MK0013-SLM-Unit-04

Marketing Research Unit 4

Sikkim Manipal University Page No. 64

Unit 4 Research Process and Design

Structure

4.1 Introduction

Objectives

4.2 Research Design

4.3 Need for a Step by Step Process

4.4 Steps in Research Process

4.5 Meaning of Research Design

4.6 Types of Research Design

4.7 Research Design and Marketing Decision Process

4.8 Types of Decision Models

Decision-making under Certainty

Decision-making under Risk

4.9 Choosing a Good Research Design

4.10 Summary

4.11 Terminal Questions

4.12 Answers

4.1 Introduction

In the earlier units, you came to know about the marketing research and

marketing information system. In this unit you will study about the research

process and its design.

In this unit you will learn about the first phase in planning the research

project, which is formulating a research design. Based on causality,

research designs have been divided into four categories of exploratory,

descriptive, causal and experimental designs. While exploratory and

descriptive studies provide information on events and attributes from which

inferences can be drawn, they can only offer tenuous conclusions.

Objectives

After studying this unit, you should be able to:

Explain research process

Describe various steps in research process

Define research design

Explain research design types



4.2 Research Design

Research design is “the framework or plan for a study that is used as a

guide in collecting and analyzing the data it is blueprint that is followed in

completing a study.”

Features of research design: Research design

is a plan specifying the sources and types of information relevant to the

research problem.

is a strategy specifying which approach will be used for gathering and

analyzing the data.

also includes the time and cost budgets since most studies are done

under these two constraints.

Need for research design: The various needs of research designs are:

It facilitates the smooth sailing of the various research operations,

thereby making as efficient research as efficient as possible yielding

maximal information with minimal expenditure of effort, time and money.

It gives us a plan in advance of data collection and analysis for our

research project.

It has a great bearing on the reliability of the results arrived at and as

such constitutes the firm foundation of the entire edifice of the research

work.

It helps the researcher to organize his ideas in a form of whereby it will

be possible for him to look for flaws and inadequacies.

Self Assessment Questions

1. Research design is a _________ for a study.

2. Research Design is a plan specifying the _________ and types of

_________ relevant to the research problem.

4.3 Need for a Step by Step Process

A researcher is often required to think a few steps ahead, because various

steps in research process are inter-woven into each other and each step will

have some influence over the other steps. In marketing research, even

though our focus is on one particular step, other interrelated steps of

operations are also being looked into simultaneously. As we complete one

activity or operation, our focus naturally shifts from it to the subsequent one,

i.e. the focus is not concentrated exclusively on one single activity or



operation at any particular point of time. The research process provides

systematic, planned approach to the research project and ensures that all

aspects of the research project are consistent with each other.


3. A researcher is often required to think _________.

4. The research process provides _____ approach to the research project.

4.4 Steps in Research Process

Figure 4.1: Steps in Marketing Research Process

Being a systematic inquiry marketing research requires careful planning of

the orderly investigation process. Though it is an over simplification to

assume that all research processes would necessarily follow a given



sequence marketing research often follows a generalised pattern which can

be broken down and studied as sequential stages.

Figure 4.1 gives the stages in the marketing research process. As shown in

the figure, research process begins with the identification. The research task

may clarify a problem or define an opportunity.

Defining the problem

You should first define the problem clearly since it is of crucial importance in

marketing research as in terms of both time and money research is a costly

process. Careful attention to problem definition allows the researcher to set

the proper research objectives which in turn facilitate relevant and economic

data collection.

Statement of research objectives

After clarifying and identifying the research problem, you must make a

formal statement of research objectives. Research objectives may be state

in qualitative or quantitative terms and expressed as research question

statements or hypothesis. For example, the research objective "to find out

the extent to which the sales promotion programmes affected sales" is a

research objective expressed as a statement. A hypothesis on the other

hand is a statement that can be refuted or supported by empirical findings.

Planning the research design

In this stage you must determine the type of sources of information needed,

the data collection methods (surveys or interviews for example), the

sampling methodology and the timing and possible costs of research. The

design chosen may be exploratory, descriptive, quasi-experimental or

experimental design categories which again include a number of alternative

methods.

Planning the sample

Sampling involves procedures that use a small number of items or parts of

the population to make conclusion regarding the whole population. The first

sampling question that needs to be asked is who is to be sampled, which

follow from what is the target population. Defining the population may not be

as simple as it seems.

Data collection

The data collection process follows the formulation of research design

including the sampling plan. Data which can be secondary or primary can be



collected from tools that are classified into two broad categories, the

observation methods and the communication methods.

Data processing and analysis

Data processing begins with the editing of data and coding. Editing involved

inspecting the data collection forms for omission, legibility and consistency

in classification.

Analysis represents the application of logic to the understanding of data

collected about the subject.

Formulating conclusion, preparing and presenting the report

Finally you have to interpret the information for drawing conclusions to be

used in managerial decisions. The research report should effectively

communicate the research findings and need not necessarily include

complicated statements about the technical aspect of the study and

research methods.


5. The first step in marketing research process is _________.

6. Data processing begins with the _________ and _________.

7. Data which can be _________ or _________.

4.5 Meaning of Research Design

A research design is the framework, a blueprint for the research study which

guides the collection and analysis of data. To be effective, a research

design should furnish at least the following details:

A statement of objectives of the study or the research output.

A statement of the data inputs required on the basis of which the

research problem is to be solved.

The methods of analysis which shall be used to treat and analyze the

data inputs.

The objective is to calculate the margin earned on sales when this

discount is offered and compare it with the margin when discount is not

being offered.

The data to be collected over a period of time



Activity 1:

What are the major problems involved in the undertaking of a

marketing research study designed to facilitate the segmentation of a

given market? Explain.


8. A research design should furnish statement of _________ of the study

or the research output.

9. A research design is the framework for the research study which guides

the _________ and _________ of data.

4.6 Types of Research Design

There are four types of research designs which are broadly classified as:

Exploratory Design

Descriptive Design

Causal Design

Experimental Design

Exploratory Research Design: The exploratory research design involves

getting a feel of the situation and emphasises a discovery of ideas and

possible insights that may help in identifying areas of further rigorous study.

For example a food product manufacturer, wanting in introduce a breakfast

cereal may be in knowing the desirable attributes of such a product before

really defining the product concept. The main objective of the exploratory

research is to fine tune the broad problem into specific problem statement

and generate possible hypotheses. It therefore, gives useful direction for

farther research. The exploratory studies are mainly used for:

Providing information to enable a more precise problem definition or

hypothesis formulation.

Establishing research priorities.

Giving the researcher a feel of the problem situation and familiarizing

him with the problem.

Collecting information about possible problems in carrying out research,

using specific collection tools and specific techniques for analysis.



Descriptive Research Design: Descriptive research is used to obtain

information concerning the current status of the phenomena to describe

"what exists" with respect to variables or conditions in a situation. The

methods involved range from the survey which describes the status quo, the

correlation study which investigates the relationship between variables, to

developmental studies which seek to determine changes over time.

Description or inference could be quantitative or qualitative in nature.

Descriptive designs only describe the phenomenon under study attempting

to establish a relationship between factors. The data collected may relate to

the demographically or the behavioural variables of respondents under

study or some situational variables. For example, descriptive research

design could be suited to measure the various attributes of successful sales

people, or evaluate a training programme or a retailing situation.

Causal Design: Causal Research explores the effect of one thing on

another and more specifically, the effect of one variable on another.

The research is used to measure what impact a specific change will have on

existing norms and allows market researchers to predict hypothetical

scenarios upon which a company can base its business plan. For example,

if a clothing company currently sells blue denim jeans, causal research can

measure the impact of the company changing the product design to the

colour white.

Following the research, company bosses will be able to decide whether

changing the colour of the jeans to white would be profitable.

Experimental Design: Experimental design provides a stronger and more

reliable basis for the existence of casual relationship between variables.

Here, your aim as a researcher is to investigate the possible cause-and-

effect relationship by manipulating one independent variable to influence the

other variable(s) in the experimental group, and by controlling the other

relevant variables, and measuring the effects of the manipulation by some

statistical means. By manipulating the independent variable, the researcher

can see if the treatment makes a difference on the subjects.




10. _________ Research explores the effect of one variable on another.

11. The researcher in ________ method does not know “what he will find”.

12. Descriptive research can be _________ or _________ in nature.

4.7 Research Design and Marketing Decision Process

The management of an industry or an organisation is involved in taking

decisions about the development or expansion of the concern. No doubt the

concern has to face many problems from time to time. The management

has to overcome or solve these problems. These problems may be

regarding the availability of resources, quality of production, costing,

publicity or promotion, etc. For example, for the publicity of goods

produced, the manufacturer or seller may take the help of TV, radio,

newspapers or door-to-door promotion. Many such endless problems are

there. In each of these decision-making problems, there are some common

components. These are:

Course of Action

States of Nature (Events)

Outcomes

Course of Action: Decision-making problems deal with the selection of a

single act from a set of alternative acts. If two or more alternative courses of

action occur in a problem, then making a decision is necessary to select

only one course of action. In the above example of advertising goods

produced, there are so many alternative courses of actions. The final choice

of any one will depend on the pay-off (or money value) of each strategy

under the circumstances.

Let the acts or actions be symbolised by a1, a2, a3, a4, ...........; then the

totality of all these actions is known as action space denoted by A. For four

actions a1, a2, a3, a4; A = action space = {a1, a2, a3} or A = {A1, A2, A3}. In a

tree diagram the acts or actions are given after the initial fork as shown. As

shown in Figure 4.2, acts may be also be represented in the following matrix

form , i.e., either in row or column way.



(Actions represented in rows) (Actions represented in cloumns)

Figure 4.2

States of Nature (Events): If the outcome of some action (or act) is not

known in advance, then that outcome is uncertain, but is vital for the choice

of any act. When there are many possible outcomes (or states of nature) of

an event, one cannot predict what will happen–it is only in terms of

probability that one may forecast.

The various states of nature are outside a firm and, as such, not under their

control, e.g., consumer demand, change of taste, improvement of

technology, etc. These affect the pay-off and, hence, the choice of an act. A

set of states of nature may be represented in any one of the following ways:

S = {S1, S2, S3, ....... Sn}

or E = {E1, E2, E3 .......En}

or = 1 2 3{ , , ...........}



For example, if a cosmetic product is marketed, it may be highly liked by

customers (outcome 1 ) or it may not appeal at all (outcome 2 ), or it may

satisfy only a small fraction, say 20% (outcome 3 ).

1 2 3 = { , , }

In a tree diagram the places are text to acts. We may also get another act

on the happening of an event as shown in Figure 4.3.

Figure 4.3



In matrix form they may be represented in either of the following two ways

as shown in Figure 4.4.

Figure 4.4

Outcomes

There is an outcome (or consequence) of the combination of each act with

each possible state of nature. This outcome is also known as conditional

value. In a tree diagram, outcomes are placed after events.

In general, if there are m possible actions and n admissible states of nature,

the consequences will be m × n in number.

It may be noted here that these consequences may be evaluated in several

ways such as

i) in terms of profit

ii) in terms of cost

iii) in terms of opportunity loss

iv) utility

Consequences of m × n in number are shown in Table 4.1 in centre cell in

row and column of a matrix.

Table 4.1: Consequences in Matrix Form



Here outcome O21 means 2nd row and 1st column and Oij means ith row and

jth column and so on.

Activity 2:

Assume yourself to be the head of an organization that is eyeing on

overseas expansions. What steps will you follow to zero down of the

right mode of entry? Illustrate it through suitable diagram.


13. The three components of decision-making are __________,

__________ and __________.

14. Decision-making problems deal with the selection of a single act from a

set of __________ acts.

4.8 Types of Decision Models

The aim of the decision theory is to guide the decision-maker in choosing

the best course of action. Depending upon the available information about

the occurrence of various states of nature and environment, the decision

models may be classified into the following types:

Decision-making under Certainty

Decision-making under Risk

4.8.1 Decision-making under certainty

In this case the decision-maker can easily select the course of action, as he

presumes that only one state of nature is relevant for his purposes. For

example, suppose a person desires to deposit Rs. 10,000 for a certain

period. Bank deposit gives 12%, Unit Trust of India offers 14% and

Government bond’s rate is 11% p.a. All the investments are fully secured.

Then surely investment in Unit Trust of India is the best choice.

4.8.2 Decision-making under risk

Here the decision-maker faces many states of nature. As such, he is

supposed to believe authentic information, knowledge, past experience or

happenings to enable him to allot probability values to the likelihood of

occurrence of each state of nature. Sometimes with reference to past

records, experience or information, probabilities to future events could be



allotted. On the basis of probability distribution of the states of nature, one

may select the best course of action having the highest expected pay-off

value.

The expected value (or expected monetary value, i.e., EMV is widely used

to evaluate the alternative course of action or act). The expected value is

calculated by the following formula for one row only.

∑ Pj Oij = P1 Oi1 + P2 O12 + ............ + Pn Oin’

Where P1 to Pn indicate the probabilities of states of nature (or events) and

Oij the pay-offs of the outcomes due to combination of each event and act.

Activity 3:

Suppose the manufacturer of a particular brand of a desert cooler

decreased the price of his sets by 5%. It was observed that there

was an increase in sales during the succeeding four months as

compared to what the company had prior to price reduction. Has the

price reduction increased the sales? Justify your answer.


15. During decision-making under certainty, the decision-maker can easily

select the __________.

16. During decision-making under risk, the decision-maker has to _______

authentic information, knowledge, past experience or happenings.

4.9 Choosing a Good Research Design

Whatever may be the type of research work and studies, one thing that is

important is that they all meet on the common ground of scientific method

employed by them. One expects scientific research to satisfy the following

criteria:

The purpose of the research should be clearly defined and common

concepts be used.

The research procedure used should be described in sufficient detail in

permit another researcher to repeat the research for further

advancement, keeping the continuity of what has already attained.

The procedural design of the research should be carefully planned to

yield results that are as objectives as possible.



The researcher should report with complete frankness, flaws in

procedural design and estimate their effect upon the findings.

The analysis of data should be sufficiently adequate to reveal its

significance and the methods of analysis used should be appropriate.

The validity and reliability of the data should be checked carefully.

Conclusions should be confined to those justified by the data of the

research and limited to those for which the data provided and adequate

basis.

Greater confidence in research is warranted if the researcher is

experienced, has a good reputation in research and is a person of

integrity.

In other words, you can say the qualities of a good research are:

Good research is systematic: it means that research is structured with

specified steps to be taken in a specified sequence in accordance with

the well defined set of rules. Systematic characteristic of the research

does not rule out creative thinking but it certainly does reject the use of

guessing and intuition in arriving at conclusions.

Good research is logical: This implies that research is guided by the

rules of logical reasoning and the logical process of induction and

deduction are of great value in carrying out research. Induction is the

process of reasoning from a part to the whole whereas deduction is the

process of reasoning from some premise to a conclusion which follows

from that very premise. In fact, logical reasoning makes research more

meaningful in the context of decision making.

Good research is empirical: It implies that research is related basically

to one or more aspects of a real situation and deals with concentrate

data that provides a basis for external validity to research results.

Good research is replicable: This characteristic allows research

results to be verified by replicating the study and thereby building a

sound basis for decisions.


17. The __________ design of the research should be carefully planned to

yield results that are as objectives as possible.

18. Conclusions should be confined to those __________ by the data of

the research.



4.10 Summary

This unit on research design gives an overiew of the research designs and

their application in marketing research. After discussing the meaning and

benefits of a research design, the discussion focusses on the four basic

types of designs namely exploratory, descriptive, quasi-experimental and

experimental. Causality, the relationship between data and conclusions,

forms the basis of this classification. The nature of causality and the need to

measure it has also been discussed.

The major design categories and their applications have been described.

Specific subtypes within the major categories have also been discussed.

Under the descriptive design, panel design, cross sectional design and

focus groups were discussed. The quasi-experimental designs discussed

include after only without control group, before-after without control group

the static group comparison, longitudinal design and multiple time series

designs.

Glossary

Research Process: The ordered set of activities focused on the systematic

collection of information using accepted methods of analysis as a basis for

drawing conclusions and making recommendations.

Data Collection: Systematic gathering of data for a particular purpose from

various sources, including questionnaires, interviews, observation, existing

records, and electronic devices. The process is usually preliminary to

statistical analysis of the data

Research Design: A plan outlining as to how information is to be gathered

for an assessment or evaluation that includes identifying the data gathering

method(s), the instruments to be used/created, how the instruments will be

administered, and how the information will be organized and analysed.

Experimental Design: A branch of statistics that attempts to outline the

way in which experiments should be carried out so the data gathered will

have statistical value.

Focus Group: A marketing research tool in which a small group of people

(typically eight to ten individuals engages in a roundtable discussion of

selected topics of interest in an informal setting.



4.11 Terminal Questions

1. What do you mean by research design? Why is it needed?

2. Explain research process.

3. What will you keep in mind while undertaking a research?

4. Distinguish between Causal and Experimental design.

5. Describe the relation between research design and marketing decision

process.

4.12 Answers

Answers to Self Assessment Questions

1. framework or plan

2. sources, information

3. a few steps ahead

4. planned

5. defining the problem

6. data editing, coding

7. secondary, primary

8. objectives

9. collection, analysis

10. Causal

11. exploratory

12. quantitative, qualitative

13. Course of Action, States of Nature (Events), Outcomes

14. alternative

15. course of action.

16. believe

17. procedural

18. justified

Answers to Terminal Questions

1. Refer to 4.2 – Also explain the need

2. Refer to 4.4 – Discuss step by step research process.

3. Refer to 4.9 – Base your answer on the qualities of a good research

4. Refer to 4.6 – Discuss the basic difference and give examples.

5. Refer to 4.7 – Research aims to identify those aspects of the world we

want to understand more clearly. Discuss this with respected to

marketing.



Mini-case

Repatriate Co-op Bank is located in a town with a population of about 2

lakh. Its two main competitors were Bharat Co-operative Bank Textile

Workers Co-op Bank.

The size of all the three banks in terms of number of shareholders, assets,

were more are less the same. Interest offered on S.B and F.D were more or

less the same.

The main services offered by Repatriate Co-op Bank were savings bank,

vehicle and personal loan, mortgage loan, Jewel loan etc. The bank had an

ATM operating 24 hours. The services offered by other two banks were also

similar.

Since services offered by all the three banks were similar, the board of

directors of Repco Bank decided to find, loyalty of current customers to the

bank. The bank also wanted a measure of how customers perceive the

various services offered by the institution.

In the light of the above, the company appointed a leading market research

agency to conduct a survey among 2,000 current customers. The decision

of the bank was that, if this survey indicates anything worthwhile, a similar

survey would be conducted on current non-customers too.

The following was the specific information sought by the bank from the M.R

agency:

1. What percentage of the current bank customers of Repco Bank use the

services of competitors for one or more services?

2. For which service of the competitors does the current customer go?

3. Of the two competitors, who has the largest percentage of Repco Bank

customer as their customers as well?

4. How do the Repco Bank customers perceive the following attributes of

the bank?

a) Locational advantage

b) Quickness

c) Ambiance

d) Convenience of working hours

e) Courtesy of Staff

f) Correctness/Accuracy

g) Use of Technology



h) How important is each of the above to Repco customers?

i) Do the above attributes have any relations with age, education, sex,

annual

j) income, numbers of years of association with Repco Bank?

A mail questionnaire has to be sent to the respondents of Repco Bank,

along with a covering note and reply envelope.

Question

What are the advantages of limiting of survey to just the current customers

of Repco Bank?

Hint: Base your answer on the facts like Surveys are relatively inexpensive,

useful in describing the characteristics of a population, can be administered

from remote locations (using mail, email or telephone) and so on.

Documents

MK0013-SLM-Unit-04