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
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
v. Legal Environment
vi. Economic Environment
vii. Marketing and Technological Skills
6) Management Decision Problem and
Marketing Research Problem
 Chapter Outline
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
9) International Marketing Research
10) Ethics in Marketing Research
11) Internet and Computer Applications
 Chapter Outline
12) Focus on Burke
13) Summary
14) Key Terms and Concepts
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.
 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,
 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 Specification
Objective/ Model: Verbal, Research of
Theoretical Hypotheses
Graphical, Questions Information
Foundations
Mathematical Needed

Step III: Research Design

Tasks Involved in Problem
Definition
Discussions with Decision Makers
Interviews with Industry Experts
Secondary Data Analysis
Qualitative Research
 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.
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
 Factors to be Considered in the
Environmental Context of the Problem
PAST INFORMATION AND FORECASTS

RESOURCES AND CONSTRAINTS

OBJECTIVES

BUYER BEHAVIOR

LEGAL ENVIROMENT

ECONOMIC ENVIROMENT

MARKETING AND TECHNOLOGICAL

SKILLS
 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.
Proper Definition of the Research
Fig. 2.3 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?
6. Can store patronage and preference be explained in terms
of store evaluations and customer characteristics?
 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 Chap. 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 Chap. 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 i xi
i 1

Where
y = degree of preference

= model parameters to be estimated

a0 ai
,
statistically
 Development of Research
Fig. Questions
2.4 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.
 Department Store Project
RQ: Do the customers of Sears 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.
 Department Store Project
Specification of Information Needed

Component 1
The researcher identified the following factors as part of the choice criteria:
quality of 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 nine department stores as competitors to Sears based
on discussions with management. The respondents should be asked to
evaluate Sears and its nine competitors on the eight choice criteria factors. 
 Department Store Project
Component 3
Sixteen 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 ten stores for each of the 16
product categories.

Component 4
No additional information needs to be obtained from the
respondents.
 
 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.
 
Component 6
No additional information needs to be obtained from the
respondents.
At United, Food is Uniting the Airline
with Travelers

United Airlines, as other major airlines, had to deal with

passenger loyalty (management decision problem: how
to attract more and more loyal passengers). The broad
marketing research problem was to identify the factors
that influence loyalty of airline travelers.
At United, 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.
 At United, 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, United Airlines
had to find a way to differentiate itself. Food
turned out to be the solution.
 At United, Food is Uniting the Airline
with Travelers

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

survey on "current and future trends in airline food
industry," indicated that "food service is a major
contributor to customers’ loyalty." This survey also
emphasized the importance of food brands.
 At United, Food is Uniting the Airline
with Travelers

The airline's Marketrak survey told United Airlines 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 for airline travelers.
H2: Travelers value branded food.
H3: Travelers prefer larger food portions, but with
consistent quality.
H4: Travelers prefer exotic food.
 At United, Food is Uniting the Airline
with Travelers

Characteristics which influence the research design

included the identification of competing airlines (Delta,
American, etc.), factors of the choice criteria (already
identified), measurement of airline travel, and loyalty.
 At United, Food is Uniting the Airline
with Travelers

This kind of research helped United Airlines to define their marketing

research problem, and develop the approach. Focus groups and surveys
were conducted to check customers' perceptions of food in United
Airlines' aircraft. The results provided support for all the hypotheses (H1
to H4). United Airlines 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.
 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.