Chapter 2

THE RESEARCH QUESTION

Learning Objectives:
After reading this chapter the students should be able to:
• Identify the key steps in formulating the problem;
• Outline the various steps in the problem formulation process; and
• Describe the elements that make up the marketing research proposal.

Market research can give you insight into your market, your competitors,
your products, your marketing and your customers. Research problems range
from simple to complex, depending on the number of variables and the nature of
their relationship.
Problem definition involves stating the general marketing research problem
and identifying its specific components. If you understand the nature of the
problem as a researcher, you will be able to better develop a solution for the
problem. Inadequate problem definition is a leading cause of failure of
marketing research project.

THE PROBLEM FORMULATION

The first step in any marketing research study is to define the problem, while
taking into account the purpose of the study, the relevant background
information, what information is needed, and how it will be used in decision
making. The tasks involved in formulating the marketing research problem
include discussions with management, including the key decision-makers,
interviews with industry experts, analysis of secondary data, and qualitative
research. These tasks should lead to an understanding of the environmental
context of the problem. The environmental context of the problem should be
analyzed and certain essential factors evaluated. These factors include past
information and forecasts about the industry and the firm, objectives of the firm,
buyer behavior, resources and constraints of the firm, the legal and economic
environment, and marketing and technological skills of the firm.
The researcher should avoid defining the marketing research problem either
too broadly or too narrowly. An appropriate way of defining the market research
problem is to make a broad statement of the problem and then identify its
specific components.

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 The research problem or the research questions should be formulated in a
sequential tuanner. This will reduce the chances of ambiguities to a
minimum. There is no hard and fast rule for formulating the research
problem. One can adopt a logical manner to reach the desired research
problem, objectives and research questions. Before deciding about the
research area or the research problem in specific the researcher should ask
two questions for himself: does he have the desired knowledge in the
particular research area or not and does he have interest in conducting
research on that particular area. Knowledge is necessary in order to deal with
the research justly and clearly. On the other hand, interest enables the
researcher to give proper concern, time and energy in the accomplishment of
the research.
A good problem formulation is:
1. Interesting — keeps the researcher involved in it throughout the
research process
2. Researchable — can be investigated through the collection and analysis
of data, using case study or other techniques
3. Understandable and logically build up — well formulated and has
logical structure with main question and following sub-questions

4. Manageable — fits the level of researched s level of research skills,

needed resources, and time restrictions
5. Purposeful — establishes cooperation between researcher and business
which should lead to economical and practical development of both
sides
6. Ethical — does not embarrass or harm participants
The Six Key Steps in Formulating Marketing Problem/s are:

1. Meet with client

At the earliest stage of the market research in order to correctly define
the problem the researcher must meet the manager needing the study. The
two goals in this step are:
a. to develop rapport and open communication lines, and
b. to obtain as much information as possible about the problem/opportunity
Generally, the planned and unplanned changes in the marketing
environment are the sources of marketing problems. The nature of the
problem and the type of research required can be properly provided by

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 understanding the basic source of the problem. Planned change is intended
for the future' while the orientation of unplanned change is toward the
past. Research on planned change tends to be proactive, while research on
unanticipated or unplanned change tends to be reactive. The basic issue in
planned change is how to go about the change that the firm desires to bring
about. The task at this step is to know whether the problem needing
information resulted from planned or unplanned change.
Planned change tuay include development and introduction of new products,
itnpt•oved distribution, Iliore effective pricing and promotion with the intention
of increasing revenues. On the other hand unplanned change can corne as a
response to new technology, new prodtlct introduced by the competitor, misuse of
product, unexpected new idea from customer complaint or a change in
demographic or lifestyle of target customers.

2. Clarify the Problem/Opportunity

Researchers play a key role in problem formulation because they bring a new
perspective to the problem/opportunity situation. In this step the researcher help
managers get the accurate the heart of the problem. Researchers posed as
consultants in determining together with the manager the root causes and clear paths
of action. The true nature of the problem should be spotted. In order to help find
out the problem the researcher may conduct exploratory research.
Providing different angles on the problem is an important thing the researcher
can do for a manager. Majority of managers, especially those were part of the
company for extended years are afflicted by normal thinking. Normal thinking is
developing routine ways of seeing the business and its environment and
responding to different conditions. Researchers can help them get to the heart of
the problem, Normally this is a positive thing, however sometimes it can be a
barrier to identifying the true nature of a problem.

3. State the Manageds Decision Problem

A decision problem is the basic problem or opportunity facing the
manager for which marketing research is intended to offer answers.
For instance, consider a laundry shop that has been open for half a year but has
yet to make profit. The owner makes costs as low as possible. The revenue from the
new business has not materialized as quickly as forecasted. Although on the mind of
the owner posed several questions like the business' lack of success and how to
successfully move forward, the initial decision would be "Why are my shop's
revenues so low?" This situation is not expected, so the problem came from
unplanned change.

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 The decision problem faced by the owner of the laundry shop is a case of
discovery-oriented decision problem. Discovery-oriented decision problems
typically ask "what" or "why" and generate information that can be used by
managers to make important decisions. These problems are frequent with
unplanned changes in the marketing environment for which managers simply
need basic information. In dealing with unplanned changes the researcher is
asked to give facts that decision makers can apply in strategizing.
Information about customer satisfaction, overall awareness of customers or
consumer perceptions can be provided by the researcher. Discovery-oriented
decision problem however, seldom provide actionable solution. The purpose
of discovery-oriented decision problem is to offer insights essential for the
managers to craft better decisions.
Another form of manager's decision problem is strategy oriented decision
problem which is usually directed at "how" planned change should be
implemented and focus on making decisions. For instance, the initial
research for the laundry shop pointed out that awareness level of the
CUStomers among its target market is only 35%. "How to best increase
awareness?" is the appropriate strategy oriented decision problem in this
situation. The researcher may determine effectiveness of two proposed
advertising campaign for increasing •awareness level.

4. Select Research Problem/s

Research problems restate the decision problem in research terms, from
the researcher's perspective. Specifically a research problem establishes the
research that can be done in order to provide answers to the decision
problem. The example of laundry shop with the owner facing the discovery-
oriented decision problem of "Why are my shop's revenues so low?" the
researcher could offer several possibilities of research to obtain the answer
to the problem, which are:
a. find out sales levels required to breakeven

b. evaluate shop traffic and pattern of obtaining laundry service

c. look into the present customer satisfaction
d. evaluate the perceptions of the present target market about the laundry
shop and its competitors
e. find out the level of awareness of the target market
Typically, in strategy oriented decision problem there are only limited
possible research problems. The reason mainly is that the focus has transferred
to making a choice among selected alternatives. In the example of the laundry

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shop, from discovery-oriented decision problem to strategy oriented decision
problem, the question would be "How do I increase the shop traffic?" Some
strategic option could be increasing level of sales promotion, introduction Of
advertising campaigns, rearranging the store layout and others. Perhaps the best
area to consider for research in this example is advertising in the presence of
factors like the manage€s experience, the available budget and the results Of
discovery-oriented research.
Possible research problems can come from the client during the proces s
of clarifying the problem, through exploratory research for new ideas
or th experiences and insights of the researcher. At this step the significant
e

thing to do is to specify the full range of possible research problems.

Developing a framework to discover the potential issues, the potential business
outcomes required and finally the approaches necessary to dev e10P the right
direction is often times recommended. The researcher may use the framework to
understand the core issue. So for the laundry shop business, the driver of lower
revenue could be the amount of spend per client due to less repeat business or
low amount of service per visit. Probably, low awareness driven by low
promotional activities or poor word-of-mouth is the reason for low revenue.
Therefore, low revenue .is not the only problem but less repeat business, less
customer awareness as well as low amount of service per visit are the research
problems that could be established.

5. Selecting Possible Research Problems

There are a lot of feasible research problems that would offer useful
information particularly with discovery-oriented decision problems. The technique
is to find out which among the research problems to prioritize given the limited
resources of the managers. The trade-off between benefits of the information to be
acquired, the significance of the decision to be made later and cost of obtaining the
information should be evaluated. The researcher ought to review each possible
research problem with consideration on money, time and effort.
Going back to the laundry shop example with the discovery-oriented decision
problem of "Why are my shop's revenues so low?" there could be quite a few
potential research problems. Collecting information from present customers, the
researcher can determine customer satisfaction. Gathering information from target
market even those are not yet the customers of the shop could reveal perception of
the target market about the shop as well as the perceptions of competitors. It be
costly though to address these three problems in market research. The researcher
closely with the owner of the laundry shop should attempt to answer too many
research problems or it may lead both of them to half-baked results. Enthusiasm
alone will not do good jobs.

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 Budget limitation makes it impossible to do all things so the best choice must
be considered.

6. Prepare and Submit a Research Request Agreement

The research request agreement summarizes the problem formulation process
in written form and is submitted to managers for approval. It includes the
following sections:
a. Background — This includes the events that led to the manager's decision
problems in order to gain deeper understanding of the problem.
b. Decision problem — This contains a short discussion of the sources of the
problem whether these is planned or unplanned change as well as if the
problem is a discovery oriented or strategy oriented one.
c. Research problem(s) This is the list of research problems and the input that
each would provide to the decision problem. The cost and benefits of each
research problem is provided here. The justification for the final choice of the
research problem is also supplied in this section.
d. Use The manner each information will be used is written in this section.
For discovery oriented decision problems key information to be obtained
and how this information will be used by manager must be pointed out.
For strategy oriented decision problems how information will be used by
manager to make action decision must be pointed out
e. Targets and their subgroups — The groups from which the information
must be collected should be specified to determine appropriate sample.

f. Logistics —Time and money estimation to conduct the research is

available in this section.
The research request agreement must be submitted to the decision maker for
approval. It is best that the approval is in writing.

THE MARKETING RESEARCH PROPOSAL

Marketing research is at the heart of addressing the four P's of marketing:
product, price, place and promotion. That is, the product must satisfy a need,
be priced at the right level in a place where it will be seen by the right people
and promoted to generate sales. A proposal is a rationale for undertaking a
research project and as such it must be persuasive, written in non-technical
language and thorough in its analysis.
Systematic planning is required at all the stages of the marketing research
process. The procedures followed at each stage are methodologically sound,
well documented, and, as much as possible, planned in advance. Marketing

30
research uses the scientific method in that data are collected and analyzed to
test prior notions or hypotheses.
A research proposal is intended to convince others that you have a
worthwhile research idea, that you have a good grasp of the relevant literature
and the major issues, and that your methodology is sound. Generally, a
research proposal should contain all the key elements involved in the research
process and include sufficient information for the readers to evaluate the
proposed study.
Regardless of your research area and the methodology you choose, all
research proposals must address the following questions: What you plan to
accomplish, why you want to do it and how you are going to do it.
The quality of your research proposal depends not only on the quality of
your proposed study, but also on the quality of your proposal writing. A good
research study may run the risk of rejection simply because the proposal is
poorly written. Therefore, it pays if your writing is coherent, clear and
compelling. The following are the common elements of a research proposal in
marketing research:

Abstract

An abstract is the first part of the marketing research proposal. It explains

why the research is taking place, the goals of this research and brief
information on the methodology and theories used.
Introduction

The introduction part is aimed at giving the readers an overall idea of the marketing
research. The introduction must include the information needed to carry out the
research in a smooth and effective manner.
For instance, if the purpose of research is to study the impact of television
viewing habits on young generation, then the first information required is the kind of
television programs and channels, which are influencing the youngsters in a positive
or negative way.

Addressing the Research Problem

A research problem is the situation that causes the researcher to feel

apprehensive, confused and ill at ease. It is the demarcation of a problem area within
a certain context involving the WHO or WHAT, the WHERE, the WHEN and the
WHY of the problem situation. Research problem leads to a hypothesis for the
project.

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Research Design
The researcher must give a complete description of the research design he will be
following in his work. The research design can be exploratory, casual, descriptive or
adopted.

Cost Analysis
Estimated costs for marketing research make an important part of the
proposal. The decision making authorities must be given a succinct idea of the
cost which will be incurred on the research. This part must include a complete
breakdown of cost in relation to the research tools.
If more research analysis tools are being employed by the researcher, then a
comparison of tools and their cost must be presented to the research committee. This
section also emphasizes on validity and reliability.

Timetable and Reporting

The proposal must include the duration of the marketing research project.
The research administration is interested in knowing the stages where the
primary, intermediary and final report will be submitted. It is recommended
that the research includes Critical Path Method (CRM) or Program Evaluation
and Review Technique (PERT) in this section.

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 MARKETING RESEARCH IN ACTUAL PRACTICE
Name: Date:
Year/ Grade/Score:
Section:
DIRECTION: Read the Surf Super-concentrate story below and answer the questions
below it using the lessons from this chapter.

SURF SUPER-CONCENTRATE FACES A SUPER WASHOUT IN JAPAN

Source: http://themarketingresearch.com/surf-superconcentrate-faces-asuper-
washout-in-japan-12127

Unilever sold consumer products in 150 countries. As much as 85 percent of their

profits came from overseas, with 7 percent oftheir profits being attributed to Asia and the
Pacific. Unilever attempted to break into the Japanese detergent market with Surf Super
concentrate. It achieved 14.5 percent of the market share initially during test marketing,
which fell down to a shocking 2.8 percent when the product was introduced nationally.
Where did they go wrong? Surf was designed to have a distinctive premeasured packet
as in tea-bag-like sachets, joined in pairs because convenience was an important attribute
to Japanese consumers. It also had a "fresh smell" appeal. However, Japanese consumers
noticed that the detergents did not dissolve in the wash, partly because of weather
conditions and also because of the popularity of low-agitation washing machines. Surf
was not designed to work in the new washing machines. Unilever also found that the
"fresh smeU" positioning of new Surf had little relevance because most consumers hung
their wash out in the fresh air. The research approach was certainly not without flaw as
Unilever failed to identify critical attributes that are relevant in the Japanese detergent
market. Furthermore, it identified factors such as "fresh smeU" that had no relevance in
the Japanese context. Appropriate qualitative research such as focus groups and depth
interviews across samples from the target market could have revealed the correct
characteristics or factors leading to a suitable research design.
Despite weak performance in the Japanese market, Surf continued to perform well in
several markets including India through 2009. Surf. launched in 1952, is the thirdbiggest-
selling product in the washing detergent market behind Unilever's Persil and Procter &
Gamble's Ariel.

QUESTIONS:
1. What are some possible marketing decision problems? State whether the decision
problems are discovery- or strategy-oriented.

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PRACTICE ACTIVITY 1
Name: Date:
Year/ Grade/Score:
Section:
Imagine that you have a friend who is the Decision Maker (DM) for a local soft-drink
company which is considering the introduction of a calamansi-lime soft-drink. The idea is
to position this product as an alternative for heavy cola drinkers to be consumed by all
soft-drink drinkers. This DM requested you to be the researcher for the company for this
particular project. First, identify the management decision problem. Then translate this
management decision problem into a research problem. The space below is provided for
you.
Management Decision Problem:
PRACTICE ACTIVITY 1
Name: Date:
Year/ Grade/Score:
Section:
Kellogg's is the world's leading producer of cereal and a leading producer of
convenience foods. including cookies, crackers, toaster pastries, cereal bars, frozen
waffles, meat alternatives, pie crusts, and cones, with 2007 annual sales of Sll.776 billion
and a market share of more than 30 percent. David Mackay, chairman and CEO of
Kellogg's, takes pride in being a part of the Kellogg Company because of the consistency
of the decisions that are made- within the company to promote the long-term growth of
their business as well as serve the needs of their people and communities.
With such a large share of the market, one would think that Kellogg's is untouchable.
However, Kellogg's faced a slump in the market. Its cereal sales were declining and it
had to face the challenge of getting out of its slump. Kellogg's therefore turned to
marketing research to identify the problem and develop several solutions to increase
cereal sales.
State the management decision problem and research problem for the situation below:
(Source: Marketing Research 3rd ed. by Malhotra, Hall Shaw & Oppenheim)
Management Decision Problem:

Research Problem:
 38
CHAPTER EXAMINATION 2

Name: Date:
Year/ Grade/Score:
Section:
l. IDENTIFICATION

Direction: On the space provided before each number, write the word or words that
will make the statement correct.

involves stating the general marketing research problem and

identifying its specific components.
2. may include development and introduction of new products,
improved distribution, more effective pricing and promotion with
the intention of increasing revenues.
3. is developing routine ways of seeing the business and its
environment and responding to different conditions.
4. is the basic problem or opportunity facing the manager for which
marketing research is intended to offer answers.
5. typically ask "what" or "why" and generate information that
can be used by managers to make important decisions.
6. restate the decision problem in research terms, from the researcher's
perspective.
7. is intended to convince others of a worthwhile research idea, a good
grasp of the relevant literature and the major issues, and that
methodology is sound.
8. is usually directed at "how" planned change should be implemented
and focus on making decisions.
9. is a rationale for undertaking a research project and as such it must
be persuasive, written in non-technical language and thorough in
its analysis.
10. includes the events that led to the manager's decision
problems in order to gain deeper understanding of the problem. ll. TRUE OR FALSE
Direction: On the space provided before each number put a C if the statement is
TRUE and IC if the statement is FALSE.
1. An appropriate way of defining the market research problem is to make a
narrow statement of the problem and then identify its specific
components.
 39

2. Research on planned change tends to be reactive, while research on unplanned

change tends to be proactive.

3. The abstract must include the information needed to carry out the research in a smooth
and effective manner,
4. Estimated costs for marketing research make an important part of the proposal.
5. The proposal must include the duration of the marketing research project.
6. The researcher should avoid defining the marketing research problem either too
broadly or too narrowly.
7. The research problem or the research questions should be formulated in a
sequential manner.
8. Marketing research is at the heart ofaddressing the four P's of marketing: product,
price, place and promotion.
9. Planned change is intended for the future, while the orientation of unplanned change is
toward the past.
10. A good research study may run the risk of rejection simply because the proposal is
poorly written.
Ill. ENUMERATION
5 Characteristics of a good problem formulation

5 sections

2. 3.
4.
 5.

2. 3.
4.
5.

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