Chapter Two

Defining the Marketing

Research Problem and
Developing an Approach

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 1) The Problem Definition Process

Pre-step 1: Tasks Involved

Fig. 2.1
Discussion Interviews Secondary Qualitative
with with Data Research
Decision Maker(s) Experts Analysis

Pre-step 2: Environmental Context of the Problem

Step I: Problem Definition

Management Decision Problem

Marketing Research Problem

Step II: Approach to the Problem

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

Step III: Research Design

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 1) The Process of Defining the Problem and Developing an Approach
2) Tasks involved in Problem Definition
i. Discussions with Decision Makers
ii. Interviews with Industry Experts
iii. Secondary Data Analysis
iv. Qualitative Research
3) Environmental Context of the Problem
4) Problem Definition
5) Components of an Approach
i. Objective / Theoretical Foundations
ii. Analytical Model
iii. Research Questions
iv. Hypothesis
v. Specification of Information Needed
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 2) Pre-step 1: Tasks Involved (Discussion w/
DM)

The problem audit is a comprehensive examination of a

marketing problem with the purpose of understanding its
origin and nature. A discussion with the decision-maker (DM)
includes:
1. History of the problem - The events that led to the
decision that action is needed.
2. Alternatives - The alternative courses of action available
to the DM.
3. Criteria - The criteria that will be used to evaluate the
alternative courses of action.
4. Potential Actions - The potential actions that are likely
to be suggested based on the research findings.
5. Information Needed - The information that is needed
to answer the DM's questions.
6. Uses of Information - The manner in which the DM will
use each item of information in making the decision.
7. Cultural Influence - The corporate culture as it relates
to decision making. 2-4
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 2) Pre-step 1: Tasks Involved, continued

• Conduct Interviews with Industry Experts

• Survey experiences professionals; useful for new products.
• Conduct Secondary Data Analysis
• Secondary data: data collected for some other purpose
other than the problem at hand; this data already exists.
• Primary data: any data that originated by the researcher
specifically to address the research problem (save this for
later).
• Conduct Qualitative Research
• Qualitative research: an unstructured, exploratory
research methodology based on small samples intended to
provide insight and understanding of the problem setting.
• Examples: focus groups, depth interviews.

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 3) Pre-step 2: Consider the
Environmental Context of the Problem
Considering the following:
PAST INFORMATION AND
FORECASTS
FIRM RESOURCES AND
CONSTRAINTS

RESEARCH OBJECTIVES

BUYER BEHAVIOR

LEGAL ENVIRONMENT

ECONOMIC ENVIRONMENT
MARKETING AND TECHNOLOGICAL
SKILLS OF THE FIRM
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 4) Step I: Problem Definition

Management Decision Problem Marketing Research Problem

Asks what the DM needs to do  Asks what information is needed
and how it should obtained

EXAMPLE
Should a new product be  What are the consumer preferences
introduced? and purchase intentions for the
proposed new product?

Should the advertising  How effective is the current

campaign be changed? advertising campaign?

Should the price of the  How elastic is the demand?

brand be increased? How will a price change impact
sales and profits?

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 4) Definition of the Research Problem
Fig. 2.3

Marketing Research Problem

Broad Statement

Specific Components

For example….

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 4) Department Store Project Example

Broad Statement
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. What is the demographic and psychological profile of the
customers of Sears and competitors?

Specific Components

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 5) Step II: Approach to the Problem

 Objective/Theoretical Foundations
 Research Questions
 Hypotheses
 Analytical Models
 Specification of the Information Needed

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 5) Objective/Theoretical Foundations

A theory is a conceptual scheme based on foundational statements

that are assumed to be true.
• Theory should be developed using objective, secondary
evidence.
• Theory should be relied upon when…
• developing variables and hypotheses
• operationalizing variables
• choosing research procedures (e.g. survey, experiment, etc.)
• selecting a sample
• analyzing and interpreting data

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 5) Development of Research
Questions and Hypotheses

Components of the
Marketing Research Problem
Objective/
Theoretical
Framework
Research Questions

Hypotheses

Analytical Model

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 5) Research Questions and Hypotheses

• Research questions (RQs) are refined

statements of the specific components of the
problem.
• Does preference for Sears lead to patronage?
• What leads to preference for Sears?
• 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.
• H1: Positive evaluation of Sears leads to
preference for Sears.
• H2: Preference for Sears leads to patronage of
Sears.

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 5) Analytical 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.

The most common forms of analytical models are

• verbal,
• graphical, and
• mathematical models.

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 5) Analytical Models, continued

In verbal models, the variables and their

relationships are stated in prose form.

Example:
A consumer first becomes aware of a department
store. That person then gains an understanding
of the store by evaluating the store in terms of the
factors comprising the choice criteria. Based on the
evaluation and understanding, the consumer forms
a degree of preference for the store. If preference
is strong, the consumer will patronize the store.

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 5) Analytical Models, continued

Graphical models state the relationships in

visual form.

Awareness

Understanding Evaluation

Preference

Patronage

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 5) Analytical Models, continued

Mathematical models explicitly specify the relationships

among variables, usually in equation form.

Y = Β0 + Β1X
where Β0 is a constant (i.e. starting point), Β 1 is the regression
coefficient, X is the value of the independent variable, and Y is the
value of the dependent variable. In this case:

• Patronage = Constant + Preference*X

• Preference = Constant + Understanding*X 1 + Evaluation*X2
• Understanding = Constant + Awareness*X
• Evaluation = Constant + Awareness*X

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 5) Specification of Information Needed

• What information should be obtained in the

marketing research project? Focus on:
• each component of the problem,
• the analytical framework/models,
• the research questions, and
• the hypotheses.

• This exercise is carried out for the department store

example on the next few slides…

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 Specification of Information Needed:
Department Store Project Example

Component 1: What criteria do households use

when selecting department stores?

• 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…

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 Department Store Project Example, cont’d.

• Research Question: Is price the most important

criteria when selecting a department store?
• Hypothesis 1: Price is the most important criteria
when selecting a department store.

Information needed:
• Survey a few hundred department store customers.
• The respondents should be asked to rate the
importance of each factor as it influences their
store selection.

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