Marketing Research

Lecture 2 – Chapter 2

Course Lecturers:
Prof. Noha El-Bassiouny
Dr. Hadeer Hammad
Winter Semester 2024
Chapter 2:
Defining the Marketing Research
Problem & Developing an Approach
Learning Objectives

2.1 Importance of defining the problem

2.2 Tasks involved in problem definition
2.3 Environmental context of the problem
2.4 Management Decision Problem and Marketing Research Problem
2.5 Components of research approach

Copyright © 2011 Pearson Education

The Marketing Research Process

Problem Definition Research Design Data Preparation

Formulation & Analysis

Development of a Fieldwork or Report Preparation

Research Approach Data Collection & Presentation
Step 1: The Problem Definition

Problem definition is the most important step in the research process.

Inadequate problem definition is a leading cause for marketing research

failure.

Only when the marketing research problem has been clearly defined can
research be designed and conducted properly.

Problems and Opportunities are treated interchangeably.

The Problem Definition Process

Figure 2.1
The Process of Defining the Problem and
Developing an Approach
Tasks Involved in Problem Definition
Discussions with Decision Maker(s)

Problem audit is a comprehensive examination of a marketing problem with the

purpose of understanding its origin and nature.

The problem audit involves discussions with the decision maker (DM) on:
1. The events that led to the decision that action is needed, or the history of the problem
2. The alternative courses of action available to the DM
3. The information that is needed to answer the DM's questions
4. The corporate culture as it relates to decision making
 The Problem Definition Process

Exhibit 2.4: The Iceberg Principle

Source: Hair, J. F., Celsi, M., Ortinau, D. J., &
Bush, R. P. (2008). Essentials of marketing
research. New York, NY: McGraw-Hill/Higher
Education.
Tasks Involved in Problem Definition
Interviews with Industry Experts

Industry Experts are individuals knowledgeable about the firm and the industry
and may be found both inside and outside of the firm.

Industry experts may help formulate the marketing research problem.

Tasks Involved in Problem Definition
Secondary Data Analysis

Secondary data are an economical and quick source of background information.

Analysis of available secondary data is an essential step in the problem definition
step.

Secondary Data Primary Data

Data collected for some purpose other Data collected for the special research at
than the problem at hand hand to address the research problem.

(i.e. Existing Data) (i.e. New Data)

Online websites
Internal databases
Consumer reports
Governmental publications
Tasks Involved in Problem Definition
Qualitative Research

Qualitative research is an unstructured, exploratory research methodology

based on small samples intended to provide insight and understanding of the
problem setting.

Qualitative research may utilize qualitative techniques such as

- In-depth Interviews
- Focus Groups (Group Interviews)
Environmental Context of the Problem

Economic Marketing &

Resources
Environment Technological Skills
& Constraints

Past Information Legal

& Forecasts Buyer Behavior Environment
Environmental Context of the Problem
Past Information & Forecasts

Past Information and forecasts of trends with respect to sales, market share, profitability,
technology, population, demographics, and lifestyles can help the researcher understand
the underlying marketing research problem.

Where appropriate, this kind of analysis should be carried out on the firm and industry
levels.
Environmental Context of the Problem
Resources & Constraints

To formulate a marketing research problem of appropriate scope, it is

necessary to take into account both the resources available, such as
money ,and the constraints of the organization such as cost and time.

In many instances, the scope might have to be reduced to accommodate

budget constraints.
Environmental Context of the Problem
Buyer Behavior

Buyer Behavior is a body of knowledge that tries to understand and predict

consumers’ reactions based on an individual’s specific characteristics.

Factors to be considered:
1. The number and geographical location of the buyers and non-buyers
2. Demographic and psychological characteristics
3. Product consumption habits and the consumption of related product categories
4. Media consumption behavior and response to promotions
5. Price sensitivity
6. Retail outlets visited/used
Environmental Context of the Problem
Legal & Economic Environment

Legal Environment includes laws and regulations within which organizations

must operate.

Economic Environment includes income levels, purchasing power, credit

availability and general economic conditions which can have important
implications on marketing research problems.
Environmental Context of the Problem
Marketing & Technological skills

A company’s expertise with each element of the marketing mix, as well as its
general level of marketing and technological skills, affects the nature and scope of
the marketing research project.
Management Decision Problem
& Marketing Research Problem

Management Decision Problem (MDP) Marketing Research Problem (MRP)

The problem confronting the decision It asks what information is needed
maker (DM). It asks what the decision and how it can be obtained in the
maker needs to do. most feasible way.
 Management Decision Problem
& Marketing Research Problem

Management Decision Problem (MDP) Marketing Research Problem (MRP)

It asks what the decision maker needs to do. It asks what information is needed and how it
should be obtained.

2 Action-Oriented Information-Oriented

Focus on Symptoms Focus on Causes

3
Management Decision Problem
& Marketing Research Problem

Management Decision Problem (MDP) Marketing Research Problem (MRP)

Examples Examples

How can we increase the market share of the To determine the relative strengths and weaknesses of
product? the product relative to competitors.
Should the advertising campaign be changed? To determine the effectiveness of the current
advertising campaign
How can we improve the service quality? To understand consumers’ perceptions/evaluations
about the service quality of the company.
Defining the Marketing Research Problem

1. Broad Statement:
The initial statement of the marketing research
problem that provides an appropriate perspective on
the problem.

2. Specific Components:
The second part of the marketing research problem
definition. The specific components focus on the key
aspects of the problem and provide clear guidelines
on how to proceed further.
Figure 2.3
The Definition of the Marketing Research Problem
Defining the Marketing Research Problem
Example: Metro’s Supermarket Patronage
The retail industry has been growing rapidly in the Egyptian market. The market
is anticipated to increase from $200 Billion in 2020 to $254 Billion in 2025. In
order to stay ahead of the fierce competition, businesses must constantly
innovate and work to provide their customers with the best goods and services
at the best prices. This fast-paced competitiveness has become more apparent
in recent years with the increase in the number of new hypermarkets and
supermarkets in Egypt such as fresh food, Kazyon, Lulu hypermarket and
Mahmoud el Far. With such competitiveness, Metro Market has been facing a
decline in sales in recent years. Hence, they conducted an intensive market
research to assist the managers with the right decisions to take.
Defining the Marketing Research Problem
Example: Metro’s Supermarket Patronage
Management Decision Problem (MDP):
How to improve the selection of Metro store?

Marketing Research Problem (MRP):

To determine the relative strengths and weaknesses of Metro market, versus other major
competitors, with respect to factors that influence store selection.

MRP Components:
1. What criteria do households use when selecting supermarkets?
2. How do households evaluate Metro market and competing stores on these criteria?
3. Which stores are visited when shopping for specific product categories?
4. What is the market share of Metro & its competitors for specific product categories?
5. What is the demographic and psychographic profile of the customers of Metro?
Does it differ from the profile of customers of competing stores?
Step 2: Development of a Research Approach

Figure 2.1
The Process of Defining the Problem and
Developing an Approach
Research Questions
Research Questions (RQs) are refined statements of the specific components of the
problem.

Each component of the MRP is broken down to subcomponents or research

questions.

RQs ask what specific information is required with respect to the problem
components.

If the RQs are answered by the research, then the information obtained should aid
the decision maker.
Defining the Marketing Research Problem
Example: Metro’s Supermarket Patronage
Management Decision Problem (MDP):
How to improve the selection of Metro store?

Marketing Research Problem (MRP):

To determine the relative strengths and weaknesses of Metro market, versus other major
competitors, with respect to factors that influence store selection.

MRP Components:
1. What criteria do households use when selecting supermarkets?
2. How do households evaluate Metro market and competing stores on these criteria?
3. Which stores are visited when shopping for specific product categories?
4. What is the market share of Metro & its competitors for specific product categories?
5. What is the demographic and psychographic profile of the customers of Metro?
Does it differ from the profile of customers of competing stores?
Research Questions
Example: Metro Supermarket Patronage
MRP Component 1:
1. What criteria do households use when selecting supermarkets?
Subcomponents/Research Questions (RQs):
1.1 What are the place-related attributes consumers focus on?
1.2 What are the design-related features consumers consider?
1.3 What are the service-related criteria consumers consider?
1.4 what are the product-related criteria consumers reflect on?

Variables for (RQ1.1):

- Importance of home proximity in store selection
- Whether traffic convenience is an important element in supermarket selection
- Relevance of availability of parking facilities in store selection decision
Research Questions
Example: Metro Supermarket Patronage
MRP Component 1:
1. What criteria do households use when selecting supermarkets?
Subcomponents/Research Questions (RQs):
1.1 What are the place-related attributes consumers focus on?
1.2 What are the design-related features consumers consider?
1.3 What are the service-related criteria consumers consider?
1.4 what are the product-related criteria consumers reflect on?

Variables for (RQ1.2):

- Importance of store cleanliness in store selection
- Importance of product display in selection decision
- Whether store lighting is an important element in supermarket selection
- Relevance of store floor space in store selection decision
Research Questions
Example: Metro Supermarket Patronage
MRP Component 5:
5. What is the demographic and psychographic profile of the customers of Metro?
Does it differ from the profile of customers of competing stores?
Subcomponents/Research Questions (RQs):
5.1 Do they exhibit store loyalty?
5.2 Are they heavy users of Metro loyalty card?
5.3 Do they combine shopping with eating out?
5.4 Are they more busy as compared to customers of competing stores?

Variables for (RQ5.1):

- The number of times they visit Metro per month
- The average amount of money spent on one visit to Metro
- Recommendation to others
- The tendency to switch to other competitors
Research Hypotheses

Research Hypothesis is an unproven statement or proposition about a factor or

phenomenon that is of interest to the researcher.

A hypothesis is a possible answer to the research question.

The hypothesis could be tentative statement about relationships between two or

more variables.
Research Hypotheses

Sample of Hypotheses

Increasing apple consumption will result in decreasing frequency of doctor’s visits.

Employees who have flexible working hours will report greater job satisfaction than employees who work fixed
hours.

There is a negative correlation between time spent on social media and attention span in under-16s.

Sustainability education has a positive effect on consumer recycling behavior.

Research Questions
Example: Metro Supermarket Patronage
MRP Component 1:
1. What criteria do households use when selecting supermarkets?
Research Question RQ1.1:
1.1 What are the place-related attributes consumers focus on?
Research Hypotheses for RQ1.1:
H1: Home proximity has a positive impact on store selection.
H2: Lack of parking facilities will obstruct/hinder store selection.

Research Question RQ1.2:

1.2 What are the design-related features consumers consider?

Research Hypotheses for RQ1.2:

H1: Store cleanliness has a positive impact on store selection.
H2: There is a negative relation between Poor product display and store selection.
Research Questions
Example: Metro Supermarket Patronage
MRP Component 5:
5. What is the demographic and psychographic profile of the customers of Metro?
Does it differ from the profile of customers of competing stores?

Research Question RQ5.1:

5.1 Do they exhibit store loyalty?

Research Hypotheses for RQ5.1:

H1: Loyal consumers will have lower switching tendencies than non-loyal consumers.
H2: Loyal consumers will have high willingness to recommend the store to others.
Specification of Information Needed

Specification of the information needed is done for every MRP component.

Research Questions
Example: Metro Supermarket Patronage
MRP Component 1:
1. What criteria do households use when selecting supermarkets?
Specific Areas of Information
- Place-related attributes:
(Home proximity, Traffic convenience, Availability of parking facilities)
- Design-related attributes:
(Store cleanliness, Product display, Store lighting, Floor space)
- Service-related attributes:
(Employee courtesy, Fast checkout, Opening hours, Exchange and Refund policies)
- Product-related attributes:
(Wide product assortment, Availability of foreign brands, Product labeling)
- Rating/Ranking the importance of each factor as it influences their store selection
Research Questions
Example: Metro Supermarket Patronage
MRP Component 5:
5. What is the demographic and psychographic profile of the customers of Metro?
Does it differ from the profile of customers of competing stores?
Specific Areas of Information
- Demographic characteristics
(Age, gender, income, educational background, family size)

- Psychographic characteristics
( store loyalty, credit card use, combining shopping and going out, and busy lifestyles)
Research Questions
Road Map for Problem Definition

Management Decision Problem

Marketing Research Problem

Component 1 Component 2 Component 3

Research Question(s) Research Question(s) Research Question(s)

Research Hypotheses Research Hypotheses Research Hypotheses

Areas of Information Areas of Information Areas of Information

Defining the Problem & Developing an Approach
Case Discussion

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Defining the Problem & Developing an Approach
Case Discussion
Cilantro has been a successful company largely because of its outstanding business
strategies. The company skillfully employs market research to keep its offerings and
marketing messaging in line with consumer needs. In recent years, there has been a
reported decline in dairy milk consumption over the past decade. Consumer reports
show that during the period from 2015 to 2020, overall sales of dairy-free milk
alternatives grew by 61 percent, with almond, coconut, and soy milk being the most
popular types. According to Forbes reports, The global dairy alternatives market is
projected to grow from $28.55 billion in 2023 to $69.84 billion by 2030. In line with
keeping up with the new consumer and social trends, Cilantro is considering to expand
in the non-dairy market. Cilantro turned to market research to help with taking the go
or no go decision.

39 Copyright © 2011 Pearson Education

Defining the Problem & Developing an Approach
Case Discussion
Discussion Questions :
1. What is the management decision problem facing Cilantro?
2. Define an appropriate marketing research problem that Cilantro needs to address.
3. Develop the MRP components for the identified MRP.
4. Develop two suitable RQs and formulate two research hypotheses for each.

40 Copyright © 2011 Pearson Education

Defining the Problem & Developing an Approach
Case Discussion
1. What is the management decision problem facing Cilantro?

MDP: Should we introduce dairy-free products to the market?

or Should we expand in the dairy-free products market?

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Defining the Problem & Developing an Approach
Case Discussion
2. Define an appropriate marketing research problem that Cilantro needs to address.

MRP: To determine consumers’ preferences/consumer acceptance and purchase

intentions for the dairy-free products.

42 Copyright © 2011 Pearson Education

Defining the Problem & Developing an Approach
Case Discussion
3. Develop the MRP components for the identified MRP.

MRP Components:
1. What is the lifestyle of the buyers of diary-free alternatives?
2. What are the consumption patterns of diary-free alternatives among consumers?
3. What are the motives and barriers for consuming diary-free alternatives?
4. Who are the main competitors in the market? what are their strengths and
weaknesses?
5. Which diary-free alternatives do consumers prefer the most?
6. What are the promotional tools that will encourage consumers to try the product?

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Defining the Problem & Developing an Approach
Case Discussion
4. Develop two suitable RQs and formulate research hypotheses for each.
Research Questions (RQs) and Research Hypotheses for MRP component 3:

MRP component 3: What are the motives and barriers for consuming diary-free
alternatives?

RQ3.1: What are the motives to consume diary-free alternatives?

H1: Health consciousness has a positive impact on dairy-free alternatives consumption.
H2: There is a positive relationship between environmental consciousness and dairy-free
alternatives consumption.

RQ3.2: What are the barriers to consume diary-free alternatives?

H1: High cost has a negative impact on dairy-free alternatives consumption .
H2: Low product availability will lead to decreasing consumption of dairy-free alternatives.
H3: There is a negative correlation between product taste and dairy-free consumption.
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