Business Research Methods

Situation I :Adv. Decision

When Columbia Pictures Industries, Inc., was planning the promotion for its new movie Starman, it had to decide how much to spend for advertising the movie and when the advertising should occur. "One of Columbia's biggest marketing weaknesses in the past was to spend too much in advertising its films .... It now carefully tracks the effects of its spending in twice-aweek polls of moviegoers. "(Columbia's marketing vice-president) believes that a movie that opens nationally like Starman should be known by at least 60% of the public by opening day. In the weeks before such a movie's release, his department tracks awareness of the film-by region, age group, and sex. If awareness builds faster than expected, Columbia cuts back its promotion .... If it doesn't pick up fast enough, spending is increased. 2

Situation II: Adv. Decision

The A&P food store chain introduced a new nationwide advertising campaign to show consumers its stores were clean, were staffed by friendly employees, and were well stocked with fresh food offered at value prices. "These commercials are the product of a variety of surprisingly extensive motivational research techniques .... Consumers were shown a simple sketch of a woman about to enter a supermarket. They were asked what the woman was thinking and how she felt. In another test, subjects were shown photographs of people, told they depicted both A&P customers and those who shopped elsewhere, and were then asked to separate the pictures into two groups and explain why. Some subjects were also asked to imagine A&P as a person: Is it a man or a woman; what kind of work does he or she do? "The results were not the stuff of happy A&P marketing conferences. The tests showed that consumers considered supermarket shopping to be drudgery and that the A&P chain, in particular, was seen as a grandmother who is a bit corny and behind the times. Perhaps worse, its stores were considered more expensive and less efficient than the competition's."
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Situation III
Although the United States represents the largest travel market in the world, only 2 percent of the country's travelers go to Canada for vacations. To learn why so few American travelers visit Canada, the Canadian tourism bureau interviewed 9,000 Americans who vacationed regularly. What emerged from these hour-long, in-home interviews was " ... the general perception of Canada as clean, safe, and dull, with immense stretches of wilderness broken up by cities that closed down at 5 PM. A typical comment was, 'Canada doesn't present itself as an exciting place, with a lot of activity like New York .... or California for the craziness. There's nothing I can identify with Canada. It's just. ... Canada.'" What resulted from the research was a $14 million advertising campaign " .... to jazz up Canada's public persona. Out went the moose and the mountains and in came the nightclubs, Broadway-type theaters, Old World architecture, French cities and sports opportunities."
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Situation IV: Adv. Decision

Diet Rite had less than a 1 percent market share, which was much smaller than either Diet Coke or Diet Pepsi. "Diet Rite had tried ads that pushed taste, lower price, even its low calorie content, but had not found an effective way to distinguish the product from its powerful competitors'. It was looking for an emotional hook. "So Diet Rite's agency ... began by interviewing dozens of women who were dieters. The interviewers, clinical psychologists, reported that these women were convinced their bodies were unattractive, or they used food for a substitute for a balanced family life, or they were raised in homes where food was used as a punishment or reward. All said they felt dieting was difficult and made them feel more vulnerable. "On the basis of these interviews (the agency) recommended that the Diet Rite campaign not show gorgeous women in skimpy bathing suits because women with poor self-images could not relate to them. The agency also decided that viewers would empathize with other dieters who appeared vulnerable and hardworking." 5

Situation V: New Product Development

When the Campbell Soup Co. first developed Juice Works, a line of fruit juices for children, " ... 200 students in elementary schools in New Jersey helped Campbell develop the new drinks by tasting and rating them. On scorecards filled with drawings of faces, the children gave the early samples low marks-a lot of frowns and children holding their noses and signaling thumbs down. Campbell modified the recipes until the scores 6 improved."

Introduction to Research
Research is the process of finding solutions to a problem after a thorough study and analysis of the situational factors

Business research
It can be defined as a systematic and objective process of gathering, recording and analyzing data that provides information to guide business decisions. It is used to understand the market trends. To find out the optimal marketing mix, devise effective HR policies, or to find the best investment options.
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Basic research
Basic research refers to focused systematic study or investigation undertaken to discover new knowledge and establish facts or principles in a particular field. It is primarily aimed at gathering knowledge. Eg: Understanding the consumer buying process Examining the consumer learning process.
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Applied research
It refers to investigation undertaken to discover the applications and uses of theories, knowledge and principles in actual work or solving problems. It is used to answer a specific question, determine why something failed or succeeded, solve a specific problem. For eg: Evaluating the impact of a training program on employee performance Examining consumer response to direct marketing programs
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Some more types of research..

Exploratory research Descriptive & Analytical research Quantitative & Qualitative research Conceptual & Empirical research

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Why is it important for managers to know about research?

Solve problems Decision making tool Competition Risk Investment

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Why Business/Marketing Research has evolved and grown

Managers are separated from their final consumers. They need information from their final consumers. Target Market Product & Services Price Distribution Promotion
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What is Marketing Research

.is the process of designing, gathering, analyzing, and reporting information that may be used to solve a specific marketing problem. (Burns & Bush) is the function that links the consumer, customer, and public to the marketer through information information used to identify and define marketing opportunities and problems; generate, refine, and evaluate marketing actions; monitor marketing performance; and improve the understanding of marketing as a process. (AMA)

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Market Research during different phases of administrative process

Setting goals and Establishing strategies Developing a plan Putting the plan in action Evaluating the plans effectiveness

Phase I

Phase II
Phase III Phase IV
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Factors affecting Business Research

Time constraint Availability of resources Nature of information sought Benefits versus costs

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Business Research Process

Problem & Objective Formulation Research Proposal & Hypotheses Formulation Research Design & Methods Select sample procedure Data collection Analysis & interpretation of data Research Report
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Problem Formulation
Research Problem refers to some difficulty which is impacting towards negativity on the business or Management and requires best solution. Components of research problem are: There must be some objective to attain. There must be alternative means for obtaining the objective, i.e., there must be more than one problem which can lead to generation of objective. There must be some doubt in the mind of researcher as to the selection of alternative. i.e. researcher must know that which problem is effecting more to the business.

1) 2)

3)

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Establishing the objective

After defining the problem, next stage is of establishing the objective. Defining of Objective is the most critical stage, as whole research is to be conducted to the objective.

Example: the scope for brining about lasting changes in attitude by means of training programs.
(Problem: prior to objective that Projects are not completing on time or conflict level is increasing)

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Sources of Problem
1) 2) 3) Reading: reading critical articles related to the problem scenario. Experience: Experienced researchers can understand the scenario and can formulate problems easily. Exposure to field situations: Researcher has to visit field and sometimes has to do internship to understand the market closely and practically. Consultation to experts: discuss scenario to Experts and Business executives. Business executives interacts more to customers so can understand market easily. Brainstorming: discussing among the group about the case.
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4)

5)

Process of Identification of Problem

1) Selecting the discipline: Specify in which discipline research is to be done. Like: Marketing, Finance, HR, Operations, Economics etc Particular aspects of the selected subject: Here concentration is more into the area of discipline which has been specified. Identification of two or more specific topics in the selected broad area: This stage requires grasp of the area and awareness about the related problems and work which already has been done. (Sources of problem can be used on this stage)

2) 3)

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Criteria of Selection
Internal Criteria Researchers interest Researchers competence Researchers own resources External Criteria Researchability: Problem should be researchable Importance & Urgency Novelty or Originality Feasibility Usefulness and Social relevance

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Management Research Question Hierarchy

Discover the Management Dilemma Discover the Management Question Discover the Research Question Exploration
Refine the Research Question

Exploration

Stage 1 of Research Process

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Formulating the Research Question

Discover Management Dilemma Exploration Review published sources and interview information to understand true dilemma.

Identify symptoms rather than problems

Discover Management Question

Using collected exploratory Information to word the dilemma into question

Exploration Clarify the possible management action that might be taken to solve the dilemma.

Define Several management questions may be taken here. Research to Questions Each question is an alternative action that may be used 24
solve the dilemma

Selecting between specific alternatives under consideration

Using Typical Research and then results will tell about the research question out of available questions Research from the past behavior and including some Quantitative techniques to research further. (Decision tree analysis)

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Research Proposal
Research Proposal is a blue print for conducting and controlling research. It is considered as a research plan to serve as a mean of communication between the researcher and the research supporter. Purpose of Research Proposal
Need of the particular research Beneficiaries of research Kind of data to be collected and the means Type of analysis that will be done Duration, facilities, and funds required to carry out the research Credentials of the proposals

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The Content of Research Proposal

Executive Summary Research Questions & Objectives Literature Review Hypotheses Generation Importance/Benefits of the Study Research Design/Method Time scale and Budget Data Analysis Bibliography and Appendices

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Developing the hypotheses

It is a statement based on some presumption about the existence of a relationship between two or more variables that can be tested through empirical data. When a researcher is developing a hypothesis, he/she will assume an answer for a particular research questions and then test for its validity.
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Developing the hypotheses

A hypothesis makes the research question clearer to the researcher. For eg: if the research question is why are the sales of refrigerators going up during winters? In this case the hypothesis could be the sales of refrigerators are going up during winters during off season discounts
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Types of Hypothesis
2) Relational
Statements that describe the relationship between two variables with respect to some case Foreign (variable) refrigerators are perceived to be of better quality (variable) by Indian consumers (case)

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Research Hypothesis
Hypotheses is the tentative proposition whose validity remains to be tested. Example : Sale of cars is decreasing.

Types of Hypotheses
1) Descriptive Hypotheses: Propositions that describes the characteristics (Size, form or distribution) of a variable like object, person, organization, situation or event. Ex.: The rate of unemployment among non graduates is higher than that of graduates

80% shareholders of HLL favour increasing the companys cash dividend Can also be stated as research question
Do shareholders of HLL favour an increased cash dividend?
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Types of Relational Hypothesis

Two types: Correlation & Causal Correlation
Merely states that variables occur together without implying that one causes the other
People in Kerela give more importance to education than people in Punjab In an office old employees are more responsive than young employees

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Types of Relational Hypothesis

Causal (or Explanatory)
There is an implication that existence of (or a change in) one causes or leads to a change in the other
Causal variable is called Independent variable and the other Dependent variable Advertisement causes higher sales Increase in income leads to higher savings
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3)

Working Hypotheses: initial statements while planning, which are to be validated.

Null Hypotheses: These are hypothetical statements denying what are explicitly indicated in working hypotheses. They state that no difference exist between the parameter and the statistics Statistical Hypotheses: Statements about statistical population and derived from a sample. Like number of components from any machine Common-sense Hypotheses: Empirical uniformity perceived through day-to-day observation.

4)

5)

6)

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Sources of Hypotheses
Hypotheses can be derived from various sources: 1) Theory: It gives direction to research by stating what is known. Ex: Higher the earning per share, more favorable is the financial leverage The optimum capital structure is the combination of debt and equity which leads to the maximum value of the firm Observation Personal Experience Finding of Studies State of knowledge Culture Continuity of research

2) 3) 4) 5) 6) 7)

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Characteristics of a Good Hypotheses

Conceptual clarity Specificity Testability Availability of techniques Consistency Objectivity Simplicity
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Hypotheses Development
Rules for constructing Hypotheses:

1)

Link two or more formal propositions through a shared independent or dependent variables where possible.
Analyse variables through their relationship Always consider alternative operations that might be more appropriate for a given variable

2) 3)

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Testing of Hypotheses
Validation of Research testing is required. For testing Hypotheses has to be assumed. In hypotheses no prior facts are being considered, however they come systematically. But these facts are used in our hypotheses only after testing. Attitude of researcher: He should not be biased for the hypotheses generated by him infect should use scientific methods to validate the hypotheses. Testing process of hypotheses forms the major part of research process. It consists of operationalization of the concepts, statistical analyses of data and drawing inferences from the results.
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Using Secondary Data

Secondary data: information that has previously been gathered by someone other than the researcher and/or for some other purpose than the research project at hand

Classification of Secondary Data

Internal secondary data: data that have been collected within the firm . Internal databases: databases (collection of data and information describing items of interest) consisting of information gathered by a company typically during the normal course of business transactions e.g.: Salespersons call reports Salespersons expense accounts Product features etc

Classification of Secondary Datacont.

External secondary data: data obtained from outside the firm Types: Published: sources of information prepared for public distribution and found in libraries or a variety of other entities Syndicated Services Data: data provided by firms that collect data in a standard format and make them available to subscribing firms External Databases

Classification of Secondary Datacont.

Types of External Secondary Data

External secondary data External Databases: databases provided by outside firms; many are now available online (online information databases) Bibliographic databases..citations by subject, i.e. ABI Inform Numeric or statistical databases, 2007 Census Directory or list databases, AMA membership list Comprehensive databases, Contain all of the above

Advantages of Secondary Data

Obtained quickly (compared to primary data gathering) Inexpensive (compared to primary data gathering) Usually available Enhances existing primary data

Disadvantages of Secondary Data

Mismatch of the units of measurement

Need daily data yet only monthly available, need incomes of $75,000 and over only available $50,000 and over

Differing class definitions used Need users in between heavy, medium or light users Timeliness (how current is the secondary data) Lack of information needed to assess the credibility of the reported data

Different types of major sources of secondary data

Documentary
Written Material
Example: Organization's records such as personnel or production Organizations communication such as notes, e-mails, letters, reports of committees, books, journals, newspapers.

Non-Written Material
Example: Media accounts including television and radio Taped interviews, Videotaped observations.

Multiple sources
Area based
Example: Financial times country reports, Govt. publications, Journals

Time series based

Example: Industry statistics & reports Census of population & employment
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Different types of major sources of secondary data (Contd.)

Survey
Census
Example: Govt. Census: Census report of population & employment

Continuous and Regular survey Example: Govt. survey, General household survey
Organization Employee Attitudes

Ad hoc surveys
Example: Govt. Surveys, Organizations survey, Academic survey

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Locating Secondary Data Sources

Step 1: Identify what you wish to know and what you already know about your topic. Develop a list of key words and names. Begin your search using several library and Web sources. Compile the literature you have found and evaluate your findings. If you are unhappy with what you have found or are otherwise having trouble and the reference librarian you contact has not been able to identify sources, use an authority (if available). Report results.

Step 2: Step 3:
Step 4: Step 5:

Step 6:

Evaluating Secondary Data

What was the purpose of the study? Who collected the information and when was this done? What information was collected (questions, scales, etc.)? How was the information obtained (sampling frame, method of sample draw, communication method, resulting sample, etc.)? How consistent is the information with other published information?

Evaluating secondary data

1) Overall Suitability Does the data set contains the information you require to answer the questions and to meet the objectives? Do the measures used match those you require? Does the data set cover the population that is the subject of your research? can the useful data be separated from the unwanted data? Are data available for all the variables of research?

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Evaluating secondary data

2) Precise Suitability Reliability of data is the methodology clearly described? if sampling was used then what was the sample size, procedure for finding sampling, sampling errors, and response rate? Is copy of questionnaire and interview checklist available? does researcher is clear about that how data is analysed and complied data is compatible for your research or not?

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Evaluating secondary data

3) Cost and benefits Financial and time costs of obtaining the data whether data is computer friendly or not? Do the overall benefits of using this secondary data source outweigh the associated costs? At the time of assessing cost and benefits of secondary data, then one thing should be kept in mind that secondary data is not always reliable and can not always give appropriate results as expected by researcher.

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