assign 1

PRtrBLEM DEFINITItrN:

JUMF-STARTINE THE RESEARf,H

FRNf,ESS After studying this chapter, you shoutd be abte to

1. trxpl&;n why proper "ptetliern definiti$n" i5 essential to Lisei'ul firarheting fesear{h

z. l(now how t0 rec{rgni;e probte!'ns

3. T.;rns{ate rnanagerial decision Jtatements into .ele'Jant reseerch objectives

4. Traxrstate reseafeh otljettiv€s inlo research questions and/ot rcsearch

5" Ou{iine the com,laneflts of a relieafch ploposa{

6, C4lngtl l-rct dulnmy tahies as part of a research proposal

hl,potlteses

Ehapter Vignette: Mario Lagastr : 's 'Advert is ing" Froblem lames Michael. owner of a smalL mafl(et research firm in Columbus, 0hio, sits over a bowl of

spaghetti and meatbaLlsand a glass of Chianti Classico at lvlario Lagasto's ltaLjan Restaurant

lames isn't there iust for lunch; he is there discussing Lagasto's current business situation

with Mario Lagasto, the restaurant's owner.lames finishes only

about a third of the spaghetti and haLf of the wine, and sayc. 'Tha" lkcIor lhelJ|h. l lceerst ' rat -emenbe' the

t r louse red being d lovelv Barbcra d'Asri.- r

Mario replies, "Ah, yes, from cascina Ballarin to be

exact. But, we had to move that to our reserve l ist. Our new

cornptroLler has really helped us control our costs."

lames asks, "Well, Let's get down to business. What

seems to be the problem? People certainly love ltalian food."

Mario explains that his sales, which have grown every year since he opened the restaurant in 1990, have actualLy

dfopped over the last twelve months. Yet, the suburban neigh-

borhood has continued to grow. "l was sjtt ing at home and I

fealized that allthe downtown restaurants have dramatically

increased their televjsion advertising and on top of this, the city's downtown revivalcampaign is everywherel" He continued, " 've been using the same advertising for years: a few spots on

local radio, an occasional newspaper spot, and a bil lboard on

the main highway across from the restaurant. When I see the fancy advertisjng run by my competitors, it is clear that I have an

advertlsing problem. I want you to telL me what I can do to make

my advertising more effective!" 0nce the interview is complete, James informs Mario that he

wi l l go back and prepare a proposal that wi l ldescr ibe how he may

be able to help Lagasto's get bacl( on track. once back in the office, lames begins to scribble some notes. He

begins to study the advertising of both Lagasto and his competitors.

He realjzes that some of the neighborhood competitors, inctuding

the big chajn ltalian restaurants [i l(e olive Garden, have always had a large prornotionaLbudget,

including television ads. The advertising deficit isn't new. He tries to identify all the things

that have changed since Lagasto's sales trends turned downward. Does Mario really have an

da a

advertising probtem? ls it a problem with competit ive positioning? ls it a problem with a change in the

external operating environment? Has Mario iust missed out on some gtowth opportunities? Then, just

as hunger starts to set in, he remembers the rather average spaghetti and meatballs and red wine he

had for tunch. He thinks about how it is has changed from what he remembers. Maybe James'hunger

has led to a discovery!

' ' , , ' " ' ' , : , " , . ' - . , ,The Nature of Market ing Froblems

I rmprxntane m mS f f i *ar t ing wi '&[s m ff i nmd FrushBprm $e$ic" l i t im$t

ChapCer 3 discussed some basics oftranslating a business situation into specific research ob.jectives

Thus, it is the {irst stage in the research process introduced in Chapter 3 While it is tempting to

skip this step and go directly to designilg a research prqect, the chances that a research prqect will

prove useful are directly related to how well the research objectives coresPond to the true business

"problem." Clearly, the easiest thing forJanres to do in the opening vignette is to start designing a

study of Lagastot adverrising ellectiveSess. This seems to be what Mario wants. ls it what Mario

needs. however? Tbis chapter looks at this important step in the research process more closely. Some useful tools

are described that can help translate the business situation into relevant, actionable research objec

tives. Research too often takes the blame for business failures when the real failure was really man-

agen-rent's view ofits own con-rpanyt situation.The Research Snapshot box on page 105 describes

some classic illustrations involving companies as big and successful as Coca-Cola, RJ Reynolds, and

Ford.While the researcher has some say in what is actually studied, rernember that the client (either

management or an outside sponsor) is the research customer and the researcher is serving the client's

needs through research. In other words, when the client fails to understand their situation or insists

on studying an irrelevant problem, the research is very likely to fail' even ifit is done perfectly'

Translating a business situation into something that can be researched is son-rewhat like trans-

lating one language into another. It begins by coming to a consensLrs on a decision strtenent or

question.A deEision staterflent is a written expression ofthe key question(s) that a research user

*ishes to "nswer.It

is the reason that research is being considered. lt musr be well stated and rele-

vant.As discussed in chapter 3, the researrher translates this into research terms by rephlasing the

decision statement into one or mole lesearch objectives.These are expressed as deliverables in the

research proposal. The researcher then further expresses these in precise and scientific research

terminology by creating research hypotl-reses fion-r the research objectives

In this chapter, we use the tetrr Ttroblem deinition. kealize that sometimes this is really opportu-

nity seeking. For sin-rpliciry the term FFEblem dEfinitiEn is adaPted here to refer to the process of

defining and developing a decision statement and the steps involved in translating it into more

precise research terrninology, including a set ofresearch objectives. Ifthis process breaks down at any

point, the research will almost certainly be useless or even harmful. It r,vill be useless if it presents

iesults tl-nt simply are deemed irrelevant and do not assist in decision making.It can be harmful both

because of tl-re wasted resources and because it may misdirect the company in a pool direction.

Ultimately, it is difficult to say that rny one steP in the research process is most important'

However, formally defining the problem to be attacked by research by developing decision state

ments and traDslating them into actiontble resealch objectives must be done well or the rest ofthe

research process is misdirected. Even a good road m:rp is useless unless you know just where you are

going. A11 ofthe roads can be correctly drawn, but they still don't get you where you want to be

Sin-rilarly, even the best research procedures will not overcome poor problerrr definition'

Fnt:himn'm ffi mm'lplexity

Ultinately, rhe quality ofmarketing research in improving business decisions is limited by the qual-

ity ofthe problen definition stage.Tl-fs is far fiom the easiest stage ofthe research process.Indeed,

Dl!r is iEn stateinEnt A written expression ofthe key

question(s) that the research uSel wlsnes to answer,

_ trr'oblern delinitiIln The process of defining and

developing a decision statement and the stePs

involved in translat ing i t into mole precr5e leSearcn

terminotogy, including a set of research obiectives.

Fnsbing An interview technique that

tr ies to draw deeper and more elaborate explanations from the

discussion.

€XH!E{T g, :

What Has Changed?

Part 2: Beginning Stages of the Research Process

4. Be open minded.It is very important to consider all ideas as plausible in the beginning stages of problem solving. One surc way to stifle progress is to think only like those intimately in- volved in the business situation or only like those in other industries. Analogies can be useful in thinking more creatively

:: IOENTIFYINE SYMPTOMS Interviews with key decision makers also can be one of the best ways to identi6/ key prob lem syn.rptoms. Recall chat all problems have symptoms just as human disease is diagnosed through symptons. Once symptoms are identified, then the researcher must probe to identifii possible causes ofthese changes. pnobing is an interview technique that tries to draw deeper and more elaborate explanations from the discussion.This discussion n-ray involve potential problem causes. This probing process will likely be very helpfirl in identif,iing key variables that are prime candi- dates for study.

One ofthe n-rost important questions the rcsearcher can ask during these interviews is, "What has changed?"Then, the researcher should probe to identify potential causes ofthe change.At the risk of seeming repetitive, it is important thxt the researcher repeat this process to make sure that some in-rportant change has not been left out.

In addition, the researcher should look for changes in company documents, including financial statements and operating reports. Changes may also be identified by tracking down news xbout competicors and customers. Exhibit 5.3 provides a summary of chis approach.

Think back to the opening vignette. Often, multiple interviews are necessary to identify all the key symptoms and gain a better understanding of the actual business situation. On a foilow up interview, the dialogue betweenJames and Mario may proceed as follows.

James: Mario, as you suggested, the downward sales trend began twelue months ago. Aside Jtom the atfue k- ing you nentioned eatliet, what &rer dmnges hate ocutterl inside oJ yow b sitess withifl the past yeat?

Matio: Just aJeu thitgs. Although sales are down, out projts haven't suffered very much. Since we hired the comptrcllet just oL'et a yeat ago, we'ue efectiuely managed out costs by thanging suppliets and dtopping some of the mote costly items.ftom aw fiefiu.

Janes (probing): Such as thanging the house red? Tell me, what letl to this decision?

Mario: The Borbera d'Asti thdt u)e serued casts us almost $ 1 5 pet bottle. Clastome$ don't like to pay mote than $5 pet glass for a house wine, so we were doing little more thal1 brcaking even on it. Besides, the Olirc Cardex axcl Macaroxi CriLI serue ajug utine for their horse rerl.They always haue.

James: Haue you noticed changes in yo r custonets?

Maio: Other thax the Jact thdt they are coming less oJten, no!They are the same Jaces that I harc seetl Jot yeats.They tend to mme Jtom the neatby, neighborhoods.

Question: What changes have occuffed recently?

Probe:T€ll me aboutlhis chang€.

Probe: Whal has brought this aboul?

Problem: How mi0hi this be relaled to your problem?

oueslion: What other changes have occurred recenily ii.e.,

compelitors, customers, environment, pricing, promotion,

suppliers, employees, etc.)?

Continue Probing

Chapter 5: Problem Definit ionr lump'Start ing the Research Process

IT.ffiffiffiAreffiMSNAPShf;MT Wf EppEntunity ls a "Fleeting" players in the European SUV marl(et. Expectations are that 0peL,

I*'5 U"u. nln-European automotive as they introduce new models for the 2006-2008 model years. In

\-l companies missed out on European hindsight, could it be that several prominent automobile compa-

I opportu ' t i t ie5? Furooe .eprese t is a nies missed opportuni t ie5 i1 Europe oecaJse thev tai led to k low

\ nearlv $rz mitl ion annual market for new how big the market truly was?

automobiles. Traditionally, the thinl(ing is Lool(ing at this from the opposite direction, the tiny (by U.S.

that European's prefer smaller or "l ight-cars." Thus, European standards) two-seater SIVIART (http://www.smartusa.com) car is

car companies Ljke Bi\4W and Audi were slow to enter the SUV ptanned to be introduced in the l lnited States. lmporters hope to

market. Merced es entered th e SUV market rather early o n, se l l 15,ooo u n its in the flrst year. What do you thin k the o pportu n ity

but the emohasis was on the American market. American and for the SMART car is here in the United States? Word is there may japanese co m pa n ies offered l jtt le more than a to ke n effort even be SMART 5 UV- a miniatu re versio n of an American icon.

at setl ing SUVs in Europe. Thus, the SUV wars were fought in America where totalvolume reached 4 mill ion shortly after 2ooo. Europeans were tert witn r"*er cr,oile' ii

"" siv iiru.t ilii'3,1;!'3i; [5;l11YjI 'tlilt'i "their fancy. 2oo5," Auio rn otive News' 79 {1/24)'

As a result, pre-2ooo SUV sales in Europe were almost non- ij'iflffii,'Fi3J?""!i';rr:'^t i"X,l' existent. However, 5UV sales in Europe have increased dtamati- i i""l i" i, i ir.p", g telt8l ' Llr"*, cally since then. By 2oo4, European 5UV sales have reached Misuel ( '?oo4)' "Europeysrna(' cars

16.5 mittion units, about one in twenty of all new units sold h i i l , l '- i i i ; l ; " nlsNBcxews' {8/3t'

Europe. Today, Nissan, Toyota, Land Rover, and Suzuki are maior idl521786tl.

lmrs: HLttt thc ontplaitts or cotnrncnts dnngtrl?

t

9

s o

r1lrrl()r N)l /d spcak of. A.fu.u rct ,trtit.ci orr rcnouing att ittn or ttrLtJront llte nrcnu../l rcttplL'dltorrl lhc

r| ir nnst,but f . l t t) ,crtu st i l l gct t l te Barbtm 0n awrcscrrc l ist. f .) t just S'12 abott lc.

Jrtnrt: Hds thcrc hccn a dtangt h pcrsottt t t l?

\ldri,: Ycs,u,t\,t had unr? thdtl thc usual shorc oJ nnttrcr. I'uc

atnpnrtllcr.ll'clc ltad notrlle ndintdininp good kitchen lrlp.

Jnnet: Har ),otr notittd an1, chanocs ta the n] lditars ll l )\)tt

r t t , tJ, , t t , " . . t u i t " t t t t ' l l , . t : t , t t : r , r l

lurc ttol already nt0ttitttctl?

Mario: ),lost oftlrc nearbl, platcs drc doin.y4 lt!n c llinls th?y hrlr dontJitt ),eats.Thc clvilt lldlid rcstdtl

ntts lLLtt,e lltc sarttt pntntofions cadr ),car attd thtir ncnLt dotsnl dnttgc ucry nudt

In the chatt.gr itLftnict4 thc rcscir-chL'l is trying to iclerttify possible changes in thc ctlstonrcl_s, thc

compcti lor_s, thc intL' lnal condit iotts ofthc companli and the extcttral cl tvironment- The intcrplay

betrveen things tl-iat li.rvc chengecl and things that havc stayccl the sllr)e can often leaci to key

research factors- I lefrrr:e pleprl i trg thc proposel,James lnd Mario aglee that the leal dccisiotr faccd

is lot m narorv as an adver:tisirtlr problcrrr; r'adrer, the clecisioti itrvolvcs lLnding rvays in rvl-tich

Mlrio crn letum sl lcs to rheir previous 1evel. In tbis clsc,James is beginl i lg to sLlspcct that one

kev frctor is that the food arrcl bcvcraqc quali ty h:N'e suflcrcd as a resLl l t ofru\ l rutt ir tq rt t(-tsLLr-c\.

Pcrhlps rhis hls been noticecl by molc than r l;rl' custonlL'L_s.

Alniost :rny siturtrorl carr be fiaDred florn a nurnbcr of difflrent perspcctlves. A plicing prob-

len urav be rephrased ls a brand imese problen. Peoplc cxpect high quali ty ptoclucts to havc

highcr priccs. A qu:rlity probiem tnay bc rcphmsed as a packagitrg problcnr. Fol exarrple, I polato

chip complny thought th:rt a qual i ty dif fere[t ial bctwccn thcir Potl ] toes.t ld thcir corlrPeti tors w:ls

the cause lor the sympton showlng sliding rlalket shrrc. However, one of the lesearch q[cstions

thrt cvcntual ly rcsulted clealt lvi th corrsurrrer preGr-ences for plckagine. In dre encl, reseatclt sug-

geited drrt cons!r)rcrs preler a foi l package bccarLsc ir helps the chips stav f icsher longer.Thus, the

ktr gap tur necl o,-rt to bc a packlgc gapl')

Il.esclrchcrs shoulcl make sulc thirt they have uncovelcd all posiblc relevrllt s,vnptorrls alnd

considcred their poiclrti]l cruses. Perhlps nrorc intcrvierv tirle rvith kcy decisiorr nrakels askir-ig

u'hv pcople choose Cokc r'vor-rld have helpecl identify sonre of the less tangiblc aspccrs of the

Cokc-Pcpsi-Ncrv (irke brttle. lt car hclp avoid nristakes latct.