CONDUCTING MARKETING RESEARCH

Although each step in a marketing research project is important, problem definition is the most important step.  For the purpose of marketing research, problems and opportunities are treated interchangeably.  Problem definition involves stating the general problem and identifying the specific components of the marketing research issue.  Only when the marketing research problem has been clearly defined can research be designed and conducted properly.  Of all the tasks in a marketing research project, a proper definition of the research problem is more vital to the ultimate fulfillment of a client’s needs than other tasks.

All the effort, time and money spent from this point on will be wasted if the problem is misunderstood or ill defined.  This point is worth remembering, because inadequate problem definition is a leading cause of failure of marketing research projects.   Further, better communication and more involvement in problem definition are the most frequently articulated ways of improving the usefulness of research as the results lead to the conclusion that the importance of clearly identifying and defining the marketing research problem cannot be overstated.
 
The Process :The task involved in problem definition consists of:
i) discussions with the decision makers, 
ii) interviews with industry experts and 
iii) other knowledgeable people

 Analysis of secondary data, and sometimes-qualitative research help the researcher to understand the background of the problem by analyzing the environmental issues.  Certain essential environmental factors bearing on the problem should be evaluated.  Understanding the environmental context facilitates the identification decision problem of the management which then is translated into a marketing research problem.  Based on the definition of the marketing research problem, an appropriate approach is developed.  

The components of the approach consist of:
 i) objective/theoretical framework, 
ii) analytical models, 
iii) research questions, 
iv) hypotheses, and 
v) specifications of the information needed.  

Further explanation of the problem definition process begins with a discussion of the tasks involved.

TASKS INVOLVED 
Discussions with Decision Makers: Discussions with decision makers are extremely important.  The Divisional Manager needs to comprehend the limitations of research. Research facilitates information pertinent to management decisions without providing solutions because solutions require managerial judgment.  The researcher has to understand the nature that decision manager’s face and what they hope to learn from the research.

To identify the management problem, the researcher must possess considerable skill in conversing with the DM. and some organizations have complicated protocols for access to top management and the investigation may find it difficult   to reach the key DM in the early stages of the project due to the organizational status of the researcher or the research department.  Finally, there may be more than one key DM and meeting with them collectively or individually may be difficult.  Despite these issues, it is necessary that the researcher interact directly with the key decision makers.
The problem audit provides a useful framework for interacting with the DM and identifying the underlying causes of the problem.  The problem audit, like any other type of audit, is a comprehensive examination of a marketing problem with the purpose of understanding its nature and origin. The problem audit involves discussions with the DM on the following issues that are illustrated with a problem facing McDonald’s:
 
The events that led to the decision that action is needed, or the history of the problem. McDonald’s, a long-time leader in the fast-food industry, was losing marketing share in 2001 and 2002 to competitors such as Burger King, Wendy’s and Subway in some of the key markets.  This problem came into sharp focus as these competitors launched new products and aggressive promotional campaigns, whereas the recent campaigns of McDonald’s were not as successful.
 
The alternative courses of action available to the DM may be incomplete at this phase, and qualitative research may be required to identify the more innovative courses of action. The alternatives available to the management of McDonald’s include: introducing new sandwiches and menu items, reducing prices, opening more restaurants, launching special promotions, and increasing advertising. The criteria used for evaluating the alternative courses of action such as new product offerings might be evaluated based on sales, market share, profitability, return on investment, and so forth. McDonald’s will evaluate the alternatives based on contributions to market share and profits.
 
The potential actions that are likely to be suggested based on the research findings. The research findings will likely call for a strategic marketing response by McDonald’s. The information that is needed to answer the DM’s questions. The information needed includes a comparison of McDonald’s and its major competitors on all the elements of the marketing mix (product, pricing, promotion, and distribution) in order to determine relative strengths and weaknesses. The manner in which the DM will use each item of information in making the decision. The key decision markers will advise a strategy for McDonald’s based on the research findings and their intuition and weaknesses. The corporate culture as it relates to decision making. The decision making process is dominant in some firms, in others the personality of the DM is predominant. Being aware of corporate culture may be one of the critical factors that distinguish researchers dominantly affecting strategic marketing decisions from those who do not. The corporate culture at McDonald calls for a committee approach in which critical decisions are made by key decision makers. It is important to perform a problem audit because the DM, in several cases, has only a vague idea of what the problem is.  For example, the DM may know that the firm is losing market share but may not know why, because DMs tend to focus on symptoms rather than on causes.  Inability to meet sales forecasts, losing of market share, and fall in profits appear to be all symptoms.  For example, superior promotion by the competition may cause loss of market share, inadequate distribution of products, or several other factors.  Only once the causes responsible are identified the problem can be successfully addressed, as exemplified by the effort of Cingular.
 
Cingular: In addition to discussions with the DM, interviews with business experts, people experienced about the firm and the industry, might facilitate formulate the marketing research problem.  These specialists could also found both inside and outside the firm.  Typically, skilled information is obtained by unstructured personal interviews, while not administering a proper questionnaire.  It is useful, however, to arrange a listing of topics to be covered through the interview.  The order in which these topics are lined up and therefore the enquiries should not be predetermined but decided as the interview progresses.  This permits greater freedom in capturing the insights of the specialists.  The aim of interviewing experts is to help define the marketing research problem rather than to develop a conclusive resolution.  Unfortunately, two potential difficulties might arise once looking for advice from specialists: Some individuals who claim to be knowledgeable and are eager to participate may not really possess expertise. It may be difficult to locate and obtain the help from experts who are outside the client organization.For these reasons,  interviews with experts are more useful in conducting marketing research for industrial firms and for products of a technical nature, where is relatively easy to identify and interact specialists.  This helps in situations where little information is available from other sources, as in the case of fundamentally new products. Experts can provide valuable insights in modifying or repositioning existing products, as illustrated by the repositioning of Diet Cherry Coke.
 
Secondary Data Analysis: Secondary data are collected for some purpose other than the problem under investigation.  Primary data are collected by the researcher for the specific purpose of dealing the research problem.  Secondary data include information obtained from business and government publications, marketing research firms, and computerized databases make available.  Such data are economical and fast source of background information.  An essential step in the process of problem definition is the analysis of available secondary data