Milk sales had declined in the 1980s and early 1990s, and the milk industry needed to find a way to increase sales. An advertising company was hired by the California Milk Processor Board, which in turn hired MfNRlC Research toconducta telephone tracking survey of Californians over age II. To identify the cause of low milk sales, the research company sought to understand the underlying behavior of consumers toward milk. Through extensive focus groups, household observations, and telephone surveys, MINRlC was able to understand consumer behavior underlying milk consumption. This research revealed how people used milk, what made them want it, with what foods they used it, and how they felt when they were deprived of it. They found that 88 percent of milk is consumed at home and that milk was not the central drink of the average person, but it was used in combination with certain foods such as cereal, cakes, pastries, and so forth. However, milk was strongly missed when there was none around. The advertising agency, Goodby, Silverstein & Partners, developed an ad campaign around consumer behavior with respect to milk and.launched the well-known “milk mustache” campaign with the “Got Milk?” tag line. This creative advertising was a real attention getter, showing celebrities from Joan Lunden to Rhea Perlman and Danny DeVito sporting the famous white mustache. Through marketing research and the advertising campaign, milk sales increased and continued to be stable through 2009. But beyond sales, “Got Milk?” has become part of the American language. Some consumers have even said that their kids walk into the kitchen with a cookie asking for a “glass of got milk
The legal environment includes public policies, laws, government agencies, and pressure groups that influence and regulate various organizations and individuals in society. Important areas of law include patents, trademarks, royalties, trade agreements, taxes, and tariffs. Federal laws have an impact on each element of the marketing mix. In addition, laws have been passed to regulate specific industries. The legal environment can have an important bearing on the definition of the marketing research problem, as can the economic environment
Marketing and Technological Skills
A company’s expertise with each element of the marketing mix, as well as its general level of marketing and technological skills, affects the nature and scope of the marketing research project. For example, the introduction of a new product that requires sophisticated technology may not be a viable course if the firm lacks the skills to manufacture or market it
A marketing and technological skills greatly influence the marketing programs and strategies that can be implemented. At a broader level, other elements of the technological environment should be considered. Technological advances, such as the continuing development of computers, have had a dramatic impact on marketing research. To illustrate, computerized checkout lanes allow supermarkets to monitor daily consumer demand for products and make the Many of the factors to be considered in the environmental context of the problem can be researched via the Internet. Past information and forecasts of trends can be found by searching for the appropriate information with search engines. For client-specific information, the user can go to the company home page and get the information from there. Investor Communication Solutions is an effective way to research a company and find information on financial reports, company news, corporate profiles, or annual reports. Finally, you can go to sites such as Yahoo! Business or Finance or to find analysts’ views of the company. Firms such as D&B create company databases that can be accessed through a subscription or reports that can be purchased on a one-time basis.
Environmental Context and Problem Definition
After gaining an adequate understanding of the environmental context of the problem, the researcher can define the management decision problem and the marketing research problem. This process was illustrated in the opening Harley-Davidson example. Forecasts called for an increase in consumer spending on recreation and entertainment well into the year 2015. Empowered by the Internet, consumers in the twenty-first century became increasingly sophisticated and value conscious. Yet brand image and brand loyalty played a significant role in buyer behavior with well-known brands continuing to command a premium. Clearly. Harley-Davidson had the necessary resources and marketing and technological skills to achieve its objective of being the dominant motorcycle brand on a global basis. The management decision problem was:
Should Harley-Davidson invest to produce more motorcycles? The marketing research problem was to determine if the customers would be loyal buyers of Harley-Davidson in the long term.
• The following section provides further understanding of the management decision problem and .” the marketing research problem
Defining the Problem
OM: We have seen a decline in the patronage of our store.
R: How do you know that?
OM: Well, it is reflected in our sales and market share.
R: Why do you think your patronage has declined?
OM: I wish I knew!
R: What about competition?
OM: I suspect we are better than competition on some factors and worse than them on others.
R: How do the customers view your store?
OM: I think most of them view it positively, although we may have a weak area or two.
After a series of dialogues with the OM and other key managers, analysis of secondary data, and qualitative research, the problem was identified as follows
Determine the relative strengths and weaknesses of Sears vis-a-vis other major competitors with respect to factors that influence store patronage
As can be seen, the preceding example provides valuable definitions of the management decision problem and the broad marketing research problems that are closely linked. The problem is now focused on a segment of customers (heavy users) and one behavior of these customers (staying with the company over the next 2 years). Measurable results, such as “90 percent retention of heavy users,” are included, as well as a company goal (10 percent increase in sales over the aext 2 years). This distinction and linkage between the management decision problem and the marketing research problem helps us in understanding how the marketing research problem should be defined.