How do you define the problem in marketing research?

Companies and other organizations use marketing research to manage the risks associated with offering new products and services. These organizations don't want to spend too much money developing a product line that research indicates will be unsuccessful. A well-designed and well-executed marketing study can go a long way towards identifying consumer tastes and demographic preferences to help with a product launch. However, several common types of problems occur with market research that can make it overly costly and produce results of questionable value for the organization.

Poor Survey Design

Organizations use marketing research to find out what customers think and what they want. The survey is a direct way of collecting quantitative, or numerical, information and qualitative, or descriptive, information. When there are errors in the survey design, marketing research problems can surface.

For example, a company might use a method that is designed to collect a random sample from the target consumer population, but the method is not really random. Therefore, the organization cannot generalize its survey results to represent the target population. Similarly, poorly-worded survey questions can lead to ambiguous results from respondents who didn't grasp the intent of the question.

Survey Nonresponse

One marketing research problem relates to how the survey is offered to the target population. Marketers design a survey that many customers choose not to respond to. They look at reasons why people don't want to participate, and they might reach conclusions such as the survey takes too much effort or that the incentive for participation is not appealing to respondents.

Tip

Survey respondents are rarely willing to spend more than a few minutes on a voluntary survey. For longer efforts, consider offering some sort of compensation such as cash, a gift card, or a free product to encourage participation.

The Problem of Survey Bias

A survey might include one or more sources of bias. Marketers might believe, for example, that they have created an online survey to appeal to respondents of all ethnic backgrounds, but the survey questions, and even images, might be biased to favor one ethnic group or could offend one or more ethnic groups.

The famous image of the "Dewey Defeats Truman" newspaper headline in 1948 was the result of survey bias. The journalists had surveyed voters by telephone, thereby missing the opinions of the many voters that did not have telephones at the time.

A survey's format and content must be acceptable to all audiences from which marketers seek to gather information.

Issues with Observation Research

Some marketing research involves observing consumers in action and noting their preferences. Marketers can become intrusive, interfering with a consumer's experience to the point that a consumer feels disgusted and leaves the business site. For example, a fast-food chain's researchers need to determine if there is a need for a new location of its store so they survey people going through the drive-through line. Although researchers conduct a short survey, they aggravate customers by slowing down the line.

Tip

A market survey is a more complicated undertaking than it might, at first, appear. You might want to employ the services of marketing professionals if you do not have someone on staff with survey design experience.

The general rule to be followed in defining the marketing research problem is that the definition shou1d (I) allow the researcher to obtain all the information needed to address the management decision problem, and (2) guide the researcher in proceeding with the project. Researchers make two common errors’ in problem definition. The first arises when the research problem is defined too brvaiJy. A broad 4efinitron does not provide clear guidelines for the subsequent steps invelecl in the project. Some examples of overly broad marketing research problem definitions art (I) develop a marketing strategy for the brand, (2) improve the competitive position of the firm, or (3) improve the company’s image. These are not specific enough to suggest an approach to the problem or a research design.

The likelihood of committing either type of error in problem definition can be reduced by Slating the marketing research problem in broad, general terms and identifying its specific components (see Figure 2.3). The broad statement provides perspective on the problem and acts as a safeguard against committing the second type of error. The specific components focus on the key aspects of the problem and provide clear guidelines on how to proceed further. thereby reducing the likelihood of the first type of error. Examples of appropriate marketing r.esearch problem definitions follow

Proper Definition

Marketing Research Problem Definition

In the department store project. the marketing research problem is to determine the relative strengths and weaknesses of Sears. vis-a-vis other major competitors. with respect to factors that influence store patronage. Specifically. research should provide information on the following questions.

1. What criteria do households use when selecting department stores?
2. How do households evaluate Sears and competing stores in terms of the choice criteria identified in question
3. Which stores are patronized when shopping for specific product categories?
4. What is the market share of Sears and its competitors for specific product categories?
5. What is the demographic and psycho graphic profile of the customers of Sears? Does it differ from the profile of customers of competing stores?
6. Can store patronage and preference be explained i’n terms of store evaluations and customer characteristics?

Major Large Baseball Majors in Research

Major League Baseball  wanted to evaluate \he effect of the size and frequency of its non price promotions for MLB games. The management decision problem was: Should MLB teams continue with nonprice promotions? The broad marketing research problem was defined as determining the impact of nonprice promotions on attendance at MLB games. Specifically, this research should answer the following questions

1. What is the overall effect of nonprice promotions on attendance?
2. What is the marginal impact on attendance of additional promotional days?
3. Are nonprice promotions effective in building long-term loyalty?
4. What are the demographic and psychographic characteristics of people who respond to non price promotions?

Analysis of a data set containing 1,500 observations revealed that non price promotion increases single game attendance by about 14 percent. Additionally, increasing the number of promotions has a negative effect on the marginal impact of each promolton. The loss from this “watering down” effect, however, is outweighed by the gain from having an extra promotios day. Promotion most influences occasional atteadees but does not engender long-term loyalty.

Once the marketing research problem has been broadly stated and its specific components identified, the researcher is in a position to develop a suitable approach.

Objective/Theoretical Framework

In general, research should be based on objective evidence and supported by theory. A theory is a conceptual scheme based on foundational statements called axioms, which are assumed to be true. Objective evidence (evidence that is unbiased and supported by empirical findings) is gathered by compiling relevant findings from secondary sources. Likewise, an appropriate theory to guide the research might be identified by reviewing academic literature contained in books, journals, and monographs. The researcher should rely on theory to determine which variables should be investigated. Furthermore, theoretical considerations provide information on how the variables should be operationalized and measured, as well as how the research design and sample should be selected. A theory also serves as a foundation on which the researcher can organize and interpret the findings. “Nothing is so practical as a good theory

The department store patronage project illustrates how theory can be used to develop an approach. Review of the retailing literature revealed that the modeling of store patronage in . terms of choice criteria had received considerable support.22 Furthermore, as many as 42 choice criteria had been identified in the literature, and guidelines on operationalizing these variables were provided. This provided an initial pool from which the final eight characteristics included in the questionnaire were selected. Theoretical considerations also suggested that store behavior could be examined via a survey of respondents familiar with department store shopping. The theoretical framework also serves as a foundation for developing an appropriate analytical model.

Analytical Model

An analytical model is a set of variables and their interrelationships designed to represent, in whole or in part, some real system or process. Models can have many different forms. The most common are verbal, graphical, and mathematical structures. In verbal models, the variables and their relationships are stated in prose form. Such models may be mere restatements of the main tenets of a theory. Graphical models are visual. They are used to isolate variables and to suggest directions of relationships but are not designed to provide numerical results. They are logical preliminary steps to developing mathematical models. Mathematical models  specif’j the relationships among variables, usually in equation . These models can be used as guides for formulating the research design and have the  of being amenable to manipulation.P The different models are illustrated in the context of the department
store project.

How do you identify a problem in research?

Why is defining the problem important in marketing research?