Problem Definition

1
Chapter 2

• Problem Definition

2
Topics

• Importance of Problem Definition
• The Process of Problem Definition
• Tasks Involved
• Environmental Context
• Management Decision Problem
• Marketing Research Problem
• Approach to the Problem

3
Importance of Problem Definition

• Foundation or starting step
• Potential loss of time, money, effort if faulty

4
Tasks Involved (slides 4-8)

• helps understand problem background
• uses varying points of view
• decision maker
• experts
• customers
• secondary data

5
Discussions with Decision maker

• Needed to identify managerial decision problem
• obvious step
• use problem audit methodology
• history of the problem
• identify underlying causes (potential)
• decision maker to evaluate each cause
• zero in on a few possible causes

6
Interview with Industry Experts

• useful for industrial products and new products
• prepare an interview guide, but be flexible

7
Secondary Data Analysis

• huge volume of data
• problem is in finding the source that has the
  information
• computerized data bases make the process easier
• companies have resources to buy data

8
Qualitative Research

• involves talking to customers
• individually - in-depth interviews
• in groups - focus groups
• can provide valuable insights into the problem

9
Environmental Context (slides 9-15)

• identifies factors that have an impact on how the
  problem is defined

10
Past Information and Forecasts

• past data can help researcher understand the
  magnitude of the problem
• let us say sales are down
• collect information on firm sales and industry
  sales
• can evaluate whether firm sales are down relative
  to industry sales
• other areas market share, profitability,
  technology, customer base, lifestyle

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Resources and Constraints

• money and time constraints
• skill and knowledge level
• internal politics

12
Objectives

• organizational and personal
• communication essential to identify the latter

13
Buyer Behavior

• useful in understanding and predicting consumer
  response
• number and geographical location
• demographics/psychographics/behaviors
• media behavior
• price sensitivity/loyalty
• decision process/criteria
• response to marketing programs

14
Legal and Economic Environments

• federal laws
• general state of the economy

15
Marketing and Technological Skills

• influences potential courses of action for the
  firm
• determined by the skills and competencies of the
  firm
• is usually interpreted relative to competitors

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Management Decision Problem

• define the problem in action terms
• should a new product be introduced?
• Should the advertising campaign be changed?
• Should the price be decreased?
• Should the brand image be changed?
• How should store patronage be increased?

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Marketing Research Problem

• define the problem in information terms
• e.g. how should store patronage be increased?
• Store selection criteria
• store evaluation on each criterion
• store patronage for specific product categories
• market share of competing stores in each product
  category
• customer profile
• importance of customer and store characterictics

18
Components of the Approach

• Objective/Theoretical Framework
• Analytical Model
• Research Questions
• Research Hypotheses