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Business Research Methods

Introduction to Research

A Corporate Problem

Newly appointed VP (Finance) strongly believes that staffing her accounts dept only with CAs (instead of commerce or management graduates) will grossly improve its performance.

On what basis can the Company accept or reject her idea?

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A Corporate Problem An expensive Ad campaign is running on TV for 3

weeks. Not produced expected jump in sales in major sales

territories Marketing manager has to decide whether to

discontinue campaign, change it or reconfirm that it is good

If Ad campaign is good it is some other marketing variable such as price, or distribution or strong competitive promotion are reasons for low sales

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A Corporate Problem

A company wants to launch a new brand of deodorant in the market

It desires to know how to position the brand in the market

It needs estimate of market size in the chosen segment

How to fulfil the information need of the company?

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A Corporate Problem

A company has launched a new brand of frost free refrigerator

After six months it wants to determine customer satisfaction with the new brand

How to determine the customer satisfaction in an authentic manner?

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A TV Channel Problem

A popular music channel on TV desire information on

Who is the most popular video jockey? Which show is most watched? How to fulfil this requirement?

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A Public Utility Problem

BEST wants to increase occupancy

Should it drop fares by 5%, 7.5%, or 10%?

On all days, only weekends, or weekdays?

For AC buses, express, or ordinary buses?

In city, west suburbs, or east suburbs?

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A Union Budget Problem

Would a 10% reduction in excise duty

lead to more than 10% increase in

demand & production of manufactured

goods?

For which product categories?

For large companies, or SMEs, or both?

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Traditional Real Life Riddle

Are bullion, real estate and

commodities supplementary or

complementary to Indian private

equity (PE) market in short term? In

medium term? In long term?

Real Life Problems

All these problems are too important

to be tackled in a naïve manner.

They need a systematic research

study.

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Definition

• Business research is defined as the systematic and objective process of gathering ,recording and analysing data that generates information to guide business decisions.

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USE OF BUSINESS REASEARCH• BR is used to help solving operational and planning

problems in various functional areas in a business organisation

• Marketing: • To understand market trends • To Gain Competitive advantage • Finance: • To find the best investment option• HR : • To devise effective HR policies• Manufacturing :• To find optimal product mix

Basic research

Applied research

Business Research Types

Basic Research

• Attempts to expand the limits of knowledge.

• Not directly involved in the solution to a specific problem.

• Concerned with generalizations and formulation of theory

Basic Research Example

• Is executive success correlated with high need for achievement?

• Are members of highly cohesive work groups more satisfied than members of less cohesive work groups?

• Understanding consumer buying process

• Research conducted at universities by academic researchers

Applied Research

• Conducted when a decision must be made about a specific real-life problem

Applied Research Examples

• Should McDonalds add Italian pasta dinners to its menu?

• Business research told McDonald’s it should not?

• Should Procter & Gamble add a high-priced home teeth bleaching kit to its product line?

• Evaluating impact of a training programme on employee performance

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Techniques for research

• Both the research forms use scientific methods in various stages of research process

Scientific Method

• Scientific method is method of all logically trained minds

• It involves the analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions.

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Use Of Scientific Method

• Basic Research :testing prior conception making inferences establishing general laws• Applied Research : assures objectivity in gathering facts and testing creative ideas for alternative business strategy

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Role of Business Research in decision Making

• It provides accurate ,timely and relevant information to the Top Management in various stages of decision making process

Stages in Decision Making

• Identifying problems and opportunities

• Diagnosis and assessment

• Selecting a course of action

• Implementing a course of action

• Evaluating the course of action

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Identifying problems and opportunities• BR helps in identifying problems and opportunities

through scanning internal & external business environment

• Problems: Loss of market share : Decline in profits : IR problems : Ad campaign not effective• Opportunities: To tap a new market : To introduce a new product :To seek a new investment opportunity : To take over a new unit

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Diagnosis and assessment• After identifying problem/opportunity BR helps in

provision of diagnostic information• For problems specify what happened & why• For opportunities explore ,clarify & refine the nature

of opportunity• For multiple opportunities set priorities• For prioritization of problems study its influence on

business operations & time factor• Quantitative and qualitative investigations are

carried out to identify alternative courses of action

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Assessment of problems and opportunities• Indian apparel company that wants to enter

US market can undertake BR in

-Identifying fashion trends in the market

-Determining brand awareness about the company among customers

-Perception about the company among the potential employees

-Examining competitors and their characteristics

-Understanding American consumer behaviour

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Selecting a course of action

• After identifying alternative courses of action BR is conducted to obtain specific information that will aid in evaluating alternatives & selecting the best course of action

-Selection of a marketing strategy using results of consumer-jury test

-Selection of investment option using results of forecasts of revenue potential

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Implementing & Evaluating a course of action

• After selecting the best course of action it has to be effectively implemented .At this stage BR is mainly used to evaluate , monitor and control the programmes that are being implemented.

• BR serves as a tool to find out -Whether planned activities were properly

executed -Whether they accomplished what they were

expected to accomplish• Tools used :Performance Monitoring Research : Evaluation Research

Evaluation Research

• Evaluation research is the formal, objective measurement and appraisal of the extent to which a given activity, project, or program has achieved its objectives.

-Evaluation of discount coupon scheme is carried out by comparing coupon redemption rate with the objectives set for the scheme

Performance-monitoring Research

• Research that regularly provides feedback for evaluation and control

• Indicates things are or are not going as planned

• Research may be required to explain why something “went wrong”

-Continuously tracking sales at retail stores to identify products with high sales ,buying behaviour of consumers and consumer preferences towards its products

Determining When to Conduct Business Research

• Time constraints

• Availability of data

• Nature of the decision

• Benefits versus costs

Is sufficient time available before

a managerial decision

must be made?

Is the infor-mation already

on handinadequate for making

the decision?

Is the decision of considerable

strategicor tactical

importance?

Does the value of the research

informationexceed the cost of conducting

research?

ConductingBusinessResearch

Do Not Conduct Business Research

Time ConstraintsAvailability of

Data Nature of the DecisionBenefits vs. Costs

Yes YesYesYes

No No No No

Determining When to Conduct Business Research

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Value versus Costs

• Potential Value of a Business Research Effort Should Exceed Its Estimated Costs

Value

•Decreased uncertainty•Increased likelihood of a correct decision•Improved business performance and resulting higher profits

Costs•Research expenditures•Delay of business decision and possible disclosure of information to rivals•Possible erroneous research results

Value Should Exceed Estimated Costs

Major Topics for Research in Business

• General Business Conditions and Corporate Research

• Financial and Accounting Research• Management and Organizational Behavior

Research• Sales and Marketing Research• Information Systems Research• Corporate Responsibility Research

Cross-functional Teams• Cross-functional teams are composed of

individuals from various organizational departments such as engineering, production, finance, and marketing who share a common purpose.

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Business Research in the 21st Century

• Increased globalization

• Growth of the Internet and other information technologies

Global Research

• Business Research is increasingly global

• Market knowledge is essential

• A.C. Nielsen - more that 67% international business

• Indian Companies- ORG_MARG

IMRB

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Global Business Research• General information about country -

economic conditions and political climate

• Cultural and consumer factors

• Market and competitive conditions - demand estimation

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The Internet Is Transforming Society

• Time is collapsing.

• Distance is no longer an obstacle.

• Crossing oceans is only a mouse click away.

• People are connected 24 hours a day, seven days a week.

• "Instantaneous" has a new meaning.

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Internet Research

• Seeking facts and figures about an issue

• Surveys on Web sites