Defining MR Problem

Recap
What is Marketing Research?

Why do Organizations Need Market Research?
What sort of information is needed generally?
Why and When does Marketing Research Work?
The Marketing Research Process

Step 1: Identify and define the Problem or
Opportunity
Step 2: Define the Marketing Research Problem
Step 3: Specify the Research Design
Step 4: Develop the Data Collection Procedure
Step 5: Design the Sampling Procedure
Step 6: Collect the Data
Step 7: Process and Analyze the Data
Step 8: Present the Results
Step 1: Identify the Problem or Opportunity

Management decision Problem asks what the decision
maker needs to do?
What should/can Subaru do to expand its share of the Automobile
market?
What do we need to know to identify or define the problem?
History of the problem
Environment in which it is being made (eg legal,
competitive, economic, financial, social)
What alternative courses of action are there?
What criteria should we use to decide between alternatives
(e.g. sales targets, market share, profitability, ROI)
What is the timing of the decision?
Who are the decision makers and what are their purposes?
Why is it important to clearly define the management

decision problem?
Because problem definition sets the course of the entire project
Because the client is paying for the research so both need to know
what to expect
Because mistakes made at this level grow into larger, more
expensive mistakes later on.
The problem definition process provides guidelines on how to
correctly define the marketing research problem
All the effort, time and money spent from this point on will be
wasted if the problem is not properly defined.
Step 2: Define the Marketing Research Problem

A statement of the information needed to make
a sound decision
Whats wrong with these statements?
1. Develop a marketing strategy for the brand.
2. Improve the competitive position of the firm
3. Improve the companys image
Whats wrong with this statement?
1. How should the company adjust its pricing given
that a major competitor has initiated price changes?
What are the various needs of automobile users and to what

extent do current product offerings satisfy those needs?
What information is needed to answer this question?
1. What needs do buyers of passenger cars, stations wagons, and
SUVs seek to satisfy. Hypotheses?
2. How well do existing automobile product offerings meet these
needs? Hypotheses?
3. Is there a segment of the automobile market whose needs are not
being met? Hypotheses?
4. What automobile features does this segment in question 3 desire.
Hypotheses?
5. What is the demographic and psychographics profile of the
identified segment? Hypotheses?
Research Q: Is there an overlap between the features sought

by station wagon buyers and buyers of sports utility vehicles
Hypothesis 1: The buyers of station wagons rate certain
features of SUVs as important
Hypothesis 2: The buyers of SUVs rate certain features of
station wagons as important
Component Analysis specific information needed

make a list of the information that should be collected for each
research question and hypothesis
E.g. Component 1.
needs of buyers of passenger cars operationalized in terms of the
attributes or features desired in an automobile
Component 1. needs of buyers of SUVs operationalized in terms of
the attributes or features desired in an automobile
Component 2:
Evaluation of passenger cars on desired attributes
Evaluation of station wagons on desired attributes
Evaluation of SUVs1` on desired attributes
The Marketing Problem versus

the Marketing Research Problem
A distinction must be made between the management

problem and the marketing research problem.
Management Problem
Focus
on symptoms
Action oriented
Marketing Research
Problems
Focus on causes
Data oriented
Examples of the Relationship between Decision

Problems and Research Problems
Decision Problems
Research Problems
How should we develop a package for

a new product
Evaluate effectiveness of alternative

package designs
Increase market penetration through

the opening of new stores
Evaluate prospective locations
Increase store traffic
Measure current image of the store
Increase amount of repeat purchasing

behavior
Assess current amount of repeat

purchasing behavior
What should be done to increase

market share of product
Determine the relative strengths and

weakness of the product with respect to
competitors
Allocate advertising budget

geographically
Determine current level of market

penetration in the respective areas
Introduce new product
Test likely acceptance of the new product

Assess probable market size and share.
1. Management Decision Problem

Should Bank X implement ATM surcharge fees on Consumers who are not customers of the bank but use the Bank's ATMs?
2. Marketing Research Problem

Quantify the impact of implementing the new ATM surcharges will have on the ability to attract new customers, retain existing
customers, and the impact on ATM usage of non customers.
3. & 4. Marketing Research Objectives & Hypotheses

Research Objectives
Hypotheses
Evaluate the impact of the new fees on the Bank's

image
The Bank's image will be hurt as well as the overall industries image
will suffer because it is already seen as greedy and these fees will be
another example in the public's view. The impact will be mitigated if
all banks implement the fee.
Develop a profile of the customers most impacted by

the new fee
The typical ATM user will be younger and have smaller balances. The
heaviest users will be those who keep little money with the bank and
therefore contribute the least to the banks profitability.
Quantify the potential gain of non-customers that will

move to the bank to avoid the fees
Some fee-sensitive customers will move to the banks with large ATM
networks while others will restrict their ATM usage. However, more
customers will change behavior rather than change banks.
Determine the expected change in customer behavior

if the fees are implemented.
The overall number of ATM transactions will decrease, especially

those at non-bank ATMs and there will be an increase in more
expensive Branch transactions
Quantify the net financial impact of implementing the

fee
A $1 fee on non-bank customers ATM transactions will outweigh the

decrease in overall ATM transactions that will be encountered and add
additional profits to the bank.
Defining the marketing/management problem
Step 3: Specify the Research Design

This step involves deciding the type of research that is
going to be used and the source of the data.
For example, deciding between exploratory,
experimental, or descriptive research
Exploratory Research
When is it used?
When looking for insights into the problem
To help define hypotheses and key variables
Information needs vague
How is it characterized
Research is flexible and unstructured
Findings tentative
Used as building block for more research
e.g. pilot surveys, secondary data, focus groups
Descriptive Research
What is the Objective?
To describe something, e.g. market characteristics
What characterizes descriptive research
Problem well understood
Tests specific hypotheses
Formal and structured
e.g. surveys
Large representative samples
Provides a snapshot of the market environment
Causal Research
What is the objective of causal research?
To obtain information regarding cause and effect
relationships
Characteristics?
Independent variable manipulated in a relatively controlled
environment
Main method is experiment
Used to understand which variables are causes (independent
variables), and which variables are the effects (dependent
variables)
Understanding
of problem?
Problem?
Poor
EXPLORATORY or
SECONDARY
RESEARCH
Good
Need to
establish
causality?
No
Yes
Objective
answers by
asking?
Yes
No
OBSERVATIONAL
RESEARCH
EXPERIMENT
Need estimates
of prevalence?
No
FOCUS GROUPS
Yes
SURVEY
Step 4: Develop the Data Collection Procedure

Decide whether the data will be collected through surveys, interviews, focus groups,
etc.
Step 5: Design the Sampling Procedure

Decide who will be in the sample, how those people are
selected, and the size of the sample.
Step 6: Collect the Data

In this step, the researcher goes out and collects the
data or a research supplier collects the data.
Step 6: Process and Analyze the Data

After collection, the data must be analyzed to see which
is appropriate for the problem.
Step 7: Present the Results

Create an oral or written presentation of the results of
the study.
Project Teams
Team One
Gene
Nic
Lisa L
Rochelle
Denise A
Team Five
BJ
Katrina
Kelly
Lyle
Chad
Team Two
Travis
Diana
Sharon
Michael H
Team Five
Chris M
Julie
Jeff
Alison
Team Three
Colin
Louis
Lindsay
Andrew
Team Six
Greg
Duncan
Christine
Thomas

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Recap

What is Marketing Research?

The Marketing Research Process

Step 1: Identify the Problem or Opportunity

Why is it important to clearly define the management

Step 2: Define the Marketing Research Problem

What are the various needs of automobile users and to what

Research Q: Is there an overlap between the features sought

Component Analysis specific information needed

The Marketing Problem versus

A distinction must be made between the management

Examples of the Relationship between Decision

How should we develop a package for

Evaluate effectiveness of alternative

Increase market penetration through

Evaluate prospective locations

Increase store traffic

Measure current image of the store

Increase amount of repeat purchasing

Assess current amount of repeat

What should be done to increase

Determine the relative strengths and

Allocate advertising budget

Determine current level of market

Introduce new product

Test likely acceptance of the new product

1. Management Decision Problem

2. Marketing Research Problem

3. & 4. Marketing Research Objectives & Hypotheses

Evaluate the impact of the new fees on the Bank's

Develop a profile of the customers most impacted by

Quantify the potential gain of non-customers that will

Determine the expected change in customer behavior

The overall number of ATM transactions will decrease, especially

Quantify the net financial impact of implementing the

A $1 fee on non-bank customers ATM transactions will outweigh the

Defining the marketing/management problem

Step 3: Specify the Research Design

Step 4: Develop the Data Collection Procedure

Step 5: Design the Sampling Procedure

Step 6: Collect the Data

Step 6: Process and Analyze the Data

Step 7: Present the Results

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