Week 5.2 Marketing Research - Problem Definition
Marketing research’s basis relies on the scientific method.
The scientific method is a process of systematically collecting, organizing, and analyzing data in an unbiased, objective manner.
Marketing research must meet two basic principles:
- reliability, and
Reliability refers to the condition that we should get the same results if we were to conduct the same study under identical environmental conditions.
Validity involves the notion of whether the research tells marketers what they need to know. The research should identify and validate the answer to the question we are interested in.
Marketing research consists of four basic stages.
These stages include the relevant tools we utilize in the process. Next, we will examine these stages in detail.
This is the first stage in the marketing research process in which exploratory research is employed. The use of the word "problem" does not mean that something has gone wrong. In some cases, marketers conduct research to explore an opportunity, to define a current marketing situation, or to monitor or evaluate a situation.
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Example: The cranberry juice business unit of Ocean Spray wants to know if entering the Asian market is a good opportunity. They start their research process with the "problem definition" stage in which they try to understand the scope and nature of the opportunity. The problem definition stage identifies a few challenges regarding entry to the Asian market:
- Would Asian consumers, who have never heard of cranberries, buy cranberry juice?
- The word "cranberry" is not part of any foreign language, do we need to find a name for it (and its juice) in the Asian market?
- What is the best way to encourage consumers in Asian countries to try the new product?
Critical Thinking Activity: What would you suggest to the marketing manager of Ocean Spray with regards to the name problem? Cranberry is not a part of their language but we would like the Asian consumers to try and like the cranberry juice.
The problem definition stage is critical to the success of the research process because "a problem well defined is a problem half-solved." If we are able to clearly identify the research problem, we increase the chances of collecting the necessary information to solve the problem.
We conduct exploratory research in the problem definition stage. Let us take a look at four basic techniques to conduct exploratory research.
Secondary data is also known as historical data. It was previously collected and assembled for some project other than the one at hand.
Primary data is gathered and assembled specifically for the project at hand.
Typically, researchers gather secondary data before collecting primary data. The reasons are based on time and budget. Secondary data can be obtained more quickly and at a lower cost compared with primary data. However, secondary data might not work in every research project. Potential problems with secondary data occur when:
- required information does not exist in secondary data sources; or
- even if the required information exists, it may not be current or particularly pertinent to the problem at hand.
Researchers have access to secondary data both inside and outside the organization.
Internal secondary data sources include: financial statements, research reports, customer letters, and customer lists that exist within the organization.
Sources of external secondary data can be wide and varied. Statistics Canada (www.statcan.gc.ca) is known as a key Canadian source of external marketing data. There are numerous other sources of secondary data, including business directories, business periodicals, newspapers, magazines, and trade associations.
Major Secondary Data Sources
Selected Statistics and Trade Sources
- Canadian Trade Index
- Conference Board of Canada
- Financial Post's Canadian Demographics: Key census data at the municipal level
- Fraser's Canadian Trade Directory
- Industry Canada website includes: Canadian Company Capabilities, online directory, Canadian Patent Database, Canadian Trademark Database
- Scott's Directories
- Statistics Canada: online database, including census data, plus guidebooks such as Market Research Handbook
- Canadian Journal of Marketing Research
- Journal of Advertising
- Journal of Consumer Research
- Journal of Marketing
- Journal of Marketing Research
- Journal of Retailing
- Advertising Age
- American Demographics
- Business Week
Business/Trade Magazines (cont'd)
- Canadian Business
- Harvard Business Review
- The Globe and Mail Report on Business
- Marketing Magazine
- Marketing News
- Profit Magazine
- Progressive Grocer
- Sales and Marketing Management
- Small Business Canada Magazine
- Strategy Magazine
- ABI Inform/Proquest
- AC Nielsen Canada
- Blue Book of Canadian Business
- Dun & Bradstreet Canada
- Interactive Advertising Bureau of Canada
Focus groups involve informal interview sessions with people who are relevant to the research project.
A focus group might consist of 6-10 persons. They get together in a room with a moderator. The moderator asks questions and manages the discussion of topics that are related to the marketing research problem. The moderator’s role is mostly focused on encouraging the individuals to answer the proposed questions and to get involved in the discussion with each other. In many instances, focus groups are watched by observers. Observers might sit on the other side of a one-way mirror, or alternatively the sessions could be videotaped or audiotaped. Focus group sessions are valuable to obtain information that could make a difference in the decision-making process. The goal is to uncover issues that should be researched in more detail.
Stop and Think Question: Can you think of an alternative method that could replace focus groups? Click reveal after thinking about your answer.
Click to reveal answer.
Social media is a powerful tool that allows companies to collect information and get feedback from millions of people, while everyone is able to see the feedback from others and bring forward their point of view. Remember from the "Chobani" case that the CEO of Chobani (Hamdi Ulukaya) said, "Who needs a focus group when social media is right in front of you!"
Another method of conducting exploratory research is depth interviews.
Depth interviews are detailed individual interviews with people relevant to a research project. The researcher gets together with an expert and asks questions in a free-flowing conversational style to obtain information. Like focus groups, these interviews are often videotaped or audiotaped.
There are other tools used in conducting exploratory research. These extraordinary methods are known as "fuzzy front-end" methods. They are designed to identify elusive consumer trends far before typical consumers have themselves recognized them.
Example: General Mills asked consumers to take a photo of themselves every time they snacked on popcorn. When they carefully studied the patterns in the photos they received, they realized that many people had salt and butter on the table to add extra flavor. They created General Mills' Homestyle Pop Secret popcorn as a result, which delivers the real butter and bursts of salt in microwave popcorn.
Social media is also employed in conducting exploratory research. The videos and photos consumers post reveal valuable information for companies who try to identify consumer trends.