Defining the Marketing

Research Problem and

Developing an Approach

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 Chain Restaurant Study

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.
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 Chain Restaurant 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,

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 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.
Copyright © 2010 Pearson Education, Inc. 2-4
 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.
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 The truly serious mistakes are made not as a
result of wrong answers but because of asking
the wrong questions!

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 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 Specification
Objective/ Model: Verbal, Research Hypotheses of
Theoretical Questions
Foundations Graphical, Information
Mathematical Needed

Step III: Research Design

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 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
7. The corporate culture as it relates to decision making
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 The Seven Cs of Interaction

The interaction between the DM and the

researcher should be characterized by the
seven Cs:
1. Communication
2. Cooperation
3. Confidence
4. Candor
5. Closeness
6. Continuity
7. Creativity

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 Factors to be Considered in the
Environmental Context of the Problem
Fig. 2.2
PAST INFORMATION AND
FORECASTS

RESOURCES AND CONSTRAINTS

OBJECTIVES

BUYER BEHAVIOR

LEGAL ENVIRONMENT

ECONOMIC ENVIRONMENT
MARKETING AND TECHNOLOGICAL
SKILLS
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 Management Decision Problem Vs. Marketing Research
Problem

Management Decision Problem Marketing Research Problem

What DM needs to do?  (Symptoms) What information is needed and
how to get it? (Causes)

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
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 Proper Definition of the Research Problem
Fig. 2.3

Marketing Research
Problem

Broad Statement

Specific Components

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 Department Store Project

DIALOGUE!
AL Fatah

1. What criteria do households use when selecting department

stores?
2. How do households evaluate Al Fatah 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 Al Fatah and its competitors for
specific product categories?
5. What is the demographic and psychological profile of the
customers of Al Fatah? Does it differ from the profile of customers
of competing stores?

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 Components of an Approach

 Objective/Theoretical Foundations
(LAUNDRY)
 Analytical Model
 Research Questions
 Hypotheses
 Specification of the Information Needed

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 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 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 (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.

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 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.

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 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
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 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

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 Development of Research
Questions and Hypotheses

Fig. 2.4

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

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 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.

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 Department Store Project

• RQ: Do the customers of Al Fatah exhibit

store loyalty?

• H1: Customers who are store-loyal are

less knowledgeable about the shopping
environment.

• H2: Store-loyal customers are more risk-

averse than are non-loyal customers.

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 Department Store Project

Specification of Information Needed

Component 1
• The researcher identified the following factors as part of the
choice criteria: merchandise, variety and assortment of
merchandise, returns and adjustment policy, service of store
personnel, prices, convenience of location, layout of store,
credit and billing policies. The respondents should be asked to
rate the importance of each factor as it influences their store
selection.
Component 2
• The researcher identified FOUR department stores as
competitors to Al Fatah based on discussions with
management. The respondents should be asked to evaluate Al
Fatah and its 4 competitors on the eight choice criteria factors. 
Copyright © 2010 Pearson Education, Inc. 2-22
 Department Store Project

Component 3
• 16 different product categories were selected, including
women's dresses, women's sportswear, lingerie and body
fashion, junior merchandise, men's apparel, cosmetics,
jewelry, shoes, sheets and towels, furniture and bedding,
and draperies. The respondents should be asked whether
they shop at each of the 10 stores for each of the 16 product
categories.

Component 4
• No additional information needs to be obtained from the
respondents.

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 Department Store Project

Component 5
• Information should be obtained on the standard
demographic characteristics and the
psychographic characteristics of store loyalty,
credit use, appearance consciousness, and
combining shopping with eating.
 

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 PIA has a problem: Consumer Loyalty!

Management Decision Problem?

Marketing Decision Problem.

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 At PIA

PIA, as other major airlines, had to deal with passenger

loyalty (management decision problem: how to attract
more loyal passengers?). The broad marketing research
problem was to identify the factors that influence
loyalty of airline travelers.
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 List the factors which can influence the
consumers’ choice for an airline?

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 At PIA, Food Is Uniting the Airline with
Travelers

The basic answer is to improve service. Exploratory

research, theoretical framework, and empirical evidence
revealed that the consumers’ choice of an airline is
influenced by: safety, price of the ticket, frequent-flyer
program, convenience of scheduling, and brand name.

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 At PIA, Food Is Uniting the Airline with Travelers

A graphical model stipulated that

consumers evaluate competing airlines
based on factors of the choice criteria to
select a preferred airline. The problem
was that major airlines were quite
similar on these factors. Indeed,
"airlines offer the same schedules, the
same service, and the same fares.”
Consequently, PIA had to find a way to
differentiate itself. Food turned out to
be the solution.

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 At PIA, Food Is Uniting the Airline with
Travelers

Secondary data, like the J. D Power & Associates'

survey on "current and future trends in the airline
food industry," indicated that "food service is a major
contributor to customers’ loyalty." This survey also
emphasized the importance of food brands.
Copyright © 2010 Pearson Education, Inc. 2-30
 At PIA, Food Is Uniting the Airline
with Travelers

The airline's Marketrak survey told PIA that "customers

wanted more varied and up-to-date food.”
The following research questions and hypotheses may be
posed.
RQ1 How important is food for airline customers?
H1: Food is an important factor determining airline
choice.
H2: Travelers prefer larger food portions, but with
consistent quality.
H3: Travelers prefer exotic food while choosing an
airline.
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 Draw graphical framework for all three
hypotheses.

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 At PIA, Food Is Uniting the Airline
with Travelers
This kind of research helped PIA define their marketing research
problem and develop the approach. Focus groups and surveys were
conducted to check customers' perceptions of food in PIA. The
results provided support for all the hypotheses (H1 to H3). PIA then
made a few changes: new "culinary menus," larger portions of food,
new coffee, and branded products (e.g., Godiva chocolates). This
resulted in better service, increasing customer satisfaction
and fostering loyalty.

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International Marketing Research Examining 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.

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