In order to understand the background of a marketing research problem, the investigator must understand the client firm and industry. Specially, the researcher ought to analyze the factors that influence the marketing research problem. The past information and forecasts pertaining to the industry and the firm, resources and constraints of the firm, objectives of the decision maker, buyer behavior, legal environment, economic environment, and marketing and technological skills of the firm are the factors, encompassing the environmental context of the problem.
Past Information and Forecast:
Past information and forecasts of trends with respect to sales, market share, profitability, technology, population, demographics, and lifestyle can assist the researcher understand the marketing research problem being investigated. Where appropriate, this kind of analysis ought to be carried out at the industry and firm levels. if a firm’s sales, for example, have decreased while industry sales have increased, the problems will be very different than if the industry sales also decreased. In the former case, the problem is likely to be specific to the firm. Past information and forecasts can be valuable in disclosing potential opportunities and threats, as the fast-food industry has uncovered. This is evident how fast-food chain McDonald’s has sought to exploit potential opportunities in the recent trend towards a shorter and vanishing lunch break in the offices.
Resources and constraints:
To formulate a marketing research problem of appropriate scope, it is necessary to take into account both the resources available and the constraints on the organization. Proposing a large-scale project that would cost $ 100,000 when only $ 40,000 has been budgeted, would not meet management approval.
In several cases the scope of the marketing research problem may have to be curtailed to accommodate budget constraints. This might be done, as in the department store project, by confining the investigation to major geographical markets rather than conducting the project on a national basis. It is usually possible to extend the scope of a project considerably with only a marginal increase in costs and considerably enhance the usefulness of the project, thereby increasing the probability and resulting in approval of the management.
Time constraints can be crucial when decisions must be made fast. A project for Fisher-Price, a major toy manufacturer, involving mall intercept interviews in six major cities (Chicago, Fresno, Kansas City, New York, Philadelphia, and San Diego) had to be completed in six weeks. Why this rush? The results had to be presented at an upcoming board meeting where a major decision was to be made about a new product introduction.
Constraints, such as the client firm’s personnel, organizational structure and culture, or decision-making styles impose, should be identified to determine the scope of the research project. However, constraints should not be permitted to reduce the value of the research or compromise the integrity where the resources are too limited to allow a high-quality project the firm should be advised not to undertake formal marketing research. For this reason, it becomes pertinent to identify resources and constraints, a task that can be better understood when investigated in the light of the objectives of the organization and the decision maker.
Objectives:
Decisions are made to accomplish objectives. The formulation of the research problem must be based on a clear understanding of two types of objectives:
Past Information and Forecast:
Past information and forecasts of trends with respect to sales, market share, profitability, technology, population, demographics, and lifestyle can assist the researcher understand the marketing research problem being investigated. Where appropriate, this kind of analysis ought to be carried out at the industry and firm levels. if a firm’s sales, for example, have decreased while industry sales have increased, the problems will be very different than if the industry sales also decreased. In the former case, the problem is likely to be specific to the firm. Past information and forecasts can be valuable in disclosing potential opportunities and threats, as the fast-food industry has uncovered. This is evident how fast-food chain McDonald’s has sought to exploit potential opportunities in the recent trend towards a shorter and vanishing lunch break in the offices.
Resources and constraints:
To formulate a marketing research problem of appropriate scope, it is necessary to take into account both the resources available and the constraints on the organization. Proposing a large-scale project that would cost $ 100,000 when only $ 40,000 has been budgeted, would not meet management approval.
In several cases the scope of the marketing research problem may have to be curtailed to accommodate budget constraints. This might be done, as in the department store project, by confining the investigation to major geographical markets rather than conducting the project on a national basis. It is usually possible to extend the scope of a project considerably with only a marginal increase in costs and considerably enhance the usefulness of the project, thereby increasing the probability and resulting in approval of the management.
Time constraints can be crucial when decisions must be made fast. A project for Fisher-Price, a major toy manufacturer, involving mall intercept interviews in six major cities (Chicago, Fresno, Kansas City, New York, Philadelphia, and San Diego) had to be completed in six weeks. Why this rush? The results had to be presented at an upcoming board meeting where a major decision was to be made about a new product introduction.
Constraints, such as the client firm’s personnel, organizational structure and culture, or decision-making styles impose, should be identified to determine the scope of the research project. However, constraints should not be permitted to reduce the value of the research or compromise the integrity where the resources are too limited to allow a high-quality project the firm should be advised not to undertake formal marketing research. For this reason, it becomes pertinent to identify resources and constraints, a task that can be better understood when investigated in the light of the objectives of the organization and the decision maker.
Objectives:
Decisions are made to accomplish objectives. The formulation of the research problem must be based on a clear understanding of two types of objectives:
- The organizational objectives.
- The personal objectives of the decision maker.
For the project to be successful, it must serve the objectives of the organization and of the decision maker. This, however, is not an easy task. The decision maker rarely formulates personal or organizational objectives accurately. Rather, it is likely that these objectives will be stated in terms that have no operational significance, such as “to improve corporate image”. Direct questioning of the decision maker is unlikely to reveal all of the relevant objectives. The researcher needs skill to extract these objectives. An effective technique is to confront the decision maker with each of the possible solutions to a problem and ask whether they would follow that course of action. In case of a negative answer received, use further probing to uncover objectives that are not served by the course of action.
Buyer Behavior:
Buyer behavior is a major component of the environmental context. In most marketing decisions, the problem can ultimately be found out to predict the response of buyers to specific actions by the marketer. An understanding of the underlying buyer behavior can provide valuable insights into the problem. The buyer behavior factors that should be considered may include the number and geographical location of the buyers and non-buyers, demographic and psychological characteristics, product consumption habits and the consumption of related product categories, media consumption behavior and response to promotions, price sensitivity, patronization of retail outlets, buyers’ preferences.
Buyer Behavior:
Buyer behavior is a major component of the environmental context. In most marketing decisions, the problem can ultimately be found out to predict the response of buyers to specific actions by the marketer. An understanding of the underlying buyer behavior can provide valuable insights into the problem. The buyer behavior factors that should be considered may include the number and geographical location of the buyers and non-buyers, demographic and psychological characteristics, product consumption habits and the consumption of related product categories, media consumption behavior and response to promotions, price sensitivity, patronization of retail outlets, buyers’ preferences.
Legal Environment:
The legal environment consists of public policies, government laws and agencies, pressure groups that influence and regulate various organizations and individuals in society. Important areas of law include patents, trademarks, royalties, trade agreements, taxes, and tariffs. Central laws have an impact on each element of the marketing mix. In addition, laws have been enacted to regulate specific industries. The legal environment can have an important impact on the definition of the marketing research problem.
Economic Environment:
The economic environment is comprised of purchasing power, gross income, disposable income, discretionary income, prices, savings, credit availability, and general economic conditions. The general state of the economy influences the willingness of consumers and businesses to take credit and spend on big-ticket items. Thus, the economic environment can have important implications for marketing research problems.
Marketing and Technological Skills:
A company’s expertise in each of the components of the marketing mix as well as its general level of marketing and technological skills can have the potential to affect the nature and scope of the marketing research project. For example, the introduction of a new product requires sophisticated technology may not be a viable course if the firm lacks the skills to manufacture or market it.
A firm’s marketing and technological skills greatly influence the marketing programs and strategies to be implemented. From a broader perspective, other elements of the technological environment ought to be considered.
Technological advances, such as the continuing development of computers, have a dramatic impact on marketing research. To illustrate, computerized checkout lanes allow supermarkets to monitor daily consumer demand for products and make the scanner data available to the researcher. It is possible to obtain precise information on retail sales, not only of the firm’s brands but also of competing brands.
The speed and accuracy of data collection enable the researcher to investigate intricate issues such as the daily changes in market share during a promotion campaign.
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