Defining Marketing Problems - Essay Example

?Marketing Research Introduction Before a marketing problem can be solved, it has first to be properly defined. Unlike the usual problem definition typical in everyday applications, the marketing problem has to be defined in such a way that it meets specific criterion to serve the marketing function. These are discussed in the following answers to the given questions. (1) What ‘problem definition’ means in the context of market research Problem definition is the first step in any research project or in the course of decision-making in an actual business situation. For ordinary research, the problem definition is comprised of a description of the background situation and the statement of the problem. In the context of market research, particularly in the case of applied market research in a practical setting, problem definition refers to an entirely different process. According to Malhotra (1996), “Problem definition involves stating the general problem and identifying the specific components of the marketing research problem. Only when the marketing research problem has been clearly defined can research be designed and conducted” (p. 47). Gibson (1998) stated that “Problem definition is best thought of as solution definition – the selection of a domain likely to be rich in ideas to solve the problem” (p. 5). Most recently, Wild & Diggines (2010) said that “Problem definition is the most important step in a research project…often more important than its solution” (p. 42). As may be deduced, there is no one hard and fast definition of problem definition in market research, except the stress on its importance to effect a solution, and from this therefore it must be said that problem definition should result in an actionable research plan. Malhotra (2011) provides the following diagram and example of a marketing research problem defined: Source: Malhotra (2011, p. 2-16) In a Subaru vignette, the management decision problem was given as: “What can Subaru do to expand its share of the automobile market?” However, such a statement, while it is a proper management decision problem statement, is not useful for the purposes of marketing research. It is therefore restated (i.e., the broad statement in preceding figure) as: “Determining the various needs of automobile users and the extent to which current product offerings were satisfying those needs.” Note that the broad statement includes the target of the research (i.e., automobile users), the object of research (their needs), and the subject of research (the extent to which the needs were satisfied). To complete the problem definition, the specific components are as follows: Component 1: What needs do buyers of passenger cars, station wagons, and sports utility vehicles seek to satisfy? Component 2: How well do existing automobile product offerings meet these needs? Component 3: Is there a segment of the automobile market whose needs are not being adequately met? Component 4: What automobile features does the segment identified in number 3 desire? Component 5: What is the demographic and psychographic profile of the identified segment? (Malhotra, 2011, 2-17 to 2-18). The problem definition should be neither too wide that the problem becomes vague, nor too narrow that important considerations are left out. A well formulated problem definition should be able to answer the following basic questions: (Zikmund & Babin, 2006, p. 122) What is the purpose of the study? How much is already known? Is additional background information necessary? What is to be measured? How? Can the data be made available? Should research be conducted? Can a hypothesis be formulated? As to subject matter, Emanuel H. Demby, formerly of MPI Marketing Research Inc in New York (in Marketing News, 1975, p. 8), marketing problems may be classified into four, namely: Market targets – understanding the who and why of the potential consumer Product positioning – critical benefits that will create a strong edge in the target market Decision-making process – should eliminate influences the researcher may have on the consumer Media choice – use of demographic and psychographic profiles to reach the customer through media at the optimum times. Demby’s categories aid in the determination of the purpose which a marketing problem seeks to accomplish, and by identifying the classification of a particular marketing situation, the details of the problem definition are guided thereby. (2) How/why ‘Accurate problem definition leads to actionable research’ An accurate problem definition should translate a perceived business situation to a relevant actionable research. The purpose of this is to resolve a broad and even ambiguous management decision problem into a set of specific objectives to be targeted, and the define the manner in which this will be done. The practical purposes of these is to save precious resources in terms of manpower, time and money, as the market research to follow can be expensive and take a long time and much effort. It is also important to do so in order to avoid misleading research results that could cause the company greater harm than good. By reducing the broad research question into a specific set of deliverables, the management is clarified on what to expect, and the course of action becomes clear to all participants in the research effort, so that the research results may be of maximum benefit to the company for the cost it entailed (Zikmund & Babin, 2006, p. 104). It is thus important to ensure that the process of defining the problem for marketing research is maximally useful and feasibly executable. After the development of a general problem definition, a more specific definition should be formulated in order for marketing research to be acted upon. Several actions are necessary to ensure that a resulting problem definition is actionable. According to Bankenship, Breen & Dutka (1998, p. 86) these actions are: Consultations with others. In manufacturing companies this means apprising and obtaining information from engineering, legal, packaging, and other departments or groups depending upon the situation; Early forecast of possible findings. There must be an early determination if possible findings will be adequate. At this point the research problem should be identified broadly enough to consider the needs of all interested personnel and departments; if not, some adjustments may be needed. Communication of possible findings. The likely findings should be brought to the attention of all interested parties, to alert everyone to what might be expected to result from the research study. By doing so, possible errors may be brought to the attention of the researchers that may impact on their procedure. Forecast of possible objections to the study findings. This is because there are already preconceived ideas entertained by managers, department heads, product development staff, etc., about what actions should be taken. This will influence perceptions about “the adequacy of the research and the reasonableness of the recommendations” (Blankenship, et al., 1998, p. 87). As much as possible the objections must be expressed and addressed ahead of time, since they will materially influence the definition of the marketing problem and the field work and office work that follows. Formulation of the problem statement. Based on the information and feedback gathered in the foregoing steps, a preliminary statement of the problem should be formulated and circulated among all personnel and departments who will later on be involved in the implementation of the marketing decision. (3) Outline of the steps involved in reaching an accurate definition of the problem The steps in problem definition differ from author to author. In the foregoing description and example, a brief walk-through was in effect done in the course of defining the Subaru problem. Consistent with this in Malhotra (2011), the important steps in conducting a problem definition exercise are enumerated in outline form below: 1. Pre-definition tasks involved 1.1. Discussion with decision makers (DM) 1.2. Interviews with experts 1.3. Secondary data analysis 1.4. Qualitative research 2. Determination of the environmental context of the problem 3. Formulation of the management decision problem 4. Formulation of the marketing research problem 5. Determination of the approach to the problem 5.1. Analytical framework and models 5.2. Research questions and hypotheses 5.3. Specification of information needed 6. Establishing the Research Design As with the definition, there are slight differences in the steps recommended by different authors, although the rationale for all the procedures lead to the same result. According to Wild & Diggines (2010, p. 42), defining the research problem is performed according to the following outline and brief description. 1. Identify the problem or opportunity / Define the marketing decision statement (Zikmund & Babin, 2006, p. 126) 1.1. Identify the symptom given by the underlying problem. A symptom is “a particular condition that indicates the presence of a problem or an opportunity” (p. 43). It is any sign a marketing manager may notice which indicates that a decision will need to be made soon. Iceberg principle: “In many business problem situations the decision maker is aware of only 10 per cent of the true problem.” 1.2. Identify the problem. A problem refers to “those independent variables that prevent conformance between the performance standards and planned objectives of the enterprise.” It results from one or a combination of two things: an ineffective marketing strategy, and/or a change in situational factors (p. 44). Two most common problems are (a) problems of choice between two alternatives; and (b) problems that indicate danger such as loss of market share. 1.3. Identify the opportunity, which is an existing situation that contains potential advantages which may be profitable for the business. Conclusion In light of the foregoing answers, it is evident that the definition of a marketing problem proceeds from a broad statement of management concern, which is more specifically restated in a marketing research context, and reduced to its significant components. In the end, the problem becomes an actionable plan from which the appropriate marketing research may be launched to arrive at the desired management solution. The brief diagram that follows shows the different types of problems as perceived by Gibson (1998). Source: Gibson, 1998, p. 7 References: “Defining marketing problems can be more important than finding solutions, says Demby.” Marketing News, 6/6/1975, Vol. 8 Issue 23, p8 Blankenship, A B; Breen, G E; & Dutka, A F 1998 State of the Art Marketing Research, 2nd edition. American Marketing Association & NTC Business Books, Chicago, Illinois. Gibson, L D 1998 “Defining marketing problems.” Marketing Research, Spring98, Vol. 10 Issue 1, p4-12 Kaatz, R B 1985 “Solving Problems In New Ways: A Research Challenge!” Journal of Advertising Research, Jun/Jul85, Vol. 25 Issue 3, pRC-10 Malhotra, N K 1996 Marketing Research: An Applied Orientation. Prentice Hall Malhotra, N K 2011 Basic Marketing Research: A Decision-Making Approach, 3rd edition. Pearson Education, Inc. Semon, T T 1999 “Make sure the research will answer the right question. Marketing News, 06/07/99, Vol. 33 Issue 12, p30 Shaw, V & Shaw, C T 2003 “Marketing: The Engineer's Perspective.” Journal of Marketing Management, Apr2003, Vol. 19 Issue 3/4, p345-378 Wild, J & Diggines, C 2010 Marketing Research, Juta & Co. Ltd., Cape Town, South Africa Zikmund, W G & Babin, B J 2006 Exploring Marketing Research. Southwest Cengage, Thomson Learning Inc., Mason, OH Read More