6

Problem Definition:
The Foundation of
Business Research
Chapter 4 and 6

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LEARNING
OUTCOMES

1. Explain why proper “problem definition” is

essential to useful business research
2. Know how to recognize problems
3. Translate managerial decision statements into
relevant research objectives
4. Translate research objectives into research
questions and/or research hypotheses
5. Outline the components of a research proposal
6. Construct dummy tables as part of a research
proposal

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 Decision Making Terms
• Business opportunity
• A situation that makes some potential
competitive advantage possible.
• Business problem
• A situation that makes some significant
negative consequence more likely.
• Symptoms
• Observable cues that serve as a signal of a
problem because they are caused by that
problem.

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 Types of Business Research
• Exploratory
• Descriptive
• Causal

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 Exploratory Research
• Exploratory Research
• Conducted to clarify ambiguous situations or
discover ideas that may be potential business
opportunities.
• Initial research conducted to clarify and define
the nature of a problem.
◗ Does not provide conclusive evidence
◗ Subsequent research expected

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 Descriptive Research
• Describes characteristics of objects, people,
groups, organizations, or environments.
• Addresses who, what, when, where, why, and
how questions.
• Considerable understanding of the nature of
the problem exists.
• Does not provide direct evidence of causality.
• Diagnostic analysis
• Seeks to diagnose reasons for market
outcomes and focuses specifically on the
beliefs and feelings consumers have about and
toward competing products.

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 Causal Research
• Research conducted to identify cause and
effect relationships (inferences).
• Evidence of causality:
• Temporal sequence—the appropriate causal
order of events.
• Concomitant variation—two phenomena vary
together.
• Nonspurious association—an absence of
alternative plausible explanations.

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 Experiments
• Experiment
• A carefully controlled study in which the researcher manipulates a
proposed cause and observes any corresponding change in the
proposed effect.
• Experimental variable
• Represents the proposed cause and is controlled by the researcher
by manipulating it.
• Manipulation
• The researcher alters the level of the variable in specific
increments.
• Test-market
• An experiment that is conducted within actual market conditions.

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 Defining the Research Objectives
• Research objectives
• The goals to be achieved by conducting
research.
• Deliverables
• The consulting term used to describe research
objectives to a research client.

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 Exploratory Research Techniques
• Previous Research
• Literature review
◗ A directed search of published works, including periodicals and
books, that discusses theory and presents empirical results that are
relevant to the topic at hand.
• Pilot Studies
◗ A small-scale research project that collects data from respondents
similar to those to be used in the full study.
◗ Pretest
 A small-scale study in which the results are only preliminary and
intended only to assist in design of a subsequent study.
◗ Focus Group
 A small group discussion about some research topic led by a moderator
who guides discussion among the participants.

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 Planning the Research Design
• Research Design
• A master plan that specifies the methods and
procedures for collecting and analyzing the
needed information.
• Basic design techniques for descriptive and
causal research:
◗ Surveys
◗ Experiments
◗ Secondary data
◗ Observation

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 Selection of the Basic Research Method
• Survey
• A research technique in which a sample is
interviewed in some form or the behavior of
respondents is observed and described.
◗ Telephone
◗ Mail
◗ Internet
◗ In person

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 Sampling
• Sampling
• Involves any procedure that draws conclusions
based on measurements of a portion of the
population.
• Sampling decisions
• Who to sample?—target population
• What size should the sample be?
• How to select the sampling units?

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 Gathering Data
• Unobtrusive Methods
• Methods in which research respondents do not
have to be disturbed for data to be gathered.

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 Good Decisions Start with a Good Problem
Definition
• Decision Statement
• A written expression of the key question(s) that
the research user wishes to answer.
• Problem Definition
• The process of defining and developing a
decision statement and the steps involved in
translating it into more precise research
terminology, including a set of research
objectives.

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 EXHIBIT 6.1 Defining Problems Can Be Difficult

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 The Problem-Definition Process
• Problem
• When there is a difference between the current
conditions and a more preferable set of
conditions.
• Problems Mean Gaps
• Business performance is worse than expected
business performance.
• Actual business performance is less than
possible business performance.
• Expected business performance is greater than
possible business performance.

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 Poor Questions Result in Poor Research
in Japan!
• A French yogurt manufacturer
noted that the Japanese were
becoming more Westernized.
• A survey supported this and
appeared to offer a strong
market potential for yogurt.
• Wrong!
• The “Yes/No” question was too
simplistic and most respondents
were too polite to say “No.”
• They wouldn’t offend the
researcher by criticizing ads
featuring a spoon as an eating
utensil.

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 EXHIBIT 6.2 The Problem-Definition Process

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 Understand the Business Decision
• Situation Analysis
• The gathering of background information to
familiarize researchers and managers with the
decision-making environment.
• Interview Process
• Develop many alternative problem statements
• Think about possible solutions to the problem
• Make lists
• Be open-minded

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 Understand the Business Decision
• Identifying Symptoms
• Interrogative techniques
◗ Asking multiple what, where, who, when, why, and
how questions about what has changed.
• Probing
◗ An interview technique that tries to draw deeper
and more elaborate explanations from the
discussion.

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 EXHIBIT 6.3 What Has Changed?

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 Writing Managerial Decision Statements into
Corresponding Research Objectives
• Decision statements must be translated
into research objectives.
• Once the decision statement is written, the
research essentially answers the question,
“What information is needed to address this
situation?”
• Research objectives are the deliverables of
the research project.

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 Determine the Unit of Analysis
• Unit of Analysis
• Indicates what or who should provide the data and
at what level of aggregation.
◗ Individuals (such as customers, employees, and owners)
◗ Households (families, extended families, and so forth)
◗ Organizations (businesses and business units)
◗ Departments (sales, finance, and so forth)
◗ Geographical areas
◗ Objects (products, advertisements, and so forth).
• Multi-level analysis studies variables measured at
more than one unit of analysis.

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 Determine the Relevant Variable
• What is a Variable?
• Anything that varies or changes from one
instance to another; can exhibit differences in
value, usually in magnitude or strength, or in
direction.
• What is a Constant?
• Something that does not change; is not useful
in addressing research questions.

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 Types of Variables
• Continuous variable • Dependent variable
• Can take on a range • A process outcome or a
of quantitative variable that is
values. predicted and/or
explained by other
• Categorical variable
variables.
• Indicates
membership in some • Independent variable
group. • A variable that is
• Also called expected to influence
classificatory the dependent variable
variable. in some way.

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 Writing Research Objectives and
Questions
• Research Questions
• Express the research objectives in terms of
questions that can be addressed by research.
• Help to develop well-formulated, specific
hypotheses that can be empirically tested.
• Help the researcher design a study that will
produce useful results.

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 Clarity in Research Questions and Hypotheses

• Research Questions
• The researcher’s translation of the problem into a
specific inquiry.
◗ Provide input that can be used as a standard for
selecting from among alternative solutions.
• Hypotheses
• Statements that can be empirically tested.
◗ State what is expected to be found through the study.
• Managerial Action Standard
• A specific performance criterion upon which a
decision can be based.

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 How Much Time Should Be Spent on Problem
Definition?
• Budget constraints usually influence how
much effort is spent on problem definition.
• The more important the decision faced by
management, the more resources should
be allocated toward problem definition.
• The time taken to identify the correct
problem is usually time well spent.

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 EXHIBIT 6.7 Influence of Decision Statement of Marketing Problem
on Research Objectives and Research Designs

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 The Research Proposal
• Research Proposal
• A written statement of the research design.
• Uses for the Proposal
• As a planning tool
• As a contract
• Funded Business Research
• Basic research usually performed by academic
researchers that is financially supported by
some public or private institution as in federal
government grants.

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 Using Dummy Tables to Clarify Research
Objectives
• Dummy Tables
• Tables placed in research proposals that are
exact representations of the actual tables that
will show results in the final report with the
exception that the results are hypothetical
(fictitious).
◗ Assist in recognizing the types of research findings
necessary to make specific decisions about
anticipated results.
◗ Help identify missing key variables and irrelevant
dependent variables in the research model.

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