Global Market Research Case Study Analysis
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bookinfo.docxThe Preliminary Stages of the Marketing Research Process
Research problems are more likely to be poorly defined, only partially understood, and missing possible decision alternatives that should be analyzed. Defining problems accurately is a combination of data and judgment that demands real thought and effort. Problems, opportunities, and “nonproblem” situations are closely related to structure. Together they make up a family of gaps. The concept of analyzing the gaps as problems is based on:
1. Recognizing/understanding a problem. A problem is a gap between what was supposed to happen and what did happen between our objective and our accomplishment. Three elements are required to recognize a problem:
. Something must be expected to happen.
. Feedback must be received on what actually happens.
. Expectations and feedback must be compared.
· Knowing where and when the gap or problem occurred. Once a problem is defined, it is easier to approach the cause and solution to the gap(s), in accordance with the level of detail of the analysis. In the end, problem definition is and will always be a creative act, a balance between thorough research and intuition. Problem definition is best thought of as a solution definition—the selection of a domain is likely to be rich in ideas to solve the problem. Problem definition is a creative act. The payoff from good marketing definition is enormous—nothing else we do has so much leverage on profit. 1
Seldom will research problems come neatly packaged with obvious information requirements, clear-cut boundaries, and pure motives on the part of the decision makers. Launching a research study with such shaky inputs is a recipe for producing unusable findings and unhappy clients. It is in the best interest of both the researcher and the managers paying for the research to be sure that the research purpose is fully understood. One of the hallmarks of a competent researcher is the ability to get to the heart of the management problem.
Consider the seemingly straightforward request by the chairperson of an association of community merchants for a research project. The objective of this project was to help reduce the propensity of residents in the community to do their shopping in two nearby communities. Clearly, the purpose of the research was to identify and evaluate various ways to increase the local merchants’ share of shopping by residents.
Further probing, however, revealed that the statement of the problem was at least partially inaccurate. Only late in the research process was it learned by the researcher that the chairperson was having real difficulty convincing the other local merchants that there was a serious enough outflow of local trade to warrant joint action to reverse the flow. This certainly changed the purpose of the research. Now the researcher would have to measure the level of retail trade outflow, in addition to finding the reasons for the outflow. This required a major change in the research design, but had the change not been made the results would have been of little value to the client.
The research purpose comprises a shared understanding between the manager and the researcher of:
1. Problems or opportunities to be studied
. Which problems or opportunities are anticipated?
. What is the scope of the problems and the possible reasons?
· Decision alternatives to be evaluated
. What are the alternatives being studied?
. What are the criteria for choosing among the alternatives?
. What is the timing or importance of the decision?
· Users of the research results
. Who are the decision makers?
. Are there any covert purposes?
Problem or Opportunity Analysis
In analyzing problems or studying opportunities, identifying loyal customers and doing targeted marketing are very important.Marketing Research in Business 3-1 reiterates the importance of market research and databased marketing in creating “top of mind awareness” of their products.
Research often is motivated by a problem or opportunity. The fact that sales are below expectations in the East might be a problem requiring research. The fact that people are consuming fewer sweets might be a problem or a potential opportunity for a candy company. Increased leisure time might be viewed as an opportunity by a recreation-oriented organization. In such cases the research purpose should specify the problem or opportunity to be explored. Identifying and defining the problem or opportunity is a crucial first step in the marketing research process. Especially in situation analysis contexts, exploratory research is needed to identify problems and opportunities. What sales areas are showing weak performance? What segments represent opportunities because they are dissatisfied with current products or because they are underusing the product? Even in exploratory research, however, it will be helpful to identify the nature of the problem or opportunity that is motivating the research. Further, the goal should be to move from exploratory research to research more focused on a decision. Marketing Research in Business 3-2illustrates the process of marketing research in order to generate a product or outcome that appeals to the needs of the customers.
Marketing Research in Business 3-1. What Do Today’s Buyers Want?
Today’s buyers have created changes for all businesses. They are
· Skeptical—their trust has been broken by every industry.
· Cautious—they take a lot of time to weigh decisions.
· Tired of selling and sales pressure—they are weary of spam and telephone sales.
· Busy—they want everything quick and easy.
· Confused—they are bewildered with the variety of offers.
Today’s buyers have access to information because of the Internet, and they can make better decisions because of the global market available for choice. Marketers have to create a “top of mind awareness” of their products. To do this, they have to constantly inform buyers about their products without irritating them. This means they have to identify their most loyal customers and do a great deal of targeted marketing. This is possible only through marketing research and databased marketing.
Once marketers have identified their customers, it’s very easy to find buyers with a similar profile and generate loyal, profit-generating customers.
SOURCE: findmorebuyers.com/page.cfm/11, January 2003.
The manager needs to make certain that the real problem is being addressed. Sometimes the recognized problem is only a symptom, or perhaps merely a part of a larger problem. A sobering illustration of this is the plight of Compton Corp., 2 a manufacturer of capital equipment costing between $10,000 and $25,000. The company was dominant in its market, with a share as large as the next two biggest competitors. All the companies sold their equipment through a network of independent distributors, each of which sold the products of at least two competitors. For several years this market leader had been losing share. In an attempt to reverse the trend, the company changed advertising agencies. When the new agents funded a study of end users, they found to their surprise that the previous agency had done a superb job of creating awareness and favorable attitudes. However, many of the equipment purchasers who favored Compton were actually buying the competing brands. This problem had little to do with the performance of the advertising agency. A new study, oriented toward the distributors, found that Compton’s distributor-relations program was very weak relative to its competitors. One competitor emphasized sales contests, another offered cash bonuses to salespeople, and a third was particularly effective with technical sales assistance directed to difficult accounts. Not surprisingly, these factors influenced the distributors when they were asked for advice, or when the prospective purchaser did not have a firm commitment to Compton equipment.
Marketing Research in Business 3-2. Kroger Opens Signature Store
Kroger Co. is adding five new Signature stores in Houston. Kroger has 87 stores in the Houston area including 32 Signature stores. Kroger Signature stores are their series of upscale supermarkets that were launched in 1993. Kroger sent out more than 1,000 questionnaires to targeted area residents. The questionnaires asked what kind of features the respondents (or future customers) would like to see included in a new supermarket in their neighborhood. Based on the surveys, Kroger added several variations such as a larger selection of wines, a sit-down coffee bar, and the largest all-natural food section. Another feature is four U-Scan Express aisles, which allow those customers with fewer items to check themselves out and pay an automated cashier with cash or credit card. The U-Scan machines have the technology to weigh produce. They can also determine when a customer has slipped an item into a shopping bag without running it through the price scanner.
For more information on Kroger Co. go to http://www.kroger.com.
SOURCE: Greg Hossell, Houston Chronicle, Thursday, January 21, 1999, p. 2C.
In this case, the real problem ultimately was isolated, but only after much time and energy had been directed toward the wrong problem. When defining the problem, it is important to think broadly about the possible causes or influential variables. This may justify a separate exploratory research study. Further, what appears to be a genuine problem or opportunity may not be researchable. For example, if a company that manufactures washing machines is interested in determining the replacement rates for all machines sold within the last three years, it may not be worthwhile to pursue the issue. Since most household washing machines have a life span ranging from five to 10 years, the problem of identifying the replacement rate for working machines sold within the last three years may be a nonresearchable problem.
Decision Alternatives
For research to be effective, it must be associated with a decision. Marketing research is committed to the principle of utility. In general, if research is not going to have an effect on decisions, it is an exercise in futility. The researcher should always be sensitive to the possibility that either there are no decision alternatives—and therefore no decision—or that the research findings will not affect the decision, usually because of resource or organizational constraints. In such circumstances, the research will have no practical value and probably should not be conducted.
When a decision potential does exist, it is important to identify it explicitly, because the research then can be designed for maximum effectiveness. For example, researchers frequently are asked to assess the potential of a market that is not familiar to the company. But what are the decisions the manager faces? Is the manager thinking of acquiring a company serving that market? Has the lab produced a new product that might be sold as a component to the industry serving that market? The answers will have a significant influence on the design of the research.
A most useful way to clarify the decision motivating the research is to ask: (1) What alternative actions are being considered? (2) What actions would be taken, given the various feasible outcomes of the research? This line of questioning can be very enlightening for the decision maker, as well as for the researcher, in terms of clarifying exactly what the research can accomplish. The story in Marketing Research in Business 3-3 illustrates how both can learn from a focus on decisions.
Sometimes the decision involved is highly specific. A copy test is used to select a copy alternative. A concept test is employed to determine if a concept should be developed further. Sometimes the decision can be very general. What markets should be the primary targets of our organization? Should our marketing program be changed? It is desirable to be as specific as possible, because the research purpose then will be more effective in guiding the development of the research design. However, even if the decision is necessarily general, it needs to be stated clearly.
