Defining the Problem and Determining Research Objectives Marketing Research | Chapter 3 Professor Yu Hongyan Sun Yat-Sen Business School, SYSU 25 November.

Defining the Problem and Determining Research Objectives Marketing Research | Chapter 3 Professor Yu Hongyan Sun Yat-Sen Business School, SYSU 25 November 2015

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. 3 Marketing Research Process 1: Establish the need for marketing research 2: Define the problem 3: Establish research objectives 4: Determine research design 5: Identify information types and sources 6: Determine methods of accessing data 7: Design data collection forms 8: Determine sample plan and size 9: Collect data 10: Data analyze 11:Prepare and present the final research report

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Agenda The Problem and the Research Objectives Sources of Problems Recognizing the Problem Problem Definition Research Objectives Formulate the Marketing Research Proposal

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. The Problem and Research Objectives Problems are situations calling for managers to make choices among alternatives. (Decision) any situation where a gap exists between the actual and the desired state. any situation where a gap exists between the actual and the desired state. Research Objectives State specifically what information will be collected in order to allow the manager to select the correct decision alternative. VW management must choose between Do Not introduce a CNG vehicle in the US. Introduce a CNG vehicle in the U.S. 4-5

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. The Problem and Research Objectives (cont’d) Research Objective: （ Example ） To gather information from a sample representative of the U.S. population among those who are “very likely” to purchase an automobile within the next 6 months, which assesses preferences (measured on a 1–5 scale ranging from “very likely to buy” to “not likely at all to buy”) for the model (Touran) operating on either (a) CNG, (b) gasoline, or (c) diesel at three different price levels. Such data would serve as input into a forecasting model that would forecast unit sales, by geographic regions of the country, for each combination of the model’s different prices and fuel configurations. What is result?

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Typical Business Research Problems Poor service encounters. Poor service encounters. Competition has superior product/service features. Competition has superior product/service features. New information system is not being used by employees. New information system is not being used by employees. Conflicts in distribution channel. Conflicts in distribution channel. Ad campaign is not generating new sales prospects. Ad campaign is not generating new sales prospects. 2-7

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. 8 The formulation of the problem is often more essential than its solution. --Albert Einstein

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. A Process For Defining The Problem and the Research Objectives Sources of Problems Recognizing the Problem Problem Definition Research Objectives

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Sources of Problems Two sources of problems: Failure to meet objective exists when a gap exists between what was supposed to happen what did happen Sales are below the sales objective An opportunity occurs when there is a gap between what did happen and what could have happened What will happen to sales, market share if we do not have a hydrogen fuel cell vehicle? More example?

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Recognizing the Problem Systems to Recognize Source of Problem Control System To recognize a problem, managers must be knowledgeable of objectives and actual performance. Balance score or plan, or schedule Opportunity Identification System MOA

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Recognizing the Problem(cont’d) The Role of Symptoms in Problem Recognition Symptoms are changes in the level of some key monitor that measures the achievement of an objective e.g., our measure of customer satisfaction has fallen 10% in each of the past two months Be careful to avoid confusing symptoms with problems Symptoms are not problems Their role is to serve as signals to alert managers to problems This is NOT a problem..it is a symptom. We are losing money

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Problem Definition(cont’d) The Role of Symptoms in Problem Definition When Management Has Already Defined the Problem in Terms of A Decision to Be made. Additional investigation ITBs are Invitations to Bid RFPs are Requests for Proposals. When ITBs and RFPs are issued, management has already defined the problem. Remember: Phony ITBs and RFPs present an ethical problem in the marketing research industry.

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Content of RFP and ITB Introduction Identification of the company or organization Scope of proposal Description of the basic problem at hand. Deliverables Specification of the tasks to be undertaken Evaluation criteria. The criteria used to judge the proposals Deadline Bidding specifics. Beer

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Problem Definition(cont’d) The Role of Symptoms in Problem Definition When Management Has Not already Defined The Problem in Terms of a Decision to be Made

Problem Definition(cont’d) Conduct a situation Analysis Company itself Internal secondary data External secondary data

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Problem Definition(cont’d) Validate the Symptoms of the Problem Researcher access the control system (or ) Assess the symptoms themselves Determine the probable causes of the symptom All Possible Causes for the symptoms. A Small Set of Probable causes for the symptoms

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. 22 University Estates – Problem Definition & Research Objectives Situation :Last year, University Estates experienced a decline in its occupancy rate from 100% to 80%. Manager & Researcher brainstorm a list of POSSIBLE CAUSES

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. 23 University Estates – Problem Definition & Research Objectives Possible Causes for University Estates Occupancy Rate Decline 1. Competitor’s Actions a. Reduced rentse. Better advertising b. New, more competitorsf. Financial deals such as no deposit c. New services d. New facilities 2. Consumers (Current and Prospective Student Renters) a. Loss of base numbers of studentse. Gravitating to condominiums b. Change in financial circumstancesf. Want more value for the money c. Better living opportunities elsewhereg. Negative word-of-mouth d. Concern for personal safety 3. University Estates Itself a. Traffic congestionb. Aging of facilities & equipment c. Noisy neighborsd. Image as “old” apartments e. Advertising cutback, changef. Upkeep issues 4. The Environment a. Less student financial aide. Cost of commuting increase b. Increased crime rate f. Other living alternatives c. Housing market oversupplyd. Students' preferences change

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. 24 University Estates – Problem Definition & Research Objectives Probable Causes for University Estates Occupancy Rate Decline 1. Competitor’s Actions Cable TV 2. Consumers (Current and Prospective Student Renters) No change 3. University Estates Itself No change 4. The Environment No change Probable Cause

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Problem Definition(cont’d) Specification of Decision Decision required alternatives Specify Decision Alternatives Decision include what? Marketing action to solve problem Decision alternatives need to address the probable cause of the symptoms What can University Estates do??? Add Satellite TV 150 channels 4 Premium channels Pay-for-view

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Problem Definition(cont’d) Consequence of the Alternatives If we know the consequence, there is no need for MR Anticipate consequent of the alternatives if we don’t know Decision: Free satellite TV with premium channels The consequence: Occupancy rates that are more than enough to offset the cost of providing the service. How certain?

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Problem Definition(cont’d) Indentify Assumptions of Consequences of Alternatives Assumptions are assertions that certain conditions exist or that certain reactions will take place if the considered alternatives are implemented. Given a symptom, assume certain causes Taking corrective alternatives, the problem will be resolved and the symptoms will disappear The lost customers will come back if we drop the price to $500 Our sales should go up if we gain more awareness by using advertising inserts in the Sunday paper

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Problem Definition(cont’d) Indentify Assumptions of Consequences of Alternatives 1.Free satellite TV with premium channels will be a strong enough incentive to cause current students to switch apartments for the next academic year and to attract new students to select his apartments over those of competitors who only offer free basic cable TV. 2. The demand will be so much greater than the demand for apartments with free cable TV that the increase in the demand will more than offset the additional cost of providing the satellite premium channels.

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Problem Definition(cont’d) Access adequacy of information on hand Validity of the manager assumption Existing information state Information Gaps Current level of information Desired level of information Gaps are the basis for establishing research objectives ? :“How do you know that students will desire the ‘premium channels’ Q: “Because there are great movies on these channels. My wife and I watch a movie almost every night.”

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. 31 Marketing Research Problem Definition State the Marketing Management Symptom(s). State the suspected causes of the Marketing Management Symptom(s). State the possible Marketing Management Actions List the specific information needs to evaluate the actions ABC Company is experiencing a decline in sales. The sales decline may be due to lower priced competitors’ products. ABC can cut prices by 5%. Are lost customers gravitating to lower priced competitors? What are customers’ reactions to a 5% price cut for ABC?

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. 32 Here is the Marketing Research Problem Definition ABC Company has experienced a decline in sales for the past 2 quarters. It is suspected that the sales decline is associated with lower prices charged by the prime competitor, XYZ Company. ABC Company is considering a 5 percent price cut to counter the sales decline. Information is needed to assist ABC Company in deciding whether or not to cut its prices by 5 percent. Specific information objectives for this research project are: 1. Are ABC customers switching to XYZ brand? 2. If so, is this shift due to XYZ’s lower prices? 3. What are customers’ reactions to a possible 5 percent price cut for ABC brand? Symptoms Possible actions Specific Information Needs

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Research Objectives (cont’d) Hypotheses Statements that are taken for true for the purpose of research Statement that can be refuted by empirical data When a manager makes a statements assumed to be true but is uncertain and want to the researcher to determine if there is support for the statement Repurchase will grow up if service quality is high Relationship between marketing actions and consequence or Model

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Research Objectives (cont’d) From Whom to Gather Information Research objectives should address who has the information we need. “students who intend to rent apartments off campus in the next academic year.

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Research Objectives (cont’d) What construct do we wish to measure? A construct is an abstract idea inferred from specific instances that are thought to be related Construct is marketing concepts that pertain to the marketing management problem e.g: brand awareness, advertising recall, brand image, intentions to purchase, demographics, market segments, satisfaction Variables Why? Go through the problem definition process Measure the right construct

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Research Objectives (cont’d) What is the unit of measurement ( operational definition ) Operational definition describes the operations to be carried out in order for the construct to be measured empirically Ways to measure the constructs Examples Brand awareness - % who know the brand exits Brand image - how good the brand is on a 10-point scale Demographics - age, income, education, household size, etc. Market segments - heavy, moderate, light users

(Serkan Aydin, 2005,EJM)

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Shu-Chi Lin, Yin-Mei Huan,2005 The role of social capital in the relationship between human capital and career mobility

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Research Objectives (cont’d) Word the information requested from respondent Each research objective must be Precise The terminology is understandable to the marketing manager It accurately captures the essence of each construct to be researched Clear There is no doubt as to what will be researched How the information will be presented to the manager Operational It implies specific measurement scales and statistical analyses

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Research Objectives (cont’d) Research Objective: Conduct a survey based upon a representative sample of college students who have stated they intend to rent off-campus apartments during the next academic year to determine the likelihood (measured on a 5-point scale ranging from 1 _ Very Unlikely to Rent to 5 _ Very Likely to Rent) that, all factors being equal, students will rent from an apartment providing “free basic cable TV” (with channels available clearly stated) or from an apartment complex providing “free satellite TV with premium channels” (with channels available clearly stated).

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Action Standards An action standard is the predesignation in a research objective of some quantity of the attribute or characteristic being measured that must be achieved in order for a predetermined action to take place.

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Action Standards The purpose of the action standard is to define what action will be taken given the results of the research findings. In other words, by specifying the action standard, we will know, once we receive the information collected by the researcher, which decision alternative to select.

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. 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.

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. “It is an accepted wisdom that the stage within a marketing research project of defining the problem is critical; the solution to the research design problem is derived from a full understanding of the marketing problem. Still, it is not uncommon for initial discussions about a research project to involve relatively superficial dialog between clients and researchers; particularly if the latter are not members of the client organization.” Professor Sue Jones

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. Impediments to Problem Definition Differences between managers and researchers Traditionally, researchers were technicians and managers were trained in general decision making. But…today managers are much more aware of technical software, such as using your SPSS.

Professor Yu Hongyan, Department of Marketing, School of Business, Sun Yat-sen University. Copyright © 2013 All Rights Reserved. The Marketing Research Proposal A marketing research proposal is a formal document prepared by the researcher; The Components of ProposalProposal States the problem Specifies the research objectives Research method proposed by the researcher to accomplish the research objectives Timetable Budget

Defining the Problem and Determining Research Objectives Marketing Research | Chapter 3 Professor Yu Hongyan Sun Yat-Sen Business School, SYSU 25 November.

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Defining the Problem and Determining Research Objectives Marketing Research | Chapter 3 Professor Yu Hongyan Sun Yat-Sen Business School, SYSU 25 November.

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