Defining MR Problem

7/31/2019 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

Documents

Defining MR Problem