Step 1 : Define the problem, the decision alternatives,and the Research objectives
Marketing manager must be careful not to define the problem too broadly or too narrowly for the marketing researcher. A marketing manager who says,"Find out everything you can about first-class air travelers 'needs" will collect a lot of unnecessary information. One who says,"Find out whether enough passengers aboard a B747 flying direct between Chicago and toyko would be willing to pay $25 for an internet connection for American airline to break even in one year on the cost of offering this service,is taking too narrow a view of the problem.
The marketing researcher might even ask,"why does the internet connection have to be priced at $25 as opposed to$10,$50,or some other price? Why does American have to break even on the cost of the service,especially if it Attracts new customers?" Another relevant question is:how important is it to be first in the market,and how long can the company sustain its lead?
The marketing manager and marketing researcher agreed to define the problem as follows "will offering an in-flight internet service create enough incremental preference and profit for American airline to justify its cost against other possible investment in service enchancement American might make?" To help in designing the research,management should first spell out the decision it might face and then work backward. Suppose management outline these decisions: 1 should American offer an internet connection? 2 if so, should we often the service to first-class only,or include business class,and possibly economy class? 3 what price should we charge? 4 on what types of planes and lengths of trips should we offer the service?
Now management and marketing researchers are ready to set specific research objective:
1 what types of first-class passengers would respond most to using an in-flight internet service?
2how many first-class passengers are likely to use the internet service at different prices levels?
3how many extra first-class passengers might choose American because of this new service?
4how much long-term goodwill will this service add to American airline image?
How important is internet service to first-class passengers relative to other services,such as a power plug or enhanced entertainment