Problems versus Symptoms and Formulating Research Objectives Steps leading to a formal research proposal.

Problem Definition Research Objectives Choice of Design

“Problem” Definition When research has been seen as ineffective, or inappropriate for marketing decisions, critics will often state “the problem was incorrectly defined.” A problem is defined in a single statement, rarely more than a few sentences long (the problem statement). How do we formulate a problem statement?

Problem or Symptom of Underlying Problem Classic symptoms of underlying problems: –Low or declining sales –Declining renewals of annual memberships –Declining profits –Declining share (in a growing market). Symptoms can be seen as either: –a change indicating adverse consequences or –imply an emerging market opportunity.

“Symptoms are changes in the level of some key monitor that measure the achievement of an objective.” “Sales are falling short… “Market share is low… “Store image is cheap… “Brand image is dowdy… “Customer satisfaction is low.. “Losing loan opportunities to competitors”

Pricing PromotionDistribution Product Target segment Intended Marketing Strategy

Pricing Promotion Distribution Product Target Segment Resultant Marketing Strategy Evolved Segment Current market mix is satisfying an insufficient segment

Management and Researchers Defining Marketing Manager’s Problem (or Marketing Management Problem) Establishing Research Objectives, Developing the Research Proposal

Marketing Managers and the Marketing Management Problem (1) If the symptoms of failure to achieve a goal are present, the marketing manager must select a course of action to regain the goal, and (2) if the symptoms of the likelihood of achieving the goal are present, the manager must decide how best to seek the opportunity.

“The current product features are viewed as an inadequate option by target consumers. Our firm needs research evaluating the impact of changing features of the product with our current customers. “The distribution of the product is too selective for the price points and market segment. To assure adequate market share, distribution needs to be expanded that will minimally affect support from current distributors. “The segment is abandoning the product category. An opportunity analysis will examine options which utilize our current strengths in this segment and compare plans for satisfying their needs. “The price of our product is competitive in one market and over-priced in another. Research is needed to examine the effects of price reductions on revenues in both markets.

The Research Proposal Serves as a “contract” or “blue-print” of: –Specifics of data collection –How variables/constructs will be measured –Conceptual model that links the constructs, previous research that supports the study. –Costs of the data collection –How the analysis will be presented –Length of the project –How much the research will cost the client.

Specify constructs and operational definitions Constructs (or concepts) form the basic variables of management problem. Operational definitions indicate how the concept will be quantified. –Segment demographics: Age, income, education, occupation, and race. –Brand loyalty: Percent repurchasing, percent stating they will repurchase, percent satisfied.

Identify relationships An agreement between the manager and researcher on basic relationship between the components of the marketing strategy. –Customer satisfaction and repeat patronage –Product positioning (through advertising) improves brand loyalty. –Increased distribution (adding stores) will increase sales to target consumers.

THE FORMAL RESEARCH PROPOSAL  Defines the Marketing Management Problem Company, Division, or Principals Symptoms Probable Causes of the Symptoms Anticipated Uses of the Research Information  Specifies the Research Objectives Precise Detailed Clear Operational  Details the Proposed Research Method

THREE TYPES OF RESEARCH DESIGNS Research design is a set of advance decisions that make up the master plan specifying the methods and procedures for collecting and analyzing the needed information.  Exploratory Research  Descriptive research  Causal research

Objectives determine designs Objective: Determine the underlying problem-- Exploratory research Objective: Determine the relative sizes of markets and preferences for specialty beers, identification of a market opportunity--Descriptive research Objective: Identification of the advertising message most appealing to the target segment, modification of marketing mix components-- Causal research