Marketing Research - Problem Definition and Research Objectives

Learning Outcomes

• Identify and define the marketing problem or opportunity.
• Redefine the marketing problem or opportunity as a research problem.
• Formulate tentative solutions (hypotheses) to the marketing problem.
• Formulate specific and relevant research objectives on the basis of the marketing problem.

Introduction

• Problem definition is crucial, often outweighing the solution itself.
• It's frequently the most challenging step in marketing research.
• A vague problem is refined into a clearly defined research problem.
• Research questions and objectives are then developed based on this problem.
• The chapter covers problem definition (step 1) and research objectives (step 2) in the marketing research process.

The Marketing Problem/Opportunity

• Initially, decision-makers may lack precise understanding of the problem or opportunity.
• They're aware something is amiss with the marketing activities.
• Awareness arises from conflicting information, reports, opinions, and symptoms.

Identify the Decision-Making Situation

• A decision-making situation occurs when a choice between alternative actions is needed to achieve an objective, but the outcome is uncertain.
• Decisions are required when problems and opportunities arise, involving a choice of actions amid uncertainty.
• A decision-making situation is characterized by:
  • Symptom
  • Underlying problem
  • Opportunity

Symptom

• A condition indicating a problem or opportunity.
• It signals a potential issue or opportunity requiring decisions.
• Declining sales, for example, is a symptom, not the problem itself.
• The iceberg principle illustrates the relationship:
  • Visible part (10%) represents the symptom.
  • The remaining 90% is the underlying problem or opportunity needing analysis.

Problem

• Indicates something is wrong and requires attention.
• Refers to independent variables hindering alignment between performance standards and planned objectives.
• A problem results from ineffective marketing strategy, situational changes, or both.
• Two common problems:
  • Problems of choice: selecting between alternatives.
  • Red-light problems: indicating danger, like lower-than-expected market share.

Addressing Problems/Opportunities

• Marketing managers can adeptly handle issues by:
  • Reading specialist literature (books, journals, newspapers).
  • Observing conditions within the enterprise.
  • Holding goal-oriented discussions with qualified executives.
  • Brainstorming with management and other involved parties.
  • Attending business gatherings (seminars, congresses, meetings).

Opportunity

• An existing situation where performance can be improved via new activities.
• It's a situation with potential advantages that can be profitable if utilized.
• While problems involve unrealized objectives, there's no formal method for monitoring opportunities.

Define the Marketing Problem

• Meaningful decision-making requires clear definition of the underlying problem or opportunity.
• Analyze the internal and external marketing environment to understand the problem and its cause or to leverage an opportunity.
• Achieved through:
  • Problem Audit: Systematic investigation to clarify the problem's nature and origin.
  • Background Analysis: Understanding the specific environment for decisions related to the problem or opportunity.

Background Analysis

• Places the problem's scope and priority in perspective.
• Indicates project feasibility regarding benefits and costs.
• Specifies the time needed for the study.
• Techniques for gathering background information:
  • Situation analysis
  • Literature survey
  • Expert opinion
  • Case studies

Situation Analysis

• Determines how a problem or opportunity arose by identifying influential factors or causes.
• Gathers information about the internal and external environment, including:
  • Marketing objectives
  • Marketing strategy
  • Resources
  • Consumers
  • Competitors
  • Industry situation

Literature Survey

• Virtually all background analyses include reviewing existing literature (secondary data).
• Sources include enterprise records, libraries, industry associations, government bodies, and marketing research firms.

Expert Opinion

• Discussing the problem with specialists inside and outside the enterprise.
• A specialist has relevant knowledge of the marketing problem.
• Provides information from various perspectives and aids in problem definition.

Case Studies

• Investigation of a small number of entities (people, enterprises, or situations) from a global perspective.
• Analyzing case studies provides a good understanding of relevant characteristics or broad relationships in a decision-making situation.

Translating the Marketing Problem into a Research Problem

• Identifying the marketing problem doesn't automatically define the research problem.
• The research problem is a redefinition of the marketing problem.
• They are related but distinct.
  • Marketing Problem: What needs to be done.
  • Research Problem: What information is needed and how to obtain it.

Differences Between Research Problems and Decision-Making Problems

• Decision-making Problem:
  • Asks what the decision-maker needs to do.
  • Action-oriented
  • Focuses on symptoms
• Research Problem:
  • Asks what information is needed and how to obtain it.
  • Information-oriented
  • Focuses on underlying causes

Factors in Defining the Research Problem

• A well-defined problem is often halfway solved.
• Precise formulation goes hand in hand with various factors.
• Consider:
  • The decision-maker's environment.
  • Alternative actions available.
  • Objectives of the decision-maker.
  • Consequences of alternative actions.

Research Objectives

• Broadly indicate the goals of the research.
• Should be accurate, relevant, and specific.
• Types:
  • Primary objectives: Overall statement of the study's thrust, indicating expected achievement.
  • Secondary objectives: Specific aspects to investigate within the research project's framework.

Research Hypothesis

• Involves stating possible reasons for the marketing problem.
• The possible cause can be stated as a question or assumption.
• A hypothesis is an unproven statement or proposition about the relationship between variables that can be tested with data.

Research Hypothesis (continued)

• Hypotheses should:
  • Demarcate the scope of the problem or opportunity.
  • Indicate data to be collected.
  • Direct and structure the research.
• A hypothesis doesn't provide a solution until empirically proven.
• It's tested by comparing the predicted answer (hypothesis) with the empirical result.
• The hypothesis can be right or wrong.

Summary

• Problem definition is the starting point of research.
• The marketing problem is the foundation, requiring clear insight into its nature, scope, and intensity.
• The problem area is demarcated, and the research problem is defined once the decision-making situation is identified.
• Research objectives are based on the research problem and indicate the direction and aim of the research.