The Marketing Research Process MKTG3342 Fall 2008 Professor Edward Fox

The Marketing Research Process Research Process - Key Questions 1. Why should we do research? Management Decision Problem Research Purpose Management Decision Problem Research Purpose 2. What research should be done? Research Objective Research Objective 3. Is it worth doing the project ? Value of Information Value of Information

Key Questions (cont.) How should research be conducted? Research Design Research Design 5. How should data be collected? Sampling and Data Collection Sampling and Data Collection 6. What will we do with the data? Data Analysis and Interpretation Data Analysis and Interpretation 7. How do we communicate the results? Report Writing and Presentation Report Writing and Presentation

Step 1 - Problem/Opportunity Identification The research process begins with the recognition of a marketing problem or opportunity The research process begins with the recognition of a marketing problem or opportunity As changes occur in the firm’s external environment, marketing managers are faced with the fundamental questions, “Should we change the current marketing mix?” and, “If so, how?” As changes occur in the firm’s external environment, marketing managers are faced with the fundamental questions, “Should we change the current marketing mix?” and, “If so, how?”

Problem Definition Translating the Management Decision Problem into Research Objectives Translating the Management Decision Problem into Research Objectives Management Decision Problem Manager’s version of the problem for which decisions is to be made. The management decision problem is action oriented. Manager’s version of the problem for which decisions is to be made. The management decision problem is action oriented. e.g., How can I increase sales? What product features should I add? Should I increase my advertising? Who should I target for coupon distribution? e.g., How can I increase sales? What product features should I add? Should I increase my advertising? Who should I target for coupon distribution?

Once a problem or opportunity has been identified, the marketing researcher comes into the picture. Once a problem or opportunity has been identified, the marketing researcher comes into the picture. The first responsibility of the researcher is to work with the marketing manager to clearly articulate the management decision problem(s) whose symptoms have been observed and then to precisely define the marketing research problem. The first responsibility of the researcher is to work with the marketing manager to clearly articulate the management decision problem(s) whose symptoms have been observed and then to precisely define the marketing research problem. Role of the Marketing Researcher

Definition of Research Objectives The culmination of the problem/ opportunity formulation process is a statement of research objectives The culmination of the problem/ opportunity formulation process is a statement of research objectives These objectives are stated in terms of the precise information necessary to address the marketing research problem These objectives are stated in terms of the precise information necessary to address the marketing research problem Objectives must be as specific and unambiguous as possible. All subsequent efforts will be geared toward achieving the research objectives Objectives must be as specific and unambiguous as possible. All subsequent efforts will be geared toward achieving the research objectives

Some wrong formulations … Symptoms vs. Problems (the Iceberg Principle) Management Decision Problem Sales were falling below quotas. What should we do? Research Objective Find ways to motivate salesforce

Some wrong formulations Management Decision Problem A major soft drink competitor is gaining market share. In blind tests, this competitor’s product is considered better by majority of consumers. Research Objective Determine whether new product formulations are preferred to the competitor’s product.

Research Objectives Research objectives can be stated as  Questions  Researchable statements  Hypotheses A hypothesis is a conjectural statement about a relationship between two or more variables that can be tested with empirical data. A hypothesis is a conjectural statement about a relationship between two or more variables that can be tested with empirical data.

Example of Problem Formulation - Ford SUV A recent report suggests that middle- class families with children are taking more frequent and longer road trips for vacations. Ford wants to exploit this opportunity and add features to their next-generation sport utility vehicle (SUV) in order to make it more attractive to potential buyers. A recent report suggests that middle- class families with children are taking more frequent and longer road trips for vacations. Ford wants to exploit this opportunity and add features to their next-generation sport utility vehicle (SUV) in order to make it more attractive to potential buyers.

Management Decision Problem - Ford SUV To identify features that could be added to the SUV in order to increase its attractiveness to potential buyers taking long trips. In particular, the following features are under consideration: To identify features that could be added to the SUV in order to increase its attractiveness to potential buyers taking long trips. In particular, the following features are under consideration: built-in TV/Video system, food warmer, refrigerator …

Research Objectives – Question Form Ford SUV Consider the following research objectives: What is the likely consumer demand for an SUV with an in-built refrigerator? What is the likely consumer demand for an SUV with an in-built refrigerator? With a built-in refrigerator, would consumers need additional cup holders in the SUV? If so, what locations in the vehicle would be most convenient? With a built-in refrigerator, would consumers need additional cup holders in the SUV? If so, what locations in the vehicle would be most convenient? What is the likely consumer demand for an SUV with Video/TV system at different price points: (i) $1500, (ii) $2000 or (iii) $2500. What is the likely consumer demand for an SUV with Video/TV system at different price points: (i) $1500, (ii) $2000 or (iii) $2500. What are the characteristics of consumers who would buy the video system? What are the characteristics of consumers who would buy the video system? …

Research Objectives – Statement Form Ford SUV Consider the following research objectives: Estimate consumer demand for an SUV with an in- built refrigerator. Estimate consumer demand for an SUV with an in- built refrigerator. Determine whether, with a built-in refrigerator in the SUV, consumers would need additional cup holders; if so, identify the most convenient locations in the vehicle. Determine whether, with a built-in refrigerator in the SUV, consumers would need additional cup holders; if so, identify the most convenient locations in the vehicle. Estimate consumer demand for an SUV with Video/TV system at different price points: (i) $1500, (ii) $2000 or (iii) $2500. Estimate consumer demand for an SUV with Video/TV system at different price points: (i) $1500, (ii) $2000 or (iii) $2500. Identify the characteristics of consumers who would buy the video system. Identify the characteristics of consumers who would buy the video system. …

Research Objectives – Hypothesis Form Ford SUV Consider the following research objectives: Demand for SUVs with built-in refrigerators will be higher in Sun Belt states (e.g., Florida, Texas) than in other states. Demand for SUVs with built-in refrigerators will be higher in Sun Belt states (e.g., Florida, Texas) than in other states. Customers who would buy an SUV with a built-in refrigerator would also prefer that the vehicle have more cupholders. Customers who would buy an SUV with a built-in refrigerator would also prefer that the vehicle have more cupholders. Demand for SUVs with video/TV systems will be highest among families with young children 1-6 years of age, compared to families with older children or no children. Demand for SUVs with video/TV systems will be highest among families with young children 1-6 years of age, compared to families with older children or no children. …

Points to Take Away Problem Definition is the first and very important phase of marketing research. Problem Definition is the first and very important phase of marketing research. Problem Definition step involves translation of Management Decision Problem into Research Objectives. Problem Definition step involves translation of Management Decision Problem into Research Objectives. Research Objectives are generally framed in terms of questions, researchable statements or hypotheses. Research Objectives are generally framed in terms of questions, researchable statements or hypotheses. Clearer and more specific Research Objectives are easier to design and implement research. Clearer and more specific Research Objectives are easier to design and implement research. There are no hard and fast rules for defining the problem. However, doing so requires interacting with managers and getting pertinent information. There are no hard and fast rules for defining the problem. However, doing so requires interacting with managers and getting pertinent information.