BASIC MARKETING RESEARCH: A DECISION MAKING APPROACH (3rd ed.)

LECTURE NOTES

Presented by: Teoman Duman

Chapter 2. Defining the Marketing Research Problem and Developing an Approach

Subaru example –Subaru wanted to expand its market share of the automobile market in the US. The marketing research problem was defined broadly as determining the various needs of automobile users and the extent to which current product offerings were satisfying those needs.The research indicated a strong market potential for a vehicle that combined the features of a station wagon and a compact SUV. Based on research results Subaru developed Outback and sales were triple what Subaru originally expected.

This chapter examines the first two steps of the six steps of the marketing research process: Defining the marketing research problem and developing an approach to the problem.

Figure 2.2. provides an overview of the topics discussed in the chapter.

The importance of defining the problem – Problem definition involves stating the general problem and identifying the specific components of the marketing research problem. Inappropriate problem definition is one of the major sources of failure in marketing research.

The process of defining the problem and developing an approach – The problem definition and approach development process is illustrated in Figure 2.3.

Tasks involved in problem definition –There are four major tasks in problem definition:

Discussions with decision makers – Researcher needs to know about decision makers’ expections from the research. Their expectations are usually practicle and solution oriented. During the discussions with decision makers, researcher can use a format called the problem audit (Figure 2.4). The distinction between symptoms and causes of the problem should be well separated. Usually, decision makers focus on symptoms but researchers should focus on causes of the problem. Figure 2.5. and Table 2.1. exemplify the difference.

Interviews with industry experts – Researchers use experience surveys (key-informant technique) and lead-user surveys. Experts can be found inside and outside the firm. No formal questionnaires should be used. A list of topics to be discussed can be helpful. Questions to be asked should not be pre-determined. This allows greater flexibility in capturing the experts’ insights.

Secondary data analysis – Secondary data are collected for some purpose other than the problem at hand. Primary data are originated by the researher for the specific problem under study, such as survey data. Analyzing available secondary data is an essential step in the problem definition process and should always precede primary data collection.

Qualitative and exploratory research – Qualitative research is an unstrucured, exploratory research methodology, based on small samples intended to provide insight and understanding of the problem setting. Focus groups and in-depth interviews are qualitative techniques used in exploratory research. Pilot surveys and case studies are also exploratory research techniques.

  • In pilot surveys, smaller sample sizes are used and more open-ended questions are used to explore the nature of the problem.
  • In case studies, examination of the a few selected cases of the phenomenon is performed. Exp. Comparing five best and five worst stores in a market chain.

Environmental context of the problem – include an analysis of past information, resources, objectives of the decision maker, buyer behavior, legal environment, economic environment and marketing and technological skills (Figure 2.6.).

Management decision problem and marketing decision problem

Management decision problem – the problem confronting the decision maker. It asks what the decision maker needs to do.

Marketing research problem – the marketing research problem asks what information is needed and how it can be best obtained.

Table 2.2. and Table 2.3. exemplifies the two concepts.

A good way to link the broad statement of the marketing research problem with the management decision problem is through the use of a conceptual map. It involves three components;

  • Management wants to (take an action)
  • Therefore, we should study (topic)
  • So that we can explain ( question). Example;
  • Management wants to develop retention programs that will retain 90% of heavy users of wireless services and lead to 10% higher sales over the next two years.
  • Therefore, we should study heavy user loyalty.
  • So that we can explain what will be the most important variables in retaining these customers over the next two years.

Defining the marketing research problem – Problem definitions should not be too narrow or too broad. It is best to separate it to specific components (Figure 2.8). A good example is in the research in action about Tennis magazine (page 76).

Components of the approach –There are three components of the approach to be taken to the research problem;

Analytical framework and models –Analytical framework should start with objective evidence (unbiased empirical findings from secondary research), and a theory (conceptual framework based on foundational statements called axioms which are assumed to be true). Example: Attitude theory (attitude toward a brand (i.e. Nike):

Evaluation of salient attributes Attitude toward brand

(independent variables) (Dependent variable)

Research models can take three forms;

  • Verbal models
  • Graphical models
  • Mathematical models

Development of research questions and hypotheses - Research questions are refined statements of the specific components of the problem. A hypothesis is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher. The hypothesis can also be stated as a possible answer to the research question. Hypotheses are statements about proposed relationships rather than merely questions to be answered. They reflect the researcher’s expectation and can be tested empirically. Example (page 79):

  • RQ: Is there an overlap between the features sought by station wagon buyers and buyers of SUV?
  • H1: The buyers of station wagons rate certain features of SUVs as important.
  • H2: The buyers of SUVs rate certain features of station wagons as important.

Specification of information needed – A list of all the information that should be collected. This list should represent components of the problem, the analytical framework and models and research questions and hypotheses. This list can also serve as the base for the data collection instrument.

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