Chapter Two
The Marketing Research Process
Decision Problems, Research
Questions, Research Objectives
and Information Value
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
2-1
Learning Objectives
 Defining the decision problem.
 The importance of defining the
decision problem as a research
question.
 The critical elements of problem
definition in marketing research.
 The expected value of information
obtained through marketing
research.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
2-2
Introduction
 A sound marketing research approach
is paramount:
 Need to define the decision problem.
 This increases the probability of making
good business decisions.
 Data and information are only as good as
the research design and the problem
definition.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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Establish the Research Parameters—
Chapter Overview
 Task 1: Define the decision problem
 Task 2: Specify the research question
 The most critical step in the marketing research
process.
 Task 3: Define the research objective
 Provide the guidelines to show what the research will
attempt to achieve.
 Task 4: Evaluate the benefits of the expected
information
 Assess the expected benefits of the research.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
2-4
Task 1: Define the Decision
Problem
 Identify the decision problem
 Marketing research is required when a
decision problem is related to an
organization’s performance.
 Determine the purpose of the research
 Apply the Iceberg Principle: Exhibit 3.2
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
2-5
Task 1: Define the Decision
Problem
 Understand the complete problem situation
 Conduct a situation analysis.
 Identify measurable symptoms
 Separate the basic problem from the observable
and measurable simplify the real decision problem
by separating possible causes from symptoms.
 Determine the unit of analysis
 Will it be individuals, households, organisations?
 Determine the relevant variables
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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Task 1:
Define the Decision Problem
 Determine the relevant variables
 Identify the different independent and
dependent variables.
 Determine the types of information
 Facts, estimates, predictions,
relationships.
 Specific constructs (concepts or ideas
about an object, attribute or phenomenon
that are worthy of measurement).
 See Exhibit 2.2, Examples of routinely
investigated constructs.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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Task 2: Specify the Research
Question
Define the decision problem in
scientific terms
Develop specific marketing research
questions
 How, when, where, what, who and why
statements.
 Develop hypotheses:
• Statements about possible relationships
between two or more market factors.
• Includes the precise variables or
constructs to be measured.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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For Example
A small retail specialty shop was
concerned about the low in store
traffic/patronage.
Management decision problem:
 Could the shop’s retail concept be modified
to increase in store traffic?
Decision problem:
 What features and product composition are
important when selecting a retail outlet?
 How is this shop evaluated on these
features?
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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Task 3: Define the Research
Objective
 Develop precise statements of what the research
project will achieve:
 Specific research objectives.
 Specify the information that is required to assist
management’s decision-making capabilities.
 Research objectives:
 To identify the shop features and product
composition that are important to the target
market.
 To identify how well the shop performs on these
characteristics.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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Task 4: Evaluate the Benefits
of the Expected Information
 Determine what are the benefits to be
gained from obtaining the information.
 Conduct a benefits-analysis
 See Exhibit 2.5
 Continue the research if the expected value
is high.
 See Exhibit 2.6
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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Task 4: Evaluate the Benefits
of the Expected Information
 Information needs
 Can the decision problem be resolved without any
further research effort?
 Nature of the decision
 Does the decision have strategic or tactical
importance?
 Availability of data
 Does adequate information for addressing the
defined decision problem already exist? Or does new
data need to be collected?
 Time constraints
 Is there enough time to conduct the research?
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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Task 4: Evaluate the Benefits
of the Expected Information
Resource requirements
 Is money budgeted for formalised research?
Costs versus benefits
 Does the benefits of having the information
outweigh the costs of gathering the
information?
 Marketing research should only be conducted
when the expected value exceeds the costs.
 See Exhibit 2.6
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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Summary - The scope for
Marketing Research
 A decision problem:
 Describes the course of action management
need to take, the reason for the research.
 Need to understand the problem situation in
detail.
 Identify measurable symptoms.
 Determine unit of analysis.
 Determine the relevant variables.
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
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The Need for Marketing
Research
 Recognising the decision
problem:
 This is the primary responsibility of
the decision maker.
 May be in the form of a symptom of
the true problem.
 For example, should we change our
ad? Should we change our
distribution/packaging, etc…?
Copyright  2007 McGraw-Hill Pty Ltd
PPTs t/a Marketing Research 2e by Hair, Lukas, Bush and Ortinau
Slides prepared by Judy Rex
2-15