Marketing Research Marketing Research Process and Problem Process and Problem

FormulationFormulation

Marketing Research Marketing Research Process and Problem Process and Problem

FormulationFormulationDr. Sanjay JainDr. Sanjay Jain

Associate ProfessorAssociate ProfessorInstitute of Management StudiesInstitute of Management Studies

GhaziabadGhaziabad

Marketing Research Process

• MR Process Evolves From Answers to Five Key Questions– Why should we do research? – What research should be done? – Is it worth doing the research? – How should the research be designed to

achieve the research objectives?– What will we do with the research?

Marketing Research Process

Step 1: Problem Formulation– Problem or opportunity analysis (Broad)– Management problem & Research Problem– Evaluation of decision alternatives

• What are the alternatives being studied?• What are the criteria for choosing among the

alternatives?– Research users

• Who are the decision makers?• What are there purposes?

Marketing Research Process (Contd.)

Step 2: Approach to the Problem• Research Question• Research Objective• Hypothesis Development• Research Boundaries

Marketing Research Process (Contd.)

• Type of research– Exploratory, Descriptive,

Experiment• Type of Data Required

– Primary & Secondary• Primary Data Collection

– Questionnaire, Observation

• Survey Methods– Personal survey,

Telephonic interview, Mail, Email, Internet

• Scale variables– Nominal, Ordinal,

Interval, Ratio• Testing Instrument

– Pilot study, Reliability, Validity

• Sample Design– Size, Procedure,

Elements• Methods of Analysis

– Data Reduction, Hypothesis Testing , Bivariate Analysis, Multivariate Analysis

Step 3: Research Design

Marketing Research Process (Contd.)

Step 4: Field Work & Data CollectionStep 5: Data Analysis

– Coding, Editing, Entering– Tabulation, Frequency Distribution– Bivariate, Multivariate Analysis

Step 6: Findings & SuggestionsStep 7: Report Writing

Problem FormulationProblem FormulationProblem FormulationProblem Formulation

A problem well defined is a problem half solved!

Failure to properly identify where you are headed and why will inevitably lead you to wonder where you are and how you got there! Wren

Problem Formulation

Problem Definition

Discussion with

Decision Makers

Management Decision Problem

Marketing Research Problem

Tasks Involved

Environmental Context of the Problem

Step I: Problem Definition

Step II: Approach to the Problem

Research Questions

Step III: Research Design

Specification of

Information Needed

Interview with

Industry Experts

Secondary Data

Analysis

Qualitative

Research

Research Objective

s

Hypothesis

Problem Identification - Tasks

1. Discussions with Decision Makers (DM)

• Problem Audit: provides a useful framework for interacting with the DM and identifying underlying causes of the problem

• It is a process of comprehensive examination of a marketing problem

Problem Identification - Tasks

• Issues covered in problem audit1. History of the problem. 2. Corporate culture as it relates to decision

making. 3. Alternative courses of action available4. Information needed to answer the DM's

questions. 5. Criteria to evaluate the alternative

courses of action.6. How the information will be used in

making the decision? 7. Potential actions based on the research

findings.

The 7 Cs of Interaction

• The interaction between the DM and the researcher should be Characterized by the 7 Cs:1. Communication2. Cooperation3. Confidence 4. Candor (being open & honest)5. Closeness6. Continuity7. Creativity

Problem Identification – Tasks

2. Interviews with Industry Experts

3. Secondary Data Analysis

4. Qualitative Research

• Pilot Surveys

• Focus Groups Interviews

• Depth Interviews

Environmental Context of the Problem

PAST INFORMATION AND FORECASTS

RESOURCES AND CONSTRAINTS

OBJECTIVES

BUYER BEHAVIOR

LEGAL ENVIROMENT

ECONOMIC ENVIROMENT

MARKETING AND TECHNOLOGICAL SKILLS

Problem Definition

Management Decision Problems vs. Marketing Research Problems•Management Decision Problem

– Simply a statement of the issue/situation that management is dealing with

– Asks what the decision maker needs to do– Action oriented– Focus on symptoms– Need restatement in research terms.

Problem DefinitionManagement Decision Problems vs.

Marketing Research Problems• Marketing Research Problem

– Asks what information is needed and how it should be obtained

– Information oriented – Focuses on the underlying causes– most critical part of the mktg. research

process - provides guidance and direction for research process

Management Decision Problem Vs.

Marketing Research ProblemManagement Decision

Problem• Should a new product

be introduced?

• Should the advertising campaign be changed?

• Should the price of the brand be increased?

Marketing Research Problem

• To determine consumer preferences and purchase intentions for the proposed new product.

• To determine the effectiveness of the current advertising campaign.

• To determine the price elasticity of demand and the impact on sales and profits of various levels of price changes.

Problem Definition - Exercise

Management Dec. Prob.

• Should the in-store promotion for an existing product line be increased?

• What pricing strategy should be adopted for a new product?

• Should the compensation package be changed to motivate the sales force?

Marketing Res. Prob.• Determine how the

various levels of in-store promotion affect the sales.

• Determine the relationship between price and demand for a new product.

• Determine the relation between alternative compensation packages and the respective sales performance.

Problem Definition - Exercise

Research problem• Estimate the sales and market

share of department stores in a certain area.

• Determine the design features for a new product that would result in maximum market share.

• Assess current and proposed sales territories with respect to their sales potential and workload.

• Determine the prices for each item in a product line so as to maximize total sales for the product line.

Decision problem• Should a new store be opened

in a certain metropolitan area?

• Should a new product be introduced? If so, what features should it have?

• How many new sales people have to be hired?

• How should the various items in the product line be priced so as to maximize revenue?

Definition of the Research Problem

Marketing Research Problem

Broad Statement

Specific Components

Developing an Approach to the Problem

• Research Question– Asks what specific information is

required to achieve the research purpose

– E.g. if a company wants to run specific advertisement, then research question may be:• Will the advertisement be noticed?• Will it be interpreted accurately?• Will it influence attitudes?

Developing an Approach to the Problem

• Research Objectives– A statement, in as precise terminology as

possible, of what information is needed– the specific bits of knowledge - that close the

information gaps highlighted in the research problem.

– Should be framed to ensure information obtained will satisfy research purpose

– Stated in action terms– Serve as a standard to evaluate the quality

and value of the research– Objectives should be specific and

unambiguous

Developing an Approach to the Problem

• Hypothesis Development– is an unproven statement or proposition

about a factor or phenomenon that is of interest to the researcher.

– A logical conjectured relationship between two or more variables expressed in the form of a testable statement.

– A possible answer to a research question.

Example - Problem Definition

• Management Decision Problem– What price should we charge for

our new product?• Marketing Research Problem

– Determine the relationship between price and demand for a new product.

Example - Problem Definition

Research Questions• What is the perceived

value of our product in the market place?

• What are our pricing objectives and position in the market?

• What price does similar types of products sell for?

• What are our costs of production and marketing (COGS)?

Research Objectives• To determine potential

customer reaction to various prices and their perception of the benefits of owning the product

• To determine corporate objectives and their implications for pricing

• To examine current prices for direct and indirect competition

• To assess the costs involved in producing and selling our product

Tips for Accurately Defining Research Problems

• Find out why the information is being sought.• Determine whether the information already

exists.• Determine whether the question really

can/should be answered.• Use exploratory research to define

background of the problem– Situation analysis– The iceberg principle

• Determine relevant variables

Practice, Practice

• For the following management problems, identify the underlying research problems and a couple of research objectives.– “Should our retail chain offer online

shopping?”– “What advertising media should we use

to reach our market?”– “How do we get more people to attend

our outdoor festival/event?”

Practice, Practice (cont’d)

– “How can we increase customer retention?”

– “Should the amount of in-store promotion for an existing product line be increased?”

– “Should the compensation package be changed to better motivate the sales force?”