MANAGEMENT DECISION AND MARKETING

RESEARCH PROBLEM
Management decision problem asks what the management
needs to do whereas marketing research problem asks what
information is needed and how it can be best obtained.
Research can provide the necessary information to make
sound decision . Management decision problem is action
oriented. It is concerned with the possible action that the
management can take . How should the loss in market share
may be gained ? Should the market be segmented
differently ?should a new product may be introduced . In
contrast marketing research problem is information oriented .
It involves what information is needed and how that
information can be obtained effectively and efficiently.
   
 Consider for example the loss of market share for a particular
product line . The management decision problem is how to
recover this loss. Alternative courses of action include
modifying existing products , introducing new products ,
changing other elements in the marketing mix and
segmenting the market . Suppose the management and the
researcher believes that the problem is due to inappropriate
segmentation of the market and want researcher to provide
information on this issue . The research problem would then
become the identification and evaluation of an alternative
basis for segmenting the market .

   
 ● Management decision problem ● Marketing research problem
ask what the decision maker ask what information is needed
needs to do and how it can be obtained .
action oriented Information oriented
focus on symptoms focus on the underlying
causes.

   
 Management decision problem Marketing research problem
● Should a new product be ● To determine consumer
introduced. preferences and purchase
intentions for the proposed
new product .
● Should the advertising ● To determine the effectiveness
compaign should be changed of the current advertising
compaign .
● Should the price of brand be ● To determine the price
increased . elasticity of demand and the
impact onsales and profits on
various level of price changes .
   
 QUALITATIVE RESEARCH
It is unstructured exploratory in nature , exploratory in
nature , based on small samples and may utilize popular
qualitative techniques such as focus groups( group
interview ), word association ( asking respondents to
indicate their first responses to stimulus words ), depth
interviews (one on one interviews that probe the
respondents ' thoughts in detail . Other exploratory research
techniques such as pilot surveys and case studies may also
be undertaken to gain insights into the phenomenon of
interest . Pilot surveys tend to be less structured than large
scale surveys in that they generally contain more open
ended questions and the sample size is much smaller .
Case studies involve an intensive examination of few
selected
  cases of the phenomenon
  of interest
 CLASSIFICATION OF QUALITATIVE RESEARCH PROCEDURE

● Direct approach – it is not disguised . The purpose of the

research is not disclosed to the respondents or is otherwise
obvious to them from the questions asked . Focus group and
depth interviews are the mazor direct techniques .
● Indirect approach – it disguises the true purpose of the report
.projective techniques the commonly used indirect
techniques , consist of association , completion , construction
and expressive techniques .

   
 FOCUS GROUP

The main purpose of focus group is to gain

insights by listening to a group of people from
the appropriate target market talk about issues
of interest to the researcher . Focus groups are
the most important qualitative research
procedure . They are so popular that many
market research practitioners considers this
technique synonymous with qualitative
research .

   
 DEPTH INTERVIEW
Depth interviews are another method of obtaining
qualitative data .Like focus groups , depth
interviews are an unstructured and direct way of
obtaining information but unlike focus groups
depth interviews are conducted on one to one
basis . A depth interview is an unstructured , direct
personal interview in which a single respondent is
probed by a highly skilled interviewer to uncover
underlying motivation , attitudes , feeling on a
topic .
   
 EXPLORATORY RESEARCH

The primary objective of exploratory research is to

provide insights into , and understanding of the problem
confronting the researcher . Exploratory research is used
in cases when you must define the problem , identify
relevant courses of action , or gain additional insights
before an approach can be developed . The information
needed is loosely defined at this stage , and the research
process that is adopted is flexible and unstructured. tThe
findings of exploratory research should be regarded as
tentative or as input to further research . As the name
implies , the objective of exploratory research is to
explore or search through a problem or situation to
   
provide insights and understanding .
 Exploratory research can be used for any of
following -
● Formulate a problem or define a problem more
precisely .
● Identify alternative courses of action.
● Develop hypothesis .
● Isolate key variables and relationships for
further examination .
● Gain insights for developing approach to the
problem.
   
● Establish priorities fot further research .
 DESCRIPTIVE RESEARCH
As the name implies , the major objective of descriptive
research is to describe something – usually market
characteristics or functions . Descriptive research is
cconducted for the following reasons :
● To describe the characteristics of relevent groups , such as
consumers , salesperson , organisation or market areas .For
ex we could develop a profile of the heavy users (frequent
shoppers ) of prestigious department stores .
● To estimate the percentage of units in a specified population
exhibiting a certain behaviour .For ex we might be interested
in estimating the percentage of heavy users of department
stores who also patronize discount department stores .
● Todetermine the perception of product characteristics . For ex
  how do households perceive   the various department stores
in terms of the salient features of choice criteria .
● To determine the extent to which market variables
are associated . For ex , to what extent is
shopping at department stores related to eating
out .

   
 TYPE OF DESCRIPTIVE DESIGN

● The cross sectional study is the most frequently used

descriptive design in marketing research . Cross sectional
design involves the collection of information from any sample
of population elements only once . They me be either single
cross sectional or multiple cross sectional . In single cross
sectional designs only one sample of respondents is drawn
from the target population ,and the information is obtained
from this sample only once. In multiple cross sectional design
there are two or more samples of respondents and information
from each sample is obtained only once . Often information
from different samples is obtained at different times over long
intervals .
   
 LONGITUDINAL DESIGN
● In it a fixed sample of population elements is measured
repeatedly on the same variables. A longitudinal design
differs from a cross sectional design in that sample or
samples remain same over time. In other words , the
same people are studied are over time and same
variables are measured . In contrast to the typical cross
sectional design , which gives a snapshot of the variables
of interest at a single point in time , a longitudinal study
provides a series of pictures that give in depth view of the
situation and the changes that takes place over time .

   
 GENERAL QUESTIONS

What type of research should be undertaken ?

● Exploratory research should be undertaken which will define
the problem more precisely ,identify the relevent courses of
action or. for gaining additional insight before an approach can
be developed . Descriptive research in the form of single cross
sectional design will quantify the findings of exploratory
research. The objective of descriptive research is to test
specific hypothesis and examine specific relationships.

   
 How can qualitative research be used to strengthen the
image ? What type of qualitative technique should be used.
● Qualitative research provides a beter understanding of the
problem and helps to define the problem more precisely and
accurately . It provides better insight into the problem and
know the key variables surrounding the issue. Focus group
and in depth interviews are the most familiar techniques
used.Focus group provide insights by listening to the group of
people from appropriate target market . In depth interview
helps to gain the key answers from the respondents who are
interviewed .

   
 EX OF LIKERT , DIFFERENTIAL, SEMANTIC
SCALE
Likert Scale: Strongly Strongly

Disagree Disagree Neutral AgreeAgree

Nike running shoes

are durable. 1 2 3 4 5

Semantic Differential Scale:

Durable _ _ _ _ _ _ _ Not durable

Stapel Scale: Nike running shoes

+5 Durability
-1 -1
   
+4 -2
+3 -3
 Marketing research problem an example -
The marketing research problem is to determine consumer
preferences for skin care products. More specifically:

What criteria do consumers use for evaluating skin care products?

How do consumers evaluate the various brands of skin care

products in terms of the choice criteria?
What is the demographic and psychographic profile of customers
loyal to Nivea in the U.S. market?
What characteristics differentiate Nivea loyalists from consumers
loyal to other brands?
   
 Research design to be adopted ? Example

Exploratory research followed by descriptive research would be the

most appropriate research design for understanding consumer
preferences for skin care products. Exploratory research will provide
insights into how consumers select and use skin care products.
Descriptive research in the form of a single cross-sectional survey
will quantify the findings of exploratory research and allow the
researcher to test specific hypotheses.

   
 MALL INTERCEPT PERSONAL INTERVIEW

● In mall intercept personal interviews repondents are

intercepted while they are shopping in malls and bought
to test facilities in the malls . The interviewer then
administers questionnare as in the in- home personal
survey. The advantage of mall intercept interviews is that
it is more efficient for respondents to come to the
interviewer than for the interviewer to go to
respondents .mall intercepts are especially appropriate
when the respondents need to see , handle or consume
the product before they can provide meaningful
information
   
 How internet can be used as a valuable source
of information ?
The Internet can be a valuable source of information. One can visit
the Websites relating to the issue and sites providing infornation
about other competitors. One can also use the various search
engines to locate other sites with valuable information. Several of the
Internet databases can be searched using appropriate key words.
Finally, one can visit newsgroups and chatgroups to collect more
information.

   
 What research design would be appropriate for
monitoring changing needs and preferences ?
● When needs are changing, an exploratory design is
appropriate since little is known about their new needs.
From the results of this study, a clear statement of the
problem, specific hypotheses, and detailed information
needs can be devised. Then, a descriptive approach can
be applied to test particular hypotheses about the new
needs and their effect on consumer preferences. Given
the need to monitor changing needs, a longitudinal
design should be used.

   
 What type of research design would be most appropriate for
segmenting the market and why ( ex hotel market)?

An exploratory phase followed by a descriptive phase is recommended. The

exploratory phase will consist of focus groups to determine consumers’
perceptions, preferences, and the benefits that they seek from hotels. These
findings will be used to construct a questionnaire that will be administered in a
single cross-sectional descriptive design. Since only a snapshot of the market
is needed, a single cross-sectional design is appropriate.

   
 If a survey is to be conducted to understand
the preferences of american consumers for
skin care product , which survey should be
used and why ?
Mall­intercept interviews would be the most useful survey method 
in understanding consumer’s preferences for skin care. This would 
allow for a high flexibility and control of data collection, and good 
diversity of questions. It would be quick and have a high response 
rate. The only drawback would be the probable high costs of 
 
conducting such a survey.  
 EXAMPLE OF LIKERT , SEMANTIC AND
DIFFERENTIAL SCALE NIVEA
Likert Scale:
Strongly Neutral Strongly
Disagree Agree

Foreign skin care products:

(a)Are of a high quality 1 2 3 4 5

(b)Priced fairly compared to
domestic products 1 2 3 4 5
   
Stapel Scale: Foreign skin care products are:

+5 +5
+4 +4
+3 +3
+2 +2
+1 +1
High quality Fairly price compared to domestic products
-1 -1
-2 -2
-3 -3
-4 -4
   
-5 -5
 Semantic Differential Scale:

Foreign skin care products are:

High quality -- -- -- -- -- -- -- Low quality
Priced fairly compared
To domestic products -- -- -- -- -- -- -- Not priced fairly
compared to domestic products
   
 NIKE SAMPLING PLAN
Develop sampling plan for survey of consumers of athletic brand?

Target population: Mall shoppers in the United States in the

current year

Sampling frame: List of Malls in the US

Sampling unit: Mall Shoppers
Sampling technique: Judgmental sampling
Sample size: 1000

Execution: Judgmentally select a set of shopping malls across the

United States. Interview shoppers
    using the mall-intercept method.
 SAMPLING PLAN FOR NIVEA
Target population: American consumers
Sampling frame: People at malls across the U.S.
Sampling unit: Individual consumers at malls
Sampling technique: Quota sampling
Sample size: 1000

Execution: Select specific shopping malls based on the judgment

of the researcher. Set quotas by age and gender. Use quota
sampling to select mall patrons and interview them.

   
 SURVEY TO BE ADMINISTERED BY NIVEA

A mall-intercept survey can be used to

determine if Nike should invest by opening more
upscale company retail outlets such as Nike
Town. Mall shoppers can be regarded as
representative of Nike’s target consumers for
regular Nike shops as well as the upscale Nike
  Town.  
 MARKETING RESEARCH PROBLEM NIKE
Marketing Research Problem:

The marketing research problem is to determine consumer preferences for

athletic shoes. More specifically,

a. What criteria do consumers use for evaluating athletic shoes?

b. How do consumers evaluate the various brands of athletic shoes in terms
of the choice criteria?
c. Are the consumers willing to pay a premium price for high performance
shoes?
d. What is the demographic and psychographic profile of customers loyal to
Nike?

What demographic, psychographic, and product usage characteristics

   
differentiate Nike loyalists from consumers loyal to other brands?
 RESEARCH DESIGN USED BY INTEL
Due  to the nature of the question, exploratory research should be 
conducted first. Exploratory research will provide insight and 
understanding into the problem. This type of research will help Intel 
gain a better understanding of how consumers and businesses select 
PCs and network communication products  The exploratory phase 
should be followed by descriptive research in the form of a single 
cross­sectional survey that will quantify the findings of exploratory 
research and enable Intel to test specific hypotheses.

   
 USE OF INTERNET

The Internet is a large source of secondary data.

Information can be found through search
engines or traditional suppliers of secondary
data. Both industry and company data can be
obtained through various sources and databases
found over the internet.
   
 QUALITATIV RESEARCH FOR INTEL

Role of qualitative esearch in how business

select pc and netork communication product?
Qualitative research would be used to define the problem and 
develop an approach. Intel would use this research to generate 
hypotheses and develop an initial understanding of how 
businesses select PC and network communications products. Both 
depth interviews and focus groups would be appropriate 
  qualitative research techniques in this case.
 
 Survey is to be conducted to business selection criteria
for choosing pc and network communiacation product ?
The most appropriate survey method to determine selection criterion
used by businesses for choosing PC and network communications
would be an Internet based survey. Virtually all businesses in the US
have access to the Internet. This technique would be preferred based
on diversity of questions, flexibility of data collection, control of the field
force, perceived anonymity, obtaining sensitive information, speed, and
cost.
   
 SAMPLING PLAN FOR INTEL
Target population: Business executives/decision makers.

Sampling frame: List of businesses in the US with more than 100

employees requiring PC or communications networks during the survey
period.
Sampling unit: Businesses on the list and decision makers within the
business.
Sampling technique: Stratified sampling by business size and industry.
Sample size: 1000
Execution: Stratify the businesses by business size and industry.
Within each stratum select the businesses by simple random sampling.
 
E-mail an invitation to the businesses selected to participate in the
 
survey providing the relevant URL and the password.