Business Research Methods

William G. Zikmund

Chapter 6: Problem Definition and the Research Proposal

Marketing and Relationship

The work of a marketer is to develop a strong relationship between consumer and brand What are the stages in a relationship?
- R - e - l - a

- t - i - o - n

What are key stages of making a friend?

I know him I want to be his friend Ive met him I like him He is my friend
Knowledge Intention to befriend
- R - e

Trial Good experience Lives up to expectation

?
- a - t - i - o - n

- l

He is my best friend Lives up to expectation more than the rest

How does this relate to Marketing?

Knowledge Intention to befriend Trial Good experience Lives up to expectation Lives up to expectation more than the rest Awareness Acceptance Trial Liked Adopter Loyal

Consumers affinity track

Aware Consumers who can at least recognize the brand when shown its
pack.

Acceptor aware who did not reject the brand when asked to rate it on 3point scale.

Trialist acceptors who have ever tried the brand at least once. Liked Trialist who rated the brand on top-5 box on 10-point likability scale. Adopter Trialist who liked the brand and adopted it, smoke regularly more
than any other brand.

Loyal adopters who smoke the brand exclusively.

DESCRIPTION OF CONSUMER AFFINITY TRACK

Target Market Consumer of brand either
Aware - Aware with the brand Not Aware -Not Aware with the brand

Amongst Aware
Acceptors :Those who have used OR those who have not used but have intentions to use the brand Rejecters : Those who have never used & have no intentions to use the brand

Amongst Accepters
Tried : Those who have ever tried the brand Not Tried : Those who have never tried the brand

Amongst Tried
Liked : Those who tried & liked the brand on 10 point affinity scale i.e. it should be on 6 to 10 Didnt Liked : Those who tried but didn't like the brand i.e. Rated the brand between 1 to 4 on 10 points affinity scale

Amongst Liked
Adopted : Those who usedt hat brand regularly. Not Adopted Those who didnt s used that particular brand regularly.

Amongst Adopters
Loyal : Have no occasional brand Not Loyal : Having an occasional brand

Consumers Affinity Track (SAT)

Users

Conversion ratio

Aware

Unaware

Awareness Acceptanc e Trial

Stage 1 :Conversion from awareness to acceptance

Accepters

Rejecters

Stage 2 :Conversion from acceptance to trial

Tried

Didnt Tried

Stage 3 :Conversion from trail to preference

Liked

Didnt Liked

Likeness

Stage 4 :Conversion from preference to adaptation Stage 5 :Conversion from adaptation to loyalty

Adopters

Didnt adopted

Reg Usage Excl. Usage

Loyal

Don't Loyal

Problem Area
Awaren ess Acceptan ce Trial Likeness Reg Brand Loyal

Marketers Objective: Create positive disposition towards the brand. Marketers tool: POS advertising/promotion Augmented Product

Marketers Objective: Make the product available/ approachable Marketers tool: Distribution Price

Marketers Objective: Make the product superior or packaging Marketers tool: Product enhancement

Marketers Objective: Marriage of consumer and brand insights Marketers tool: Product enhancement

Marketers Objective: Drive brand loyalty Marketers tool: Product enhancement Price Adjustment Communication

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CONSUMER AFFINITY TRACK(CAT)

Absolutes %
Brand 1 Brand 2 Brand 3

Awareness

Acceptor

Trial

Liked/ Trial 69% 81% 78%

Liked

Adopter
29 30 25
Adopter / Liked 100% 100% 100%

Loyal

94 96 95

49 44 43
Accepters/ Awareness 52% 46% 45%

42 37 32

29 30 25

2 1 0
Loyal/ Adopter 7% 3% 0%

Conversions (Ratios)
Brand 1 Brand 2 Brand 3

Trial/ Acceptor 86% 84% 74%

The objective of CAT is to minimize filtering through different stages

IMPORTANCE OF PROBLEM DEFINITION

1. A problem well defined is half solved The research problem drives subsequent stages of the research process Proper problem definition ensures that the research results will meet decision makers objectives

2.

3.

Marketing decision problem vs. Marketing research problem

The Marketing Decision Problem The difference between the current marketing situation and a given desired situation, e.g. sales are not picking up for a new product as expected Usually indicated by symptoms Preliminary exploratory research is often needed to: x Clarify and better understand the marketing problem, x Understand possible causes of the marketing problem x Determine what research information should be collected to help solve the problem x Help define the research problem

Marketing decision problem vs. Marketing research problem

The Marketing Research Problem

The researchers translation of the marketing decision problem into a form that will guide the data collection effort and provide the required information to solve the marketing problem

Components (contents) of the marketing research problem definition

1. Unit of analysis Target population from whom data is to be collected, e.g. individual consumers, households, retailers, organizational customers, etc Key Variables, Constructs, and/or Concepts Anything that may assume different values among members of the target population, e.g. age, level of satisfaction, etc 3. Research objectives (questions) stating what variables (constructs/concepts) will be measured for what units of analyses Broad Objective Provides perspective (the big picture)
x x

2.

Research Objective Business Objective

Specific Objectives Provide clear guidelines on how to proceed with the research (Action standard)

Marketing Decision Problem Vs. Marketing Research Problem

Marketing Decision Problem Should a new product be introduced? Marketing Research Problem To determine consumer preferences and purchase intentions for the proposed new product. To determine the effectiveness of the current advertising
campaign among the target audience.

Should the advertising campaign be changed?

Should the price of the brand be increased?

To determine the price elasticity of demand and the impact on sales and profits of various levels of price changes.

THE PROCESS OF DEFINING THE RESEARCH PROBLEM

Tasks Involved in Defining the Research Problem

1. 2. 3. 4. 5. Discussions with the Decision Maker Interviews with Industry Experts Analysis of Secondary Data Conducting Qualitative Research Reviewing the General Environmental Context of the Problem

(1) Discussions with the Decision Maker

1. Typically designed as a Problem Audit - a comprehensive examination of a marketing problem with the purpose of understanding its origin and nature Often includes discussions related to: 1. Events leading to the situation for which action is needed - history of the problem. 2. Alternative courses of action available to the DM. 3. Criteria to be used in evaluating alternative courses of action. 4. Potential actions that are likely to be suggested by the research findings. 5. Information needed to answer the DM's questions. 6. Manner in which each item of information will be used by the DM in making the decision.

(2) Expert Interviews

Unstructured, in-depth interviews with individuals both within and outside the organization who are knowledgeable about the marketing decision problem at hand Purpose is to help define the marketing research problem rather than develop a comprehensive solution

(3) Analysis of Secondary Data

Secondary Data Data that has earlier been collected for a purpose other than the problem at hand. Often in the form of published statistics, research articles, reports, etc Usually economical and quick to collect Can provide valuable insights to understanding the current marketing decision problem

(4) Qualitative Research

Unstructured, exploratory research based on small samples, and intended to provide insights and understanding of the problem setting Provides qualitative (as opposed to quantitative) data Generally used to refer to a collection of research methods such as focus group discussions, depth interviews, and projective techniques

(5) Environmental Context of the Problem

PAST INFORMATION AND FORECASTS RESOURCES AND CONSTRAINTS OBJECTIVES BUYER BEHAVIOR LEGAL ENVIROMENT ECONOMIC ENVIROMENT MARKETING AND TECHNOLOGICAL SKILLS

Uncertainty Influences the Type of Research

CAUSAL OR DESCRIPTIVE
COMPLETELY CERTAIN ABSOLUTE AMBIGUITY

EXPLORATORY

Problem Discovery and Definition

First step Problem, opportunity, or monitor operations Discovery before definition Problem means management problem

Problem Definition
The indication of a specific business decision area that will be clarified by answering some research questions.

Defining Problem Results in Clear Cut Research Objectives

Symptom Detection

Analysis of the Situation Exploratory Research (Optional) Problem Definition

Statement of Research Objectives

The Process of Problem Definition

Ascertain the decision makers objectives Determine unit of analysis

Understand background of the problem

Determine relevant variables

Isolate/identify the problem, not the symptoms

State research questions and objectives

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Ascertain the Decision Makers Objectives

Decision makers objectives Managerial goals expressed in measurable terms.

The Iceberg Principle

The principle indicating that the dangerous part of many business problems is neither visible to nor understood by managers.

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Understand the Background of the Problem

Exercising judgment Situation analysis - The informal gathering of background information to familiarize researchers or managers with the decision area.

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Isolate and Identify the Problems, Not the Symptoms

Symptoms can be confusing

Isolate and Identify the Problems, Not the Symptoms

Organization Symptoms Problem Definition Based on Symptom True Problem

Twenty-year-old neighborhood swimming association in a major city.

Membership has been declining for years. New water park with wave pool and water slides moved into town a few years ago.

Neighborhood residents prefer the expensive water park and have negative image of swimming pool.

Demographic changes: Children in this 20year-old neighborhood have grown up. Older residents no longer swim anywhere.

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Determine the Unit of Analysis

Individuals, households, organizations, etc. In many studies, the family rather than the individual is the appropriate unit of analysis.

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Determine the Relevant Variable

Anything that may assume different numerical values

Types of Variables
Categorical (Limited no. of distinct value e.g. Gender/SEC) Continuous (Unlimited no. of possible values.e.g. sales) Dependent Independent

Hypothesis
An unproven proposition A possible solution to a problem Guess

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Before planning a Research

State the research questions and research objectives

If you do not know where you are going, any road will take you there.

Broad research objectives

Statement of business problem

Exploratory research (optional)

Specific Objective 1

Specific Objective 2

Specific Objective 3

Research Design

Results

Research Proposal
A written statement of the research design that includes a statement explaining the purpose of the study Detailed outline of procedures associated with a particular methodology