Chapter Two

Defining the Marketing

Research Problem and
Developing an Approach

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Chapter
Outline
1) Overview
2) Importance of Defining a Problem
3) The Process of Defining the Problem
and
Developing an Approach
4) Tasks involved in Problem Definition
i. Discussions with Decision Makers
ii. Interviews with Industry Experts
iii. Secondary Data Analysis
iv. Qualitative Research
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Chapter Outline
5) Environmental Context of the Problem
i.

Past Information and Forecasts

ii. Resources and Constraints

iii. Objectives
iv. Buyer Behavior
v. Legal Environment
vi. Economic Environment
vii. Marketing and Technological Skills
6) Management Decision Problem and
Marketing Research Problem
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Chapter Outline
7) Defining the Marketing Research
Problem
8) Components of an Approach
i.

Objective / Theoretical Foundations

ii. Analytical Model

iii. Research Questions
iv. Hypothesis
v. Specification of Information Needed
9) International Marketing Research
10) Ethics in Marketing Research
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Chapter Outline
11) Summary
12) Key Terms and
Concepts

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Chain Restaurant Study

One day I received a
phone call from a
research analyst who
introduced himself as
one of our alumni.
He was working for a
restaurant chain in
town and wanted help
analyzing the data he
had collected while
conducting a
marketing research
study.
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Chain Restaurant Study

When we met, he presented me with a copy

of the questionnaire and asked how he
should analyze the data. My first question
to him was,
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Chain Restaurant Study

When he looked
perplexed, I
explained that
data analysis is
not an
independent
exercise.

Rather, the goal of data analysis is to

PROVIDE INFORMATION RELATED TO THE
PROBLEM COMPONENTS.

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Chain Restaurant Study

I was surprised to learn that
he did not have a clear
understanding of the
marketing research problem
and that a written definition
did not exist. So before going
any further, I had to define
the marketing research
Once that was done, I found
that
problem.
much of the data collected was
not relevant to the problem. In
this sense, the whole study was
a waste of resources. A new
study had to be designed and
implemented to address the
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defined.

Problem Discovery
and Definition

Problem
discovery

Sampling
Selection of
exploratory research
technique

Secondary
(historical)
data

Experience
survey

Probability

Pilot
study

Case
study

Problem definition
(statement of
research objectives)

Experiment
Laboratory

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Interview

Data
Gathering

Collection of
data
(fieldwork)

Data
Processing
and Analysis

Editing and
coding
data

Conclusions
and Report

Survey
Field

Nonprobability

Data
processing

Selection of
basic research
method

Research Design

Selection of
exploratory research
technique

Questionnaire

Observation

Secondary
Data Study

Interpretation
of
findings

Report

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The Problem Definition and Approach

Development Process
Tasks Involved

Discussions with
Decision Makers

Interviews with
Experts

Secondary Data
Analysis

Qualitative
Research

Environmental Context of the Problem

Step 1: Problem Definition
Management Decision Problem
Marketing Research Problem
Step 2: Approach to the Problem
Analytical Framework
Research
and Models
Questions and Hypotheses

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Step 3: Research Design

Specification of
Information Needed

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Beware the Iceberg!

The Iceberg Principle

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The dangerous part of many

marketing problems is neither
visible to nor understood by
many marketing managers.
Submerged parts of the
problem must be understood and
including in the research design
for the research to be useful.
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Symptoms vs. Problems

Microbrewery
Symptom

Problem Definition(PD) based on the

Symptom

Consumers prefer the taste of competitors

brand

What type of reformulated taste is needed?

True Problem

Old-fashioned package influenced taste

perception

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Symptoms vs. Problems

Manufacturer of palm-size computers with

Internet access
Symptom

PD based on the Symptom

Distributors complain prices are too high

Investigate business users to learn how much
prices need to be reduced

True Problem

Distributors do not have adequate product

knowledge to communicate products value

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Introduction

Defining the problem is the most important

step, because only when a problem has been
clearly and accurately identified can a
research project be conducted properly.
properly
Defining the marketing research problem
sets the course of the entire project.

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Importance of Defining the

Problem

Problem definition involves stating the

general marketing research problem and
identifying its specific components.
Only when marketing research problem has
been clearly defined can research be
designed and conducted properly.
Inadequate problem definition is a leading
cause of failure of marketing research project.
Better communication and more involvement
in problem definition are the most
frequently mentioned ways of improving the
usefulness of research.

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The Problem Definition

Process
Tasks Involved

Fig. 2.1

Discussion
with
Decision Maker(s)

Interviews
with
Experts

Secondary
Data
Analysis

Qualitative
Research

Environmental Context of the Problem

Step I: Problem Definition

Management Decision Problem

Marketing Research Problem

Step II: Approach to the Problem

Objective/
Theoretical
Foundations

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Analytical
Model:
Verbal,
Graphical,
Mathematica
l

Research
Questions

Specification
Hypotheses of
Information
Needed

Step III: Research Design

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Problem Definition
A broad statement of the
general problem and
identification of the specific
components of the marketing
research problem

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Tasks Involved in Problem

Definition

Discussions with Decision

Makers

Interviews with Industry Experts

Secondary Data Analysis

Qualitative Research

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Discussions with the

Decision Maker

Discussions with the decision maker (DM) are

extremely important.
important
The DM needs to understand the capabilities
and limitations of research.
Research provides information relevant to
management decisions, but it cannot provide
solutions,
solutions because solutions require
managerial judgment.
Conversely, the researcher needs to
understand the nature of what decisions
managers face - the management problem and what they hope to learn from the research
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The Problem Audit

The problem audit is a comprehensive examination of a
marketing problem with the purpose of understanding its
origin and nature (Example McDonalds)
1. The events that led to the decision that action is
needed, or the history of the problem.
2. The alternative courses of action available to the DM.
3. The criteria that will be used to evaluate the
alternative courses of action.
4. The potential actions that are likely to be suggested
based on the research findings.
5. The information that is needed to answer the DM's
questions.
6. The manner in which the DM will use each item of
information in making the decision.
7. The corporate culture as it relates to decision making.
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Problem Audit

The problem audit provides a useful

framework for interacting with the DM and
identifying the underlying causes of the
problem.
It is important to perform a problem audit
because the DM, in most cases, has only a
vague idea of what the problem is.

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Problem Audit

The problem audit involves discussions with the DM

on the following issues:

The events that led to the decision that action is needed,

or the history of the problem.
The alternative courses of action available to the DM
The criteria that will be used to evaluate the alternative
courses of action.
The potential actions that are likely to be suggested
based on the research findings.
The information that is needed to answer the DMs
questions.
The manner in which the DM will use each item of
information in making the decision.
The corporate culture as it relates to decision making.

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Interaction Between the DM

and the Researcher Should Be
Characterized by:

Communication (free exchange ideas)

Cooperation (marketing research is a team project)
Confidence (mutual trust)
Candor (an attitude of openness, no hidden
agenda)
Closeness (feeling of warmth and closeness,
between the DM and the researcher)
Continuity (must interact continually)
Creativity (the interaction between the DM and the
researcher should be creative rather than formulaic)

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Interviews with Industry

Experts

Interviews with industry experts,

experts individuals
knowledgeable about the firm and the industry, may
help formulate the marketing research problem.
These experts may be found both inside and
outside the firm.
Typically, expert information is obtained by
unstructured personal interviews, without
administering a formal questionnaire.
The purpose of interviewing experts is to help define
the marketing research problem rather than to
develop a conclusive solution.
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Two Potential Difficulties of

Seeking Advice from Experts
1.

2.

Some individuals who claim to be knowledgeable

and are eager to participate may not really
posses expertise.
expertise
It may be difficult to locate and obtain the help
from experts who are outside the client
organization.

For these reasons, interviews with experts are more

useful in conducting marketing research for
industrial firms and for product of a technical
nature, where it is relatively easy to identify and
approach the experts.
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Secondary Data Analysis

Primary data,
data are collected or produced by
the researcher for the specific purpose of
addressing the research problem.
Secondary data are:

data collected for some purpose other than the

problem at hand.
include information made available by business and
government sources, commercial marketing
research firms and computerized databases.
an economical and quick source of background
information.

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Qualitative Research

Sometimes qualitative research must be

undertaken to gain an understanding of the
problem and its underlying factors.
factors
Qualitative research is unstructured,
unstructured exploratory
in nature, based on small samples, and may
utilize popular qualitative techniques such as

focus group (group interviews),

word association (asking respondents to indicate
their first response to stimulus words), and
depth interviews (one-on-one interviews that
probe the respondents thought in detail).
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Environmental Context of
the Problem

To understand the background to a marketing

research problem,
problem the researcher must
understand the clients firm and industry.
In particular, the researcher analyze the factors
that have an impact on the definition of the
marketing research problem such as:

past information and forecast pertaining to the industry

and the firm;
resources and constraints of the firm;
objective of the decision maker;
buyer behavior;
legal environment;
economic environment; and
marketing and technological skills of the firm.

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Management Decision
Problem and Marketing
Research Problem

The management decision problem asks what

the DM needs to do, whereas the marketing
research problem ask what information is
needed and how it can best be obtained.
Research can provide the necessary information
to make a sound decision.
The management decision problem is action
oriented.
oriented It is concerned with the possible
actions the DM could take.

How should the loss of market share be arrested?

Should the market be segmented differently?

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Management Decision Problem

and Marketing Research
Problem

The marketing research problem is

information oriented. It wants to determine
what information is needed to make the best
decision.
It involves determining what information is needed
and how that information can be obtained
effectively and efficiently.
Whereas the management decision problem
focuses on symptoms,
symptoms the marketing research
problem focuses on underlying causes.
causes
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Management Decision Problem

versus Marketing Research
Problem
Management
decision problem

Asks what the

decision maker
needs to do

Action oriented

Focuses on
symptoms
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Marketing research
problem
Asks what information
is needed and how it
should be obtained
Information oriented
Focuses on the
underlying causes

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Management Decision Problem

Vs.
Management
Decision
Problem Marketing
Research Problem
Marketing
Research
Problem
(The problem confronting the DM
(entails determining what
info. is What the DM needs to do
need & how in the most
feasible
way)
Should a new product be
To determine consumer preferences
introduced? and purchase intentions for the
proposed new product.

Should the advertising

To determine the effectiveness
campaign be changed?
of the current advertising
campaign.

Should the price of the

To determine the price elasticity
brand be increased? of demand and the impact on sales
and profits of various levels
of price changes.
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Translating Management
Problems into Research Problems
Management Problem
(Questions)

Determine the best ways the firm can

communicate with potential purchasers of
laptop computers

Research Questions

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How familiar are consumers with the various

brands of computers?
What attitudes do consumers have toward
these brands?
How important are the various factors for
evaluating the purchase of a laptop
computer?
How effective are the communications efforts
of the various competitive marketers in terms
of message recognition?
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Department Store Project

Problem Definition
In the department store project, the marketing research
problem is to determine the relative strengths and
weaknesses of Sears, vis--vis other major competitors, with
respect to factors that influence store patronage. Specifically,
research should provide information on the following
questions.

1. What criteria do households use when selecting

department stores?
2. How do households evaluate Sears and competing stores
in terms of the choice criteria identified in question 1?
3. Which stores are patronized when shopping for specific
product categories?
4. What is the market share of Sears and its competitors for
specific product categories?
5. What is the demographic and psychological profile of the
customers of Sears? Does it differ from the profile of
customers
of competing stores?
6. Can store patronage and preference be explained in terms
of
store evaluations and customer
characteristics?
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Defining the Marketing

Research Problem (Cont)

Two common errors in problem definition: too

broadly definition and too narrowly definition.
A broad definition does not provide clear
guidelines for the subsequent steps involve in the
project.
A narrow focus may preclude consideration of
some courses of action, particularly those that are
innovative and may not be obvious.

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The Broad Statement and The

Specific Component

The Broad Statement provides perspective

on the problem and act as a safeguard against
committing the second type of error (define
the marketing research problem too narrowly).
The Specific component focus on the key
aspects of the problem and provide clear
guidelines on how to proceed further, thereby
reducing the likelihood of the first type of
error.

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Proper Definition of the Research

Problem
Marketing Research
Problem
Broad Statement

Specific
Components
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Components of the Approach

In the process of developing an approach, we
must not lose sight of the goal - the outputs.
outputs
The outputs of the approach development
process should include the following
components:

Objective/theoretical framework
Analytical models
Research Questions
Hypotheses, and
Specification of Information Needed.
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Objective/Theoretical
Framework

In general, research should be based on objective

evidence and supported by theory.
theory
A theory is conceptual scheme based on
foundational statements called axioms, which are
assumed to be true.
Objective evidence (that is unbiased and
supported by empirical findings) is gathered by
compiling relevant findings from secondary
sources.
The researcher should rely on theory to
determine which variables should be investigated.

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Analytical Framework &

Models

Research questions & hypotheses are

developed within analytical frameworks

Basically, theories & models

Theory suggests that satisfaction improves

morale & perceptions
A sales manager who wants to increase
market share (management problem) may

Ask how to encourage salespeople to generate

more sales (research question)
State that (based on theory) higher job
satisfaction leads to greater sales productivity
(hypothesis)

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The Role of Theory in Marketing

Research
Research Task
Role of Theory
1. Conceptualizing Provides a conceptual foundation and understanding of the basic processes
and identifying
key variables

underlying the problem situation. These processes will suggest key dependent
and independent variables.

2. Operationalizing Theoretical constructs (variables) can suggest independent and dependent

key variables

variables naturally occurring in the real world.

3. Selecting a

Causal or associative relationships suggested by the theory may

indicate whether

research design

a causal or descriptive design should be adopted.

4. Selecting a

The theoretical framework may be useful in defining the population and

sample

suggesting variables for qualifying respondents, imposing quotas, or stratifying

the population(see Chap. 11).

5. Analyzing and

The theoretical framework (and the models, research questions and hypotheses

interpreting data

based on it) guide the selection of a data analysis strategy and the interpretatio
of results (see Chap. 14).

6. Integrating

The findings obtained in the research project can be interpreted in the light of

findings

previous research and integrated with the existing body of knowledge.

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Models
An analytical model is a set of variables and
their interrelationships designed to represent,
in whole or in part, some real system or
process. They are of three types: Verbal,
Graphical & Mathematical.
In verbal models, the variables and their
relationships are stated in prose (text) form.
Such models may be mere restatements of the
main tenets of a theory.
Consumer know store form some degree of
preference if preference is strong enough,
the consumer will patronize the store.
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Graphical Models
Graphical models are visual. They are used to
isolate variables and to suggest directions of
relationships but are not designed to provide
numerical results.
Awareness
Understanding: Evaluation
Preference
Patronage
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Mathematical Models
Mathematical models explicitly specify
the
relationships among variables, usually in
equation form.
n

a x

i 1

Where
y
= degree of preference

a =,a model parameters to be estimated

0

statistically
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Research Questions

Research questions are refined statements of

the specific components of the problem.
The components of problem define the
problem in specific terms, but further detail may
be needed to develop an approach.
Each component of the problem, may have to be
broken down into subcomponent or research
questions.
questions
Research questions ask what specific
information is required with respect to the
problem components.
Information obtained using research questions
should aid the decision maker.
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Errors in Defining the Market Research

Problem
Common
Errors

Problem
Definition is too
Broad
Does Not Provide
Guidelines for
Subsequent Steps
e.g., Improving
the Companys
Image
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Problem
Definition
is
too Narrow
May Miss Some
Important
Components of the
Problem
e.g. Changing
Prices in Response
to a Competitors
Price Change.

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Bad vs. Good Research

Questions

Research questions should be

stated as clearly as possible
Bad research question

Is advertising copy X better than

advertising copy Y?

Good research question

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Which advertising copy has a

higher day-after recall score?

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Research Question and

Theoretical Framework

The formulation of the research questions

should be guided not only by the problem
definition, but also by the theoretical framework
and the analytical model adopted.
adopted
The theoretical framework and the analytical
model play a significant role in the
operationalization and measurement of variables
specified by the research questions.
questions
The research questions were further refined by
precisely defining the variables and determining
how they were to be operationalized.
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Hypotheses

A hypothesis (H) is an unproven statement or

proposition about a factor or phenomenon that is
of interest to the researcher.
It may be a tentative statement about
relationship between two or more variables as
stipulated by the theoretical framework or the
analytical model.
Often, a hypothesis is a possible answer to the
research question.
An important role of a hypothesis is to suggest
variables to be included in the research design.
design
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Hypotheses Vs Research
Question

Hypotheses go beyond
research questions because
they are statement of
relationships or propositions
rather than merely questions to
which answers are sought.
Where are research questions
are interrogative, hypotheses
are declarative and can be
tested empirically.

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Hypotheses
RQ: Do Customers of Sears exhibit store loyalty?
H: Customers of Sears are loyal.
Hypotheses are an important part of the
approach to the problem.

Objective/
Theoretical
Framework

Components of the
Marketing Research Problem
Research Questions

Development
of Research
Questions
and
Hypotheses

Analytical
Model
Hypotheses
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Specification of Information
Needed

By focusing on each component of the

problem and the analytical framework and
models, research questions, and
hypotheses, the researcher can determine
what information should be obtained in
the marketing research project.
It is helpful to carry out this exercise for
each component of the problem and make
a list specifying all the information that
should be collected.

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Department Store Project

RQ: Do the customers of Sears exhibit

store loyalty?

H1: Customers who are store-loyal are less

knowledgeable about the shopping
environment.

H2: Store-loyal customers are more riskaverse than are non-loyal customers .

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Department Store Project

Specification of Information Needed
Component 1

The researcher identified the following factors as part of

the choice criteria: quality of merchandise, variety and
assortment of merchandise, returns and adjustment
policy, service of store personnel, prices, convenience of
location, layout of store, credit and billing policies. The
respondents should be asked to rate the importance of
each factor as it influences their store selection.

Component 2

The researcher identified nine department stores as

competitors to Sears based on discussions with
management. The respondents should be asked to
evaluate Sears and its nine competitors on the eight
choice criteria factors.

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Department Store Project

Component 3

Sixteen different product categories were

selected, including women's dresses, women's
sportswear, lingerie and body fashion, junior
merchandise, men's apparel, cosmetics, jewelry,
shoes, sheets and towels, furniture and bedding,
and draperies. The respondents should be
asked whether they shop at each of the ten
stores for each of the 16 product categories.

Component 4

No additional information needs to be obtained

from the respondents.

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Department Store Project

Component 5

Information should be obtained on the

standard demographic characteristics and the
psychographic characteristics of store loyalty,
credit use, appearance consciousness, and
combining shopping with eating.

Component 6

No additional information needs to be

obtained from the respondents.

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At United, Food Is Uniting

the Airline with Travelers

United Airlines, as other major airlines, had to

deal with passenger loyalty (management
decision problem: how to attract more and more
loyal passengers). The broad marketing research
problem was to identify the factors that influence
loyalty of airline travelers.
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At United, Food Is Uniting the

Airline with Travelers
The basic answer is to improve service.
Exploratory research, theoretical framework, and
empirical evidence revealed that the consumers
choice of an airline is influenced by: safety, price
of
the
ticket,
frequent-flyer
program,
convenience of scheduling, and brand name.

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At United, Food Is Uniting the

Airline
with
Travelers
A graphical
model stipulated that
consumers evaluate competing
airlines based on factors of the
choice criteria to select a preferred
airline. The problem was that
major airlines were quite similar on
these factors. Indeed, "airlines offer
the same schedules, the same
service, and the same fares.
Consequently, United Airlines had
to find a way to differentiate itself.
Food turned out to be the solution.

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At United, Food Is Uniting the

Airline with Travelers

Secondary data, like the J. D Power &

Associates' survey on "current and future
trends in the airline food industry," indicated
that "food service is a major contributor to
customers
loyalty."
This
survey
also
emphasized
the importance of food brands.
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At United, Food Is Uniting the

Airline
with
Travelers
The airline's Marketrak survey told United Airlines
that "customers wanted more varied and up-to-date
food.
The following research questions and hypotheses
may be posed.
RQ1 How important is food for airline customers?
H1: Food is an important factor for airline
travelers.
H2:

Travelers value branded food.

H3:

Travelers prefer larger food portions, but with

quality.
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At United, Food Is Uniting the

Airline
with
Travelers
Characteristics that influence the research
design included the identification of competing
airlines (Delta, American, etc.), factors of the
choice criteria (already identified),
measurement of airline travel, and loyalty.

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At United, Food Is Uniting the

Airline
This kind of research helped United Airlines define their
with
Travelers
marketing
research problem and develop the approach.
Focus groups and surveys were conducted to check
customers' perceptions of food in United Airlines' aircraft.
The results provided support for all the hypotheses (H1 to
H4). United Airlines then made a few changes: new
"culinary menus," larger portions of food, new coffee, and
branded products (e.g., Godiva chocolates). This resulted in
better service, increasing customer satisfaction and
fostering loyalty.

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International Marketing
Research
Examining the impact of the
Self-Reference
Criterion (SRC)
1.
Define the marketing research problem in
terms of domestic environmental and cultural
factors.
2.

3.

4.

Define the marketing research problem in terms of

foreign environmental and cultural factors. Make
no judgments.
Isolate the self-reference criterion (SRC) influence
on the problem and examine it carefully to see how
it complicates the problem.
Redefine the problem without the SRC influence and
address it for the foreign market situation.

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Internet and Marketing

Research Problem

Discussion with decision maker,

maker
anywhere at any time.
Interviews with industry experts.
experts The
Internet can be searched to find industry
experts outside the clients organization.
Internet search engine can be used to collect
secondary data quickly and economically.
Environmental Context of the problem.
problem
Past information and forecasts of trends can
be found by searching for the appropriate
information with the search engine.
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