1. Chapter TwoDefining the Marketing ResearchProblem and Developing anApproach

2. 2-2Chapter Outline1) Overview2) Importance of Defining a Problem3) The Process of Defining the Problem andDeveloping an Approach4) Tasks involved in Problem Definitioni. Discussions with Decision Makersii. Interviews with Industry Expertsiii. Secondary Data Analysisiv. Qualitative Research 3. 2-3Chapter Outline5) Environmental Context of the Problemi. Past Information and Forecastsii. Resources and Constraintsiii. Objectivesiv. Buyer Behaviorv. Legal Environmentvi. Economic Environmentvii. Marketing and Technological Skills6) Management Decision Problem and Marketing Research Problem 4. 2-4Chapter Outline 7) Defining the Marketing Research Problem 8) Components of an Approach i. Objective / Theoretical Foundations ii. Analytical Model iii. Research Questions iv. Hypothesis v. Specification of Information Needed 9) International Marketing Research10) Ethics in Marketing Research11) Internet and Computer Applications 5. 2-5Chapter Outline12) Focus on Burke13) Summary14) Key Terms and Concepts 6. 2-6Chain Restaurant StudyOne day I received aphone call from aresearch analyst whointroduced himself asone of our alumni.He was working for arestaurant chain in townand wanted helpanalyzing the data hehad collected whileconducting a marketingresearch study. 7. 2-7Chain Restaurant StudyWhen we met, he presented me with a copy of thequestionnaire and asked how he should analyzethe data. My first question to him was, 8. 2-8Chain Restaurant StudyWhen he lookedperplexed, Iexplained that dataanalysis is not anindependentexercise. Rather, the goal of data analysis is to PROVIDE INFORMATION RELATED TO THE PROBLEMCOMPONENTS. 9. 2-9 Chain Restaurant StudyI was surprised to learn that he didnot have a clear understanding ofthe marketing research problemand that a written definition did notexist. So before going any further, Ihad to define the marketingresearch problem.Once that was done, I found that muchof the data collected was not relevantto the problem. In this sense, thewhole study was a waste of resources.A new study had to be designed andimplemented to address the problemdefined. 10. 2-10The Problem Definition ProcessFig. 2.1 Tasks InvolvedDiscussion Interviews SecondaryQualitativewith with Data ResearchDecision Maker(s)ExpertsAnalysisEnvironmental Context of the Problem Step I: Problem DefinitionManagement Decision ProblemMarketing Research Problem Step II: Approach to the ProblemAnalyticalSpecification Objective/ Model: Verbal,Researchof TheoreticalHypothesesGraphical,Questions Information FoundationsMathematicalNeededStep III: Research Design 11. 2-11Tasks Involved in Problem Definition Discussions with Decision Makers Interviews with Industry Experts Secondary Data Analysis Qualitative Research 12. 2-12The Problem Audit The problem audit is a comprehensive examination of a marketing problem with the purpose of understanding its origin and nature. 1. The events that led to the decision that action is needed, or the history of the problem. 2. The alternative courses of action available to the DM. 3. The criteria that will be used to evaluate the alternativecourses of action. 4. The potential actions that are likely to be suggested based on the research findings. 5. The information that is needed to answer the DMs questions. 6. The manner in which the DM will use each item of information in making the decision. 7. The corporate culture as it relates to decision making. 13. 2-13The Seven Cs of Interaction The interaction between the DM and the researcher should be characterized by the seven Cs:1. Communication2. Cooperation3. Confidence4. Candor5. Closeness6. Continuity7. Creativity 14. Factors to be Considered in the 2-14Environmental Context of the ProblemFig. 2.2 PAST INFORMATION AND FORECASTSRESOURCES AND CONSTRAINTSOBJECTIVESBUYER BEHAVIOR LEGAL ENVIROMENT ECONOMIC ENVIROMENT MARKETING AND TECHNOLOGICALSKILLS 15. 2-15 Management Decision Problem Vs. Marketing Research ProblemManagement Decision Problem Marketing Research ProblemShould a new product be To determine consumer preferencesintroduced? and purchase intentions for theproposed new product.Should the advertisingTo determine the effectivenesscampaign be changed?of the current advertisingcampaign.Should the price of the To determine the price elasticitybrand be increased? of demand and the impact on salesand profits of various levelsof price changes. 16. Proper Definition of the Research 2-16ProblemFig. 2.3 Marketing Research ProblemBroad Statement Specific Components 17. 2-17Department Store ProjectProblem Definition In the department store project, the marketing research problem is to determine the relative strengths and weaknesses of Sears, vis--vis other major competitors, with respect to factors that influence store patronage. Specifically, research should provide information on the following questions. 1. What criteria do households use when selecting department stores? 2. How do households evaluate Sears and competing storesin terms of the choice criteria identified in question 1? 3. Which stores are patronized when shopping for specific product categories? 4. What is the market share of Sears and its competitors forspecific product categories? 5. What is the demographic and psychological profile of thecustomers of Sears? Does it differ from the profile of customers of competing stores? 6. Can store patronage and preference be explained in termsof store evaluations and customer characteristics? 18. 2-18Components of an Approach Objective/Theoretical Foundations Analytical Model Research Questions Hypotheses Specification of the InformationNeeded 19. 2-19 The Role of Theory in Applied Marketing ResearchResearch Task Role of Theory1. ConceptualizingProvides a conceptual foundation and understanding of the basic processesand identifying underlying the problem situation. These processes will suggest key dependentkey variables and independent variable s.2. Operationalizing Theoretical constructs (variables) can suggest independent and dependentkey variables variables naturally occurring in the real world.3. Selecting aCausal or associative relationships suggested by the theory may indicate whetherresearch design a causal or descriptive design should be adopted.4. Selecting aThe theoretical framework may be useful in defining the population andsamplesuggesting variables for qualifying respondents, imposing quotas, or stratifyingthe population (see Chap. 11).5. Analyzing andThe theoretical framework (and the models, research questions and hypothesesinterpreting data based on it) guide the selection of a data analysis strategy and the interpretationof results (see Chap. 14).6. IntegratingThe findings obtained in the research project can be interpreted in the light offindingsprevious research and integrated with the existing body of knowledge. 20. 2-20Models An analytical model is a set of variables and their interrelationships designed to represent, in whole or in part, some real system or process. In verbal models, the variables and their relationships are stated in prose form. Such models may be mere restatements of the main tenets of a theory. 21. 2-21Graphical ModelsGraphical models are visual. They are used toisolate variables and to suggest directions ofrelationships but are not designed to providenumerical results. Awareness Understanding: Evaluation Preference Patronage 22. 2-22Mathematical ModelsMathematical models explicitly specify therelationships among variables, usually inequation form. n y = a0 + ai xii =1Wherey = degree of preferencea ,a 0 = model parameters to be estimated istatistically 23. Development of Research2-23Questions and Hypotheses Fig. 2.4 Components of the Marketing Research ProblemObjective/TheoreticalFrameworkResearch QuestionsAnalyticalModel Hypotheses 24. 2-24Research Questions and Hypotheses Research questions (RQs) arerefined statements of the specificcomponents of the problem. A hypothesis (H) is an unprovenstatement or proposition about a factoror phenomenon that is of interest to theresearcher. Often, a hypothesis is apossible answer to the researchquestion. 25. 2-25Department Store Project RQ: Do the customers of Sears exhibitstore loyalty? H1: Customers who are store loyal areless knowledgeable about the shoppingenvironment. H2: Store-loyal customers are morerisk-averse than are non-loyalcustomers. 26. 2-26Department Store ProjectSpecification of Information NeededComponent 1 The researcher identified the following factors as part of thechoice criteria: quality of merchandise, variety and assortmentof merchandise, returns and adjustment policy, service of storepersonnel, prices, convenience of location, layout of store, creditand billing policies. The respondents should be asked to ratethe importance of each factor as it influences their storeselection.Component 2 The researcher identified nine department stores as competitorsto Sears based on discussions with management. Therespondents should be asked to evaluate Sears and its ninecompetitors on the eight choice criteria factors. 27. 2-27Department Store ProjectComponent 3 Sixteen different product categories were selected,including womens dresses, womens sportswear,lingerie and body fashion, junior merchandise, mensapparel, cosmetics, jewelry, shoes, sheets andtowels, furniture and bedding, and draperies. Therespondents should be asked whether they shop ateach of the ten stores for each of the 16 productcategories.Component 4 No additional information needs to be obtained fromthe respondents. 28. 2-28Department Store ProjectComponent 5 Information should be obtained on the standarddemographic characteristics and the psychographiccharacteristics of store loyalty, credit use,appearance consciousness, and combining shoppingwith eating.Component 6 No additional information needs to be obtained fromthe respondents. 29. At United, Food is Uniting the Airline 2-29 with TravelersUnited Airlines, as other major airlines, had to deal withpassenger loyalty (management decision problem: howto attract more and more loyal passengers). The broadmarketing research problem was to identify the factorsthat influence loyalty of airline travelers. 30. At United, Food is Uniting the Airline 2-30with TravelersThe basic answer is to improve service. Exploratoryresearch, theoretical framework, and empirical evidencerevealed that the consumers choice of an airline isinfluenced by: safety, price of the ticket, frequent-flyerprogram, convenience of scheduling, and brand name. 31. At United, Food is Uniting the Airline2-31 with TravelersA graphical model stipulated thatconsumers evaluate competing airlinesbased on factors of the choice criteria toselect a preferred airline. The problem wasthat major airlines were quite similar onthese factors. Indeed, "airlines offer thesame schedules, the same service, and thesame fares. Consequently, United Airlineshad to find a way to differentiate itself. Foodturned out to be the solution. 32. At United, Food is Uniting the Airline 2-32 with TravelersSecondary data, like the J. D Power & Associatessurvey on "current and future trends in airline foodindustry," indicated that "food service is a majorcontributor to customers loyalty." This survey alsoemphasized the importance of food brands. 33. At United, Food is Uniting the Airline2-33 with TravelersThe airlines Marketrak survey told United Airlines that"customers wanted more varied and up-to-date food.The following research questions and hypotheses may beposed.RQ1 How important is food for 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. 34. At United, Food is Uniting the Airline2-34with TravelersCharacteristics which influence the research designincluded the identification of competing airlines (Delta,American, etc.), factors of the choice criteria (alreadyidentified), measurement of airline travel, and loyalty. 35. At United, Food is Uniting the Airline 2-35with TravelersThis kind of research helped United Airlines to define their marketingresearch problem, and develop the approach. Focus groups and surveyswere conducted to check customers perceptions of food in UnitedAirlines aircraft. The results provided support for all the hypotheses (H1to H4). United Airlines then made a few changes: new "culinary menus,"larger portions of food, new coffee, and branded products (e.g., Godivachocolates). This resulted in better service, increasing customersatisfaction and fostering loyalty. 36. 2-36International Marketing ResearchExamining the impact of the Self-Reference Criterion (SRC)1. Define the marketing research problem in terms of domestic environmental and cultural factors.2. Define the marketing research problem in terms of foreign environmental and cultural factors. Make no judgments. 3. Isolate the self-reference criterion (SRC) influence on the problem and examine it carefully to see how it complicates the problem.4. Redefine the problem without the SRC influence and address it for the foreign market situation.