Problem Formulation Chapter 3

Problems or Opportunities? PROBLEM OPPORTUNITY

Key Steps in Problem Formulation Step One: Meet with Client Step Two: Clarify Problem / Opportunity ALCA, “normal thinking”, scenarios Step Three: State Manager’s Decision Problem Discovery oriented vs. strategy oriented Step Four: Develop Full Range of Possible Research Problems Step Five: Select Research Problem(s) Step Six: Prepare Research Request Agreement

Sources of Marketing Research Problems Any change in the marketing environment or in an organization’s strategies Planned Change Unplanned Change Serendipity in the form of new ideas Exercise 4 p.59

The ALCA Model A SK L ISTEN C LARIFY A NALYZE Managers become afflicted with “normal thinking”. Researcher should provide the new perspective Challenge managers on their pre-existing assumptions Use scenarios that attempt to anticipate the contents of the final report

The Relationship Between Decision Problems and Research Problems Decision Problems Research Problems * Discovery-Oriented (What? Why?) Unplanned changes Why are revenues so low? Investigate current customer satisfaction. Assess target market perceptions of store. Determine target market awareness. * Strategy-Oriented (How?) Planned change How do we increase store traffic? Investigate effectiveness of different sales promotions. Determine consumer response to two proposed ad campaigns. Measure consumer preferences for new store layouts.

Decide what you want to accomplish Collecting unneeded, unfocused, and unrelated information To avoid making these costly research mistakes, you can use a market research information questionnaire.

Decide what you want to accomplish Take the time to determine your: Objectives Decisions Questions

Decide what you want to accomplish Objective: to maintain profit margins while the prices in your industry are falling

RESEARCH REQUEST STEP The initial step that sets the research process in motion, this statement, which is prepared by the researcher after meeting with the decision maker, summarizes the problem and the information that is needed to address it.

Research Request Agreement p ORIGIN The events that led to the manager’s decision problem DECISION PROBLEM The underlying question confronting the manager RESEARCH PROBLEMS The range of research problems that would provide input to the decision problem USE The way each piece of information will be used TARGETS AND THEIR SUBGROUPS The groups from whom the information must be gathered LOGISTICS Estimates of time and money that are available to conduct the research

RESEARCH PROPOSAL A written statement that describes the marketing problem, the purpose of the study, and a detail outline of the research methodology.

Components of a Research Proposal p  Tentative project title  Statement of the marketing problem  Purpose and limits of the project  Outline, a tentative framework for the entire project  Data sources and research methodology  Estimate of time and personnel requirements  Cost estimates