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MARKETING RESEARCH

STEP1Defining the problem

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WHAT IS A PROBLEM ? RESEARCH QUESTION

PROBLEM DEFINITION – Involves stating the

general problem ( a broad statement) and

identifying the specific components of the

marketing research problem

Inadequate problem definition is a leading cause

of failure of marketing research projects

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The truly serious mistakes are

made not as a result of wrong

answers but because of askingthe wrong questions (Peter

Drucker)

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1.Discussions with management

including key decision makers

2.Interviews with industry experts3.Analysis of secondary data

4.Qualitative research

The above lead to understanding of the

environmental context of the problem

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Consists of factors that have an impact on the

definition of the marketing research problem. These

include:

i. Past information and forecasts

ii. Resources and constraints of the firm

iii.Objectives of the decision makeriv.Buyer behavior

v. Legal environment

vi.Economic environment

vii.Marketing and technological skills of the firm

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Can be defined after gaining an adequate

understanding of the environmental context. Both aredistinct yet closely linked

MANAGEMENT DECISION PROBLEM: Confronts the

decision maker. Asks what he needs to do. E.g. Howshould the loss of a market share be addressed? Should

the market be segmented differently? Should a new

product be introduced? Should the promotional budget

be increased?

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MARKETING RESEARCH PROBLEM: Entails

determining what information is needed and how it

can be obtained efficiently and effectively.

The distinction aids in understanding how the MR

problem should be defined.

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Management

decision problem

Marketing research

problem

Asks what the

decision maker

needs to do

Action oriented

Focuses on

symptoms

Asks what

information is

needed and how itshould be obtained

Information

oriented

Focuses on

underlying causes

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Management decision

problem

Marketing research

problem

1. Should a new product beintroduced?

2. Should the advertising

campaign be changed?

3. Should the price of thebrand be increased?

1. To determine consumerpreferences and purchase

intentions for the proposed

product

2. To determine the

effectiveness of the current

advertising campaign

3. To determine the priceelasticity of demand and the

impact of various levels of

price changes on sales and

profits

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*Three components:

1.Management wants to (take an action) –-This linestates the rationale behind the research question n

the project ( Management Decision Problem)

2.Therefore, we should study (topic)—

Declares what

broad topic is being investigated

3.So that we can explain (question)—

Implies thequestion being investigated- i.e. the who/how/why

that needs to be explained

2. and 3. define the broad marketing problem

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A good way to link the broad

statement of the marketing

research problem with themanagement decision problem is

through the use of the conceptual

map

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EXAMPLE : AT & T (American Telephony &

Telegraphy—American multinational corporation

headquartered in Texas)

1.Management wants to (develop retention

programs that will retain 90% of heavy users of

wireless services and lead to 10% higher salesover the next two years)

2.Therefore , we should study (heavy-user loyalty)

3.So that we can explain (what will be the most

important variable in retaining these customers

over the next two years)

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Problem focuses on: A segment of customers---Heavy

users

A customer behaviour---Staying withthe company over the next 2 years

Measurable results---90% retention of

heavy users

Company goal---10% increase in sales

over the next 2 years

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ERROR I Research problem defined too broadly .Does not provide clear guidelines for the subsequent

steps in the research project

Examples of overly broad problem definitions:

Develop a marketing strategy for the brand

Improve the competitive position of the firmImprove the company’s image

Not specific enough to suggest an approach to the

problem or a research design

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ERROR II Research problem defined toonarrowly .

A narrow focus:

i. Decreases the possibility of considering

alternative courses of action which may be

innovative

ii. Prevents the researcher from addressing

important components of the management

decision problem

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EXAMPLE OF A PROJECT CONDUCTED BY A

CONSUMER PRODUCTS FIRM

Management problem–- How to respond to a price

cut initiated by a competitor?

The alternative courses of action initially identifiedby the firm’s research staff:

1.Decrease the price of the firm’s brand to match

the competitor’s price cut

2.Maintain price but increase advertising heavily3.Decrease the price somewhat, without matching

the competitor's price, and moderately increase

advertising

These were not promising

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Outside marketing experts redefined the problem as:

How to improve the market share and profitability of the

product line?

Qualitative research indicated that:

In blind tests consumers could not differentiate productsoffered under different brand names

They relied on price as an indicator of quality

Findings led to a creative alternative:

Increase the price of the existing brand and introduce two

new brands—one priced to match the competitor and the

other priced to undercut it

The strategy was implemented resulting in the solution

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Two things to be kept in mind while defining the

problemThe definition should:

Allow the researcher to obtain all the information

needed to address the management decisionproblem

Guide the researcher in proceeding with the

project

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The broad statement provides anappropriate perspective on the problem

(safeguards against committing Error II)

The specific components focus on the key

aspects of the problem and provide clear

guidelines on how to proceed further(prevent Error I)

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TO SUM UP following are the factors to be

considered while analyzing the

environmental context of the problem:

P ast information and forecasts

R esources and constraintsO bjectives of the decision maker

B uyer behaviour

L egal environmentE conomic environment

M arketing and technological skills

THANK YOU

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mr -- step 1

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