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Students, in our introduction to the subject lecture we had Descriptive Research

conquered the areas where research is used as a tool for decision- Descriptive research is more rigid than exploratory research and
making. Also we know that all business operates in the world of seeks to describe users of a product, determine the proportion of
uncertainty. Research methodology minimizes the degree of the population that uses a product, or predict future demand for
uncertainty involved in management decisions. Research lays the a product or describes the happening of a certain phenomenon.
structure for decision-making
As opposed to exploratory research, if you are doing descriptive
research you should define questions, people surveyed, and the
method of analysis prior to beginning data collection.
In other words, the who, what, where, when, why, and how aspects
of the research should be defined. Such preparation allows you
the opportunity to make any required changes before the costly
process of data collection has begun.
There are two basic types of descriptive research:
Let us recapitulate what we have studied in the last lecture. We saw
Longitudinal Studies
that research plays a dominant role in the field of
Longitudinal studies are time series analyses that make repeated
• Marketing measurements of the same individuals, thus allowing you to
• Production monitor behaviour such as brand switching. However, longitudinal
• Banking studies are not necessarily representative since many people may
refuse to participate because of the commitment required.
• Materials
Cross-sectional Studies
• Human Resource Development
Cross-sectional studies sample the population to make
• Government
measurements at a specific point in time. A special type of cross-
You can classify Research in one of three categories: sectional analysis is a cohort analysis, which tracks an aggregate of
1. Exploratory research individuals who experience the same event within the same time
2. Descriptive research interval over time. You can use Cohort analyses for long-
forecasting of product demand.
3. Causal research
These classifications are made according to your objective of the Causal Research
research. In some cases the research will fall into one of these Casual Research seeks to find cause and affect relationships between
categories, but in other cases different phases of the same research variables. It accomplishes this goal through laboratory and field
project will fall into different categories. experiments.
Research process involves important steps-
Now we will discuss these categories in detail:
• Problem definition
Exploratory Research • Research proposal
Exploratory research has the goal of formulating problems more
precisely, clarifying concepts, gathering explanations, gaining • Research Design
insight, eliminating impractical ideas, and forming hypotheses. • Data Collection
Exploratory research can be performed using a literature search, • Data Analysis & interpretation
surveying certain people about their experiences, focus groups, • Report writing
and case studies.
• Interpretation of Research
When you will be surveying people, exploratory research studies
would not try to acquire a representative sample, but rather, seek Refer diagram below to understand each steps clearly
to interview those who are knowledgeable and who might be able The Research Process
to provide you the insight concerning the relationship among
Case studies can include contrasting situations or benchmarking
against an organization known for its excellence. Exploratory
research may develop hypotheses, but it does not seek to test
them. Exploratory research is characterized by its flexibility.

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Let us assume that the alternative choices are clearly

specified: either II or I be employed.We have identified
the alternative choices but not completely specified
the problem.
The complete problem is concerned with the criterion
that will determine the superiority of the two
The criterion could be:
• Cost
• Efficiency of materials
• Availability of resources, etc.
There are three aspects of research problem
a. The specification of units to be studied
b. The identification of the particular units within
the scope of study
c. The specification of the kind of information to
be sought.

What would you like to know if information is

free and without error?
A complete answer to this question defines the initial
research problem. It can be redefined later if some
difficulty arises.
Research Proposal
Research proposal are necessary for all business
research, it may be the internal proposal or it may be
the external proposal. But research proposal is not
required in case of research studies for P. hd., or paper
presentation as concerned.
A proposal is known as a work plan, prospectus,
outline, statement of intent, or draft plan. The
proposal tells us what, why, how, where, and to whom
it will be done.
The proposal of research is:
Problem Definition 1. To present the management question to be
First of all one should be clear as what exactly the problem is. researched and its importance
If you are working in a company, the problem is assign by the top 2. To discuss the research efforts of others who
management; usually you get broad ideas regarding the problem. have worked on related management questions.
Then with the broad concept from the top management you
define the specific problem statement. 3. To suggest the data necessary for solving the
management question and how the data will be
Or if you are doing some research project then you have to identify gathered, treated, and interpreted.
your problem statement of your own. Remember your problem
statement should be specific. We will discuss the research proposal in detail in lesson
Let us suppose that we want to know which of the two methods
can be employed Research Design

Method I or Method II Data Collection -Types and Sources:

The researcher should be clear with the alternative choices he Once the researcher has decided the ‘Research Design’,
has.Should other Methods be also considered? the next job is of data collection. For data to be
useful, our observations need to be organized so

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that we can get some patterns and come to logical conclusions. Questionnaire

Statistical investigation requires systematic collection of data, so The questionnaire is an important tool for gathering primary data.
that all relevant groups are represented in the data. Poorly constructed questions can result in large errors and invalidate
the research data, so significant effort should be put into the
To determine the potential market for a new product, for example,
the researcher might study 500 consumers in a certain geographical
area. It must be ascertained that the group contains people Secondary Data
representing variables such as income level, race, education and When an investigator uses the data, which has already been collected
neighborhood. The quality of data will greatly affect the by others, such data is called secondary data. This data is primary
conclusions and hence, utmost importance must be given to this data for the agency that collects it and becomes secondary data for
process and every possible precaution should be taken to ensure someone else who uses this data for his own purposes. The
accuracy, while gathering and collecting data. secondary data can be obtained from journals, reports, government
Depending upon the sources utilized, whether the data has come publications, publication of professional and research organization
from actual observations or from records that are kept for normal and so on. For example, if a researcher desires to analyze the
purposes, statistical data can be classified into two categories, weather conditions of different regions, he can get the required
primary and secondary. information or data from the records of the meteorology
Primary Data
There are several criteria that you should use to evaluate secondary
Primary data is one, which is collected by the investigator himself
for the purpose of a specific inquiry or study. Such data is original
in character and is generated by surveys conducted by individuals • Whether the data is useful in the research study.
or research institutions. • How current the data is and whether it applies to time period
Some common types of primary data are: of interest.
• Demographic and socioeconomic characteristics • Errors and accuracy - whether the data is dependable and can
be verified.
• Psychological and lifestyle characteristics
• Presence of bias in the data.
• Attitudes and opinions
• Specifications and methodologies used, including data
• Awareness and knowledge:for example, brand awareness
collection method, response rate, quality and analysis of the
• Intentions:for example, purchase intentions. While useful, data, sample size and sampling technique, and questionnaire
intentions are not a reliable indication of actual future design.
• Objective of the original data collection.
• Motivation:a person’s motives are more stable than his/her
• Nature of the data, including definition of variables, units
behavior, so motive is a better predictor of future behavior
of measure, categories used, and relationships examined.
than is past behavior.
Data Collection Procedure for Primary
Primary data can be obtained by:
Planning the Study
Since the quality of results gained from statistical data depends
Involves questioning respondents either verbally or in writing.
upon the quality of information collected, it is important that a
This method is versatile, since you need only to ask for the
sound investigative process be established to ensure that the data
information; however, the response may not be accurate.
is highly representative and unbiased. This requires a high degree
Communication usually is quicker and cheaper than observation.
of skill and also certain precautionary measures may have to be
Observation taken.
Involves the recording of actions and is performed by either a
Modes of Data Collection
person or some mechanical or electronic device. Observation is
Following are widely used methods for collection of primary data:
less versatile than communication since some attributes of a person
may not be readily observable, such as attitudes, awareness, • Observation
knowledge, intentions, and motivation. Observation also might • Experimentation
take longer since observers may have to wait for appropriate events • Questionnaire
to occur, though observation using scanner data might be quicker
• Interviewing
and more cost effective. Observation typically is more accurate
than communication. • Case Study Method

Personal Interviews Observation Process

Have an interviewer bias that mail-in questionnaires do not have. Observing the process at work collects information. The following
For example, in a personal interview the respondent’s perception are a few examples.
of the interviewer may affect the responses i. Service Stations:Pose as a customer, go to a service station
and observe

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ii. To evaluate the effectiveness of display of the Dunlop • Finally, the data is tabulated to count the number of samples

cushions in a departmental store, an observer notes: falling into various categories.
• How many pass by? Simple tabulations count the occurrences of each variable
• How many stopped to look at the display? independently of the other variables.
• How many decide to buy? Cross tabulations, also known as contingency tables or cross tabs,
treats two or more variables simultaneously. However, since the
iii. Super Market What is the best location in the shelf? Hidden
variables are in a two-dimensional table, cross tabbing more than
cameras are used.
two variables is difficult to visualize since more than two
iv. Concealed tape recorder with the investigator helps to dimensions would be required. Cross tabulation can be performed
determine typical sales arguments and find out sales for nominal and ordinal variables. Cross tabulation is the most
enthusiasm shown by various salesmen. By this method, commonly utilized data analysis method in marketing research.
response bias is eliminated. Many studies take the analysis no further than cross tabulation.
The method can be used to study sales techniques, customer This technique divides the sample into sub-groups to show how
movements, customer response, etc. However, the customer’s/ the dependent variable varies from one subgroup to another. A
consumer’s state of mind, their buying motives, their images are third variable can be introduced to uncover a relationship that
not revealed. Their income and education is also not known. It initially was not evident.
also takes time for the investigator to wait for particular sections
to take place.
Experimental Method:
Many of the important decisions facing the marketing executives
cannot be settled by secondary research, observation or by surveying
the opinions of customers or experts.
Experimental method may be used in the following situations.
i. What is the best method for training salesmen?
ii. What is the best remuneration plan for salesmen?
iii. What is the best shelf arrangement for displaying a product?
iv. What is the effectiveness of a point-of-purchase display?
v. What package design should be used?
Conjoint Analysis
vi. Which copy is the most effective? The Conjoint Analysis is a powerful technique for determining
vii.What media are the most effective? consumer preferences for product attributes.
viii.Which version of a product would consumers like best? Hypothesis Testing
In a marketing experiment, the experimental units may be A basic fact about testing hypotheses is that a hypothesis may be
consumers, stores, sales territories, etc.\Factors or marketing rejected but that the hypothesis never can be unconditionally
variables under the control of the researcher which can be studied accepted until all possible evidence is evaluated.
are price, packaging, display, sales incentive plan, flavor, color shape, In the case of sampled data, the information set cannot be
Competitor’s actions, weather changes, in cooperative dealers, etc. complete. So if a test using such data does not reject a hypothesis,
are environmental factors. the conclusion is not necessarily that the hypothesis should be
To study the effect of the marketing variables in the presence of
The null hypothesis in an experiment is the hypothesis that the
environmental factors, a sufficiently large sample should be used.
independent variable has no effect on the dependent variable. The
Or sometimes a control group is set up. A Control group is a
null hypothesis is expressed as H0. This hypothesis is assumed to
group equivalent to the experimental group and differing only in
be true unless proven otherwise. The alternative to the null
not receiving any treatment. hypothesis is the hypothesis that the independent variable does
The result/ response of a marketing experiment will be in the have an effect on the dependent variable. This hypothesis is known
form of sales, attitudes or behaviour. as the alternative, research, or experimental hypothesis and is
expressed as H1. This alternative hypothesis states that the
Data Analysis-Preliminary Steps
relationship observed between the variables cannot be explained
• Before the analysis can be performed, raw data must be by chance alone.
transformed into the right format.
There are two types of errors in evaluating hypotheses:
• Then, it must be edited so that errors can be corrected or
• Type I error: occurs when one rejects the null hypothesis and
accepts the alternative, when in fact the null hypothesis is
• The data must then be coded; this procedure converts the true.
edited raw data into numbers or symbols. A codebook is
• Type II error: occurs when one accepts the null hypothesis
created to document how the data was coded.
when in fact the null hypothesis is false.

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Because their names are not very descriptive, these types of errors of freedom (df). For chi-square applied to cross-tabulated data,

sometimes are confused. Some people jokingly define a Type III the number of degrees of freedom is equal to
error to occur when one confuses Type I and Type II. To illustrate
(number of columns - 1) (number of rows - 1)
the difference, it is useful to consider a trial by jury in which the
null hypothesis is that the defendant is innocent. If the jury convicts This is equal to the number of categories minus one. The
a truly innocent defendant, a Type I error has occurred. If, on the conventional critical level of 0.05 normally is used. If the calculated
other hand, the jury declares a truly guilty defendant to be innocent, output value from the function is greater than the chi-square look-
a Type II error has occurred. up table value, the null hypothesis is rejected.
Hypothesis testing involves the following steps: Anova
• Formulate the null and alternative hypotheses. Another test of significance is the Analysis of Variance (ANOVA)
• Choose the appropriate test.
test. The primary purpose of ANOVA is to test for differences
between multiple means. Whereas the t-test can be used to
• Choose a level of significance (alpha) - determine the
compare two means, ANOVA is needed to compare three or more
rejection region.
means. If multiple t-tests were applied, the probability of a TYPE
• Gather the data and calculate the test statistic. I error (rejecting a true null hypothesis) increases as the number of
• Determine the probability of the observed value of the test comparisons increases
statistic under the null hypothesis given the sampling One-way ANOVA examines whether multiple means differ. The
distribution that applies to the chosen test. test is called an F-test. ANOVA calculates the ratio of the variation
• Compare the value of the test statistic to the rejection between groups to the variation within groups (the F ratio). While
threshold. ANOVA was designed for comparing several means, it also can be
• Based on the comparison, reject or do not reject the null used to compare two means. Two-way ANOVA allows for a second
hypothesis. independent variable and addresses interaction.
• Make the marketing research conclusion. To run a one-way Anova, use the following steps:
In order to analyze whether research results are statistically • Identify the independent and dependent variables.
significant or simply by chance, a test of statistical significance can • Describe the variation by breaking it into three parts - the
be run total variation, the portion that is within groups, and the
portion that is between groups (or among groups for more
Tests of Statistical Significance
than two groups).
The chi-square goodness-of-fit test is used to determine whether
a set of proportions have specified numerical values. It often is The total variation (SStotal) is the sum of the squares of the
used to analyze bivariate cross-tabulated data. differences between each value and the grand mean of all the values
Some examples of situations that are well suited for this test are: in all the groups. The in-group variation (SSwithin) is the sum of
the squares of the differences in each element’s value and the group
• A manufacturer of packaged products test markets a new
mean. The variation between group means (SSbetween) is the total
product and wants to know if sales of the new product will
variation minus the in-group variation (SStotal - SSwithin).
be in the same relative proportion of package sizes as sales
of existing products. 1. Measure the difference between each group’s mean and the
grand mean.
• A company’s sales revenue comes from Product A (50%),
Product B (30%), and Product C (20%). The firm wants to 2. Perform a significance test on the differences.
know whether recent fluctuations in these proportions are 3. Interpret the results.
random or whether they represent a real shift in sales. This F-test assumes that the group variances are approximately
Defining k categories and observing the number of cases falling equal and that the observations are independent. It also assumes
into each category perform the chi-square test. Knowing the normally distributed data; however, since this is a test on means
expected number of cases falling in each category, one can define the Central Limit Theorem holds as long as the sample size is not
chi-squared as: too small

?2 = SOi - Ei )2 / Ei ANOVA is efficient for analyzing data using relatively few

i observations and can be used with categorical variables. Note that
Where regression can perform a similar analysis to that of ANOVA.
Oi = the number of observed cases in category i,” Discriminant Analysis
E i = the number of expected cases in category i, Analysis of the difference in means between groups provides
k = the number of categories, information about individual variables, it is not useful for
determine their individual impacts when the variables are used in
the summation runs from i = 1 to i = k.
combination. Since some variables will not be independent from
Before calculating the chi-square value, one needs to determine the
one another, one needs a test that can consider them
expected frequency for each cell. This is done by dividing the
simultaneously in order to take into account their interrelationship.
number of samples by the number of cells in the table.
One such test is to construct a linear combination, essentially a
To use the output of the chi-square function, one uses a chi-
weighted sum of the variables. To determine which variables
square table. To do so, one needs to know the number of degrees

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discriminate between two or more naturally occurring groups, eigen value is greater than one are used. Other criteria for

discriminant analysis is used. Discriminant analysis can determine determining the number of factors include the Scree plot criteria
which variables are the best predictors of group membership. It and the percentage of variance criteria.
determines which groups differ with respect to the mean of a To facilitate interpretation, the axis can be rotated. Rotation of the
variable, and then uses that variable to predict new cases of group axis is equivalent to forming linear combinations of the factors. A
membership. Essentially, the discriminant function problem is a commonly used rotation strategy is the varimax rotation. Varimax
one-way ANOVA problem in that one can determine whether attempts to force the column entries to be either close to zero or
multiple groups are significantly different from one another with one.
respect to the mean of a particular variable. A discriminant analysis
consists of the following steps: Cluster Analysis
Market segmentation usually is based not on one factor but on
1. Formulate the problem.
multiple factors. Initially, each variable represents its own cluster.
2. Determine the discriminant function coefficients that result The challenge is to find a way to combine variables so that relatively
in the highest ratio of between-group variation to within- homogenous clusters can be formed. Such clusters should be
group variation. internally homogenous and externally heterogeneous. Cluster
3. Test the significance of the discriminant function. analysis is one way to accomplish this goal. Rather than being a
4. Interpret the results. statistical test, it is more of a collection of algorithms for grouping
objects, or in the case of marketing research, grouping people.
5. Determine the validity of the analysis.
Cluster analysis is useful in the exploratory phase of research when
Discriminant analysis analyzes the dependency relationship, whereas there are no a-priori hypotheses.
factor analysis and cluster analysis address the interdependency
among variables. Cluster Analysis Steps
Formulate the problem, collecting data and choosing the variables
Factor Analysis to analyze.
Factor analysis is a very popular technique to analyze
Choose a distance measure. The most common is the Euclidean
interdependence. Factor analysis studies the entire set of
distance. Other possibilities include the squared Euclidean distance,
interrelationships without defining variables to be dependent or
city-block (Manhattan) distance, Chebychev distance, power
independent. Factor analysis combines variables to create a smaller
distance, and percent disagreement.
set of factors.
Choose a clustering procedure (linkage, nodal, or factor
Mathematically, a factor is a linear combination of variables. A
factor is not directly observable; it is inferred from the variables.
The technique identifies underlying structure among the variables, Determine the number of clusters. They should be well separated
reducing the number of variables to a more manageable set. Factor and ideally they should be distinct enough to give them descriptive
analysis groups variables according to their correlation names such as professionals, buffs, etc.
The factor loading can be defined as the correlations between the Profile the clusters.
factors and their underlying variables. Assess the Validity of the Clustering
A factor-loading matrix is a key output of the factor analysis. An The format of the marketing research report varies with the needs
example matrix is shown below. of the organization.
The report often contains the following sections:
Factor 1 Factor 2 Factor 3 Authorization letter for the research
Variable 1 • Table of Contents
Variable 2
• List of illustrations
Variable 3
• Executive summary
Column's Sum of Squares:
• Research objectives

Column’s Sum of Squares • Methodology

Each cell in the matrix represents correlation between the variable • Results
and the factor associated with that cell. The square of this correlation • Limitations
represents the proportion of the variation in the variable explained
• Conclusions and recommendations
by the factor. The sum of the squares of the factor loadings in
each column is called an eigen value. An eigen value represents the • Appendices containing copies of the questionnaires, etc
amount of variance in the original variables that is associated with Data is then processed in order to summarise the results
that factor. The communality is the amount of the variable variance It seeks to determine how units covered in the research project
explained by common factors respond to the items under investigation.
A rule of thumb for deciding on the number of factors is that It could be
each included factor must explain at least as much variance as does
• Univariate
an average variable. In other words, only factors for which the
• Bivariate

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• Multivariate • Formulating an objective or theoretical framework,

Interpretation of Results • analytical models,

• Research questions, and hypotheses and identifying the
information needed.
This process is guided by
• Discussion with management and industry experts,
• Analysis of secondary data,
• Qualitative research, and
• Pragmatic considerations

Step 3: Research Design Formulation

A research design is a framework or blueprint for conducting the
marketing research project. It details the procedures necessary for
obtaining the required information, and its purpose is to design a
study that will test the hypotheses of interest, determine possible
It is the “so what”? of research. answers to the research questions, and provide the information
Research is wasted if it is not used in decision making or influencing needed for decision making.
actions. Not only the results should be interpreted into action Conducting exploratory research precisely defines the variables,
recommendations but the recommendations must also be and designing appropriate scales to measure them are also a part
communicated in an understandable manner. Results should be of the research design
presented in as simple manner as possible. The issue of how the data should be obtained from the
Basic Requirement respondents (for example, by conducting a survey or an
experiment) must be addressed. It is also necessary to design a
1. Researcher must understand the proper interpretation of
questionnaire and a sampling plan to select respondents for the
research results and the assumptions embodied in them.
2. Researcher should understand the kinds of questions
More formally, formulating the research design involves the
research can handle and the type of structure required making
following steps:
a problem “researchable”
1. Definition of the information needed
3. Researcher must be capable of appraising the feasibility of
research proposals 2. Secondary data analysis
3. Qualitative research
Special Case
In management maximum research is done in the field of 4. Methods of collecting quantitative data (survey, observation,
marketing. and experimentation)
We conceptualize the marketing research process as consisting of 5. Measurement and scaling procedures
six steps. Each and every step in market research we will be doing 6. Questionnaire design
in detail. First let us discuss these briefly now. 7. Sampling process and sample size
Step 1: Problem Definition 8. Plan of data analysis
The first step in any marketing research project is to define the
Step 4: Fieldwork or Data Collection
problem. In defining the problem, the you should take into
Data collection involves a field force or staff that operates either in
the field, as in the case of personal interviewing (in-home, mall
• The purpose of the study, intercept, or computer-assisted personal interviewing), from an
• The relevant background information,the information office by telephone (telephone or computer-assisted telephone
needed, and interviewing), through mail (traditional mail and mail panel
• How it will be used in decision-making. surveys with pre-recruited households), or electronically (e-mail
or Internet).
Problem definition involves discussion with the
Proper selection, training, supervision, and evaluation of the field
decision makers,
force help minimize data-collection errors.
• Interviews with industry experts,
Step 5: Data Preparation and Analysis
• Analysis of secondary data, and
Data preparation includes the editing, coding, transcription and
• Perhaps, some qualitative research, such as focus groups. verification of data. Each questionnaire or observation form is
Once the problem of investigation has been precisely defined, the inspected or edited and, if necessary, corrected. Number or letter
research can be designed and conducted properly codes are assigned to represent each response to each question in
Step 2: Development of an Approach to the Problem the questionnaire. The data from the questionnaire are transcribed
Development of an approach to the problem includes or key punched onto magnetic tape or disks, or input directly into

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the computer. The data are analyzed to derive information related

to the components of the marketing research problem and, thus,
provide input in to the management decision problem.
Activity 2
Step 6: Report Preparation and Presentation Explain the importance of interpretation of results?
The entire project should be documented in a written report that
addresses the specific research questions identified, describes the
approach, the research design, data collection, and data analysis
procedures adopted, and presents the results and the major
findings. The findings should be presented in a comprehensible
format so that management can readily use them in the decision
making process. In addition, an oral presentation should be Activity 3
made to management using tables, figures, and graphs to enhance Name and briefly discuss the five steps of research process?
clarity and impact
Errors in Research Process
There are 2 types of errors
a. Sampling error
b. Non sampling error
Sampling error is the difference between sample value and
corresponding population value.
Non sampling error are errors in the difference stages of
Activity 4
a. Defective problem design Explain with the help of a suitable example the need for
b. Defective population definition introducing two types of environmental conditions in a research
c. Frame set problem?
d. Surrogate information error
e. Non response error
f. Measurement error
g. Experimental error
h. Poor questionnaire design
i. Interview bias
j. Data processing error
k. Data analysis errors The environmental conditions specified in the research problem
l. Interpretation errors are of two types:
References and Further Readings i. Those beyond firm’s control
1. Boyd, westfall, and stasch, “Marketing Research Text and ii. Those within the firm’s control
Cases”, All India Traveller Bookseller, New Delhi.
2. Brown, F.E. “Marketing Research, a structure for decision
making”, Addison – Wesley publishing company
3. Kothari, C.R. “Research Methodology-Methods and
Techniques”, Wiley Eastern Ltd.
4. Stockton and Clark, “Introduction to Business and
Economic Statistics”, D.B.Taraporevala Sons andCo. Private Activity 5
Limited, Bombay. A local supermarket has experienced a decline in unit _sales and
little change in rupee value sales. Profits have almost vanished.
5. Dunn Olive Jean and Virginia A Clarck, “Applied Statistics”
The chief executive in searching for ways to revitalize the operation
John Wiley and Sons.
was advised to increase the number of hours the market is open
6. Green Paul E and Donald S. Tull, “Research for Marketing for business. He comes to you for _advice in structuring a research
Decisions” Prentice Hall of India, New Delhi problem that will provide relevant information for decision-
Activity 1 making.
The definition of the problem comprise Define the problem, taking care to:
a. State the relevant question
b. Enumerate the alternative answers,

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c. Clearly define the units of analysis and characteristics of

What are the relevant “ states of nature” which would lead to the
selection each alternative answer?

Activity 6
A shampoo manufacturing company wishes to test two types of
makes in order to determine which is the best one .
A. Propose and defend a precise definition of “best”
B. What is the set of hypothesis that should be tested?
C. What action would be associated with each hypothesis?

Activity 7
Define and state the research problem for the following case:
“Why is the productivity in Japan so much higher than in India”?
Think about problem in a broader sense and narrow down the
research problem.

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