Basics Of Business Research

Basic Concept & Business Research Vocabulary Hypothesis a proposition (statement) that is empirically testable Deductive Reasoning is the logical process ofderiving a conclusion about a specific instance based on a known general premise or something known to be true. (e.g. all students are human being--- Daneesh is a student, then we can deduce that Daneesh is a human being)

Inductive Reasoning

is the logical process of establishing a general proposition on the basis of observation of particular facts. (e.g. all students that have ever been seen are human beings; therefore, all students are human beings)

Research Vocabulary (cont.) Variables Anything that may assume differentnumerical values (e.g. gender, religion, age etc.) Independent Variables Dependent Variables Moderating Variables\ -- Example: The switch to commission from a salary compensation system (IV) will lead to increased sales productivity (DV) per worker, especially among young workers(MV)

The Research Process

THE RESEARCH PROCESS

Every research project is different and unique. However, research procedures and activities are common and constitute the research process .

Research Process Defined:

This process: is well-organized sequence of 9 steps involved in the systematic collection and analysis of marketing data. provides a description of how a marketing investigation is designed and implemented, and helps to guide the execution of a research project.

The Research Process: 9 Steps

1. 2. 3. 4. 5. 6. 7. 8. 9.

Define the Problem Establish Research Objective Determine Research Design & Data Sources Determine Methods & instrument of Data Collection Determine Sample Plan and Sample Size Data Collection Data Processing Data Analysis Prepare and Present Final Report

The Research Process

A 9 step process: there is nothing magic about 9 steps Not all studies use all 9 steps Few studies follow the steps in order

Step 1: Define the research problem The very first, and the most important step in research: A problem well-defined is half solved Anonymous The formulation of the problem is often more essential than its solution Albert Einstein Nature of the problem determines the type of study to conduct. Symptoms, for example, declining sales, profit, market share, or customer loyalty are not problems. Loss of market share is a symptom; reason for the loss is the problem.

Step 1: Define the research problem A research problem must be accurately and precisely defined, otherwise the task of designing a good research difficult. Marketing problems may be difficulty-related or opportunity-related. For both, the prerequisite of defining the problem is to identify and diagnose it.

Step 2: Establish Research Objectives If you do not know what you are looking for, you wont find it Research objectives, when achieved, provide the information necessary to solve the problem identified in step 1. Research objectives state what the researchers must do. In establishing research objectives, the researcher must answer the following questions:What specific information should the project provide? If more than one type of information will be developed from the study, which is the most important? What are the priorities?

Step 2: Establish Research Objectives

When specifying research objectives, development of hypotheses, might be very helpful. When achieved, objectives provide the necessary information to solve the problem.

Step 2: Establish Research Objectives Example of Subaru Motors America Management problem: What can Subaru do to expand its share of the automobile market? To conduct market research need to define the problems more precisely Q.1 What needs do buyers of passengers cars, and station wagons seek to satisfy? Q.2 How well do existing automobile product offerings meet these needs?

Step 3: Research Design Research Design step involves the development of a research plan for carrying out the study. There are a number of alternative research designs. The choice will largely depend on the research purpose.

Step 3: Research Design

M R ETIN R A K G ESEA C RH

Q A TIVER U LITA ESEA C RH

Q A TITA U N TIVER ESEA C RH

EXPLO A R R TO Y Focus G roup; O bservation; O thers.

D R ESC IPTIVE Surveyresearch

CU L A SA Laboratory Experim ent Field Experim ent

Step 3: Research DesignQualitative (focus groups and depth interviews) generally used for exploratory purposes small number of respondents Much more interactive and involved 2-way conversations and engagements generally softer and yields more subjective information

Step 3: Research DesignExample: Rose Petal Focus Group initiation of a new product line tissue of a different colorCharacteristics of Focus Groups: Within closed doors Moderated Conducive environment Representatives of target segment

Step 3: Research DesignQuantitative (Survey and Questionnaires) generally used to draw conclusions tests a specific hypothesis uses random sampling to infer for population involves a large number of respondents Numeric research. Very formal

Step 4: Specify the information required

After defining the problem the researcher must determine what kind of information will best meet the research objectives. Secondary information Primary information

Step 4: Specify the information required Secondary data: have previously been gathered by someone other than the researcher and/or for some other purpose than the research project at hand Internal e.g. such as invoices and warranty cards, Customer records, sales data External e.g. Public commercially available data Example:

Step 4: Specify the information requiredAdvantages Disadvantages

Secondary data are obtained quickly. Secondary data are inexpensive relative to primary data. Secondary data are usually available. Secondary data enhances existing primary data. Secondary data may achieve the research objective.

Incompatible reporting unitsneed zip code data and only have County data. Measurement units do not matchneed per capita income and only have household income. Class definitions are not usableneed to know percent of population with income above $100k and only have $50k and over.Outdated Data

Step 4: Specify the information required Primary data: data:Refers to the information that is developed or gathered by the researcher specifically for the research project at hand. Some common types of primary data: Demographic and socio-economic characteristics Psychological and life-style characteristics Attitudes and opinions Awareness and knowledge like brand awareness Intention, like purchase intention, while useful, may not be a reliable indication of actual future behavior Motivation this is more reliable than a persons behavior, so motivation is a better predictor of future behavior than is past behavior. It is a precursor to behavior. Past behavior.

Step 5: Design the Information collection methods Business research information may be collected in many ways:1. 2. 3. 4. 5. 6. 7. Secondary Research Focus Group Interviews Mail Surveys Telephone Interviewing Personal Interviewing Product Placement Test Marketing

Step:5 Sample Design Most field market research relies on taking a sample from the stated population. Population is not necessarily a group of individual human beings it is a statistical term covering people, companies, school, etc. from which the sample is to be drawn. Sampling strategy involves three stages: Defining the population or target group. Determining sample size Choosing the right type of sample.

Probability SamplesSimple random sample:Every member has a known and equal chance of selection

Stratified sample:Population is divided into mutually exclusive groups (such as gender or age), and then random samples are drawn from each group.

Cluster sample:Population divided into mutually exclusive groups (such as geographic areas), then random sample of clusters is selected. The researcher then collects data from all the elements in the selected clusters or from a probability sample of elements within each selected cluster.

Systematic sample:A list of the population and a skip interval is obtained. The skip interval is obtained by dividing the sample size by the population size

Non-probability SamplesConvenience sample:The researcher selects the easiest population members from which to obtain information.

Judgment sample:The researchers selection criteria are based on personal judgment regarding accuracy of information.

Quota sample:The researcher finds a prescribed number of people in several categories.

Snowball sample:The selection of additional respondents is made on the basis of Referrals from the initial respondents. This is used when a desired type of respondent is hard to find.

Primary Data Primary data collection process Data collection methods surveys qualitative researchpersonal interviews & focus groups observation Experiment Design study materials (e.g., questionnaire design) Sampling Data collection

Step 6:Data Collection Data collection is very important because, regardless of the data analysis methods used, data analysis cannot fix bad data Non-sampling errors may occur during data collection. These are related to poor design and/or execution of the data gathering. Sampling errors may occur based purely on chance

Step 6:Data Collection

Non-sampling errors by interviewers or respondents Intentional Unintentional

Such non-sampling errors can be reduced through quality control techniques.

Survey Survey Data collection by asking people questions personal interview telephone survey mail survey Internet survey

Advantages large size data, flexibility

Disadvantages errors in questionnaire, expensive, response error

Personal Interview Survey (cont.) Personal interview Advantages flexible, more information Disadvantages expensive, time-consuming, interviewer bias e.g., shopping mall intercept: a convenient, low-cost method but lacks representativeness

Mail Survey Survey (cont.) Mail survey Advantages low cost Disadvantages low response rate less control

Internet Survey Survey (cont.) Internet survey Advantages low costmuch lower even than mail Disadvantages low response ratelarge response bias Data reliabilitydifficult to verify if personal information is true

Focus Group Interview Qualitative research (cont.) Focus group interview Loosely structured group discussion led by interviewer The discussion is observed or videotaped Best for preliminary research Individual depth interview: similar interview with a single person Difficult to understand without seeing it, so we have a video.

Step 7: Data Processing Data Entry Data Cleansing Summarization Editing Coding Error Assessment Reliability/Validity

Step 7: Data Processing Tabulating

Simple tabulations Cross tabulationsCross tabulation is the most commonly utilized data analysis method in the research. This technique divides the sample into sub-groups to show how the dependent variable varies from one subgroup to another.

Hypothesis Testing Tests of Statistical Significance

Step 8: Data Analysis Purpose of the analysis is to interpret and draw conclusions from the mass of collected data Must select appropriate analytic tools to match data, research objectives, and information needs

Step 9: Prepare and Present the Final Research Report The last step is one of the most important phases of business research. Its importance cannot be overstated because it is the report, or its presentation, that properly communicates the results to the client.

ELEMENTS OF A RESEARCH Report1. 2. 3. EXECUTIVE SUMMARY MANAGEMENT PROBLEM OBJECTIVESTypes of Data Relevance

4.

Value of Information. (So What?) RESEARCH APPROACH Data Collection Method Measurement Instrument Sample Analytical Technique

5.

FINDINGS

ERRORS IN BUSINESS RESEARCH

Errors in Business Research Mistakes done while performing each step of business research process are called business research errors. The errors may result in serious misinformation being communicated to managers. The control of these errors is of critical concern in business research.

Basic Types of Errors Sampling Errors Non sampling Errors

Sampling Errors Errors related to business research based on sampling of people, product or store etc are called sampling errors. Sampling errors are measurable. Sampling errors decrease with increase in sample size. The major reason of sampling error are: Sample too small. Sample not representative. Inappropriate sampling method used.

Non sampling Errors Non sampling errors are all the errors that may occur in the marketing research process except the sampling error. Non sampling errors are not measurable. Non sampling errors increase with increase in sample size. One must be aware of following: What non sampling errors may occur Effect of errors on results Steps to reduce errors

The Effects of Non sampling Errors As Non sampling errors increases with sample size they put a bias on results of unknown direction and magnitude. Can render the results of the study useless.

Types of Non sampling Errors Faulty Problem Definition. Defective Population Definition Frame non representative of the population Non response Error Measurement Error Improper Casual Inference Poor Questionnaire Design