58 PART I • INTRODUCTION AND EARLY PHASES OF MARKETING RESEARCH

Several ethical issues are also pertinent in developing an approach. When a client solicits
propos- als, not with the intent of subcontracting the research, but with the intent of gaining the
expertise of research firms without pay, an ethical breach has occurred. If the client rejects the
proposal of a research firm, then the approach specified in that proposal should not be
implemented by the client, unless the client has paid for the development of the proposal.
Likewise, the research firm has the ethical obligation to develop an appropriate approach. If the
approach is going to make use of models developed in another context, then this should be
communicated to the client. For example, if the researcher is going to use a customer
satisfaction model developed previously for an insurance company in a customer satisfaction
study for a bank, then this information should be disclosed. Proprietary models and approaches
developed by a research firm are the property of that firm and should not be reused by the client
in subsequent studies without the permission of the research firm.
Such ethical situations would be satisfactorily resolved if both the client and the researcher
adhered to the seven Cs: communication, cooperation, confidence, candor, closeness,
continuity, and creativity, as discussed earlier. This would lead to a relationship of mutual trust
that would check any unethical tendencies.

Decision Research Kellogg’s: From Slumping to Thumping

The Situation
Kellogg’s is the world’s leading producer of cereal and a leading producer of convenience foods,
including cookies, crackers, toaster pastries, cereal bars, frozen waffles, meat alternatives, pie crusts, and
cones, with 2007 annual sales of $11.776 billion and a market share of more than 30 percent. David
Mackay, chairman and CEO of Kellogg’s, takes pride in being a part of the Kellogg Company because of
the consistency of the decisions that are made within the company to promote the long-term growth of
their business as well as serve the needs of their people and communities.
With such a large share of the market, one would think that Kellogg’s is untouchable. However,
Kellogg’s faced a slump in the market. Its cereal sales were declining and it had to face the challenge of
getting out of its slump. Kellogg’s therefore turned to marketing research to identify the problem and
develop several solutions to increase cereal sales.
To identify the problem, Kellogg’s used several tasks to help them in the process. The researchers
spoke to decision makers within the company, interviewed industry experts, conducted analysis of
available data, and performed some qualitative research. Several important issues came out of this
preliminary research. Current products were being targeted to kids. Bagels and muffins were winning for
favored breakfast foods. High prices were turning consumers to generic brands. Some other information
also came to light during the research. Adults want quick foods that require very little or no preparation.

Marketing research helped

Kellogg’s address a slump
in sales by introducing
successful new products
and increasing market
share.
 CHAPTER 2 • DEFINING THE MARKETING RESEARCH PROBLEM AND DEVELOPING AN APPROACH 59

The Marketing Research Decision

1. What is the management decision problem facing Kellogg’s?
2. Define an appropriate marketing research problem that Kellogg’s needs to address.
3. Discuss the role of the type of marketing research problem you have identified in enabling
David Mackay to increase the sales of Kellogg’s.

The Marketing Management Decision

1. David Mackay is wondering what changes Kellogg’s should make to increase market share.
What marketing strategies should be formulated?
2. Discuss how the marketing management decision action that you recommend to David Mackay is
influenced by the research that you suggested earlier and by the findings of that research.31 ■

SPSS Windows
In defining the problem and developing an approach, the researcher can use Decision Time and
What If? software distributed by SPSS. Forecasts of industry and company sales, and other
relevant variables, can be aided by the use of Decision Time. Once the data are loaded into
Decision Time, the program’s interactive wizard asks you three simple questions. Based on the
answers, Decision Time selects the best forecasting method and creates a forecast.
What If? uses the forecast by Decision Time to enable the researcher to explore different
options to get a better understanding of the problem situation. The researcher can generate
answers to questions such as: How will an increase in advertising affect the sales of the
product? How will a decrease (increase) in price affect the demand? How will an increase in the
sales force affect the sales by region? And so on.
Forecasts and what-if analyses can help the researcher to isolate the underlying causes,
identify the relevant variables that should be investigated, and formulate appropriate research
questions and hypotheses.

Summary
Defining the marketing research problem is the most
effectively and efficiently. The researcher should avoid
impor- tant step in a research project. It is a difficult step,
defining the marketing research problem either too broadly
because frequently management has not determined the
or too narrowly. An appropriate way of defining the
actual prob- lem or has only a vague notion about it. The
market- ing research problem is to make a broad statement
researcher’s role is to help management identify and isolate
of the problem and then identify its specific components.
the problem. Figure 2.5 is a concept map for problem
Developing an approach to the problem is the second
definition.
step in the marketing research process. The components of
The tasks involved in formulating the marketing
an approach consist of an objective/theoretical framework,
research problem include discussions with management,
analytical models, research questions, hypotheses, and
including the key decision makers, interviews with industry
specification of information needed. It is necessary that the
experts, analysis of secondary data, and qualitative
approach developed be based on objective or empirical evi-
research. These tasks should lead to an understanding of the
dence and be grounded in theory. The relevant variables
environ- mental context of the problem. The environmental
and their interrelationships may be neatly summarized via
context of the problem should be analyzed and certain
an analytical model. The most common kinds of model
essential factors evaluated. These factors include past
struc- tures are verbal, graphical, and mathematical. The
information and forecasts about the industry and the firm,
research questions are refined statements of the specific
objectives of the DM, buyer behavior, resources and
components of the problem that ask what specific
constraints of the firm, the legal and economic
information is required with respect to the problem
environment, and marketing and technological skills of the
components. Research questions may be further refined into
firm.
hypotheses. Finally, given the problem definition, research
Analysis of the environmental context should assist in questions, and hypotheses, the information needed should
the identification of the management decision problem, be specified. Figure 2.6 is a con- cept map for developing
which should then be translated into a marketing research an approach to the problem.
problem. The management decision problem asks what the
When defining the problem in international marketing
DM needs to do, whereas the marketing research problem
research, the researcher must isolate and examine the
asks what information is needed and how it can be obtained
impact