Defining the Problem and Determining Research Objectives

The Importance of Properly Defining the Problem 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

Define the Problem 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. An opportunity occurs when there is a gap between what did happen and what could have happened…called an opportunity. Ch 4

Define the Problem Ch 4

Recognizing the Problem To recognize a problem, managers must be knowledgeable of objectives and actual performance. To be aware of opportunities, managers must have a process for monitoring opportunities, such as opportunity identification. Ch 4

The Role of Symptoms in Problem Recognition “We have a problem … we are losing money” Managers must be careful to avoid confusing symptoms with problems. Ch 4

The Role of Symptoms in Problem Recognition Symptoms are changes in the level of some key monitor that measures the achievement of an objective. The role of the symptom is to alert management to a problem; there is a gap between what should be happening and what is happening. Ch 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 problem is adequately defined. Ch 4

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. Ch 4

Impediments to Problem Definition 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

The Role of ITBs and RFPs ITBs are Invitations to Bid. RFPs are Requests for Proposals. When ITBs and RFPs are issued management has already defined the problem. Phony ITBs and RFPs present an ethical problem in the marketing research industry. Ch 4

Defining the Problem & Establishing Research Objectives A Process: There is no universally accepted, step-by-step approach used by marketing researchers to define the problem and establish research objectives. “Defining problems accurately is more an art than a science.” – Lawrence D. Gibson Ch 4

Assess the Background and the Manager’s Situation The researcher should first understand the industry, the competitors, and the company. The researcher must understand the manager’s unique situation… Does the manager have a particular objective? What constraints is the manager operating under? Ch 4

Clarify the Symptoms of the Problem The researcher must understand the control system and determine what symptoms are being identified by the system. Ch 4

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

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

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

University Estates – Problem Definition & Research Objectives

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

University Estates – Problem Definition & Research Objectives Probable Causes for University Estates Occupancy Rate Decline Competitor’s Actions Basic Cable TV 2. Consumers (Current and Prospective Student Renters) No change 3. University Estates Itself 4. The Environment Probable Cause Probable Cause Probable Cause Probable Cause Ch 4

University Estates – Problem Definition & Research Objectives What can University Estates do? Add Satellite TV 150 channels 4 Premium channels Pay-for-view Ch 4

Specify Possible Solutions that May Alleviate the Symptoms Possible solutions include any marketing action that the marketing manager thinks may solve the problem, such as price changes, product modification, etc. Ch 4

Speculate on Anticipated Consequences of the Solutions “What if” questions should be made regarding possible consequences of each marketing action being considered. Ch 4

Identify Manager’s Assumptions about Solutions’ Consequences Assumptions are assertions that certain conditions exist or certain reactions will take place if considered solutions are implemented. The expected outcome. If the manager is completely certain of assumptions there is no need for research. Ch 4

Identify Manager’s Assumptions about Solutions’ Consequences For those uncertain assumptions, research will eliminate a manager’s uncertainty and therefore aid in decision making. Ch 4

The Role of Hypotheses in Defining the Problem Hypotheses are statements that are taken for true for the purposes of argument or investigation. Assumptions about the consequences of solutions are hypotheses. Ch 4

The Role of Hypotheses in Defining the Problem When a manager makes a statement or an assumption that he/she believes to be true and wants research to determine if there is support for that statement, we call this statement a hypothesis. Ch 4

Assess the Adequacy of Information on Hand To specify research objectives The information state should be assessed. The information state refers to the quantity and quality of evidence a manager possesses for each of his or her assumptions. Information gaps are discrepancies between the current information level and the desired information level. Ch 4

Assess the Adequacy of Information on Hand To specify research objectives Information gaps are the basis for establishing research objectives. Research objectives are set to gather the specific bits of knowledge that need to be gathered in order to close the information gaps. Ch 4

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 react to the inclusion of the satellite television programming package with the base apartment? To what extent do prospective student residents want satellite television? Will University Estates be more competitive if it adds a satellite television package? Will University Estates be more attractive than competing apartment complexes if it has the satellite television programming package? Ch 4

Review! How to get research objectives from management questions. State the marketing management question. List the specific pieces of information needed to answer the question. Do this for each and every management question. Ch 4

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

Research Objectives Precise Detailed Clear Operational Operational definitions describe the operations to be carried out in order for constructs to be measured. Ch 4

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

Constructs CONSTRUCT Brand awareness Recall, recognition of advertising Knowledge of product features Brand familiarity Comprehension of product benefits OPERATIONAL DEFINITION Question: Have you heard of Brand A? ____ Yes ____ No Measure: Percentage of respondents having heard of the brand Question: Do you recall seeing an advertisement for Brand A? Measure: Percentage who remember seeing a specific ad Question: Indicate which of Brand A’s features you know about. Measure: Percentage who know about each feature Question: Are you “unfamiliar,” “somewhat familiar,” or “very familiar” with Brand A? Measure: Percentage for each familiarity category Question: For each product benefit statement, indicate if you agree or disagree. Measure: Percentage who agree with each benefit statement Ch 4

Constructs CONSTRUCT Attitudes, feelings toward brand Intentions to purchase Past purchase or use Brand loyalty Satisfaction OPERATIONAL DEFINITION Question: Rate Brand A on a 1–5 scale, where 1 = “poor” and 5 = “excellent” Measure: Average rating Question: What is the probability that you will buy Brand A the next time you purchase this product? Measure: Average probability Question: Have you used Brand A in the past three months? Measure: Percentage who have used it Question: With your last five purchases of the product, how many times did you buy Brand A? Measure: Percentage of times Question: Rate Brand A on a 1–5 scale, where 1 = “unsatisfied” and 5 = “very satisfied” Ch 4

Importance-Performance Model 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

Company Performance Model Segmentation Model Divide up the market based on demographics, etc. Company Performance Model Sum of evaluations on various attributes Ch 4

HIERARCHY STAGE Unawareness Awareness Knowledge Liking Intention Purchase* Repurchase/ Loyalty* DESCRIPTION Not aware of your brand Aware of your brand Know something about your brand Have a positive feeling about your brand Intend to buy your brand next Have purchased your brand in the past Purchase your brand regularly RESEARCH QUESTION (University Estates Example) What percentage of prospective student residents are unaware of satellite television? What percentage of prospective student residents are aware of satellite television? What percentage of prospective student residents who are aware of it know that satellite television (1) has 150 channels, (2) premium channels, and (3) pay-for-view? What percentage of prospective student residents who know something about satellite television feel negatively, positively, or neutral about having it in their apartment? What percentage of prospective student residents who are positive about having satellite television in their apartment intend to rent an apartment with it? What percentage of the market purchased (tried) your brand in the past? What percentage of the market has purchased your brand more than other brands in the last five purchases? Ch 4

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