Session 2

Session 2 AUnderstanding the Decision ProblemResearch for Marketing DecisionsThe Decision ProblemThe starting point of the researchTypically includes some management decision problem / issueAre the consumers satisfied? If not why? What needs to be done to satisfy them?Who are the consumers? What are their purchase behaviour?Sometimes it could be a research problem tooDemand forecasting / sales forecastingWhat is the ideal price point? What is the attrition rate of the consumers with the increase of price?

The Decision ProblemSometimes, it could be rather vague tooWould the consumer culture support health clubs / organic produce in XYZ city?I want to make my business green. Tell me how.Hence, the researcher / consultant needs to develop clarity of thought, judgmental evaluation of symptoms and evidence and considerable amount of checking and cross checking of alternative ideas for arriving at most worthy questions / issues for investigationIn other words, one needs to develop a logical thought process for being a successful marketing researcherHow to progress?PrerequisiteGeneral contextual familiarity / methodological familiarity with the problemRequirementsBreak down the problem into many clear components and integrating them into a coherent setDeveloping and examining some starting hypotheses (from the broken down components) about the problem about the why / how of the problemHow to progress?Intelligent dialogue with the decision maker/s to decipher what the real problem is compared to the reported oneCarry out preliminary analyses to check and re-check the starting hypotheses and generate new hypotheses (If needed)Determining the information requirements with utmost clarityHow to progress?Checking for the availability / sources of the informationEvaluating the cost and value of the information (seriousness of the consequences envisaged)Writing the project proposal and asking for the approval of the clientIllustrationDecision ProblemSale of NIKE shoes has been declining in the last couple of yearsGeneral contextual familiarityIndustry as a whole is reporting declining sales and what the company has noticed is nothing but a reflection of industry trendIncreased competition from low priced brands is responsible for decline in NIKEs salesIllustrationTo ascertain the general contextual issues as the key reasons, one needs to determine some facts that bear upon the decisionWhat is the size and trend of industry volume?What is NIKEs share in the industry volume?What is the trend in NIKEs market share?How is the industry volume divided into high priced, med priced and low priced brands?What are the industry volume trends in each of these categories?IllustrationBreaking down the decision problemThe construct declining sales could depend upon multiple factors; one needs to look up the theory and practice to identify those factorsProduct mixPricingDistribution channels and their coverageDisplays, Promotions, advertisingConsumer buying habitsEach of the above can be converted to starting hypothesesIllustrationSales DeclineProduct DecisionsPricing DecisionsDistribution Channel TypesDistribution channel coverageIn store PromotionsAdvertising & sales strategyH1: High pricing is the reason for declining salesH2: Lack of in store promotions is the reason for declining salesIllustrationAt this stage, it is significant to go back to the client and discuss the hypotheses with him for further developmentYou may need to interact with executives / shop floor workers at various levels and different interest levelsOne also needs to gauge the real reason for the project and its consequencesSubsequently, you may pick up some of the hypotheses for further development or may create new hypotheses for further developmentIllustrationCarrying out initial analysisYou need to collate all the information you have gathered till now and validate the starting hypotheses for further developmentYou may carry out fresh interviews, scan variety of documents and gather numerous internal and external data

Consumer SurveyInternal ReportsSecondary reportRetailer Survey