Business

Marketing Research- Chapter 4

Problem definition and research

objectives
Learning Outcomes
After learning this chapter you should be able to:
• identify and define the marketing problem or opportunity;
• redefine the marketing problem or opportunity as a research
problem;
• formulate tentative solutions (hypotheses) to the marketing
problem; and
• formulate specific and relevant research objectives on the
basis of the marketing problem.
Introduction
• Problem definition is the most important step in a research
project and is often more important than its solution.
• Defining the research problem can also be the most difficult
step in the marketing research process.
• The vague problem or opportunity is demarcated and
redefined as a clearly formulated research problem.
• Then based on the research problem, the research questions
and objectives are developed.

This chapter discusses the first two steps of the marketing research process:
Problem definition (step 1) and Research objectives (step 2)
The marketing problem/opportunity
• In the initial stage, the decision-maker does not know
precisely what the problem is, what the opportunity
involves, or what has to be decided.
• The decision maker is only aware that something is
wrong with the marketing activities of the enterprise.
• Decision makers usually become aware of a problem
or opportunity when conflicting fragments of
information, reports, opinions and symptoms come
to their attention.
Identify the decision-making situation
• A decision making situation arises when the decision maker
has to choose between two alternative courses of action to
achieve a particular objective, and is not sure of the outcome
of that decision.
• A decision is present in situations that involve problems and
opportunities, where the manager faces a choice of
alternative courses of action and uncertainty exists about the
outcome of the decision.
• A decision-making situation is characterised:
– Symptom
– Underlying problem
– Opportunity
Symptom:
• It is a particular condition that indicates the presence of a problem
or an opportunity.
– It is a sign to the marketing manager that a problem or
opportunity requiring decisions is about to arise.
• For example, a decline in sales is not in itself a problem, but is a
symptom of an underlying problem, about which the marketing
manager must make decisions
• The iceberg principle is a useful illustration of the relationship
between a symptom and an underlying marketing problem or
opportunity, as the visible part (only 10% or the tip of the iceberg)
represents the symptom, and the remaining 90% of the underlying
marketing problem or opportunity is invisible and has to be
analysed.
Problem:
• Is an indication that something is wrong and needs attention.
• It refers to those independent variables that prevent
conformity between the performance standards and planned
objectives of the enterprise.
• A problem is the result of an ineffective marketing strategy, a
change in situational factors, or a combination of the two.
• The two most common problems that confront decision
makers are:
– Problems of choice - where a choice must be made
between two alternatives.
– Red-light problems - which indicate danger, such as when
the enterprise’s market share is lower than expected.
• In practice, marketing managers can become very adept at
dealing with problems or opportunities by:
– reading up-to-date specialist literature such as books, journals
and newspapers;
– observing conditions in the enterprise;
– holding goal-oriented discussions with qualified industrial
executives;
– holding brainstorms with management and industrial executives
and other involved groups of individuals; and
– attending business gatherings such as seminars, congresses and
meetings.
Opportunity:
• Is an existing situation where performance can be improved
by undertaking new activities.
• An opportunity is a situation that contains potential
advantages for the enterprise and which, if identified and
utilised, could be profitable for the enterprise.
• While problems are characterised by unrealised objectives, no
formal method exists for monitoring opportunities.
Define the marketing problem
• Meaningful decision making can take place only if the underlying
marketing problem or opportunity is clearly defined.
• The internal and external marketing environment must be analysed
in order to understand and define the marketing problem and to
determine its cause or how to utilize an opportunity.
• This is achieved by carrying out a problem audit and background
analysis:
– Problem Audit: an extensive, systematic investigation of the
marketing problem, intended to clarify the nature and origin of
the problem.
– Background Analysis: become familiar with the specific
environment in which decisions concerning the marketing
problem or opportunity must be made.
Background analysis cont.
• A thorough background analysis places the marketing problem’s
scope and priority in perspective, indicates the project’s feasibility
in terms of potential benefits and costs, and specifies the time
required to undertake the study.
• To gather background information on the marketing problem, four
different techniques may be used:
– Situation analysis
– Literature survey
– Expert opinion
– Case studies
Situation analysis:
• Is intended to determine why or how a marketing problem or
opportunity arose by identifying the influential factors or causes.
• Information is gathered about the internal and external
environment of the organisation or, more specifically, the marketing
objectives, marketing strategy, resources, consumers, competitors
and the general situation in the industry.

Literature survey:
• Virtually all background analyses include the study of existing
literature (secondary data).
• Existing literature can be obtained from enterprise records,
libraries, industry associations, chambers of business and industry,
government bodies and marketing research firms.
Expert opinion:
• Discussing the marketing problem with various specialists and
experts both inside and outside the enterprise.
• A specialist is someone with relevant knowledge concerning the
marketing problem.
• Discussing the marketing problem with experts provides
information from various perspectives and can play an important
role in problem definition.

Case studies:
• Is an investigation of a small number of entities (people, enterprises
or situations) from a global perspective.
• By analysing case studies, a good understanding of the relevant
characteristics or the broad relationship of a specific decision-
making situation can be acquired.
Translating the marketing problem
into a research problem
• Identifying and defining the marketing problem does not mean that
the research problem has been defined.
• The research problem is a redefinition of the marketing problem.
• They are closely related but differ to a certain degree.
– Marketing problem: covers what has to be done
– Research problem: determines what information is needed to
make a decision that will solve the marketing problem and how
it can be obtained efficiently and effectively.
Translating the marketing problem
into a research problem (continue)
Decision-making Problem Research Problem

Ask what the decision maker Ask what information is needed

needs to do and how it should be obtained

Action-orientated Information-orientated

Focuses on symptoms Focuses on underlying causes

Table 4.1 Differences between research problems and decision-making problems

Translating the marketing problem
into a research problem (continue)
• A problem that is well defined is often already halfway solved.
• The precise formulation of the research problem goes hand in
hand with a variety of factors.
• In defining the research problem, the researcher must take
the following factors into account:
– the environment in which the decision-maker functions;
– the alternative actions that can be taken;
– the objectives of the decision-maker; and
– the consequences of the alternative actions.
Research Objectives:
• Broadly indicate what the research hopes to accomplish.
• Should be stated accurately, relevantly and specifically
• Types of research objectives:
– Primary objectives: is an overall statement of the thrust of the
study, and gives an indication of what is expected to be achieved
by the study.
– Secondary objectives: are the specific aspects of the topic that
the researcher wants to investigate within the main framework
of the research project.
Research Hypothesis:
• This step involves stating possible reasons for the marketing
problem.
• The possible cause of the marketing problem can be stated as
a question, or as an assumption.
• An assumption of this nature is known as a hypothesis.
• Hypothesis defined as an unproven statement (answer) or
proposition about the relationship between two or more
variables (research question) that can be tested with empirical
data.
Research Hypothesis (continued):
• Hypotheses fulfils certain requirements:
– to demarcate the scope of the marketing problem or opportunity.
– to indicate the data to be collected in the formal marketing
research investigation.
– to direct and structure the research.
• The hypothesis cannot provide the solution to the formulated
marketing problem or opportunity until it has been proved
empirically.
• It is tested by comparing the predicted answer (hypothesis) with
the answer obtained in the empirical investigation (result).
• The hypothesis may prove to be right or wrong.
Summary
• Problem definition is the starting point of any scientific
research process.
• The marketing problem is the basis of any investigation and so
it is necessary to obtain a clear insight into the nature, scope
and intensity of the problem before formulating the research
problem.
• The problem area can only be demarcated (hypotheses
formulated) and the research problem defined once the
decision-making situation has been identified.
• The research objectives are based on the research problem
(which can also be stated in the form of a question). They
indicate the direction of the formal marketing research survey
and the aim of the research.