Pricing Mess Underscores Problem Identification's Critical Role

Problem identification represents the first, and most critical, step in a research method because it sets and informs the research project. If you do not know what you are looking for, then you cannot find the answer. In the problem identification stage, the decision maker and the researcher determine and agree on the objective or objectives for the project's outcomes. A lack of agreement on, or even the absence of research objects will hobble any research project; a point made by Annie Pettit and highlighted by Roger Dooley. Dooley reviews a research effort undertaken by a company operating in a business-to-business market. The company wants to improve its positional advantage in the marketplace and, ultimately, achieve superior financial performance. To undertake this endeavor, the company generates market intelligence by conducting a survey. It then disseminates the results, and creates a response.

The company does not achieve its desired goal of improving its position in the marketplace.

Dooley lays the blame on the research team because they fail to consider properly the role of price.

Dooley's vignette leaves a lot of critical information out of the story. For example, how involved was the marketing research group in setting the research objectives? Did anyone considered using conjoint analysis?

The last question proves some possible insight into the problem. Conjoint analysis determines what respondents will give up to gain something else. In Dooley's example, conjoint analysis would have revealed what metal buyers would require from the company's market offering in order for buyers to accept a higher price. To use conjoint analysis, however, requires proper survey design, which would have probably necessitated a different research objective than the initial research objective.

It is entirely possible that the market research group's report meets the research objectives. Furthermore, it is entirely possible that the conclusion of the report discusses the need for additional research to better understand buyers' willingness to pay a higher price for the market offering.

Finally, it also entirely possible that no one thought to collect data related to the willingness issue.

So, in addition to Pettit's six worst marketing research mistakes, a seventh should be added to reflect Dooley's complaint: ignorance of your analytical toolkit will create havoc for your firm's response to market intelligence. Researchers must stay abreast of emerging tools as well as traditional methods to create value for the company by constantly learning.

The identified problem should guide your choice of tool.