Marketing Research: Problem Formulation

Marketing Research

• Connects the organization to its external environment.
• Helps management identify potential threats and opportunities.
• Helps to develop and evaluate alternative courses of action
• Aids in decision making.

Backward Market Research

• Traditional market research often leads to poor results.
• Poor problem definition occurs
• Recommendations aren't actionable
• Achieves low client buy-in.
• Lack of collaboration between researcher and client
• Separation of results from decisions and marketing action outcomes.
• Start the process where it usually ends, working backward.
• Determine how the research results will be implemented.
• Define what the final report should contain.
• Begin with an end in mind.
• The research process is: Problem Formulation → Internal and Secondary Data Sources → Research Design → Data Collection → Sample Design → Data Analysis → Research Report.

Problem Formulation

• "Sighting the gun" is another term for problem formulation
• Management Decision Problem: Asks what the decision-maker needs to do; is action-oriented and focuses on symptoms.
• Marketing Research Problem: Asks what info is needed and how it should be obtained; information-oriented and focuses on underlying causes.
• Data Types: New data that is collected and data in existence.

Data in Existence

• Internal Data: Sales data, consumer call reports, consumer complaints, past marketing programs and minds of many temp.
• Secondary Data: Government data, industry sources, commercial sources, and academic and publishing sources.

Week 2

• "Listen to the customer" is closest thing to a marketing law
• Critical for learning about the external environment, particularly non-customers and potential competitors.
• Good marketing research improves marketing decision making.
• Bad experiences with marketing research are often a consequence of poor choice of methodology, inadequate quality control
• Don't throw the baby out with the bathwater.

Problem formulation:

• Problem formulation is a critical step, focusing on the decision problem, research problem and fit between the two
• Backward Market Research (BMR) approach helps
• Close coordination between the client and researcher to define the problem.
• Tie the research results to decision
• Measure twice, cut once

Research Design

• A framework/blueprint for conducting a marketing research project.
• Details the procedures necessary for obtaining the info needed to structure/solve marketing problems

Classification of Research Design

• Research design can be either exploratory or conclusive

Exploratory research

• Objective is to provide insights and understanding.
• Information needed is only loosely defined.
• The research process is flexible and unstructured.
• Sample is small and non-representative.
• Analysis of primary data is qualitative.
• Findings/Results are tentative.
• Outcome is generally followed by further explanatory or conclusive research.

Conclusive research

• Objective is to test specific hypotheses and examine relationships
• Info needed is clearly defined.
• Research process is formal and structured.
• Sample is large and representative.
• The data analysis is quantitative
• Findings/Results are conclusive.
• The outcome used as input into decision making.

Descriptive Research

• Provides an accurate snapshot of some aspect of the market environment

Descriptive research includes

• Description of the characteristics of relevant groups like consumers, retailers or salespeople.
• Consumer evaluation of the attributes of a product versus competing products.
• Supplies numerical information relevant to decision-making.
• Presupposes much prior knowledge about the phenomenon being studied and remains relatively rigid.
• Results need to be comparable for interpretation.
• Requires a clear understanding of the why, what, who, when, where, and how of the research approach.

Data to Collect

• Demographics/Psychographics
• Awareness/Knowledge
• Unaided and aided recall
• Recognition
• Usage and other reported behavior
• Perceptions
• Attitudes
• Purchase intentions

Types of descriptive research

• Cross-Sectional Studies: Collection of info from sample elements measured, observed, or reporting info at one point in time.
• Longitudinal Studies: Collection of data from sample elements measured, observed, or reporting info over time.

Comparison of Conclusive Research Designs

• Descriptive research describes market characteristics or functions, while causal research determines cause-and-effect relationships.
• Descriptive research is marked by the prior formulation of specific hypotheses; causal research involves the manipulation of one or more independent variables.
• Descriptive research is preplanned and structured while causal research involves the control of other mediating variables.
• Descriptive research uses secondary data, surveys, panels, and observation; causal research uses experiments.
• If little is known about the problem, begin with exploratory research.
• Exploratory research is typically the first step in a research design framework, followed by descriptive and/or causal research.
• Not necessary to begin every research design with exploratory research.
• Fit the research design to the research problem

Exploratory Research

• Exploratory research is less structured and more flexible.
• Number of participants is small and only partially representative of the population.
• Examples of exploratory: interviews, focus groups, secondary info, projective methodologies

Uses of Focus groups

• Product Development: Can uncover hidden needs and wants, enable new product screening.
• Background info/hypothesis formation
• Assist in evaluations of advertising concepts, packaging or name screening and pricing or can determine attitudes underlying purchases
• Selecting conclusive research methodology
• Interpreting quantitative results

Focus Groups

• Focus groups are moderated, interactive group discussions used to get in-depth, qualitative info on a specific topic.
• Number: 8-12 participants
• Time is 1-2 hours
• Atmosphere should be relaxed, informal, casual and comfortable.
• Recording via video/audio tape and observation happens
• Respondents should be prescreened
• Homogeneity within groups
• Heterogeneity between groups
• Follow rule of thumb of 2-4 participants per segment

Moderator is Crucial

• Preparation is essential.
• Needs to be comfortable with group processes.
• Needs to make others feel comfortable and draw all info from respondent before moving on.
• Must exercise mild unobtrusive control over the group.
• Must have an acute sense of timing.
• Needs to be attentive to own body language and must be able to think, write, and listen simultaneously.

Flow of focus group

• Intro (5-15%): Moderator/participant intro; participants are given procedural rules/rationale for session.
• Warm-up/Reconnaissance (10-20%): Low anxiety questions asked.
• Moderator gets a picture of the group and participants learn the group dynamics.
• In-depth Investigation (55-65%):Transition to focus on critical issues; product group may have an intro of concept or prototype.
• Closure (10-20%): Sifting on attitudes discussed to determine how group stands on the issue and summarization to permit clarification, with an appeal for additional info.
• Results/Findings are summarized through reporting, analytical or quantitative content analysis.

Variations of Focus Groups

• Two-way focus group
• Dual-moderator group
• Dueling moderator group
• Client-participant group
• Mini groups/ Internet focus groups.

In depth Interviews

• A type of exploratory research
• Semi-structured or open
• Emphasis is on interviewee's personal experiences and attitudes.
• Rule of thumb: Twice the number of focus groups.
• It's a good option when a group might bias results, like sensitive issues for consumers or confidential issues for companies, and when dealing with expert informants.
• Advantages are that its expensive and time consuming.
• Analysis is similar to focus groups

Laddering

• Line of questioning proceeds from product character to user character.
• Allows the researcher to tap into consumers' network of meaning.

Projectives

• It presents an ambiguous, unstructured stimulus or task that a respondent is asked to interpret and explain.
• Good option when respondents have latent feelings and subconscious motivations they're unaware of, along with attitudes they're unable or unwilling to express.
• Disadvantages: cost and interpretation.

Projective Techniques

• Association: word or picture association
• Completion: sentence/story completion, picture interpretation
• Expressive: role playing/third person
• Constructions: cartoon, collage, photo sort, ZALT
• Unstructured Observation helps tap into current behavior.
• Observation is an option when, the respondent can't verbalize needs and activity of int is repetitive and of short duration.

Observation Methods

• Personal observation
• Disguised (mystery shopper) or direct
• Mechanical observation
• Video cameras, ACNielson's "PPI Meter", eye movement recorder/pupilometers/psychogalvanometers, voice pitch analysis, MRI, mobile phones, personal voice assistants (ex. Alexa).
• Physical Trace Measures
• Trace analysis, home audit or 'garbology'.
• Observation is also used for descriptive research, where analysis is quantitative.

Take Away Points from Exploratory Research

• Focus groups are the dominant and default mode of exploratory research because of the group interaction, spontaneity, security, richness, easy understanding using the consumers language,speed and flexibility.
• Some Limitations: "professional" respondents; incentives for participation; groupthink; moderator influence; focus on stated attitudes and intentions rather than actual behavior.

When to Use

• Depth Interviews: expert/busy respondents, sensitive info, confidential info
• Focus groups are suitable for tech/fashion products where consumers are unaware/unable to articulate needs and are suitable for kids.
• Projectiles: unaware, unwilling or unable to articulate needs; unobtrusive situation short duration and repetitive behavior.

Limitations of Methods

• Depth interviews are costly and time-consuming.
• Projectives are also costly and hard to interpret.
• Observation limited to studies of short duration and repetitive behavior that is cost is effective, but provides little insight into motivations and attitudes
• Bottom line: combine methods.

Classification of Research Design

• Error in Re De Imayo
• Personal interviews, phone interviews and mail intercepts
• Mail Questionnaires, combinations and conventionintercept

Factors Affecting Response Rates

• Perceived amount of work required/ length of the questionnaire
• Intrinsic interest in the topic
• Characteristics of the sample
• Credibility of the sponsoring organization
• Level of induced motivation

Methods for improving Response Rates

• Prior notification
• Incentives are monetary and non-monetary
• Prepaid and followed up with other facilitators.

Questionnaire Design: Question Necessities

• Content of Individual Questions

• Is the question necessary?

• Every question consumes valuable resources, making it necessary to ensure that each question is critically needed.

• Need to ensure that respondents understand the question and are willing and able to answer it

• Ambiguous meaning of words: What kind of razor do you use?

• Encourage bogus recall of information.

• Implied assumptions or alternatives, in a frame of reference.

• Are complex in wording and task

• Incorporate double-barreled (compounded)

Questionnaire Organization

• Screeners: Qualifying questions to identify target respondents
• First few questions should be warm-ups, easy to answer
• Middle half to second third.
• Ensure respondents understand and are willing and able to answer all questions

Questionnaire Testing

• Pretesting the Questionnaire Requirements

Testing The Questions

• Pretest: real study conditions with clients, researchers, interviewers and respondents
• Review variation in meaning, task difficulty, and interest/attention-getting properties for specific questions.
• Check flow, skip patterns, length and time, and respondent interest and attention

Takeaway: Questionnaire Design

• Understand the rationale for each question.

Week 6

• Measurement is the assignment of numbers to characteristics of objects, people, stores, or events according to rules
• Four levels of measurement scales -- nominal, ordinal, interval, and ratio

Scales

• Nominal: used in multiple-choice questions (MCQ) where choices have no sequential relation to one another, mutually exclusive
  • Gender: Male/Female
  • Province: Ontario, Manitoba, Quebec
• Ordinal: used to order or rank the choices
  • Rank the provinces from 1 to 5
  • Numeric values assigned only indicate rank/order
  • Range between numbers doesn't reflect intensity of preference
• Interval: scales with the same character as ordinal, but the interval between the different choices is equal -Scale ranges 1-7 to rate how likely to purchase a product; 5-7 likely, 3- neutral, 1-2 Unlikely
  • Scale has properties of order and difference; interval scales have an arbitrary zero, 0 doesn't equal nothing

Ratio measurement

• Has all the characteristics of nominal, ordinal, and interval, plus having a meaningful zero point
• Examples: length, weight, age, income, sales, market shares
• Measurement Scales: Comp or Non-Comp

Scaling Techniques

• Comparative Scales

• Paired Comparison: Respondents are presented with two objects and asked to select one according to some criteria.

  • Freq used when stimulus objects are physical products Easier to select one item from a set of two rather than a large dataset. No order bias, no pattern in the ordering of items or questions.

• Order for objects being evaluated should remain small to prevent interviewee fatigue

  • Respondents are presented with several objects simultaneously and asked to order them according to some criterion. -Measure preferences for brands and attributes.

  • More closely resembles real shopping environment.

    • Only produces ordinal level data. If all alt in a choice set aren't included, results can be misleading.

      -A concept being ranked may be outside person's choice set

• Researcher doesn't know why the resp ranked the items as he/she did constant Sum: Units among sets stimuli with respect to criterion

• If Attribute is important, it receives more points

  • Resp may have difficulty allocating points to add to 100

Non-Comparative Scales

• Respondent makes a judgment with no reference to another object

• Likert scale, semantic differential, graphic, itemized, balanced scale, and unbalanced scale.

• Respondents express level of agreement or disagreement with statements 1Likert- X Is trustworthy

• Uses multiple Statements 1Correlation Analysis-can bias resp

          reverse valance or statements
  

Semantic Differential

Rating scale anchors of each end by bipolar(sweet-sour) or monopolar(Sweet, not Sweet) adjectives -Uses 7 point scales

• uses multiple statements
• examinines a product in vs competitor settings more efficiently-

Non-comparison scale cons

    -lacks standardization,reg, development of customized sales
    -halo effect , lack of universally accepted bipolar adjectives
    - graphic -mark opinion by marking a continuous line

Very Bitter , Bitter, sweet, verry sweet-1+easy to administrade -No firm dissintict -Balanced Scale scales have the same numbers of poisitive and Negative Un Balances Scale scales weight toward on ander or the others , If research expects a wider rangs of OPions balanced -Ascrtn degree of posit given research findigns>Um baland,