Defining the Problem and Determining Research Objectives

Differences Between Managers and Researchers Marketing managers and researchers see the world differently because they have different jobs to perform and their backgrounds differ markedly.

Differences Between Managers and Researchers

Define the Marketing Manager’s Problem: Questions Researchers Should Ask Discussions often take place between managers and researchers to determine the problem. Researchers should ask questions relating to: Symptoms of the problem? Manager’s situation (history, products, mission, customer information, manager’s objectives, etc.)? Suspected causes of the problem?

Define the Marketing Manager’s Problem…Questions cont. Possible solutions to the problem? Anticipated consequences of tentative solutions? Manager’s assumptions about existing conditions and what will take place if solution is carried out? Adequacy of info on hand to specify research objectives (quantity, quality of info)

Decide When Marketing Research Is Warranted Four conditions when marketing research should likely be undertaken: If it clarifies problems or investigates changes in the marketplace that can directly impact your product responsibility If it resolves your selection of alternative courses of marketing action to achieve key marketing objectives If it helps you gain a meaningful competitive advantage If it allows you to stay abreast of your markets

Online Research and Problem Definition Managers sometimes must act fast, Online research could help Positive Outcome: Online systems aid in the process because information systems speed information delivery Negative Outcomes: 1. Information Overload or 2. Online environment also means that competitors and customers have better information

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Define the Marketing Management Problem and Research Objectives Symptoms of failure to achieve an objective are present. What should be done? Symptoms of the likelihood of achieving an objective are present (opportunity identification). What should be done? Marketing Research Objectives: Providing relevant, accurate, and unbiased information that managers can use to solve their marketing management problems

Defining the Marketing Management Problem Assess Manager’s Situation Background of the product/service; company history, overall mission, marketing plans, managers objectives and her/his resources, etc. Clarify Symptoms Symptoms are changes in the level of key indicators of company success. Examples include changes in sales volume, market share, profits, or dealer orders, also complaints and/or competitor actions could be indicators

Define the Marketing Manager’s Problem…cont. Pinpoint suspected causes of the problem. Eliminating a symptom does not solve the problem. For every problem, an underlying cause can be found. A probable cause differs from a possible cause. Important to list all possibilities first. Specify actions that may alleviate the problem. Solutions include any marketing action that may resolve the problem.

Define the Marketing Manager’s Problem…cont. Speculate on anticipated consequences of the action. What will be the impact not only on the problem at hand but also throughout the marketing program if a specific marketing action is implemented? What additional problems will be created if a proposed solution to the current problem is implemented?

Define the Marketing Manager’s Problem…cont. Identify the manager’s assumptions about the consequences. Assumptions are beliefs that certain conditions exist or that certain reactions will take place if the considered actions are implemented. Assumptions are the glue that holds the decision problem parts together. Research may help eliminate or lessen a manager’s uncertainty.

Define the Marketing Manager’s Problem…cont. Assess the adequacy of information on hand to specify research objectives. Information State: quantity and quality of evidence a manager possesses for each assumption Information Gaps: discrepancies between the current information level and the desired level of information at which a manager feels comfortable resolving the problem at hand Manager and researcher come to agree on research objectives based on the information gaps.

MARKETING RESEARCH PROBLEM Examples MANAGEMENT PROBLEM New package design for an existing product  Increasing store traffic    Launching a new product Determining the position of Boyner department stores among its equivalents, Changing price strategy Should we launch a new advertising campaign? MARKETING RESEARCH PROBLEM Evaluating the effectiveness of alternative packages Measuring current store image Designing a test market SWOT analysis for Boyner, Determining the factors for leadership in the department stores sector Determining demand elasticity What is the impact of different prices on sales and profit? Determining the effectiveness of the current advertising programme

Diagnosing the Problem CB:We are losing market share in corporate banking R: Is it only happening in Istanbul? CB: No, it isn’t. But we are more concerned since it is the city we have the largest transaction volume. R: Why do you think you are losing market share? CB : I wish I had known..... R: How are your competitors doing? CB : The other banks have similar problems too. However, foreign banks are gaining more market share. R : How do your clients evaluate the service quality? CB : We are very proud of the ISO9000 certificate that we recently got. R: Very good. However, how do you evaluate your service quality compared to your competitors?

Example (cont.) Specifically the following information is required: 1. Which criteria the firms use when they are choosing a corporate finance banking service for the first time? 2. How do the firms allocate their financial service purchase among different banks? 3. Which services do the firms buy from local and European banks? 4.  How do the firms evaluate local and European banks’ service quality? 5. What is the market share of X bank in Ireland compared to its competitors? 6. What is the profile of X bank’s clients? How are they different from other banks’ clients?  

Analytic Model Analytic model defines the relationships among several variables as a process Or as parts of a bigger model, It can be verbal, mathematical or graphical They serve as a basis for the research design and used as a guide for the rest of the research

Example Behavioural Loyalty Emotional Attachment H1a H3 H5a H5b Purchase/ Repurchase Intention Other Customers Effect H2 Corporate Image Consumer-company Identification H5c Customer Extra-Role Behaviours H1b H4

Figure 2.5 Development of research questions and hypotheses

The Role of Theory in Marketing Research

Marketing Research Questions Examples Determining psychographic profile of department store customers   What is the level of store loyalty of customers? What sort of activities the customer engage in after the purchase? What shopping means to customers other than getting what is needed?

Operationalized Definitions How can we understand when store cards or credit cards are used for transaction? Do the customers have store cards? How frequently do the customers use store cards? What is the amount of purchase with the store cards in a specific period of time?

Hypotheses RQ : Does Chanel have an upscale image Hypothesis is a statement that asserts the assumed (but not supported in reality yet) relationships between the variables of interest Examples: H1: The loyal customer are more aware than less loyal ones in terms of store atmosphere qualities. H2 : The loyal customers are more willing to bare risk in purchase than less loyal ones.  RQ : Does Chanel have an upscale image H : Chanel is perceived to be an expensive barnd. H : Users of Chanel have higher than average incomes H : Users of Chanel associate this parfume with status

Example “The Factors Affecting Purchase Intention: Brand awareness and Brand trust” General Problem Definition-Aim of the Research: What can affect purchase intention?  Preliminary Literature Review Objectives ???? Depth Literature Review Trust has two aspects: Trust on the basis of prior knowledge Trust at the time of decision-making

Main Variables Attitude Towards Brand Trust about the brand Attitude towards other brands Awareness about the brand Purchase intention

Operationalised Definitions Brand awareness: The degree of prior awareness while asserting a preference Trust: The degree of self-assurance while evaluating the brand and other brands Attitude: The degree of liking or satisfaction about the preferred brands Purchase intention: The degree of likelihood of buying the same brand in the next ten shopping exercises.

Hypotheses H1 : The more the brand awareness, the more the prior-knowledge based trust about that brand. H2 : The consumers positive attitude towards a brand is positively affected by brand awareness. H3: There is a positive relationship between purchase intention and prior-knowledge based trust H4 : The purchase intention of a consumer is positively affected by attitude toward the brand but is negatively affected by the attitude towards competing brands

The Invitation to Bid and the Marketing Research Proposal A marketing research proposal flows from an “invitation to bid” (ITB) or “request for proposal” ( RFP) Both define the marketing management problem Both specify the research objectives The bid details the research method proposed by the researcher to accomplish the research objectives

The Invitation to Bid and the Marketing Research Proposal The problem statement for both identifies: the company, division, or principals involved the symptoms the possible causes of the symptoms the anticipated uses of the research information The research proposal ensures that the researcher and the manager see the problem in the same way.

The Invitation to Bid and the Marketing Research Proposal: The proposal itemizes the information objectives agreed by the manager and researcher. Constructs and operational definitions are specified. A construct is a marketing term or concept that is involved in the marketing management problem (e.g. brand awareness, product knowledge, attitude, loyalty, satisfaction). An operational definition describes how the researcher will measure a construct.

Formulate the Marketing Research Proposal: Translate the Research Objectives to Be Researchable…cont. Relationships are identified. A relationship is a meaningful link believed to exist between two constructs (lower price is related to greater sales, higher exposure is related to greater awareness, etc.). A model is decided. A model connects constructs with understandable logic

The Invitation to Bid and the Marketing Research Proposal: The proposed research method identifies data collection mode, questionnaire design, sample plan, and other aspects of the anticipated marketing research.

Figure 2.1 Components of the marketing research brief

The Marketing Research Report Executive summary Background Problem definition Research objectives Research design Fieldwork/data collection Data analyses Recommendations Cost and timetable Research organisation and researchers Appendices Agreement

Research Design

Research Design The research design is the master plan specifying the methods and procedures for collecting and analyzing the needed information.

Types of Research Design Although every problem and research objective may seem unique, there are usually enough similarities among problems and objectives to allow decisions to be made in advance about the best plan to resolve the problem. There are some basic marketing research designs that can be successfully matched to given problems and research objectives.

Types of Research Design Three traditional categories of research design: Exploratory Descriptive Causal The choice of the most appropriate design depends largely on the objectives of the research and how much is known about the problem and these objectives.

Research Design: Some Observations The overall research design for a project may include one or more of these three designs as part(s) of it. Further, if more than one design is to be used, typically we progress from Exploratory toward Causal.

Basic Research Objectives and Research Design Research Objective Appropriate Design To gain background information, to define terms, to clarify Exploratory problems and develop hypotheses, to establish research priorities, to develop questions to be answered To describe and measure marketing phenomena at a point Descriptive in time To determine causality, test hypotheses, to make “if-then” Causal statements, to answer questions

Research Quantitative research: research involving the use of structured questions in which response options have been predetermined and a “large” number of respondents are involved Qualitative research: collecting, analyzing, and interpreting data based on what people do and say with smaller samples Pluralistic research: combination of both quantitative and qualitative research methods in order to gain the advantages of both

Research Design: Exploratory Research Exploratory research is most commonly unstructured, “informal” research that is undertaken to gain background information about the general nature of the research problem. Exploratory research is usually conducted when the researcher does not know much about the problem and needs additional information or desires new or more recent information.

Research Design: Exploratory Research Exploratory research is used in a number of situations: To gain background information To define terms To clarify problems and hypotheses To establish research priorities

Research Design: Exploratory Research A variety of methods are available to conduct exploratory research: Secondary Data Analysis Experience Surveys Case Analysis Focus Groups Projective Techniques

Observation, Focus Groups, and Other Qualitative Measures

Observation Techniques Observation methods: techniques in which the researcher relies on his or her powers of observation rather than communicating with a person in order to obtain information Types of observation (will explain later): Direct versus indirect Disguised versus undisguised Structured versus unstructured Human versus mechanical

Observation Techniques…cont. Direct versus Indirect Direct observation: observing behavior as it occurs Indirect observation: observing the effects or results of the behavior rather than the behavior itself Archives (written records) Physical traces (erosion or accumulation/accretion)

Observation Techniques…cont. Disguised versus Undisguised Disguised observation: subject is unaware that he or she is being observed Undisguised observation: respondent is aware of observation

Observation Techniques…cont. Structured versus Unstructured Structured observation: researcher identifies beforehand which behaviors are to observed and recorded Unstructured observation: No restriction is placed on what the observer would note: all behavior in the episode under study is monitored

Observation Techniques…cont. Human versus Mechanical Human observation: person or persons observe behavior (person hired by the researcher, clients, or perhaps the observer is the researcher) Mechanical observation: human observer is replaced with some form of static observing device(audio and or visual recording)

Observation Techniques…cont. Appropriate Conditions for the Use of Observation Short duration Public Faulty recall (difficult for person to remember accurately what was done) conditions Person is unaware of behavior

Observation Techniques…cont. Advantages of Observational Data Insight into actual, not reported, behaviors No chance for recall error Better accuracy (versus self-reporting) Less cost

When to Use? Limited information about the market conditions When new insights are needed To understand customer behaviour To understand what motivated customer satisfaction and to discover customer habits, jargon, myths, desires and expectations

Examples Technology and media usage at home Setting a brand community Sub-cultural consumption habits and behaviours

Activities Involved Dairy keeping Recording behaviour, daily routine and opinions Video and photographs Providing those to support their oral or behavioural actions Projective techniques Online observation

Example: Subject: Hygenic and cosmetic products usage among Americans, English and Turks Sample characteristics – Moderate and Intensive users Methodology Taking pictures of the products at their location and asking respondents to describe the photos Keeping dairy about their daily usage of these products Describing their shopping experience about those products in detail Keeping health and beauty advertisements content analysis Doing in-depth interviews on the following questions: How do you define beauty? What motivates you for dermatological health care? If your most liked dermatological product disappears from the market how would you feel? How much time do you allocate for dermatological health care? Which brands do you like most? Why?

Observation Techniques…cont. Limitations of Observational Data Small number of subjects Can only observe short-duration, frequently occurring events Subjective interpretations (by observer) Inability to understand what is beneath the behavior observed (why was the behavior carried out - motivations, attitudes, and other internal conditions are unobserved)

Focus Groups Focus groups: small group (6 – 12 people) discussions led by a trained moderator; homogeneous group; tightly bounded topic area Objectives: Generate ideas Understand consumer vocabulary Reveal consumer benefits sought, needs, motives, perceptions, and attitudes on products and services Understand findings from quantitative studies

Moderator’s Role and Responsibilities Focus Groups Moderator’s Role and Responsibilities Focus group moderator: a person who conducts the session and guides the flow of group discussion across specific topics Moderator characteristics: Experienced Enthusiastic Prepared Involving Energetic Open-minded

Reporting and Use of Focus Group Results Focus Groups Reporting and Use of Focus Group Results Factors to remember when analyzing data: Some sense must be made by translating the qualitative statements of participants into categories and then reporting the degree of consensus apparent in the focus groups Demographics and buyer behavior characteristics of focus group participants should be judged against the target market profile to assess what degree the group(s) represent(s) the target market A focus groups analysis should identify major themes as well as salient areas of disagreement among the participants

Focus Groups Online Focus Groups Online focus group: one in which the respondents and/or moderator (and sometimes clients) communicate and/or observe by use of the Internet; group members are at their own pc Advantages: No physical setup is necessary Transcripts are captured on file in real time Participants can be in widely separated geographical areas Participants are comfortable in their home or office environments The moderator can exchange private messages with individual participants

Online Focus Groups…cont. Disadvantages: Observation of participants’ body language is not possible Participants cannot physically inspect products or taste food items Participants can lose interest or become distracted

Focus Groups – In General Advantages: Generation of fresh ideas Client interaction Versatility (many topics, other research techniques may be used, product tests, etc.) May tap special respondents (drs., lawyers …) Disadvantages: Representative of the population? Interpretation is subjective High cost-per-participant ($150 - $200 each)

Other Qualitative Research Techniques Depth interview: a set of questions with probes, posed one-on-one to a subject by a trained interviewer to gain an idea of what the subject thinks about something or why he or she behaves a certain way Protocol analysis: involves placing a person in a decision-making situation and asking him or her to verbalize everything he or she considers when making a decision (step-by-step)

Other Qualitative Research Techniques…cont. Projective techniques: involve situations in which participants are “projected into” another person, an inanimate object, or a simulated activity, with the hope that they will divulge things about themselves that they might not reveal under direct questioning. Types include: Word association test Sentence completion Picture test (may include “headline” or statement) Cartoon or balloon test Role-playing activity

Physiological Measurements Physiological measurements: monitoring a respondent’s involuntary responses to marketing stimuli via the use of eye cameras, salinity detectors, blood pressure sensors, and other devices Pupilometer (iris dilation/contraction) Eye-tracking Galvanometer Voice Print Analysis (VOPAN)

Research Design: Descriptive Research Descriptive research is undertaken to provide answers to questions of who, what, where, when, and how – but not why. Two basic classifications: Cross-sectional studies Longitudinal studies

Research Design: Descriptive Research Cross-sectional Studies Cross-sectional studies measure units from a sample of the population at only one point in time. Sample surveys are cross-sectional studies whose samples are drawn in such a way as to be representative of a specific population. On-line survey research is being used to collect data for cross-sectional surveys at a faster rate of speed.

Research Design: Descriptive Research Longitudinal Studies Longitudinal studies repeatedly draw sample units of a population over time. One method is to draw different units from the same sampling frame. A second method is to use a “panel” where the same people are asked to respond periodically. On-line survey research firms recruit panel members to respond to online queries.

Research Design: Descriptive Research Longitudinal Studies Two types of panels: Continuous panels ask panel members the same questions on each panel measurement. Discontinuous (Omnibus) panels vary questions from one time to the next. Longitudinal data used for: Market tracking Brand-switching Attitude and image checks

Research Design: Causal Research Causality may be thought of as understanding a phenomenon in terms of conditional statements of the form “If x, then y.” Causal relationships are typically determined by the use of experiments, but other methods are also used.

Experiments An experiment is defined as manipulating (changing values/situations) one or more independent variables to see how the dependent variable(s) is/are affected, while also controlling the affects of additional extraneous variables. Independent variables: those over which the researcher has control and wishes to manipulate i.e. package size, ad copy, price. Dependent variables: those over which the researcher has little to no direct control, but has a strong interest in testing i.e. sales, profit, market share. Extraneous variables: those that may effect a dependent variable but are not independent variables.

Experimental Design An experimental design is a procedure for devising an experimental setting such that a change in the dependent variable may be solely attributed to a change in an independent variable. Symbols of an experimental design: O = measurement of a dependent variable X = manipulation, or change, of an independent variable R = random assignment of subjects to experimental and control groups E = experimental effect

Experimental Design After-Only Design: X O1 One-Group, Before-After Design: O1 X O2 Before-After with Control Group: Experimental group: O1 X O2 Control group: O3 O4 Where E = (O2 – O1) – (O4 – O3)

How Valid Are Experiments? An experiment is valid if: the observed change in the dependent variable is, in fact, due to the independent variable (internal validity) if the results of the experiment apply to the “real world” outside the experimental setting (external validity)

Types of Experiments Two broad classes: Laboratory experiments: those in which the independent variable is manipulated and measures of the dependent variable are taken in a contrived, artificial setting for the purpose of controlling the many possible extraneous variables that may affect the dependent variable Field experiments: those in which the independent variables are manipulated and measurements of the dependent variable are made on test units in their natural setting

Test Marketing Test marketing is the phrase commonly used to indicate an experiment, study, or test that is conducted in a field setting. Two broad classes: To test the sales potential for a new product or service To test variations in the marketing mix for a product or service

Types of Test Markets Standard test market: one in which the firm tests the product and/or marketing mix variables through the companies normal distribution channels Controlled test markets: ones that are conducted by outside research firms that guarantee distribution of the product through prespecified types and numbers of distributors

Types of Test Markets…cont. Electronic test markets: those in which a panel of consumers has agreed to carry identification cards that each consumer presents when buying goods and services Simulated test markets: those in which a limited amount of data on consumer response to a new product is fed into a model containing certain assumptions regarding planned marketing programs, which generates likely sales volume

Test Markets Test marketing is used in both consumer markets and industrial or B2B markets as well. Lead country test market: test marketing conducted in specific foreign countries that seem good predictors for an entire continent

Criteria for Selecting Test Market Cities Representativeness: Do demographics match the total market? Degree of isolation: Phoenix and Tulsa are isolated markets; Los Angeles is not isolated. Ability to control distribution and promotion: Are there preexisting arrangements to distribute the new product in selected channels of distribution? Are local media designed to test variations in promotional messages?

Test Marketing Pros: Allows most accurate method of forecasting future sales Allows firms the opportunity to pretest marketing mix variables Cons: Does not yield infallible results Are expensive Exposes the new product or service to competitors Takes time to conduct