CHAPTER 2 Problem Definition and The Marketing Research

CHAPTER 2 Problem Definition and The Marketing Research Process

The Marketing Research Process 5. Data collection How? What? Why? 4. Selecting the Sampling procedure 6. Data analysis 3. Choosing the research method 2. Creating the research design 1. Identifying & Formulating the Research Problem 8. Follow-up 7. Report writing & presentation

Overview of the Research Process (alt. ) 1. Establish need for information 2. detail research objectives and information needs – “Why is this project being conducted? ” and "What specific information is required to attain the objectives? " 3. design research and data sources – information to collect, sources of data, and plan guiding data collection and analysis 4. design data-collection procedure – e. g. , questionnaire 5. design sample – define population, sample-selection method, and the sample size 6. collect data 7. process and code data 8. analyze data 9. present results – oral presentation and/or written report

Step 1: Define the problem Objectives Vs. problems Management decision problem vs. marketing research problem? Problem or Symptom?

THE CASE OF CHERRY BLOSSOM Cherry Blossom sales are dropping. Kiwi is the main competitor. Salespeople tell me that Kiwi is gaining share. LET’S KILL KIWI!!! what is likely to happen with such decisions? $20 million ad campaign Price promotions Six months later - NO JOB!!

How to define the decision problem? DECION MAKING ISSUES: Cherry Blossom shoe polish is losing sales! BEWARE OF FRAMING Cherry’s market share is dropping…. because Kiwi is taking away market share WHAT ELSE COULD BE HAPPENING?

ANALYSIS! Is the market shrinking? Are there other new competitors? Are there different needs?

Problem Definition: Cherry Blossom Shoe Polish is losing sales due to three important trends: -consumers are wearing other kinds of non-leather shoe -attitudes towards shoe polishing is declining -consumers have less time to polish their shoes

Identifying & Formulating the Research Problem

Packaging Identifying & Formulating the Research Problem

Creating the Research Design Exploratory Study (Montblanc) Seeking insight into the general nature of the problem. Descriptive Study Description of the environment. Causal Study Whether one variable causes the other. Hypotheses A conjecture; a possible answer to the research question

Conducting Exploratory Research What is Exploratory Research? Seeking insight into the general nature of the problem Qualitative Research; Observation, Mystery shopping, Focus groups, In-depth interviewing, Garbology. NO hypothesis or vague hypothesis

Descriptive Research (Example) Describe the characteristics of relevant groups Internet users Who buys our products? Where do they buy it?

Causal Studies Variable Dependent variable Independent variable Three issues for causal studies Temporal sequence. Attitude Behavior. Concomitant variation Spurious association

What is this type of research? Who are our users? Will an increase in service staff help profitability? What is the demographic profile of our target market?

What is this type of research? What are the reasons for falling sales? Will a change in price improve loyalty?

Choosing a Method of Research Survey Mail Telephone Intercept Observation Monitors respondents actions without direct interaction Experiments

Sampling Procedure Probability vs. Non-probability sampling Population Vs. Sample www. cnn. com The other steps……….

Regardless of which presidential candidate you now support, who do you think won the debate?

NEWSWEEK Poll George W. Bush John Kerry No winner/about even Don't know 19% 61% 16% 4% The NEWSWEEK poll was conducted by Princeton Survey Research Associates, which interviewed 1, 013 registered voters by telephone on Sept. 30 -Oct. 2. The margin of error is plus or minus 4 percentage points.

2 -5 Errors in Marketing Research Two main types of errors in marketing research: sampling errors unavoidable inaccuracy stemming from using samples to estimate quantities in the population equals difference between the sample value and the true underlying population value non-sampling errors – errors that occur in the research process over and above the sampling error inadvertent mistakes deliberate deceptions

2 -5 c Types of Non-Sampling Errors faulty problem definition – solving the wrong problem incorrect population definition – wrong sample sampling frame not representative of the population e. g. , phone book under-represents stock buyers non-response errors – refusals and not at home poor questionnaire design e. g. , biased or misleading question measurement error – scale doesn’t match construct of interest improper causal inferences – assigning cause inappropriately