentice Hall, Sydney, p.147

MMIS vs. DSSMarketing Management Information System

•Structured problems•Use of reports•Rigid structure•Information displaying restricted•Can improve decision making by clarifying raw data

Decision Support Systems

•Unstructured problems•Use of models•User-friendly interaction•Adaptability•Can improve decision making by using “what if” analysis

Define the Management Problem• How does management define the

problem?– In management terms– Stated as a question to ensure focus is on a

decision Decision alternatives

• What is the decision to be made?– If there is no decision or the decision has

already been made - don’t do research! – Understand how the information will be

used

Define the Management Problem cont.

Criteria for choosing among alternatives

• How will the decision be made?– clarify criteria

Timing

• When does the decision need to be made? Is there time for research? Users

• Who will make the decision? Overt & covert purposes

• Is the research being conducted for the right reasons?

Questions to Ask the Marketing Manager

• Symptoms– What has changed that is causing you

concern?

• Background– What is the recent history of the brand,

service, company or market involved?

• Decision-makers situation– How are these changes impacting your

objectives? What resources do you have at your disposal? What is the time frame for required action?

Questions to Ask the Marketing Manager cont.

• Information– What do you know about the circumstances

of these changes?

• Suspected causes– Why have these changes come about?

• Possible solutions– What can you change?

• Anticipated consequences– What will result from changes made?

• Assumptions– Why do you anticipate these responses to

actions?

Differences between Managers and Researchers

Attribute differences Decision makers Researchers

Research motivation

Disposition to knowledgeOrientationResponsibilityUse of the researchLevel of involvementTraining

To make symptoms disappear

Want answers to questions

Pragmatic, subjectiveTo make profitPoliticalHighly involved, emotionalGeneral decision making

To discover facts and relationshipsWant to ask question

Scientific, objectiveTo generate informationNon-politicalDetached, analyticalScientific/technique

Management Decision Problem

• What the decision maker needs to do?– What does the company need to do to

increase its market share?– Should the product be changed or a

new one introduced?– Should we increase or change

promotion?– Should the market be segmented

differently?

The importance of proper problem definition

The right answer to the wrong question may be worthless or even harmful.– RJ Reynolds and Real cigarettes– Coca–Cola and new Coke formula.

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The process of defining the problem

• Problem definition indicates a specific marketing decision to be clarified or problem to be solved.

• It specifies research questions to be answered and the objectives of the research.

• It involves several interrelated steps.

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The process of defining the problem

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Ascertain the decision–maker’s objectives

• Researcher must attempt to satisfy decision–maker’s objectives.

• Managerial goals should be expressed in measurable terms.

• The iceberg principle: the dangerous part of many marketing problems is neither visible to nor understood by marketing managers.

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Understand the background of the problem

• Exercising managerial judgement• Situation analysis: informal gathering of

background information to familiarise researchers or managers with the decision area.

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Isolate and identify the problems, not the symptoms

• Symptoms can be confusing.– Certain occurrences that appear to be the

problem may be only symptoms of a deeper problem.

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Isolate and identify the problems, not the symptoms

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Determine the unit of analysis

• Individuals, households, organisations, etc.,• In many studies, the family rather than the

individual, is the appropriate unit of analysis.

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Determine the relevant variable

• Variable is anything that varies in value.– For example, attitudes toward airlines may be a

variable ranging from positive to negative.• Categorical/classificatory: limited number of distinct

values• Continuous: infinite number of values• Dependent: variable that is to be predicted or

explained• Independent: variable that is expected to influence

the dependent variable.

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State the research questions and research objectives

• Written statement of research questions and research objectives that clarifies any ambiguity about what the research hopes to accomplish.

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Clarity in research questions and hypotheses

• Research questions and hypotheses add clarity to the statement of the marketing problem.

• A hypothesis is an unproven proposition or a possible solution to a problem.– For example, if consumers’ attitudes toward a

product are changed in a positive direction, consumption of the product will increase.

• A hypothesis should provide information that will be useful in decision–making.

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Marketing Research Question• What information is needed and

how that information can be obtained effectively and efficiently?– To determine the effectiveness of the

current advertising campaign.– To determine consumer preferences

and purchase intentions for a new product.

– To determine whether children influence their parents purchase habits of environmentally friendly products.

– To identify consumer attitudes towards the company image.

How do you assist the client in clearly defining the problem?

Michael Sparks, Director

Intuitive Solutions

Potential Errors of Marketing Research Questions

• Too broad• Too narrow

Solution!• Broad statement• Specific components

Example: Research Objectives• Broad statement (i.e., research

question)– To understand the decision making process

of potential university students in their choice of university .

• Specific components (i.e., research objectives)– To determine the factors potential students

consider to be important in selecting a university.

– To determine when decisions regarding university selection are made.

– To determine sources of information and people who influence potential students decision regarding choice of university.

Research Objectives cont.• Should be:

– Precise– Detailed– Clear– Operational

e.g. Compare the demographic profiles of buyers and non-buyers using age, sex, education and annual family income

What variales are required to meet the

research objectives?

Example: Research objectivesManagement Problem• How can consumer attitudes towards our company

be improved? Should advertisement X be run?

Research Problem/question• To determine the effectiveness of the current ad.

Research objectives• To determine whether consumers can recall the

advertisement• To identify whether the advertisement will be

interpreted accurately• To evaluate the influence of the advertisement on

attitudes towards the product.

Objective and Theoretical Foundation

• Research should be based on objective evidence and supported by theory – e.g., books, journals and monographs

• Helps determine which variables should be investigated and how they should be measured

Literature Review Background – Required for Phase

1 of Assessment

Decision–oriented research objectives

• The research objective is the researcher’s version of the marketing problem.– Explains the purpose of the research in

measurable terms– Defines standards for what the research

should accomplish– Also influences decisions about the

research design.

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Decision-oriented research objectives

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Decision–oriented research objectives

• Statement of a marketing problem influences the research objectives, which in turn, becomes the basis for the research design.

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Research proposal

• A written statement of the research design that includes a statement explaining the purpose of the study.

• Detailed outline of procedures associated with a particular methodology.

• All ambiguities about why and how the research will be conducted must be clarified before the proposal is complete.

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Research proposal(2)• A mechanism that allows managers to evaluate

the details of the proposed research design and determine if alterations are necessary.

• Helps managers decide if proper information will be obtained to accomplish what is desired.

• The format follows the six stages in the research process outlined in Exhibit 1.2.

– Basic questions asked when planning research design.

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Stage one — problem definition

• What is the purpose of the study?• How much is already known?• Is additional background information

necessary?• What is to be measured? How?• Can the data be made available?• Should research be conducted?• Can a hypothesis be formulated?

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Stage two — selection of basic research design

• What types of questions need to be answered?

• Are descriptive or causal findings required?• What is the source of the data?• How quickly is the information needed?• How should survey questions be worded?• How should experimental manipulations be

made?

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Stage three — selection of sample

• Who or what is the source of the data?• Can the target population be identified?• Is a sample necessary?• How accurate must the sample be?• Is a probability sample necessary?• Is a national sample necessary?• How large a sample is necessary?• How will the sample be selected?

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Stage four — data gathering

• Who will gather the data?• How long will data gathering take?• How much supervision is needed?• What operational procedures need to be

followed?

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Stage five — data analysis and evaluation

• Will standardised editing and coding procedures be used?

• How will the data be categorised?• Will computer or hand tabulation be used?• What is the nature of the data?• What questions need to be answered?• How many variables are to be investigated

simultaneously?• Performance criteria for evaluation?

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Stage six — type of report

• Who will read the report?• Are managerial recommendations requested?• How many presentations are required?• What will be the format of the written report?

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Overall evaluation of the research design

• How much will the study cost?• Is the time frame acceptable?• Is outside help needed?• Will this research design attain the stated

research objectives?• When should the research begin?

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Anticipating outcomes

• The anticipation of statistical findings is often lacking in research proposals.

• Use of a dummy table helps manager gain a better understanding of the actual outcome.

• Dummy tables: representations of the actual tables that will be in the findings section of the final report.

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What is the strategic value of a single source monitor?

William Burlace

Roy Morgan Research

Explain the use of market research for Sofitel

Hotels.

Neil Paterson

Director of Sales and Marketing

Sofitel Hotel, Gold Coast

What types of marketing issues do clients generally want researched?

Peter Kenny

Managing Director

Colmar Brunton

How does a small research company compete against the big players?

Michael Sparks

Director - Intuitive Solutions