Transcript 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?
What is the Marketing Research Process
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 9: Follow-up
Decision Process
Research Process
• Recognize a situation calling for a
decision
• Define the decision problem
• Establish a need for information
Decision to
undertake
research
• Identify alternative courses of
action
• Specify research objectives
• Specify information needs
• Determine sources of data
• Evaluate courses of action
• Select a course of action
• Implement and modify
Formal
research
project
• Develop the data collection of
forms
• Design the sample
• Collect, process, and analyze the
data
• Present the results
Link between the decision process and the research process
The Management 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
Step 1: Identify the Management Problem or
Opportunity
What Question Does the Management decision
Problem ask?
What should the decision maker do?
Moti Italian restaurant sales are low (the symptom) and
if they remain at current levels the restaurant will soon
go out of business. What broadly is the management
decision problem?
What should the restaurant do to improve sales?
Is this enough?
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)
Constraints, e.g.. timing, monetary
Who are the decision makers and what are their
purposes?
Why is it important to clearly define the
management decision problem?
 The problem definition process provides guidelines on how
to correctly define the marketing research 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.
 All the effort, time and money spent from this point on will
be wasted if the problem is not properly defined.
What’s wrong with these statements?
1. Develop a marketing strategy for the brand.
2. Improve the competitive position of the firm
3. Improve the company’s image
What’s wrong with this statement?
1. How should the company adjust its pricing
given that a major competitor has initiated
price changes?
Step 2: Define the Marketing Research Problem
A statement of the objective of the research and
the information needed to make a sound
decision
Examples
To determine the effectiveness of the advertising
campaign
To determine the impact on sales and profits as
various price levels
To determine the needs of product users and the
extent to which the needs are being met by the
market.
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.
Management Decision Problem:
What should Moti restaurant do to improve sales?
Marketing Research Problem:
Why are Sales low?
What factors influence people to spend money in
restaurants and to what extent does Moti meet their
needs?
What information is needed to answer this question?
What can we say about restaurant patrons that
makes them go out to dinner to an Italian restaurant
and spend money? I.e. what’s our theory?
People who go out to restaurants like a wide menu
selection at a convenient location and demand good
tasting food, good service, at a reasonable price.
Research Objectives and Hypotheses
1. What needs do restaurant goers seek to satisfy.
Hypotheses?
2. How well does Moti Italian restaurant meet these needs?
Hypotheses?
3. What are the psychographic and demographic
characteristics of the restaurant goers? Hypotheses?
4. Does Moti Italian restaurant cater to this segment?
Hypotheses?
make a list of the information that should be collected for each
research question and hypothesis
In 2002, Westjet added service to two new Ontario destinations,
London and Toronto. As Westjet expanded into Eastern Canada
it began to run into competition from Montreal-based discount
carrier Jetsgo, which started in 2002.
In 2003 Jetsgo expanded into Western Canada to compete
directly on flights between Calgary and Toronto and Montreal.
In the first six months of 2004, Westjet’s net earnings were $8.0
million compared to $15.5 million during the first six months of
2003. Both Jetsgo and Westjet modeled themselves on the highly
successful US Carrier Southwest Airlines. Both airlines offered
the same schedules, the same service, and the same fares. With
little to differentiate the two airlines Westjet began to look at a
way to increase passenger loyalty especially on the longer haul
domestic flights.
Management decision problem
How to attract more loyal
customers
Marketing Research
Problem
Identify the factors that
influence loyalty of airline
passengers
Exploratory research revealed that the consumer’s choice of an
airline is influenced by safety, ticket price, frequent flyer
program, convenience of scheduling and brand name.
A theoretical model stipulated that consumers evaluate
competing airlines based on factors of the choice criteria to
select a preferred airline. Since both airlines offer the same
schedules, same service, and fares Westjet had to find a way to
differentiate itself,
Food turns out to be the solution.
Secondary data, like the J. D. Power and Associates survey on
“current and future trends in the airline food industry” indicated
that “food service is a major contributor to customer loyalty”.
This survey also emphasized the importance of food brands.
Westjet then conducted a survey to evaluate the importance of
food service to its customers
The following research questions and hypothesis may be posed
RQ1 How important is food for the airline customers?
H1 Food is an important factor for airline travelers
H2 Travelers value branded food
H3 Travelers prefer larger food portions, but with consistent quality
H4. Travelers prefer exotic food.
Characteristics which influence the research design will include the
identification of competing airlines, factors of the choice criteria
(already identified) measurement of airline travel loyalty.
This kind of research helped Westjet to define their marketing
research problem and approach. Focus groups and surveys were
conducted to check customers perceptions of food in Westjet
aircraft. The results provided support for all the hypotheses.
The survey conducted by Westjet told them that “customers
wanted more varied and up-to-date food”
Westjet Airlines then made a few changes: new “culinary menus”
larger portions of food, new coffee and branded products, eg.
Bernard Callebaut chocolates.. This has resulted in better service
increasing customer satisfaction fostering loyalty.
Defining the marketing/management problem
Problem Formulation and Approach
Understand and define the managerial
decision problem/opportunity
Translate into research objective(s) (what
information is needed)
Pose the right research questions
State questions in terms of hypotheses