Chapter 3 The Research Process and Problem Formulation

1. Chapter 3 • The Research Process and • Problem Formulation © 2005 Thomson/South-Western

2. Figure 1: Relationship among the Stages in the Research Process Formulate Problem Determine Research Design Design Data Collection Method and Forms Design Sample and Collect Data Analyze and Interpret the Data Prepare the Research Report

3. Questions That Need Addressing at the Various Stages of the Research Process Stage in the Process Typical Questions What is the purpose of the study--to solve a problem? Identify an opportunity? Is additional background information necessary? What information is needed to make the decision? How will the information be utilized? Should research be conducted? How much is already known? Can a hypothesis be formulated? What types of questions need to be answered? What type of study will best address the research questions? Can existing data be used to advantage? What is to be measured? How? What is the source of the data? Can objective answers be obtained by asking people? How should people be questioned? Should the questionnaires be administered in person, over the phone, or through the mail? Should electronic or mechanical means be used to make the observations? What specific behaviors should the observers record? Should structure or unstructured items be used to collect the data? Should the purpose of the study be made known to the respondents? Should rating scales be used in the questionnaire? Formulate problem Determine research design Determine data collection method and forms

4. Questions That Need Addressing at the Various Stages of the Research Process Stage in the Process Typical Questions Design sample and collect the data Analyze and interpret the data Prepare the research report Who is the target population? Is a list of population elements available? Is a sample necessary? Is a probability sample desirable? How large should the sample be? How should the sample be selected? Who will gather the data? How long will the data gathering take? How much supervision is needed? What operational procedures will be followed? What methods will be used to ensure the quality of the data collected? Who will handle the editing of the data? How will the data be coded? Who will supervise the coding? Will computer or hand tabulation be utilized? What tabulations are called for? What analysis techniques will be used? Who will read the report? What is their technical level of sophistication? Are managerial recommendations called for? What will be the format of the written report? Is an oral report necessary? How should the oral report be structured?

5. A1 01 02 A2 I N The Decision-Problem Paradigm

6. Examples of the Relationship Between Decision Problems and Research Problems Decision Problems Research Problems Develop package for a new product Increase store traffic Increase market penetration through the opening of new stores Decide which merchandise will be available for purchase over the Internet Evaluate alternative package designs Measure current image of the store Evaluate prospective locations Determine consumers’ confidence in purchasing different categories of products unseen

7. Parts of a Research Request 1. Action- -the actions that are contemplated on the basis of the research. Origin- -the events that led to a need for the decision to act; while the events may not directly affect the research that is conducted, they help the researcher understand more deeply the nature of the research problem. Information- -the questions that the decision maker needs to have answered in order to take one of the contemplated courses of action. Use- -a section that explains how each piece of information will be used to help make the action decision; supplying logical reasons for each piece of the research ensures that the questions make sense in light of the action to be taken. Targets and Subgroups- -a section that describes from whom the information must be gathered; specifying the target groups helps the researcher design an appropriate sample for the research project. Logistics- -a section that gives approximate estimates of the time and money that are available to conduct the research; both of these factors will affect the techniques finally chosen. 2. 3. 4. 5. 6.

8. Process for Choosing a Research Supplier Identify the most critical areas of research and the issues that would benefit most from research Identify suppliers that have the expertise necessary to do the research Get proposals from at least three qualified suppliers Talk with key personnel at supplier companies whose proposals look particularly promising paying particular attention to the firm’s quality control procedures Perform a comparative analysis on the proposals with respect to: * Each supplier’s understanding of the problem *The approach being recommended *The cost and timing of each research effort Choose a supplier for the research Formally evaluate the performance of the supplier chosen with respect to specific criteria

9. Figure 3: Parts of a Research Proposal, and an Example Marketing Problem Brief description of general problem; reason for conducting research Sum up preliminary discussions between researcher & manager; demonstrate knowledge of situation & particular info needs Project Title:Research on Your Consumers 2 1 Data Sources & Methodology Purpose of Research Project Describe secondary data to be used Describe how primary data will be gathered (surveys, experiments) Keep methods descriptions nontechnical Describe sample and proposed size Include draft of questionnaire or focus group moderator outline (etc.), if applicable State goals & objectives, w rationales Describe scope of project (i.e., what will not be investigated) Spell out specific questions to be answered Address possible limitations due to time or budget constraints (to avoid later disagreement) by bidding Marketing Research Firm 3 4 Time and Personnel Provide time estimates for each phase of the research Specify personnel required and their rates of pay Calculate nonpersonnel costs (e.g., supplies, printing, mailing, etc.) 5

10. Marketing Opportunity • $27billion U.S. beauty market • 45% U.S. population Internet access • Related Internet site (fashion) up, possible profitable link? • Manager concern fragrances cannot be sampled electronically • Past research: trial is important • Can image & brand dominate? Eau de Internet: Selling Fragrances Online 2 1 Purpose of Research Project Data Sources & Methodology • Objective: determine will consumers buy perfumes online • Focus on women’s attitudes (buying for self or gift), not yet purchase • Concerns women have re: buying fragrances online? • What factors lower resistance (brand, price, return • policy?) • Client desires results in 3months… Secondary data: sales in beauty, perfumes, online apparel Primary data: email contact directed to Internet surveys Analysis: averages, cross-tabs Sample size goal of 300 women, given time constraints, target those w internet access, modify questions for gift purchases by Marketing Researchers R Us 3 4 Time and Personnel Preliminary phase, 3 weeks Survey pre-test, debug, 2 weeks Sample select & solicitation, 2 wks Administer survey, follow-up, 1 wk Analyses, 1 month Discuss required staff (& salaries) Other costs minimal (given format of electronic contact and survey execution) 5

11. Figure 2: Percentage of Research Users who believe Marketing Researchers Should Engage in the following Activities:

12. RESEARCH REALITIES 3: Segments of Online Consumers Use the information in the following chart to answer the questions: • If you were an information or entertainment portal, who would you target? If you were a e-commerce arm of a department store, which group(s) would you target? Who would you avoid? • If you just allowed any random person to click through to your web survey, what do these numbers suggest your sample would resemble? • If you wished to target any one of these segments to obtain their opinions in a marketing research web survey, how would you find them? Contact them? Appeal to them? #hours #domains #pages percent segment size month month month buying why online? Simplifiers 29% 7.1 6.2 1021 87% Internet makes my life easier, seek convenience (no ads, chat, popup), 49% online >5yrs, comprise 50% online transactions Surfers 8% 30.2 224 4852 71% spend most time online, many purposes including buying, comedy central, eye candy, videostreams) Bargainers 8% 8.3 43 1295 64% find best buys, shop and entertainment =50% of e-bay, priceline, ubid, quote.com Connectors 36% 5.7 54 791 42% Internet newcomers, communicate, more tied to offline brands, icq, bluemountain Routiners 15% 8.2 32 624 50% source info, not necessarily online shoppers, news, financials, wsj, msnbc Sportsters 4% 7.1 47 1023 51% info, focus on sports and entertainment sites, espn, cbs sportsline, boxerjam average 9.8 74 1398 61% Source: “All Visitors are Not Created Equal” White Paper series, mckinsey.com.