Defining the Marketing

Research Problem and

Developing an Approach
Clearly defined research problem…
• Serves as a guideline to the researcher in designing and conducting research
properly
• helps the researcher in answering the question: what is to be done?
• In absence of a well-defined problem, the data collected may be worthless to the
decision maker.
The Problem Definition Process
The Problem Audit (McD’s Example)
The problem audit is a comprehensive examination of a marketing problem with
the purpose of understanding its origin and nature.
1. The events that led to the decision that action is needed, or the history of the problem
McDs vs competition – 2013/14 – launch of new menu & campaign by competition
2. The alternative courses of action/ options available to the DM
New menu items/ reduce prices/ open more restaurants/ launch better campaigns/ ad spent
3. The criteria that will be used to evaluate the alternative courses of action
Market share/ ROI/ Profit
4. The potential actions that are likely to be suggested based on the research findings
Strategic marketing response
5. The information needed to answer the DM's questions
SWOT/ 4P competitor analysis
6. The manner in which the DM will use each item of information in making the decision
research finding + judgement + intuition
7. The corporate culture as it relates to decision making
decision making vs. decision maker – committee approach at McD’s
The Problem Definition Process

Experience Survey
The Problem Definition Process
The Problem Definition Process

Pilot Surveys:
Less structured, more
open ended questions,
small sample size
 Past Information/Forecasts –
The Problem Definition Process
sales , market share, profits

Buyer behavior
Economic environment

Legal environment
 Great Recession

Global financial
crisis
 Past Information/Forecasts
The Problem Definition Process
Marketing skills
Resources and constraints
Technological skills

Buyer behavior
Economic environment

Legal environment

The Problem Definition Process
Management Decision Problem Marketing Research Problem
(MDP) (MRP)
Should a new product be introduced?
To determine consumer preferences and
purchase intentions for the proposed new
product

Should the advertising campaign be changed? To determine the effectiveness of the current
advertising campaign
To determine the price elasticity of demand and
Should the price of the brand be increased? the impact on sales and profits of various levels
of price changes

Asks what the decision

maker needs to do

Asks what information is needed

Action oriented
and how it should be obtained

Focus on symptoms Information oriented

Focuses on the underlying causes

 MDP : How to recover this loss?

Alternative course of actions:

1. Modify existing product
2. Introduce new products
3. Segment the market differently

Anticipated underlying cause: Inappropriate

segmentation of the market

MRP : To identify and evaluate an alternative basis for market segmentation

Proper Definition of the Research Problem
The Problem Definition Process
The Problem Definition Process
Objective Evidence/ Theoretical Framework
• Definition of Theory: A conceptual scheme based on foundational statements, or
axioms, that are assumed to be true.
• Client: Decathlon
• MDP: How to increase the sales in children segment
• MRP: To identify the drivers of engagement amongst children
• Theory: Theory of interpersonal love and relationship proposes that similar to
interpersonal relationships, consumers can even build emotional connections
with certain consumption objects such as brands
• Research Tasks: Conceptualizing and identifying key variables, Operationalising
the varoables
The Problem Definition Process
 Analytical 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.

Verbal Models Graphical Models Mathematical Models

In Verbal models, the
variables and their
relationships are stated in
prose form. Such models may
be mere restatements of the
main tenets of a theory.
E.g. Children visit Decathlon
stores. Based on their
evaluation, children first form
a degree of preference for the
store. If preference is strong
enough, children will become
loyal to the store.
Graphical models are visual.
They are used to isolate
variables and to suggest
directions of relationships.
Mathematical models explicitly
specify the relationships among
variables, usually in equation
form.
n
y = a0 + å ai xi
i= 1
Where
y = degree of preference
a0, ai = model parameters to
be estimated statistically
The Problem Definition Process
Research Question: Refined statements of the specific components of the problem

Hypothesis: An is an unproven statement or proposition about a factor or phenomenon

that is of interest to the researcher. Often, a hypothesis is a possible answer to the
research question.

Research Questions:
1. Do the children exhibit store loyalty?
2. Do they combine shopping with eating out?

Hypothesis:
1. Children who are store loyal are less knowledgeable
about the shopping environment
2. Store-loyal customers are more risk averse than are
non loyal customers.
The Problem Definition Process
 Role Play
Local Soft drink firm - owner

MDP: Should a lemon-lime drink be introduced in the market to increase sales?

MRP: Determine the market size for a lemon-lime drink and the strengths and
weaknesses of similar products, if any, already in the market.

Research Questions:
1. What is the market size of the lemon-lime segment of the market?
2. What are the attributes of lemon-lime drinks in the market?
3. Which attributes are positively evaluated? Which are negatively evaluated?
4. Do the attributes of the new product match the desires of the market?
Accenture Case
1. Marketing research was vital in the selection of the name Accenture. The marketing
research process was used appropriately to identify the problem and develop a
suitable approach to finding a name. A tremendous amount of information was
gathered and different solutions were formulated and tested. All of this resulted in a
successful conversion from Anderson Consulting to Accenture.
2. Accenture’s clients are many and span across several industries. They include 89 of the
Fortune Global 100 companies and over half of the Fortune Global 500. Therefore,
Accenture’s target market includes the executives of most large corporations and
many small ones. The use of marketing research is important for Accenture to
maintain and develop good relationships by understanding the decision making
process and the information needs of these corporations.
3. The management decision problem is: What can Accenture do to improve preference
and loyalty within its target market?
4. The marketing research problem is to determine customer preference and loyalty for
consulting companies.
Accenture Case
More specifically :

(a) What criteria do companies use for evaluating consulting firms?

(b) How do customers in the target market evaluate various consulting firms?
(c) What is the Firmographic profile of customers loyal to Accenture?
(d) What characteristics differentiate Accenture loyalists form other target customers.
Accenture Case
5. Graphical Model:
Accenture Case
6. Research Questions:
RQ1 How important is the brand name?

H1: Brand name is very important to all potential clients.

H2: Brand name is more important to new/first time clients.

RQ2 How important is the role of price in the selection of a consulting firm?

H1 Price is not the most important factor for Fortune 500 firms when selecting
a consulting firm.
H2 Price is less important to Fortune 500 firms than it is to other firms.
HP Case
2. MDP: What should the management do to maintain and build on its leadership position in the
consumer segment of the personal computer market? (Note, although HP markets its products and
services to consumers, businesses and governments, to keep the scope of the problem manageable,
it has been confined to the consumer segment for personal computers. Alternatively, you can
select any or all of the other segments.)

3. MRP: To determine consumer preferences for personal computers.

More specifically,

1. What criteria do consumers use for evaluating personal computers?

2. How do consumers evaluate the various brands of personal computers in terms of the
choice criteria?
3. What is the demographic and psychographic profile of customers loyal to HP?
4. What demographic, psychographic, and product usage characteristics differentiate HP
loyalists from consumers loyal to other brands?
HP Case
4. Graphical Model
HP Case
5. Research questions and Hypothesis:
RQ1: Is customer service more important than price in selecting a PC?
H1: For consumers who are loyal to HP, customer service is more important
than price.

RQ2: Is HP evaluated more favorably than Dell on customer satisfaction.

H2: HP is evaluated more favorably than Dell on customer satisfaction.

RQ3: Which is more important, performance or price?

H3: For one segment of consumers, performance is more important than price.
H4: For another segment of consumers, price is more important than
performance.