2 Defining the Marketing Research Problem Problem Definition

2 Defining the Marketing Research Problem

Problem Definition • Defining the problem is the most important step, because only when a problem has been clearly and accurately identified can a research project be conducted properly • Defining the marketing research problem sets the course of the entire project.

Importance of Defining the Problem • Problem definition involves stating the general marketing research problem and identifying its specific components. • Only when marketing research problem has been clearly defined can research be designed and conducted properly. • Inadequate problem definition is a leading cause of failure of marketing research project. • Better communication and more involvement in problem definition are the most frequently mentioned ways of improving the usefulness of research.

The Problem Definition Process Tasks Involved Discussion with Decision Maker(s) Interviews with Experts Secondary Data Analysis Qualitative Research Environmental Context of the Problem Step I: Problem Definition Management Decision Problem Marketing Research Problem Step II: Approach to the Problem Objective/ Theoretical Foundations Analytical Model: Verbal, Graphical, Mathematical Research Questions Hypotheses Step III: Research Design Specification of Information Needed 4

The Process of Defining the Problem and Developing an Approach • Tasks Involved – – Discussions with Decision Maker(s) Interviews with Experts Secondary Data Analysis Qualitative Research • Environmental Context of the Problem

Discussions with The Decision Maker • Discussions with the decision maker (DM) are extremely important • The DM needs to understand the capabilities and limitations of research. • Research provides information relevant to management decisions, but it cannot provide solutions, solutions because solutions require managerial judgment. • Conversely, the researcher needs to understand the nature of what decisions managers face - the management problem - and what they hope to learn from the research

F i g u r e 2. 5 D i s c u s s i o n B e t w e e n t h e R e s e a r c h e r Discussions with The Decision Maker Cont… a n d t h e D M Focus of the DM Focus of the Researcher Symptoms Underlying Causes • Loss of Market Share • Superior Promotion by Competition Discussion • Inadequate Distribution of Company’s Products • Lower Product Quality • Price Undercutting by a Major Competitor

Interaction between the DM and the Researcher should be characterized by: • • • Communication (free exchange ideas) Cooperation (marketing research is a team project) Confidence (mutual trust) Candor (an attitude of openness, no hidden agenda) Closeness (feeling of warmth and closeness, between the DM and the researcher) • Continuity (must interact continually) • Creativity (the interaction between the DM and the researcher should be creative rather than formulaic)

Interviews with Industry Experts • Interviews with industry experts, experts individuals knowledgeable about the firm and the industry, may help formulate the marketing research problem. • These experts may be found both inside and outside the firm. • Typically, expert information is obtained by unstructured personal interviews, without administering a formal questionnaire. • The purpose of interviewing experts is to help define the marketing research problem rather than to develop a conclusive solution.

Two Potential Difficulties of Seeking Advice from Experts 1. 2. Some individuals who claim to be knowledgeable and are eager to participate may not really posses expertise It may be difficult to locate and obtain the help from experts who are outside the client organization. For these reasons, interviews with experts are more useful in conducting marketing research for industrial firms and for product of a technical nature, where it is relatively easy to identify and approach the experts.

Secondary Data Analysis • Primary data, data are collected or produced by the researcher for the specific purpose of addressing the research problem. • Secondary data are: • data collected for some purpose other than the problem at hand. • include information made available by business and government sources, commercial marketing research firms and computerized databases. • an economical and quick source of background information.

Qualitative Research • Sometimes qualitative research must be undertaken to gain an understanding of the problem and its underlying factors • Qualitative research is unstructured, unstructured exploratory in nature, based on small samples, and may utilize popular qualitative techniques such as • focus group (group interviews), • word association (asking respondents to indicate their first response to stimulus words), and • depth interviews (one-on-one interviews that probe the respondents’ thought in detail).

Environmental Context of the Problem • To understand the background to a marketing research problem, problem the researcher must understand the client’s firm and industry. • In particular, the researcher analyze the factors that have an impact on the definition of the marketing research problem such as: • past information and forecast pertaining to the industry and the firm; • resources and constraints of the firm; • objective of the decision maker; • buyer behavior; • legal environment; • economic environment; and • marketing and technological skills of the firm.

Problem Definition: Variations of the Problem • The management decision problem asks what the DM needs to do, whereas the marketing research problem ask what information is needed and how it can best be obtained. • Research can provide the necessary information to make a sound decision. • The management decision problem is action oriented It is concerned with the possible actions the DM could take. • How should the loss of market share be arrested? • Should the market be segmented differently?

Problem Definition: Variations of the Problem Cont… • The marketing research problem is information oriented. It wants to determine what information is needed to make the best decision. • It involves determining what information is needed and how that information can be obtained effectively and efficiently. • Whereas the management decision problem focuses on symptoms, symptoms the marketing research problem focuses on underlying causes

Defining the Marketing Research Problem Cont… • Two common errors in problem definition: too broadly definition and too narrowly definition. • A broad definition does not provide clear guidelines for the subsequent steps involve in the project. • A narrow focus may preclude consideration of some courses of action, particularly those that are innovative and may not be obvious.

The Broad Statement and The Specific Component • The Broad Statement provides perspective on the problem and act as a safeguard against committing the second type of error (define the marketing research problem too narrowly). • The Specific component focus on the key aspects of the problem and provide clear guidelines on how to proceed further, thereby reducing the likelihood of the first type of error.

Problem Definition: Variations of the Problem Cont… Management decision problem • Asks what the decision maker needs to do • Action oriented • Focuses on symptoms Marketing research problem • Asks what information is needed and how it should be obtained • Information oriented • Focuses on the underlying causes

Problem Definition: Variations of the Problem Cont… Examples: Management decision problem • Should a new product be introduced? • Should the advertising campaign be changed? Marketing research problem • To determine consumer preferences and purchase intentions for the proposed new product. • To determine the effectiveness of the current advertising campaign

Approach to the Problem: Components • In the process of developing an approach, we must not lose sight of the goal - the outputs • The outputs of the approach development process should include the following components: • Objective/theoretical framework • Analytical models • Research Questions • Hypotheses, and • Specification of Information Needed.

Objective/ Theoretical Framework • In general, research should be based on objective evidence and supported by theory • A theory is conceptual scheme based on foundational statements called axioms, which are assumed to be true. • Objective evidence (that is unbiased and supported by empirical findings) is gathered by compiling relevant findings from secondary sources. • The researcher should rely on theory to determine which variables should be investigated.

The Role of Theory in Applied Marketing Research • Conceptualizing and identifying key variables (IV and DV). • Operationalizing key variables. • Selecting a research design. • Selecting a sample. • Analyzing and interpreting data. • Integrating findings.

Analytical Model • Analytical model An explicit specification of a set of variables and their relationships designed to represent some real system or process in whole or in part. Models can have many different forms such as: verbal, graphical, an mathematical structure. • Verbal model Analytical models that provide a written representation of the relationships among variables.

Analytical Model Cont… • Graphical model Analytical models that provide a visual picture of the relationships among variables. Awareness Understanding; Evaluation Preference Patronage

Analytical Model Cont… • Mathematical model Analytical models that explicitly describe the relationships among variables, usually in equation form Where, y = degree of preference model parameters to be estimated statistically store patronage factors that constitute the choice criteria

Research Questions • Research questions are refined statements of the specific components of the problem. • The components of problem define the problem in specific terms, but further detail may be needed to develop an approach. • Each component of the problem, may have to be broken down into subcomponent or research questions • Research questions ask what specific information is required with respect to the problem components. • Information obtained using research questions should aid the decision maker.

Research Question and Theoretical Framework • The formulation of the research questions should be guided not only by the problem definition, but also by theoretical framework and the analytical model adopted • The theoretical framework and the analytical model play a significant role in the operationalization and measurement of variables specified by the research questions • The research questions were further refined by precisely defining the variables and determining how they were to be operationalized.

Hypotheses • A hypothesis (H) is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher. • It may be a tentative statement about relationship between two or more variables as stipulated by theoretical framework or the analytical model. • Often, a hypothesis is a possible answer to the research question. • An important role of a hypothesis is to suggest variables to be included in the research design

Hypotheses Cont… RQ: Do Customers of Sears exhibit store loyalty? H: Customers of Sears are loyal. • Hypotheses are an important part of the approach to the problem. Objective/ Theoretical Framework Components of the Marketing Research Problem Research Questions Analytical Model Hypotheses Development of Research Questions and Hypotheses

Hypothesis Vs Research Question • Hypotheses go beyond research questions because they are statement of relationships or propositions rather than merely questions to which answers are sought. • Where are research questions are interrogative, hypotheses are declarative and can be tested empirically.

Specification of Information Needed • By focusing on each component of the problem and the analytical framework and models, research questions, and hypotheses, the researcher can determine what information should be obtained in the marketing research project. • It is helpful to carry out this exercise for each component of the problem and make a list specifying all the information that should be collected.