Defining the Problem and Determining Research Objectives by 76E00Gn8

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									       Defining the Problem
         and Determining
       Research Objectives

Ch 4
       The Importance of Properly
         Defining the Problem
 Easy problem: What are the media habits of
   the heavy users of our brand?
 Difficult problem: Our sales are increasing
   but our market share is going down. Is
   there a problem, and if so, what is it?

 • Properly defining the problem is the most
   important step in the marketing research
   process.
 • If the wrong problem is defined, all the
   remaining steps in the marketing research
   process are wrong.
Ch 4                                           2
TWO SOURCES OF PROBLEMS
– A problem exists when a gap exists between
  what was supposed to happen and what did
  happen, i.e., failure to meet an objective.
   • Manager should determine the course of
     action to take in order to close the gap
     between the objective and actual
     performance.
– An opportunity occurs when there is a gap
  between what did happen and what could have
  happened…called an opportunity.
   • Manager must determine whether and how
     to take advantage of an opportunity.

Ch 4                                     3
The Role of Symptoms in Problem Recognition
• “We have a problem … we are losing
  money”
   – Problem is “all those factors that cause to
     lose money..
• Symptoms are changes in the level of some
  key monitor that measures the achievement
  of an objective. (e.g.- Our measure of
  customer satisfaction has fallen 10% in each
  of past two months)
• A symptom may also be a perceived change
  in the behavior of some market factor that
  implies an emerging opportunity.
• Type of Problems: Specific Vs General

Ch 4                                          4
 The Role of the Researcher in
     Problem Definition
 • Researchers should ensure
     managers are defining the problem
     correctly.
 • This is particularly true when the
     manager has already defined the
     problem in very specific terms.
 • Researchers sometimes take
     additional investigations, known as a
     “situation analysis,” to ensure the
Ch 4
     problem is adequately defined.        5
 Impediments to Problem Definition
• Failure to change behavior for problem
  definition situations
   – Managers deal with outside suppliers
     efficiently with little interaction. Marketing
     research requires a great deal of interaction
     and communication.
• There are differences between managers’
  and researchers’ backgrounds.
   – Traditionally researchers were technicians
     and managers were trained in general
     decision making.
   – Today managers are much more aware of
     technical software such as using your SPSS
Ch 4                                            6
    Defining the Problem &
Establishing Research Objectives
• A Process:
  – No universally accepted, step-by-step
    approach
       • “Defining problems accurately is more an
        art than a science.” – Lawrence D. Gibson




Ch 4                                           7
    Defining the Problem &
Establishing Research Objectives
 PROCESS:
 • Assess the background and the manager’s
   situation
 • Clarify the symptoms of the problem
 • Pinpoint suspected causes of the symptom
 • Specify solutions that may alleviate the symptom
 • Speculate on anticipated consequences of the
   solutions
 • Identify the manager’s assumptions about the
   consequences of the solutions
 • Assess the adequacy of information on hand to
   specify research objectives
Ch 4                                             8
1)Assess the Background and the Manager’s Situation
  • The researcher should first understand the
    industry, the competitors, and the company
    (history, performance, products/services, unique
    competencies, marketing plans, customers).
  • The researcher must understand the manager’s
    unique situation…
     – Under what constraints is this manager
       operating?
     – Does the manager have a particular
       objective?
           • May conduct exploratory research

    Ch 4                                        9
2) Clarify the Symptoms of the Problem
   • Does the company have adequate
     control system (in terms of defining
     objectives, monitoring result, taking
     corrective action) to measure
     symptoms?
   • Is the manager aware of symptoms?
   • What are they?
   • Are they accurate measures of
     performance?
   • Are they reported in a timely fashion?

  Ch 4                                    10
3) Pinpoint Suspected Causes of the Symptom
    • There’s always some cause or
      causes for a change.
    • It is important to determine all
      possible causes.
    • Researchers should narrow possible
      causes to a small set of probable
      causes.




    Ch 4                                   11
 University Estates – Problem
Definition & Research Objectives
  • Situation: Last year, University
    Estates (which targets mainly
    university students) experienced a
    decline in its occupancy rate from
    100% to 80%.
  • Manager & Researcher brainstorm a
    list of POSSIBLE CAUSES

             Wait! You give it a try.

Ch 4                                    12
 University Estates – Problem
Definition & Research Objectives
 • What are some possible cases for
   University Estates’ Occupancy
   Decline?




Ch 4                                  13
 University Estates – Problem
Definition & Research Objectives




Ch 4                         14
 University Estates – Problem
Definition & Research Objectives
 • What is/are the probable cause(s) for
   University Estates Occupancy Rate
   Decline?
   – Something that changed just
     before or at the same time as the
     symptom(s).
       • If it did not change, how could it
         cause the symptom?

Ch 4                                          15
 University Estates – Problem
Definition & Research Objectives
•      Probable Causes for University Estates
       Occupancy Rate Decline
1.     Competitor’s Actions
       Basic Cable TV              Probable Cause

2.     Consumers (Current
       and Prospective Student
                                   Probable Cause
       Renters)
       No change
                                      Probable Cause
3.     University Estates Itself
       No change

4.     The Environment             Probable Cause

Ch 4   No change                                       16
 University Estates – Problem
Definition & Research Objectives
 • What can University Estates do?

       Add Satellite TV
                 150 channels
                   4 Premium channels
                   Pay-for-view



Ch 4                                    17
4) Specify Possible Solutions that
  May Alleviate the Symptoms
  • Specify ALL possible solutions
  • Possible solutions - any marketing
    action that managers think may solve
    the problem. Such as price changes,
    product modification or improvement,
    promotion of any kind, or even
    adjustments in channels of
    distribution.


 Ch 4                                  18
     5) Speculate on Anticipated
    Consequences of the Solutions
• “What if” questions should be made regarding
  possible consequences of each marketing
  action being considered.
   • What will be the impact not only on the
     problem at hand but also throughout the
     marketing program if a specific marketing
     action is implemented?
   • What additional problems will be created if a
     proposed solution is implemented?
• Typically, the range of consequences of
  possible marketing actions is readily apparent.
  Ch 4                                          19
6) Identify Manager’s Assumptions
  about Solutions’ Consequences
• Assumptions are assertions that certain
  reactions will take place if considered
  solutions are implemented.
        – e.g. – I am positive that our lost customers
          will come back if we drop the price to Tk.
          300
        – e.g. – Our sales should go up if we gain
          more awareness by using advertising
          inserts in the Daily Star.
 Ch 4                                              20
Identify Manager’s Assumptions
 about Solutions’ Consequences
 Assumptions deserve researcher attention
   because they are the glue that holds the
   decision process together.
 • If the manager is completely certain of
   assumptions (those may solve problems)
   there is no need for research.
 • For those uncertain assumptions, research
   will eliminate a manager’s uncertainty and
   therefore aid in decision making.

Ch 4                                        21
    The Role of Hypotheses in
      Defining the Problem
• Hypotheses are statements that are taken for
   true for the purposes of argument or
   investigation.
• A research project may or may not use
   hypotheses. When a manager makes a
   statement he or she believes to be true and
   wants the researcher to determine if there is
   support for the statement, we call these
   statements “hypotheses”.
• A research question is always used to guide
   research. The question, not being a
   statement, is not considered a hypothesis. 22
 Ch 4
   Department Store Patronage Project
Marketing Objective – assess the relative strengths and weaknesses
   of a major department store relative to a group of direct and indirect
   competitors.
Management Objective – formulate marketing programs designed to
   boost the declining sales and profits
Following information was solicited
   1. familiarity with the 10 department stores
   2. frequency with which household members shopped at each of
   the 10 stores
   3. relative importance attached to each of the eight factors selected
   as the choice criteria utilized in selecting a department store. These
   factors were quality of merchandise, variety and assortment of
   merchandise, returns and adjustment policy, service of store
   personnel, prices, convenience of location, layout of store, and
   credit and billing policies.
   4. evaluation of the 10 stores on each of the eight factors of the
   choice criteria
   5. preference ratings for each store
   6. rankings of the 10 stores (from most preferred to least preferred)
   7. degree of agreement with 21 lifestyle statements
   8.
  Ch 4standard demographic characteristics (age, education, etc.) 23
   9. name, address, and telephone number
              Management Decision Problem &
               Marketing Research Problem
Management Decision Problem      Marketing Research Problem

 Asks what the decision maker   Asks what information is needed
 Needs to do                    And How it should be obtained


  Action oriented               Information oriented


  Focuses on symptoms           Focuses on the underlying
                                causes




       Ch 4                                                 24
       Management Decision Problem Vs.
         Marketing Research Problem
Management Decision Problem   Marketing Research Problem
Should a new product          To determine consumer
be introduced?                Preferences and purchase
                              Intentions for the proposed
                              New product.
Should the advertising        To determine the effectiveness
Campaign be changed?          Of the current ad 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.

       Ch 4                                             25
    State Marketing Research Problem
1. Should a new product be introduced?
Assess the probable market size and acceptance
  for the product.
2. Should an advertising campaign that has run for
  three years be changed?
How effective the campaign been in boosting sales
  in the past three years?
3. Should the in-store promotion for an existing
  product line be increased?
Determine how various levels of in-store promotion
  affect the sales.

   Ch 4                                        26
    State Marketing Research Problem
4. What pricing strategy should be adopted for a
  new product?
Determine the relationship between price and
  demand for the new product.
5. Should the compensation package be changed to
  motivate the sales force better?
Determine the relation between alternative sales
  packages and the respective sales performance




   Ch 4                                     27
         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?
6.   Can store patronage and preference be explained in terms of
     store evaluations and customer characteristics?
      Ch 4                                                              28
Research Questions and Hypotheses
 • Research questions (RQs) are refined
   statements of the specific components of
   the problem. Each component of the
   problem may have to be broken down into
   subcomponents or research questions.
 • Research question asks what specific
   information is required with respect to the
   problem components. If the (RQs) are
   answered by research, the information
   obtained should aid the decision maker.
 • For a given problem component, there are
   likely to be several research questions
   Ch 4                                          29
          Department Store Project
The fifth component of the research problem was the
  psychological profile of Sears’ customers. In the context of
  psychological characteristics, several RQ were asked.

• RQ: Do the customers of Sears exhibit store loyalty?

• RQ: Are they heavy users of credit?

• RQ: Do they combine shopping with eating out?

Considering credit card usage was measured as –

• Whether the customer holds a Sears credit card.

• Whether the customer uses the Sears credit card.

• The number of times the Sears credit card was used in a
  specified time period.

  Ch 4                                                      30
         Department Store Project
The following hypotheses were formulated in
  relation to the RQ on 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.

• RQ: What foods are considered to be comfort
  foods?

• H1: Potato chips are considered comfort food.

• H2: Ice cream is considered comfort food

• H3: Fuchka is considered comfort food.
  Ch 4                                             31
    7) Assess the Adequacy of
       Information on Hand
 • Available information varies in both
     quantity and quality.
 • Researcher should assess the existing
     information state, which is the quantity and
     quality of evidence a manager possesses
     for each of his or her assumptions.
 • Researcher should identify information
     gaps, which are discrepancies between
     the current information level and the
     desired information level. Information gaps
     are the basis for setting research
Ch 4
     objectives.                                32
 University Estates – Problem
Definition & Research Objectives
 • Information Gaps (Management
   Questions) and Research Objectives
   for University Estates
         Information Gap/Question             Research Objective(s)
       How will prospective residents     To what extent do prospective
       react to the inclusion of the      student residents want satellite
       satellite television programming   television?
       package with the base
       apartment?




Ch 4                                                                         33
       The Marketing Research
             Proposal
 • Three functions:
    – It states the problem.
    – It specifies the research objectives.
    – It details the research method
      proposed.
 • Proposals also contain a timetable
   and a budget.

Ch 4                                      34
            Research Objectives
 •     Precise
 •     Detailed
 •     Clear
 •     Operational
       – Operational definitions describe the
         operations to be carried out in
         order for constructs to be
         measured.
Ch 4                                        35
       The Role of Constructs
 • A construct is an abstract idea
   inferred from specific instances that
   are thought to be related.
 • Typical marketing constructs are
   brand loyalty, satisfaction,
   preference, awareness, knowledge.
 • Research objectives typically call for
   the measurement of constructs.
 • There are customary methods for
   defining and measuring constructs.
Ch 4                                        36
                            Constructs
  CONSTRUCT           OPERATIONAL DEFINITION
  Brand               Question: Have you heard of Brand A? ____ Yes ____ No
  awareness           Measure: Percentage of respondents having heard of the
                      brand

  Recall,             Question: Do you recall seeing an advertisement for Brand
  recognition of      A?
  advertising         Measure: Percentage who remember seeing a specific ad

  Knowledge of        Question: Indicate which of Brand A’s features you know
  product features    about.
                      Measure: Percentage who know about each feature

  Brand familiarity   Question: Are you “unfamiliar,” “somewhat familiar,” or “very
                      familiar” with Brand A?
                      Measure: Percentage for each familiarity category

  Comprehension       Question: For each product benefit statement, indicate if you
  of product          agree or disagree.
  benefits            Measure: Percentage who agree with each benefit
Ch 4                  statement                                                  37
                            Constructs
   CONSTRUCT                 OPERATIONAL DEFINITION
   Attitudes, feelings       Question: Rate Brand A on a 1–5 scale, where 1 =
   toward brand              “poor” and 5 = “excellent”
                             Measure: Average rating

   Intentions to purchase    Question: What is the probability that you will buy
                             Brand A the next time you purchase
                             this product?
                             Measure: Average probability

   Past purchase or use      Question: Have you used Brand A in the past three
                             months?
                             Measure: Percentage who have used it

   Brand loyalty             Question: With your last five purchases of the
                             product, how many times did you buy Brand A?
                             Measure: Percentage of times

   Satisfaction              Question: Rate Brand A on a 1–5 scale, where 1 =
                             “unsatisfied” and 5 = “very satisfied”
Ch 4                         Measure: Average rating                       38
 • A model is a logical arrangement of
   constructs and relationships based
   on theory or experience
    – Hierarchy of Effects
         • Unaware-Aware-Knowledge-Liking-
           Intention-Purchase-Loyalty
       – Importance-Performance Model
         • Importance: Performance on
           attributes
Ch 4                                         39
       – Segmentation Model
         • Divide up the market based on
           demographics, etc.
       – Company Performance Model
         • Sum of evaluations on various
           attributes




Ch 4                                       40
     HIERARCHY     DESCRIPTION         RESEARCH QUESTION (University Estates
     STAGE                             Example)

     Unawareness   Not aware of your   What percentage of prospective student
                   brand               residents are unaware of satellite television?

     Awareness     Aware of your       What percentage of prospective student
                   brand               residents are aware of satellite television?

     Knowledge     Know something      What percentage of prospective student
                   about your brand    residents who are aware of it know that
                                       satellite television (1) has 150 channels, (2)
                                       premium channels, and (3) pay-for-view?

     Liking        Have a positive     What percentage of prospective student
                   feeling about       residents who know something about
                   your brand          satellite television feel negatively, positively,
                                       or neutral about having it in their apartment?

     Intention     Intend to buy       What percentage of prospective student
                   your brand next     residents who are positive about having
                                       satellite television in their apartment intend
                                       to rent an apartment with it?

     Purchase*     Have purchased      What percentage of the market purchased
                   your brand in the   (tried) your brand in the past?
                   past
                                       What percentage of the market has
Ch 4 Repurchase/   Purchase your       purchased your brand more than other                41
     Loyalty*      brand regularly     brands in the last five purchases?
Ch 4   42

								
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