Defining The Marketing Research Problem and Developing An Approach

Chapter Outline
1) Overview
2) Importance of Defining a Problem
3) The Process of Defining the Problem and Developing an
Approach
4) Tasks involved in Problem Definition
i. Discussions with Decision Makers
ii. Interviews with Industry Experts/Focus groups
iii. Secondary Data Analysis
iv. Qualitative Research
Chapter Outline….
5) Environmental Context of the Problem
i. Past Information and Forecasts
ii. Resources and Constraints
iii. Objectives
iv. Buyer Behavior
vi. Economic Environment
6) Management Decision Problem and
Marketing Research Problem
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
Eg: Chain Restaurant Study
From Author: “One day I received a phone call from a
research analyst who introduced himself as one of our
alumni. He was working for a restaurant chain in town and
wanted help analyzing the data he had collected while
conducting a marketing research study. When we met, he
presented me with a copy of the questionnaire and asked
how he should analyze the data. My first question to him
was, What is the problem being addressed” – Prof Malhotra.
Chain Restaurant Study
When he looked perplexed, I explained that data analysis
is not an independent exercise.

Rather, the goal of data analysis is to PROVIDE INFORMATION

RELATED TO THE PROBLEM COMPONENTS.
 Chain Restaurant Study
I was surprised to learn that he did not have
a clear understanding of the marketing
research problem and that a written
definition did not exist. So before going any
further, I had to define the marketing
research problem.

Once that was done, I found that much of the

data collected was not relevant to the problem.
In this sense, the whole study was a waste of
resources. A new study had to be designed and
implemented to address the problem defined.
 The Problem Definition Process
Tasks Involved

Discussion Interviews Secondary Qualitative

with with Data Research
Decision Maker(s) Experts Analysis

Environmental Context of the Problem

Step I: Problem Definition

Management Decision Problem

Marketing Research Problem

Step II: Approach to the Problem

Analytical Model: Verbal, Specification

Objective/ Graphical, Mathematical Research of
Theoretical Hypotheses
Questions Information
Foundations
Needed

Step III: Research Design

Tasks Involved in Problem Definition

 Discussions with Decision Makers

 Interviews with Industry Experts

 Secondary Data Analysis

 Qualitative Research
Discussion with Decision Makers: The 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 alternative courses 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 DM's
questions
6. The manner in which the DM will use each item of
information in making the decision
The Seven Cs of Interaction
The interaction between the DM and the Researcher(R) should be
characterized by the seven Cs:
1. Communication: Free exchange of ideas b/w DM and R(BC)
2. Cooperation: MR is a team project in which parties both must
cooperate
3. Confidence :the interaction b/w them should be guided by
mutual trust
4. Candor: There should not be any hidden agenda, and an
attitude of openness should prevail.
5. Closeness: Feelings of warmth and closeness should
characterize the relation between the DM and R.
6. Continuity: both must interact continually rather than
sporadically.
7. Creativity: The interaction must be creative rather than
formulaic.
Environmental Context of the Problem
 The tasks involved in understanding the environmental context of the
marketing and research problem can include
 discussions with decision makers,
 qualitative interviews with industry experts,
 and secondary data collection and analysis.
 The purposes of these tasks are to develop an understanding of forces that
may affect the nature of decision makers’ problems and related research
problems.
Factors to be Considered in the
Environmental Context of the Problem

PAST INFORMATION AND FORECASTS

RESOURCES AND CONSTRAINTS

OBJECTIVES

BUYER BEHAVIOR

LEGAL ENVIRONMENT

ECONOMIC ENVIRONMENT
MARKETING AND TECHNOLOGICAL
SKILLS
Environmental Context…
 Past information and forecasts: Past information and forecasts provide
industry data that put the current problem into context.
 Past information and forecasts of trends with respect to sales, market share,
profitability, technology, demographics, and life styles can help researcher
understand the underlying marketing research.

 Resources and constraints: Resources and constraints force the problem

to be defined in an appropriate scope.
 It is necessary to take into account both the resources available, such as
money and research skills, and the constraints on the organization, such as
cost and time.
 Objectives: An understanding of the objectives of the organization and
decision maker allows the researcher to pinpoint the exact desires for the
study.

 Buyer behavior: An understanding of the ultimate consumer’s behavior is

critical to understanding their response to specific marketing actions.
 The buyer behavior factors that should be considered include:
 The geographical location of buyers and non buyers
 Demographic & psychographic (life style) characteristics
 Price sensitivity
 Prices of related goods
 Legal behavior: The legal environment may regulate certain aspects of the
marketing mix and the research effort, thus affecting the problem
definition.
 The legal environment includes public policies, laws, government agencies
can influence business environment.
 Patents, trade marks, royalties, trade agreements, taxes and tariffs..
 Economic environment: The economic environment can affect the
decisions of consumers and impact the marketing mix. The economic
environment, which is comprised of purchasing power, gross income,
disposable income, savings, prices, credit availability ..
 Marketing and technological skills: The abilities of the organization to
develop and market products may affect the scope of the research to be
done. In addition, technological advances offer new methods of conducting
marketing research.
Marketing Research Problem
 The management decision problem asks what the DM needs to do,
whereas the marketing research problem entails determining what
information is needed and how it can be obtained in the most feasible
way.
 The marketing decision problem is action oriented. It is concerned with
the possible actions the decision maker can take. How should the loss of
market share be arrested? Should the market be segmented differently?
Should a new product be introduced? Should the promotional budget be
increased?
Management Decision Problem Vs. Marketing Research Problem

Management 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

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
Problem definition
Approach to the Problem
Defining Marketing research problem
 The general rule to be followed in defining the research problem is that
the definition should:
 allow the researcher to obtain all the information needed to address the
marketing decision problem;
 guide the researcher in maintaining focus and proceeding with the project in
a consistent manner.
 Researchers make two common errors in problem definition.
 The first arises when the research problem is defined too broadly. A broad
definition does not provide clear guidelines for the subsequent steps involved
in the project.
  Some examples of excessively broad marketing research problem definitions
are: developing a marketing strategy for a brand, improving the competitive
position of the firm, or improving the company’s image. These are not specific
enough to suggest an approach to the problem or a research design.

 The second type of error is just the opposite: the marketing research
problem is defined too narrowly A narrow focus may preclude consideration
of some courses of action, particularly those that are innovative and not
obvious. It may also prevent the researcher from addressing important
components of the marketing decision problem.
 For example, in a project conducted for a consumer products firm, the
marketing problem was how to respond to a price cut initiated by a
competitor. The alternative courses of action initially identified by the firm’s
research staff were to:

 decrease the price of the firm’s brand to match the competitor’s price cut; •
maintain price but increase advertising heavily; or •
 decrease the price somewhat, without matching the competitor’s price, and
moderately increase advertising.
Proper Definition of the Research Problem
Marketing Research Problem

Broad Statement

Specific Components
Department Store Project
Problem Definition
In the department store project, the marketing research problem is to
determine the relative strengths and weaknesses of Sears, vis-à-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 stores in
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 for
specific product categories?
5. What is the demographic and psychological profile of the
customers of Sears? Does it differ from the profile of customers
of competing stores?
Components of an Approach

 Objective/Theoretical Foundations
 Analytical Model
 Research Questions
 Hypotheses
 Specification of the Information Needed
The Role of Theory in Applied Marketing Research
Research Task Role of Theory
1. Conceptualizing Provides a conceptual foundation and understanding of the basic processes
and identifying underlying the problem situation. These processes will suggest key dependent
key variables and independent variables.
2. Operationalizing Theoretical constructs (variables) can suggest independent and dependent
key variables variables naturally occurring in the real world.
3. Selecting a Causal or associative relationships suggested by the theory may indicate whether
research design a causal or descriptive design should be adopted.
4. Selecting a The theoretical framework may be useful in defining the population and
sample suggesting variables for qualifying respondents, imposing quotas, or stratifying
the population (see Chapter 11).
5. Analyzing and The theoretical framework (and the models, research questions and hypotheses
interpreting data based on it) guide the selection of a data analysis strategy and the interpretation
of results (see Chapter 14).
6. Integrating The findings obtained in the research project can be interpreted in the light of
findings previous research and integrated with the existing body of knowledge.
Models
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.
Graphical Models
Graphical models are visual. They are used to
isolate variables and to suggest directions of
relationships but are not designed to provide
numerical results.

Awareness

Understanding: Evaluation

Preference

Patronage
Mathematical Models
Mathematical models explicitly specify the
relationships among variables, usually in
equation form.
n
y = a
0
+ a x i i
i =1

Where
y = degree of preference

a ,a
0 i = model parameters to be estimated
statistically
Development of Research
Questions and Hypotheses

Components of the
Marketing Research Problem
Objective/
Theoretical
Framework
Research Questions
Analytical
Model
Hypotheses
Research Questions and Hypotheses

 Research questions (RQs) are refined

statements of the specific components of the
problem.
 A hypothesis (H) is an unproven statement
or proposition about a factor or phenomenon
that is of interest to the researcher. Often, a
hypothesis is a possible answer to the
research question.
References
 Naresh K. Malhotra & S Das, “Marketing Research –An Applied
Orientation", 6th Edition, Pearson.