project on research methodology n data analysis

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project on research methodology n data analysis

  1. 1. ACKNOWLEDGEMENTS As long journey of B.M.S.course draws to an end we are over whelmed withfeelings of gratitude for all those who have made it possible for us to reach thisstage. Some have helped us directly and some indirectly but one and all of them weare of our success in completing this course. There have been many speed breakers in route but all these people have helpedto make the road sooth, helped us to speed on towards the goal. It is faith that givesus strength, it is faith that leads us onwards, it is faith that brings us success, andwe bow to the GOD who is the inner self and seek his blessings for completing thiscourse. First and foremost our heartfelt thanks go to our guide Prof. R.R.shah, ShriM.D. shah Mahila College, T.S. Bafna road, Malad west, Mumbai400064. For hisguidance in the subject and technical knowledge this task would have remainedincomplete. For inspiration, constant motivation and unceasing support, positive thinking,encouragement at all times, our special thanks goes to Smt.Bharati Akshay Naik,director of Janseva Samiti, c/o Shri M. D. Shah Mahila college, Malad WestMumbai 400064, who has been a pillar of strength through the ups and downsthroughout our life also who have been a source of inspiration to me my team andto move further to meet my academic aims. Our further thank to the following staff of Shri.M.D.Shah Mahila College, Themanagement of janseva samiti. Dr.Deepa Sharma, Principal the teaching, library,administrative staff, support staff and students. Similarly, we express our gratitude to the Management, coordinator ProfessorR.R.SHAH SIR Smt. Bharti A Naik and all the staff of Shri m.d. shah mahilacollege, malad west Mumbai 400064. 1
  2. 2. INTRODUCTIONIt is the emotional and psychological relationship you have with your customers. Strong brandselicit thoughts, emotions, and sometimes physiological responses from customers. Examine thefollowing logos:Simply looking at these logos elicits an emotional response. You had thoughts and feelings abouteach company. In fact, when you looked at the A flac logo, you probably heard the duck in yourmind saying "Ah Flack." When starting your own business, one of your most important concernsis to develop your companys face to the world. This is your brand. It is the companys name,how that name is visually expressed through a logo, and how that name and logo extendthroughout an organizations communications. A brand is also how the company is perceived byits customers — the associations and inherent value they place on your business.A brand is also a kind of promise. It is a set of fundamental principles as understood by anyonewho comes into contact with a company. A brand is an organizations "reason for being"; it ishow that reason is expressed through the various communications to its key audiences, includingcustomers, shareholders, employees, and analysts. A brand should also represent the desiredattributes of a companys products, services, and initiatives. Apples brand is a great example.The Apple logo is clean, elegant, and easily implemented. Notice that the company has alteredthe use of the apple logo from rainbow-striped to monochromatic. In this way they keep theirbrand and signal in a new era for their expansive enterprise. Think about how youve seen thebrand in advertising, trade shows, packaging, product design, and so on. Its distinctive and it alladds up to a particular promise. The Apple brand stands for quality of design and ease of use. 2
  3. 3. Products and services have become so alike that they fail to distinguish themselves by theirquality, efficacy, reliability, assurance and care. Brands add emotion and trust to these productsand services, thus providing clues that simplify consumers’ choice.(2) These added emotions and trust help create a relationship between brands and consumers,which ensures consumers’ loyalty to the brands.(3) Brands create aspiration lifestyles based on these consumer relationships. Associating oneselfwith a brand transfers these lifestyles onto consumers.(4) The branded lifestyles extol values over and above the brands’ product or service categorythat allow the brands to be extended into other product and service categories. Thus, savingcompanies, the trouble and costs of developing new brands while entering new lucrative markets.(5) The combination of emotions, relationships, lifestyles and values allows brand owners tocharge a price premium for their products and services, which otherwise are barelydistinguishable from generics.A brand is a product, service, or concept that is publicly distinguished from other products,services, or concepts so that it can be easily communicated and usually marketed. A brand nameis the name of the distinctive product, service, or concept. Branding is the process of creating anddisseminating the brand name. Branding can be applied to the entire corporate identity as well asto individual product and service names.Brands are usually protected from use by others by securing a trademark or service mark from anauthorized agency, usually a government agency. Before applying for a trademark or servicemark, you need to establish that someone else hasnt already obtained one for your name. Brandsare often expressed in the form of logos, graphic representations of the brand. In computers, arecent example of widespread brand application was the "Intel Inside" label provided tomanufacturers that use Intels microchips .A companys brands and the publics awareness ofthem is often used as a factor in evaluating a company. Corporations sometimes hire marketresearch firms to study public recognition of brand names as well as attitudes toward the brands.Brand management is the application of marketing techniques to a specific product, product line,or brand. It seeks to increase the products perceived value to the customer and thereby increasebrand franchise and brand equity. Marketers see a brand as an implied promise that the level ofquality people have come to expect from a brand will continue with future purchases of the sameproduct. This may increase sales by making a comparison with competing products morefavorable. It may also enable the manufacturer to charge more for the product. The value of thebrand is determined by the amount of profit it generates for the manufacturer. This can resultfrom a combination of increased sales and increased price, and/or reduced COGS (cost of goodssold), and/or reduced or more efficient marketing investment. All of these enhancements mayimprove the profitability of a brand, and thus, "Brand Managers" often carry line-managementaccountability for a brands P&L (Profit and Loss) profitability, in contrast to marketing staff 3
  4. 4. manager roles, which are allocated budgets from above, to manage and execute. In this regard,Brand Management is often viewed in organizations as a broader and more strategic role thanMarketing alone. Brand evaluation in the process of building and sustaining brandsA new role for brands—at the core of business 4
  5. 5. The time has come to recognize a new role for brands—and the brand team—at the core ofbusiness. As shown in the Brand Core Model below, brand building is moving to a crucialposition at the strategic center of business operations. At this vital confluence of company,product and customer, the brand team provides the vision and the platforms to create new formsof value, and to create and grow the customers that will drive the business forward. Brand Core ModelCreating value at the coreThe Brand Core Model illustrates how brands have moved from symbols and slogans at theperiphery of business to a value-creating activity at the heart of the enterprise. Brand practicebelongs at the company core because the brand logic of creating customers shapes the alliedfields of marketing, product development and customer development. From this central position,the brand team emerges as a key player in determining how customers are created, and howcustomers can be grown into new market opportunities.Brand as the hub of a value network 5
  6. 6. Within the brand-centric enterprise, the brand is the core of a value creation process and the hubof a value network, feeding the innovation pipeline within the company, and between thecompany and its customers. This new brand environment differs radically from that of traditionalbrands. The brands produced are action-based. They’ve moved beyond the symbols, gestures andidentities of conventional brand campaigns. These new brands are digitally enabled platformsand programs of value innovation. They pump value through the company, into the customer,and back again, gaining power and reach via network effects. While old brands beg for attention,these new brands join their customers as allies, directly adding pop and pulse to their lives.Brands move from periphery to coreFor most companies, this will be a dramatic new role for brands and the brand team. It marks theprogress of brands from a communication layer on the periphery of business to a valueinnovation engine at the core.In this process, brands are finally emerging as a strategic business practice in their own right.They’re no longer a subset of marketing, advertising, design, packaging or communications.Brand strategy can drive the business. Brand practice brings its own vision, platform logic,customer creation process, methodology, tools and resources.Brands reinventedFrom their new locus, brands are situated to reinvent themselves, sloughing off antiquated, top-down approaches for a new fusion of culture, technology and social software. They’re free tomorph to customer needs, large or small, from a panorama of the possible to pocket-size, a pin,or a pixel. As we’ve said before: “Brands are tools that enable customers to interoperate with theuniverse. The genius of brands is that they have no limits. The value of brands is that throughthem, customers have no limits.”A new role for the brand teamThe Brand Core Model illustrates the central importance of the brand team. Through acollaborative process, the brand team brings together company vision, business priorities,platform logic and freewheeling creativity, all focused on creating and growing customers. Therole of the team is to guide and augment value innovation through the company, and thenthrough the customer, insuring that resulting customer growth can return new forms of valueback to the business.Brand central: how it works 6
  7. 7. The Brand Core Model illustrates how innovation and value are co-created by groups inside andoutside the company, mediated by the brand. The brand provides a collaborative framework forvalue innovation, cutting across internal divisions and other boundaries, and speeding innovationto market.At the intersection of Company and Product, the brand shapes Marketing by defining theplatforms and programs that will create and grow the customers to grow the business. Brandplatforms and programs become the structure for marketing imagination.At the intersection of Product and Customer, the brand shapes Innovation in three ways: 1) byproviding clear brand platform and customer platform direction to R&D, product developmentand engineering; 2) by helping develop cost-effective, high-value prototypes, and 3) by enlistingcustomer initiative and intelligence to augment the innovation process.At the intersection of Customer And Company, the brand shapes Value by using collaborativemethods and value networks to establish an exclusive context of mutual (company/customer)value. This helps synchronize brand platform deliverables with customer platform needs.Because the brand is committed to creating customer freedoms, it does not lead to backwaterpools where innovation stagnates in an attempt to contain customers. 7
  8. 8. ProductThe most common brand is that associated with a tangible product, such as a car or drink. Thiscan be very specific or may indicate a range of products. In any case, there is always a unifyingelement that is the brand being referred to in the given case.Individual productProduct brands can be very specific, indicating a single product, such as classic Coca-Cola. It canalso include particular physical forms, such as Coca-cola in a traditional bottle or a can.Product rangeProduct brands can also be associated with a range, such as the Mercedes S-class cars or allvarieties of Colgate toothpaste.ServiceAs companies move from manufacturing products to delivering complete solutions andintangible services, the brand is about the service.Service brands are about what is done, when it is done, who does it, etc. It is much more variablethan products brands, where variation can be eliminated on the production line. Even incompanies such as McDonalds where the service has been standardized down to the eye contactand smile, variation still occurs.Consistency can be a problem in service: we expect some variation, and the same smile everytime can turn into an annoyance as we feel we are being manipulated. Service brands need a lotmore understanding than product brands. 8
  9. 9. OrganizationOrganizations are brands, whether it is a company that delivers products and services or someother group. Thus Greenpeace, Mercedes and the US Senate are all defined organizations andeach has qualities associated with them that constitute the brand.In once sense, the brand of the organization is created as the sum of its products and services.After all, this is all we can see and experience of the organization. Looking at it another way, theflow also goes the other way: the intent of the managers of the organization permeatesdownwards into the products and the services which project a common element of that intent.PersonThe person brand is focused on one or a few individuals, where the branding is associated withpersonality.IndividualA pure individual brand is based on one person, such as celebrity actor or singer. The brand canbe their natural person or a carefully crafted projection.Politicians work had to project a brand that is attractive to their electorate (and also work hard tokeep their skeletons firmly in the cupboard). In a similar way, rock stars who want to appear coolalso are playing to a stereotype.GroupNot much higher in detail than an individual is the brand of a group. In particular when this is asmall group and the individuals are known, the group brand and the individual brand overlap, forexample in the way that the brand of a pop group and the brand of its known members arestrongly connected.Organizations can also be linked closely with the brand of an individual, for example Virgin isclosely linked with Richard Branson.EventEvents have brands too, whether they are rock concerts, the Olympics, a space-rocket launch or atown-hall dance.Event brands are strongly connected with the experience of the people attending, for examplewith musical pleasure or amazement at human feats. 9
  10. 10. Product, service and other brands realize the power of event brands and seek to have their brandsassociated with the event brands. Thus sponsorship of events is now big business as one brandtries to get leverage from the essence of the event, such as excitement and danger of car racing.GeographyAreas of the world also have essential qualities that are seen as characterizations, and hence alsohave brand. These areas can range from countries to state to cities to streets and buildings.Those who govern or represent these geographies will work hard to develop the brand. Cities, forexample, may have de-facto brands of being dangerous or safe, cultural or bland, which will beused by potential tourists in their decisions to visit and by companies in their decisions on whereto set up places of employment.Brand equity refers to the marketing effects or outcomes that accrue to a product with its brandname compared with those that would accrue if the same product did not have the brand name.And, at the root of these marketing effects is consumers knowledge. In other words, consumersknowledge about a brand makes manufacturers/advertisers respond differently or adoptappropriately adept measures for the marketing of the brand The study of brand equity isincreasingly popular as some marketing researchers have concluded that brands are one of themost valuable assets that a company has Brand equity is one of the factors which can increasethe financial value of a brand to the brand owner, although not the only one Measurement 10
  11. 11. There are many ways to measure a brand. Some measurements approaches are at the firm level,some at the product level and still others are at the consumer level.Firm Level: Firm level approaches measure the brand as a financial asset. In short, a calculationis made regarding how much the brand is worth as an intangible asset. For example, if you wereto take the value of the firm, as derived by its market capitalization - and then subtract tangibleassets and "measurable" intangible assets- the residual would be the brand equity. One highprofile firm level approach is by the consulting firm Inter brand. To do its calculation, Interbrand estimates brand value on the basis of projected profits discounted to a present value. Thediscount rate is a subjective rate determined by Inter brand and Wall Street equity specialists andreflects the risk profile, market leadership, stability and global reach of the brandProduct Level: The classic product level brand measurement example is to compare the price ofa no-name or private label product to an "equivalent" branded product. The difference in price,assuming all things equal, is due to the brand. More recently a revenue premium approach hasbeen advocatedConsumer Level: This approach seeks to map the mind of the consumer to find out whatassociations with the brand that the consumer has. This approach seeks to measure the awareness(recall and recognition) and brand image (the overall associations that the brand has). Freeassociation tests and projective techniques are commonly used to uncover the tangible andintangible attributes, attitudes, and intentions about a brand. Brands with high levels of awarenessand strong, favorable and unique associations are high equity brands 11
  12. 12. Define the vision. Before moving ahead with the web site, create a brand positioning statement.“This isn’t just, ‘What kind of web site do we want to be?’ This is ‘Who are we?’” says HarleyManning, vice president at Forrester Research in Cambridge, Mass., a technology and marketresearch firm that advises on the effects technology has on consumers and businesses. Goodbrand statements typically include the company’s mission, vision and values. “It’s succinct. It’stypically something that will fit on a page easily,” he says.Build a brand worth believing in. “Do you so believe in what you’re creating that you wouldtrademark it?” says Andrea Fitch, president and CEO of Red Carpet Creations, Inc., and nationalpresident of the Society for Marketing Professional Services, both based out of Alexandria, Va.Really consider what kind of brand could represent the business through the next decade. “Don’thave a logo that in five years you’re going to be tired of and discard for another,” she says.Remember, the web site is the brand. “A web site is not just a communication medium,”Manning says. “It is actually a channel that must deliver on the promise.” Essentially, a web siteshould embody the promise that it makes to customers. If, for instance, a business claims to beinnovative, the web site should look fresh and modern.Create a cohesive experience between all mediums. Before she launched her company’s newweb site, Fitch made sure it would be an event that her potential clients would never forget. RedCarpet Creations mailed 4,000 silver tubes containing scrolls that looked like rolled-up carpet.Inside the scrolls was an announcement about the web site’s launch. Once online, the web sitewas an extension of the invitations because it followed through on the themes of red carpetimagery and references to visitors being treated like a VIP. Customers should easily be able torecognize the company’s brand, whether it is print, online or some other form of media, Manningsays.Don’t sacrifice creativity. Once the brand’s guidelines are established, creative choices mustbring those attributes to life, Manning says. Don’t let the company’s brand become sodominating that there is no room for new thoughts and ideas. Brand should be the jumping-offpoint for interesting ideas, not the place where every new idea dead-ends. Fitch stresses that asense of fun and whimsy will only enhance the likelihood that people will take an interest in theweb site.Don’t communicate brand at the expense of delivering. While a web site can be a significanttool for building brand awareness, clarity and functionality are paramount. “Just be careful not tolet the communication about your brand get in the way of delivering your message,” Manningsays. People should be able to understand how to navigate the site without knowing a thing aboutthe company’s catch phrases. “You can’t frustrate and annoy people into liking your brand,” hesays.Listen to the customers: They determine a brand’s true value. Pay attention to customerfeedback about the site because, ultimately, it’s the customers’ opinion that counts. When itcomes to building a brand, a company can incorporate everything from signature colors to catchphrases, but at the end of the day, it’s the consumer who decides what a brand is really worth.“It’s not what you say [about] yourself, it’s what others say of you,” Fitch says. IMPORTANCE OF BRAND 12
  13. 13. Branding is a very powerful component in business. The brand must have a logo to makebranding easier and more possible. The consumers decide if they will buy a product or use aservice based on how they view the brand. The brand itself tells us or let us imagine how good orbad the product is even if we never tasted it before! All that brand promotion and advertisingreally do tell us how great a brand can be (like Nike). Once a customer likes your brand he/shewill definitely come back for repeated services or products. The qualities of the product orservices are ensured through the customers minds from the brand image. Brand is not onlyconvenient for businesses for repeated customer purchase but also easier for customers to filterout the countless generic items. Brand gives consumers the reason to buy it and wastes less timefor consumer to choose. There are ways to improve a brand from advertising such as viralcampaign (more trustworthy), online ads, print ads and commercials. Another way is to improveyour product or services that will reinforce the brand. This is a good way to promote your brandby always being in the cutting edge or “customer’s first image”. The qualities of your productsand services will reinforce the brand. Advertise as much as possible to spread that message andmake it into a cult brand. Branding doesn’t only benefit the business but you as well (yes I meanit). The brand you choose reflects who you are and expresses yourself on what you like to do andbe able to join the community of like minded people. Branding is a win: win situation for boththe businesses and the loyal customers. Advantages of BrandsA strong brand offers many advantages for marketers including: • Brands provide multiple sensory stimuli to enhance customer recognition. For example, a brand can be visually recognizable from its packaging, logo, shape, etc. It can also be recognizable via sound, such as hearing the name on a radio advertisement or talking with someone who mentions the product. • Customers who are frequent and enthusiastic purchasers of a particular brand are likely to become Brand Loyal. Cultivating brand loyalty among customers is the ultimate reward for successful marketers since these customers are far less likely to be enticed to switch to other brands compared to non-loyal customers. • Well-developed and promoted brands make product positioning efforts more effective. The result is that upon exposure to a brand (e.g., hearing it, seeing it) customers conjure up mental images or feelings of the benefits they receive from using that brand. The reverse is even better. • This “benefit = brand” association provides a significant advantage for the brand that the customer associates with the benefit sought. • Firms that establish a successful brand can extend the brand by adding new products under the same “family” brand. Such branding may allow companies to introduce new products more easily since the brand is already recognized within the market. Brand Limitations 13
  14. 14. Ideally, a good brand serves to enhance a sound infrastructure with a solid reputation. Brandingis not a magic wand; it cannot provide a quick fix to a company’s problems or compensate forany shortcomings. Branding will help very little if your internal operations and culturalpersonality are opposite what you are trying to convey to the outside audience. Your internalbrand personality is just as important as the external message. The average customer is not goingto purchase a product or service without feeling comfortable with the company offering it.Consumers have become alert to the “fluff” in advertising. They are also on the lookout forcompanies that outright lie. When-not if – the public finds out it has been deceived, the companyin question will have to deal with a backlash-and the damage may very well be permanent. Thebest way to maintain good public relations during the brand building process is to run an ethicalbusiness. Public relations involve sharing information with the public, and that creates problemswhen you have something to hide. So…make sure you’re not running your brand in a way thatrequires you to keep secrets from any of your publics-customers, employees, shareholders, andso on.No matter how persuasive your ad campaign or how hard-working your sales staff may be,neither can move an inferior product, coupled by a poor image, off the shelves. If a companydoes not does not live up to consumer expectations, negative word-of-mouth will eventually beits undoing. An eye-catching logo that represents an uninspired company or a substandardproduct will be quickly sniffed out by savvy buyers. In this case, branding can work to drivecustomers away. Consumer brand preferenceThe essence of being in business by any business outfits is to produce for sales and profits. Inorder to remain in business an organization must generate enough sales from its products tocover operating costs and post reasonable profits. For many organizations, sales estimate is thestarting point in budgeting or profit planning. It is so because it must be determined, in mostcases, before production units could be arrived at while production units will in turn affectmaterial purchases. However, taking decision on sales is the most difficult tasks facing manybusiness executives. This is because it is difficult to predict, estimate or determine with accuracy,potential customers’ demands as they are uncontrollable factors external to an organization.Considering, therefore, the importance of sales on business survival and the connection betweencustomers and sales, it is expedient for organizations to engage in programmes that can influenceconsumers’ decision to purchase its products. This is where advertising and brand managementare relevant. Advertising is a subset of promotion mix which is one of the 4ps in the marketingmix i.e. product, price, place and promotion. As a promotional strategy, advertising serve as amajor tool in creating product awareness and condition the mind of a potential consumer to takeeventual purchase decision. Advertiser’s primary mission is to reach prospective customers andinfluence their awareness, attitudes and buying behaviour. They spend a lot of money to keepindividuals (markets) interested in their products. To succeed, they need to understand whatmakes potential customers behave the way they do. The advertisers goals is to get enoughrelevant market data to develop accurate profiles of buyers-to-find the common group (andsymbols) for communications this involves the study of consumers behaviour: the mental and 14
  15. 15. emotional processes and the physical activities of people who purchase and use goods andservices to satisfy particular needs and wants (Arens, 1996). Proctor et al. (1982) noted that theprincipal aim of consumer behaviour analysis is to explain why consumers act in particular waysunder certain circumstances. It tries to determine the factors that influence consumer behaviour,especially the economic, social and psychological aspects which can indicate the most favouredmarketing mix that management should select. Consumer behaviour analysis helps to determinethe direction that consumer behaviour is likely to make and to give preferred trends in productdevelopment, attributes of the alternative communication method etc. consumer behavioursanalysis views the consumer as another variable in the marketing sequence, a variable thatcannot be controlled and that will interpreted the product or service not only in terms of thephysical characteristics, but in the context of this image according to the social andpsychological makeup of that individual consumer (or group of consumers). Economic theoryhas sought to establish relationships between selling prices, sales achieved and consumer’sincome; similarly, advertising expenditure is frequently compared with sales. On otheroccasion’s financial accounting principles maybe applied to analyses profit and losses.Management ratios, net profit before tax, liquidity and solvency ratios can all be investigated.Under the situations the importance of the consumer’s motivations, perceptions, attitudes andbeliefs are largely ignored. The consumer is assumed to be “rational” that is, to react in thedirection that would be suggested by economic theory and financial principles. However, it isoften apparent that consumer behaviours does not fall neatly into these expected patterns. It is forthese reasons that consumer behaviour analysis is conducted as yet another tool to assess thecomplexities of marketing operations. The proliferation of assorted brands of food drinks in thecountry has led to the cut-throat competition for increased market share being witnessedcurrently among the operations in the food drink industry. Today, in Nigeria, there exists morethan twenty brands of food drink both local and foreign, out of which two, namely CadburyNigeria Plc’s Bournvita and Nestle Nigeria Plc’sMilo keenly compete for market leadership.There are quite a host of up-coming and low-price localized brands in small sachets with “Vita“suffixes springing up in every nook and cranny of the country. Existing and popular brands,therefore, face intense competition with the “affordable” localized” “Vitas” with high sugarcontent targeted at the low-income groups. It is, therefore, imperative for the more establishedbrands like Bournvita to employ brilliant advertising and branding strategies to influenceconsumers’ behaviours in order to continue to enjoy and maintain market leadership. Given thecompetitive environment in the food and beverages sub sector of the economy and the highpotential of advertising in helping companies realize and retain their position this paper examinethe influence of advertising on a leading company in the food and beverages subsector as a casestudy.RURAL BRAND PREFERENCE DETERMINANTS ININDIA 15
  16. 16. This study was done in two Indian states with the objective of exploring the dynamics ofbranding in rural India. The study was done through sample survey using structuredquestionnaire. The sample size for the study was 354. The measurement was done on brandpreference at overall level for three product families namely FMCG (Fast moving consumergoods), consumer durables and agro inputs. Preference for various aspects of brands was alsomeasured. The objective was to establish the determinants of brand preference in rural India forFMCG, durables and agro inputs and to find out whether any differential exists across productfamilies. The collected data was analyzed using regression analysis. Findings indicated that goodquality, value for money and sense of identity with brand were likely to act as key determinantsof a FMCG brand in rural India. Better finish and good looks, recommendations from retailerswere found be key determinants of a consumer durable brand in rural India. Only value formoney emerged as significant determinant for an agro input brand in rural India. The paperdiscusses why a brand preference in rural India is limited to these attributes only and what ruralbranding means in the current context. Brand loyaltyBrand loyalty, in marketing, consists of a consumers commitment to repurchase or otherwisecontinue using the brand and can be demonstrated by repeated buying of a product or service orother positive behaviors such as word of mouth advocacy.Brand loyalty is more than simple repurchasing, however. Customers may repurchase a branddue to situational constraints (such as vendor lock-in), a lack of viable alternatives, or out ofconvenience. Such loyalty is referred to as "spurious loyalty". True brand loyalty exists whencustomers have a high relative attitude toward the brand which is then exhibited throughrepurchase behavior. This type of loyalty can be a great asset to the firm: customers are willingto pay higher prices, they may cost less to serve, and can bring new customers to the firm. Forexample, if Joe has brand loyalty to Company A he will purchase Company As products even ifCompany Bs are cheaper and/or of a higher quality.An example of a major brand loyalty program that extended for several years and spreadworldwide is Pepsi Stuff. Perhaps the most significant contemporary example of brand loyalty isthe dedication that many Mac users show to the Apple Company and its products.From the point of view of many marketers, loyalty to the brand — in terms of consumer usage— is a key factor: Factors influencing brand loyalty 16
  17. 17. It has been suggested that loyalty includes some degree of pre-dispositional commitment towarda brand. Brand loyalty is viewed as multidimensional construct. It is determined by severaldistinct psychological processes and it entails multivariate measurements. Customers perceivedvalue, brand trust, customers satisfaction, repeat purchase behaviour, and commitment are foundto be the key influencing factors of brand loyalty. Commitment and repeated purchase behaviourare considered as necessary conditions for brand loyalty followed by perceived value,satisfaction, and brand trust. Fred Reichheld, one of the most influential writers on brand loyalty,claimed that enhancing customer loyalty could have dramatic effects on profitability. Among thebenefits from brand loyalty — specifically, longer tenure or staying as a customer for longer —was said to be lower sensitivity to price. This claim had not been empirically tested untilrecently. Recent research found evidence that longer-term customers were indeed less sensitiveto price increases.Industrial marketsIn industrial markets, organizations regard the heavy users as major accounts to be handled bysenior sales personnel and even managers; whereas the light users may be handled by thegeneral sales force or by a dealer.Portfolios of brandsAndrew Ehrenberg, then of the London Business School said that consumers buy portfolios ofbrands. They switch regularly between brands, often because they simply want a change. Thus,brand penetration or brand share reflects only a statistical chance that the majority of customerswill buy that brand next time as part of a portfolio of brands they favour. It does not guaranteethat they will stay loyal.Market inertiaOne of the most prominent features of many markets is their overall stability — or inertia. Thus,in their essential characteristics they change very slowly, often over decades — sometimescenturies — rather than over months. This stability has two very important implications. The firstis that those who are clear brand leaders are especially well placed in relation to their competitorsand should want to further the inertia which lies behind that stable position. This, however, stilldemands a continuing pattern of minor changes to keep up with the marginal changes inconsumer taste (which may be minor to the theorist but will still be crucial in terms of thoseconsumers purchasing patterns as markets do not favour the over-complacent). These minorinvestments are a small price to pay for the long term profits which brand leaders usually enjoy.The second, and more important, is that someone who wishes to overturn this stability andchange the market (or significantly change ones position in it), massive investments must beexpected to be made in order to succeed. Even though stability is the natural state of markets,sudden changes can still occur, and the environment must be constantly scanned for signs ofthese. 17
  18. 18. WHAT IS PRODUCTIn marketing, a product is anything that can be offered to a market that might satisfy a want orneed In retailing, products are called merchandise. In manufacturing, products are purchased asraw materials and sold as finished goods. Commodities are usually raw materials such as metalsand agricultural products, but a commodity can also be anything widely available in the openmarket. In project management, products are the formal definition of the project deliverables thatmake up or contribute to delivering the objectives of the project. In general usage, product mayrefer to a single item or unit, a group of equivalent products, a grouping of goods or services, oran industrial classification for the goods or services. A related concept is sub product, asecondary but useful result of a production process.Tangible and Intangible Products 18
  19. 19. Products can be classified as tangible or intangible. A tangible product is any physical productthat can be touched like a computer, automobile, etc. An intangible product is a non-physicalproduct like an insurance policy.In its online product catalog, retailer Sears, Roebuck and Company divides its products intodepartments, and then presents products to shoppers according to (1) function or (2) brand. Eachproduct has a Sears’s item number and a manufacturers model number. The departments andproduct groupings that Sears’s uses are intended to help customers browse products by functionor brand within a traditional department store structure.Sizes and colorsA catalog number, especially for clothing, may group sizes and colors. When ordering theproduct, the customer specifies size, color and other variables. Example: you walk into a storeand see a group of shoes and in that group are sections of different colors of that type of shoe andsizes for that shoe to satisfy your need.Product lineA product line is "a group of products that are closely related, either because they function in asimilar manner, are sold to the same customer groups, are marketed through the same types ofoutlets, or fall within given price ranges."Many businesses offer a range of product lines which may be unique to a single organization ormay be common across the businesss industry. In 2002 the US Census compiled revenue figuresfor the finance and insurance industry by various product lines such as "accident, health andmedical insurance premiums" and "income from secured consumer loans". Within the insuranceindustry, product lines are indicated by the type of risk coverage, such as auto insurance,commercial insurance and life insurance. 19
  20. 20. The Product Life CycleA new product progresses through a sequence of stages from introduction to growth, maturity,and decline. This sequence is known as the product life cycle and is associated with changes inthe marketing situation, thus impacting the marketing strategy and the marketing mix.The product revenue and profits can be plotted as a function of the life-cycle stages as shown inthe graph below: Product Life Cycle DiagramIntroduction StageIn the introduction stage, the firm seeks to build product awareness and develop a market for theproduct. The impact on the marketing mix is as follows: • Product branding and quality level is established and intellectual property protection such as patents and trademarks are obtained. • Pricing may be low penetration pricing to build market share rapidly, or high skim pricing to recover development costs. • Distribution is selective until consumers show acceptance of the product. • Promotion is aimed at innovators and early adopters. Marketing communications seeks to build product awareness and to educate potential consumers about the product. 20
  21. 21. Growth StageIn the growth stage, the firm seeks to build brand preference and increase market share. • Product quality is maintained and additional features and support services may be added. • Pricing is maintained as the firm enjoys increasing demand with little competition. • Distribution channels are added as demand increases and customers accept the product. • Promotion is aimed at a broader audience.Maturity StageAt maturity, the strong growth in sales diminishes. Competition may appear with similarproducts. The primary objective at this point is to defend market share while maximizing profit. • Product features may be enhanced to differentiate the product from that of competitors. • Pricing may be lower because of the new competition. • Distribution becomes more intensive and incentives may be offered to encourage preference over competing products. • Promotion emphasizes product differentiation.Decline StageAs sales decline, the firm has several options: • Maintain the product, possibly rejuvenating it by adding new features and finding new uses. • Harvest the product - reduce costs and continue to offer it, possibly to a loyal niche segment. • Discontinue the product, liquidating remaining inventory or selling it to another firm that is willing to continue the product. Product Positioning StrategiesPositioning is what the customer believes about your product’s value, features, and benefits; it isa comparison to the other available alternatives offered by the competition. These beliefs tend tobased on customer experiences and evidence, rather than awareness created by advertising orpromotion. 21
  22. 22. Marketers manage product positioning by focusing their marketing activities on a positioningstrategy. Pricing, promotion, channels of distribution, and advertising all are geared to maximizethe chosen positioning strategy.Generally, there are six basic strategies for product positioning:1. By attribute or benefit- This is the most frequently used positioning strategy. For a light beer,it might be that it tastes great or that it is less filling. For toothpaste, it might be the mint taste ortartar control.2. By use or application- The users of Apple computers can design and use graphics more easilythan with Windows or UNIX. Apple positions its computers based on how the computer will beused.3. By user- Face book is a social networking site used exclusively by college students. Face bookis too cool for MySpace and serves a smaller, more sophisticated cohort. Only college studentsmay participate with their campus e-mail IDs.4. By product or service class- Margarine competes as an alternative to butter. Margarine ispositioned as a lower cost and healthier alternative to butter, while butter provides better tasteand wholesome ingredients.5. By competitor- BMW and Mercedes often compare themselves to each other segmenting themarket to just the crème de la crème of the automobile market. Ford and Chevy need not apply.6. By price or quality- Tiffany and Costco both sell diamonds. Tiffany wants us to believe thattheir diamonds are of the highest quality, while Costco tells us that diamonds are diamonds andthat only a chump will pay Tiffany prices.Positioning is what the customer believes and not what the provider wants them to believe.Positioning can change due the counter measures taken at the competition. Managing yourproduct positioning requires that you know your customer and that you understand yourcompetition; generally, this is the job of market research not just what the entrepreneur thinks istrue. PRODUCT DESIGNChanges in design are largely dictated by whether they would improve the prospects of greatersales, and this, over the accompanying costs. Changes in design are also subject to culturalpressures. The more culture-bound the product is, for example food, the more adaptation isnecessary. Most products fall in between the spectrum of "standardization" to "adaptation"extremes. The application the product is put to also affect the design. In the UK, railway engineswere designed from the outset to be sophisticated because of the degree of competition, but inthe US this was not the case. In order to burn the abundant wood and move the prairie debris,large smoke stacks and cowcatchers were necessary. In agricultural implements a mechanizedcultivator may be a convenience item in a UK garden, but in India and Africa it may be essential 22
  23. 23. equipment. As stated earlier "perceptions" of the products benefits may also dictate the design.A refrigerator in Africa is a very necessary and functional item, kept in the kitchen or the bar. InMexico, the same item is a status symbol and, therefore, kept in the living room.Factors encouraging standardization are:i) economies of scale in production and marketingii) consumer mobility - the more consumers travel the more is the demandiii) technologyiv) image, for example "Japanese", "made in".The latter can be a factor both to aid or to hinder global marketing development. Nagashima1(1977) found the "made in USA" image has lost ground to the "made in Japan" image. In somecases "foreign made" gives advantage over domestic products. In Zimbabwe one sees manyadvertisements for "imported", which gives the product, advertised a perceived advantage overdomestic products. Often a price premium is charged to reinforce the "imported means quality"image. If the foreign source is negative in effect, attempts are made to disguise or hide the factthrough, say, packaging or labelling. Mexicans are loathing taking products from Brazil. Byputting a "made in elsewhere" label on the product this can be overcome, provided the productsare manufactured elsewhere even though its company maybe Brazilian.Factors encouraging adaptation are:i) Differing usage conditions. These may be due to climate, skills, level of literacy, culture orphysical conditions. Maize, for example, would never sell in Europe rolled and milled as inAfrica. It is only eaten whole, on or off the cob. In Zimbabwe, kapenta fish can be used as arelish, but wilt always be eaten as a "starter" to a meal in the developed countries.ii) General market factors - incomes, tastes etc. Canned asparagus may be very affordable in thedeveloped world, but may not sell well in the developing world.iii) Government - taxation, import quotas, non tariff barriers, labelling, health requirements. Nontariff barriers are an attempt, despite their supposed impartiality, at restricting or eliminatingcompetition. A good example of this is the Florida tomato growers, cited earlier, whosuccessfully got the US Department of Agriculture to issue regulations establishing a minimumsize of tomatoes marketed in the United States. The effect of this was to eliminate the Mexicantomato industry which grew a tomato that fell under the minimum size specified. Some non-tariffbarriers may be legitimate attempts to protect the consumer, for example the ever stricterrestrictions on horticultural produce insecticides and pesticides use may cause African growers aheadache, but they are deemed to be for the public good.iv) History. Sometimes, as a result of colonialism, production facilities have been establishedoverseas. Eastern and Southern Africa is littered with examples. In Kenya, the tea industry is acolonial legacy, as is the sugar industry of Zimbabwe and the coffee industry of Malawi. Thesefacilities have long been adapted to local conditions. 23
  24. 24. v) Financial considerations. In order to maximize sales or profits the organization may have nochoice but to adapt its products to local conditions.vi) Pressure. Sometimes, as in the case of the EU, suppliers are forced to adapt to the rules andregulations imposed on them if they wish to enter into the market. PRODUCT DECSIONIn decisions on producing or providing products and services in the international market it isessential that the production of the product or service is well planned and coordinated, bothwithin and with other functional area of the firm, particularly marketing. For example, inhorticulture, it is essential that any supplier or any of his "out grower" (sub-contractor) cansupply what he says he can. This is especially vital when contracts for supply are finalized, asfailure to supply could incur large penalties. The main elements to consider are the productionprocess itself, specifications, culture, the physical product, packaging, labelling, branding,warranty and service.Production processThe key question is, can we ensure continuity of supply? In manufactured products this mayinclude decisions on the type of manufacturing process - artisanal, job, batch, and flow line or 24
  25. 25. group technology. However in many agricultural commodities factors like seasonality,perishability and supply and demand have to be taken into consideration. A checklist ofquestions on product requirements for horticultural products as an example Quantity and qualityof horticultural crops are affected by a number of things. These include input supplies (or lack ofthem), finance and credit availability, variety (choice), sowing dates, product range andinvestment advice. Many of these items will be catered for in the contract of supply.SpecificationSpecification is very important in agricultural products. Some markets will not take produceunless it is within their specification. Specifications are often set by the customer, but agents,standard authorities (like the EU or ITC Geneva) and trade associations can be useful sources.Quality requirements often vary considerably. In the Middle East, red apples are preferred overgreen apples. In one example French red apples, well boxed, are sold at 55 dinars per box, whilstnot so attractive Iranian greens are sold for 28 dinars per box. In export the quality standards areset by the importer. In Africa, Maritim (1991), found, generally, that there are no consistentstandards for product quality and grading, making it difficult to do international trade regionally.CultureProduct packaging, labeling, physical characteristics and marketing have to adapt to the culturalrequirements when necessary. Religion, values, aesthetics, language and material culture allaffect production decisions. Effects of culture on production decisions have been dealt withalready in chapter three.Physical productThe physical product is made up of a variety of elements. These elements include the physicalproduct and the subjective image of the product. Consumers are looking for benefits and thesemust be conveyed in the total product package. Physical characteristics include range, shape,size, color, quality, quantity and compatibility. Subjective attributes are determined byadvertising, self image, labelling and packaging. In manufacturing or selling produce,cognizance has to be taken of cost and country legal requirements.Again a number of these characteristics is governed by the customer or agent. For example, inbeef products sold to the EU there are very strict quality requirements to be observed. In fishproducts, the Japanese demand more "exotic" types than, say, would be sold in the UK. None ofthe dried fish products produced by the Zambians on Lake Kariba, and sold into the Lusakamarket, would ever pass the hygiene laws if sold internationally. In sophisticated markets likeseeds, the variety and range is so large that constant watch has to be kept on the new strains andvarieties in order to be competitive.PackagingPackaging serves many purposes. It protects the product from damage which could be incurredin handling and transportation and also has a promotional aspect. It can be very expensive. Size, 25
  26. 26. unit type, weight and volume are very important in packaging. For aircraft cargo the packageneeds to be light but strong, for sea cargo containers are often the best form. The customer mayalso decide the best form of packaging. In horticultural produce, the developed countries oftendemand blister packs for mange touts, beans, strawberries and so on, whilst for products likepineapples a sea container may suffice. Costs of packaging have always to be weighed againstthe advantage gained by it.Increasingly, environmental aspects are coming into play. Packaging which is non-degradable -plastic, for example - is less in demanded. Bio-degradable, recyclable, reusable packaging is nowthe order of the day. This can be both expensive and demanding for many developing countries.LabellingLabelling not only serves to express the contents of the product, but may be promotional(symbols for example Cashel Valley Zimbabwe; HJ Heinz, Africafe, Tanzania). The EU is nowputting very stringent regulations in force on labelling, even to the degree that the pesticides andinsecticides used on horticultural produce have to be listed. This could be very demanding forproducers, especially small scale, ones where production techniques may not be standardized.Government labelling regulations vary from country to country. Bar codes are not widespread inAfrica, but do assist in stock control. Labels may have to be multilingual, especially if theproduct is a world brand. Translation could be a problem with many words being translated withdifficulty. Again labelling is expensive, and in promotion terms non-standard labels are moreexpensive than standard ones. Requirements for crate labelling, etc. for internationaltransportation will be dealt with later under documentation. Product StrategyProduct Strategy is perhaps the most important function of a company. It must take in accountthe capabilities in terms of engineering, of production, of distribution (sales) existing in thecompany or of time to acquire them (by hiring or by mergers). It must evaluate the customer’sexpectations at the time of delivery. It must guest mate the competition (including new entrants)probable moves to enter the same market.Product strategy by Bull appeared sometimes erratic and not coordinated, especially during theperiods where product lines run independently. However, it has been dominated by very oldtrends rooted in the Sales Network during the 1950s defining Bulls market around the businessapplications, and fighting against the sole IBM as competitor.So, the company adopted its version of IBMs business model, following IBM with a variabledelay, in the domain of products, price and market following. Sometimes new opportunitiesappeared and some innovative products were developed, (e.g. time-sharing in GE time, smartcard applications) but they faded as marginalized by the Sales Network. In fact, the SalesNetwork was not conscious of the pressure it exerted on Planning and Engineering. Often, itfocalized on IBMs short term moves, ignoring the reasons for those moves (sometimes due tolegal constraints, sometimes by internal fighting inside IBM, other times because othercompetitors move). 26
  27. 27. While IBMs influence on Bull was extremely important, the reverse existed sometimes (1).Dispute between IBM World Trade and IBM US domestic may have been fueled by some worryof IBM European salesmen about some Bulls (and GEs or Honeywells) products.The capability of Bull to match IBMs offer on the market never existed. Before the GEs merger,Bull did not address the US market directly and by consequence excluded itself from the marketsegments needing the quantities only addressed by a worldwide market (such as large scientificcomputers). Another market that was ignored (knowledgeably) early was the small scientificmarket; its margins did not match the corporate model.Bull never did a comparable investment to IBMs in the technology area. Each time it (or itsAmerican associates) tries a significant move, the success did not reward it. The reasons of thefailure were multiple: overestimation of the return on investment, lack of a long term perspective(that existed in architecture and software), size of market. Some more specific problems weredue to the lack of experience in fundamental physics, themselves related to the isolation of theengineers.For historical reasons related to the acquisition of a park of customers and for "political" reasons,Bull did not succeed to shut down a product line before the 1990s. Its resource limitations did notallow to embark in the simultaneous developments of more than one or a couple of compatibleprocessors at the same time. Product Planning had to prepare several product line plans and toinvent models within each product line to match the competition prices and performances.Models were developed from a single engineering design with the same manufacturing cost byslowing down the processor clock or adding dummy cycles and/or by reducing the"connectivity" of the system.When the performances exceeded IBMs target, the system was not sold at full speed to avoid therisk of undercutting IBM future announcements price and keeping some reserve power to reactagainst a competition "mid-life kicker".New higher models were also created by unleashing the design constraints after one year. Newlower models were created by slowing down a bit already shipped processors.This strategy worked well as far as the manufacturer controlled completely the customerconfiguration by leasing the systems. The first evolution of the model was the advent of clone’smanufacturers. They obviously attacked IBMs market but GE, Honeywell and Bull strategistsordered to take all measures, sometimes detrimental to product and service costs, toescape cloners. The architecture or the assembler of the machines remained confidential, sourceand object code of programs was secrete, network architecture was not available even toperipheral suppliers, peripheral interfaces were modified and the differences kept in vaults... Bullargued to the persons objecting the strategy (suppliers, other manufacturers, customers ) that itwould respect the "de jure" standards (such as ISOs or ANSIs) but that it did not have to followthe "de facto" standards (such as IBMs). That changed in the 1980s when "Open Systems"became Bulls religion.Another IBM decision impacted the business model, it was unbundling. While the IBM pricingwas more or less related to development and manufacturing costs, adopting the same price forBulls items where software, for instance, was reproduced in far smaller number of copies, lead 27
  28. 28. to a disconnect between decisions to produce and customers acceptation. Especially in the late1970s and the 1980s, Bull embarked in many developments with a very low production rate, butthey were asked to match the IBMs catalog. Later, in the late 1980s, the competition with opensystems, lead to some re-bundling of the offer (the word was "packaging") where for instanceassociate a purchased data base system with a memory bank and even an additional processor.Research can be defined as the search for knowledge or any systematic investigation to establishfacts. The primary purpose for applied research (as opposed to basic research)is discovering, interpreting, and the development of methods and systems for the advancement ofhuman knowledge on a wide variety of scientific matters of our world and the universe. Researchcan use the scientific method, but need not do so.Scientific research relies on the application of the scientific method, a harnessing of curiosity.This research provides scientific information and theories for the explanation of the nature andthe properties of the world around us. It makes practical applications possible. Scientific researchis funded by public authorities, by charitable organizations and by private groups, includingmany companies. Scientific research can be subdivided into different classifications according totheir academic and application disciplines. 28
  29. 29. WHAT IS RESEARCH?Research is an often-misused term, its usage in everyday language very different from the strictscientific meaning. In the field of science, it is important to move away from the looser meaningand use it only in its proper context. Scientific research adheres to a set of strict protocols andlong established structures. Often, we will talk about conducting internet research or say that weare researching in the library. In everyday language, it is perfectly correct grammatically, butin science, it gives a misleading impression. The correct and most common term used in scienceis that we are conducting a literature review.Research must be systematic and follow a series of steps and a rigid standard protocol. Theserules are broadly similar but may vary slightly between the different fields of science.Scientific research must be organized and undergo planning, including performing literaturereviews of past research and evaluating what questions need to be answered. 29
  30. 30. Any type of ‘real’ research, whether scientific, economic or historical, requires some kind ofinterpretation and an opinion from the researcher. This opinion is the underlying principle, orquestion, that establishes the nature and type of experiment.The scientific definition of research generally states that a variable must be manipulated,although case studies and purely observational science do not always comply with this norm. Types of ResearchThere are many different types of research methods, also called research designs that are used bypsychologists in trying to find things out about behavior. This is just a quick aid to theidentification of research designs. In real life, some studies may combine the features of severalresearch designs or may contain elements not included below.Experiment: Participants randomly assigned to different groups being studied. Groups aretreated differently in one or a few very specific ways--the independent variable. Behaviorresulting from this treatment difference is measured--the dependent variable. If one group gets aspecific treatment and ones does not, usually the treated group is called the experimental groupand other groups are called control groups. Conditions other than the independent variable areheld as constant as possible for all groups. These constant conditions are called controls. If 30
  31. 31. participants are their own control group, that is, they receive both research treatments; the designis called a within-subjects experiment. Conclusions can be taken to indicate a cause and effectrelationship between the independent and dependent variables. Because of this, the experimentis in a class by itself and it is a very special type of research procedure.Quasi-experiment: Participants achieve membership in different groups as a result ofcharacteristics other than random assignment, for example: gender, age, socioeconomic status,athletic ability, or ethnic identification. A link may be found between one or more of thesecharacteristics and some outcome variables, but cause and effect relationships are not clearlyidentified. Without random assignment to groups, a researcher cannot clearly demonstrate cause.Correlation study: In the most general sense, a correlation study investigates the relationshipbetween two variables. Usually the data are reported as correlation coefficients. Strength anddirection (positive or negative) of relationships can be demonstrated by correlation studies butcausal links remain an open question.Longitudinal study: A longitudinal study follows a group composed of the same people acrossa period of the life span. The behavior of these individuals is observed and/or measured atseveral intervals over time in an attempt to study the changes in their behavior. Longitudinalstudies may cover a short time, such as a few weeks, or a long time, such as the entire life span.Longitudinal studies may additionally employ other methods, such as quasi-experimental or corelational approaches, but the defining characteristic is that the same people are studiedrepeatedly across time.Cross sectional study: A cross sectional study usually examines groups of different people whobelong to different age groups as a means of studying behavior development across part or all ofthe life span. These studies can usually be done more easily and quickly than longitudinal studiesbut the resulting data may be of lower quality. More rarely, the term cross sectional may be usedto describe studies which divide and examine segments of society based on variables other thanage, such as income, educational level or family size.Survey: A survey is a structured list of questions presented to people. Surveys may be writtenor oral, face to face or over the phone. It is possible to cheaply survey large numbers of people,but the data quality may be lower than some other methods because people do not always answerquestions accurately.Interview: An interview may be highly structured or it may involve less structured narrative. Itmay include survey methodology. It usually involves people responding orally to questions ortalking about their thoughts on a topic.Case study: A case study involves extensive observations of a few individuals. Data collectionmay include watching behavior, interviews and record searching. Case studies may be 31
  32. 32. retrospective and/or prospective. Usually case studies are employed where the behavior orsituation is so rare that other methods, involving larger groups of participants, are not possible.Naturalistic observation: Naturalistic observations can range from unstructured observationsof humans or other animals to situations involving hypothesis testing or some manipulations of anatural setting. If you wanted to know if males are likely to hold doors open for females, youcould watch until you had seen a number of natural occurrences of this, or you could get afemale helper to follow males into buildings and watch to see what happens. It can be difficult toprecisely define the natural setting, particularly when the participants are humans. Placing anactual research procedure into this category or others can involve a judgment call which might bedebatable.Demonstration: An unsystematically engineered observation of behavior, sometimes involvingonly one participant. The demonstration is remarkably common in the history of psychology,even though it provides only very weak evidence. It is not a recognized research method but it isa term which can be quite useful as a descriptor for studies that seem to employ no establishedmethod. RESEARCH METHODSThe goal of the research process is to produce new knowledge, which takes three main forms(although, as previously discussed, the boundaries between them may be fuzzy): Exploratory research, which structures and identifies new problems Constructive research, which develops solutions to a problem Empirical research, which tests the feasibility of a solution using empirical evidenceResearch can also fall into two distinct types: Primary research Secondary researchIn social sciences and later in other disciplines, the following two research methods can beapplied, depending on the properties of the subject matter and on the objective of the research: Qualitative research Quantitative research 32
  33. 33. Research is often conducted using the hourglass model Structure of Research The hourglassmodel starts with a broad spectrum for research, focusing in on the required information throughthe methodology of the project (like the neck of the hourglass), then expands the research in theform of discussion and results.1) QUALITATIVE RESEARCHQualitative research is a method of inquiry appropriated in many different academic disciplines,traditionally in the social sciences, but also in market research and further contexts. Qualitativeresearchers aim to gather an in-depth understanding of human behavior and the reasons thatgovern such behavior. The qualitative method investigates the why and how of decision making,not just what, where, when. Hence, smaller but focused samples are more often needed, ratherthan large samples.Data Collectionqualitative researchers may use different approaches in collecting data, such as the groundedtheory practice, narratology, storytelling, classical ethnography, or shadowing. Qualitativemethods are also loosely present in other methodological approaches, such as action research oractor-network theory. Forms of the data collected can include interviews and group discussions,observation and reflection field notes, various texts, pictures, and other materials.Qualitative research often categorizes data into patterns as the primary basis for organizing andreporting results. Qualitative researchers typically rely on the following methods for gatheringinformation: Participant Observation, Non-participant Observation, Field Notes, ReflexiveJournals, Structured Interview, Unstructured Interview, Analysis of documents and materialsIn the academic social sciences the most frequently used qualitative research approaches includethe following: 1. Ethnographic Research, used for investigating cultures by collecting and describing data thatis intended to help in the development of a theory. This method is also called “ethnomethodology” or "methodology of the people". An example of applied ethnographic research isthe study of a particular culture and their understanding of the role of a particular disease in theircultural framework. 2. Critical Social Research, used by a researcher to understand how people communicate anddevelop symbolic meanings. 33
  34. 34. 3. Ethical Inquiry, an intellectual analysis of ethical problems. It includes the study of ethics asrelated to obligation, rights, duty, right and wrong, choice etc. 4. Foundational Research, examines the foundations for a science, analyses the beliefs anddevelops ways to specify how a knowledge base should change in light of new information. 5. Historical Research, allows one to discuss past and present events in the context of thepresent condition, and allows one to reflect and provide possible answers to current issues andproblems. Historical research helps us in answering questions such as: Where have we comefrom, where are we, who are we now and where are we going? 6. Grounded Theory is an inductive type of research, based or “grounded” in the observationsor data from which it was developed; it uses a variety of data sources, including quantitativedata, review of records, interviews, observation and surveys. 7. Phenomenological Research, describes the “subjective reality” of an event, as perceived bythe study population; it is the study of a phenomenon. 8. Philosophical Research, is conducted by field experts within the boundaries of a specificfield of study or profession, the best qualified individual in any field of study to use anintellectual analyses, in order to clarify definitions, identify ethics, or make a value judgmentconcerning an issue in their field of study.2) Quantitative marketing researchQuantitative marketing research is the application of quantitative research techniques to thefield of marketing. It has roots in both the positivist view of the world, and the modern marketingviewpoint that marketing is an interactive process in which both the buyer and seller reach asatisfying agreement on the "four Ps" of marketing: Product, Price, Place (location) andPromotion.As a social research method, it typically involves the construction of questionnaires and scalesPeople who respond (respondents) are asked to complete the survey. Marketers use theinformation so obtained to understand the needs of individuals in the marketplace, and to createstrategies and marketing plans.Typical general procedureSimply, there are five major and important steps involved in the research process: 1. Defining the Problem. 2. Research Design. 3. Data Collection. 34
  35. 35. 4. Analysis. 5. Report Writing & presentation.A brief discussion on these steps is: 1. Problem audit and problem definition - What is the problem? What are the various aspects of the problem? What information is needed? 2. Conceptualization and operationalization - How exactly do we define the concepts involved? How do we translate these concepts into observable and measurable behaviours? 3. Hypothesis specification - What claim(s) do we want to test? 4. Research design specification - What type of methodology to use? - examples: questionnaire, survey 5. Question specification - What questions to ask? In what order? 6. Scale specification - How will preferences be rated? 7. Sampling design specification - What is the total population? What sample size is necessary for this population? What sampling method to use?- examples: Probability Sampling:- (cluster sampling, stratified sampling, simple random sampling, multistage sampling, systematic sampling) & Non probability sampling:- (Convenience Sampling, Judgment Sampling, Purposive Sampling, Quota Sampling, Snowball Sampling, etc. ) 8. Data collection - Use mail, telephone, internet, mall intercepts 9. Codification and re-specification - Make adjustments to the raw data so it is compatible with statistical techniques and with the objectives of the research - examples: assigning numbers, consistency checks, substitutions, deletions, weighting, dummy variables, scale transformations, scale standardization 10. Statistical analysis - Perform various descriptive and inferential techniques (see below) on the raw data. Make inferences from the sample to the whole population. Test the results for statistical significance. 11. Interpret and integrate findings - What do the results mean? What conclusions can be drawn? How do these findings relate to similar research? 12. Write the research report - Report usually has headings such as: 1) executive summary; 2) objectives; 3) methodology; 4) main findings; 5) detailed charts and diagrams. Present the report to the client in a 10 minute presentation. Be prepared for questions. Research methods 35
  36. 36. 1. Causal ResearchWhen most people think of scientific experimentation, research on cause and effect is most oftenbrought to mind. Experiments on causal relationships investigate the effect of one or morevariables on one or more outcome variables. This type of research also determines if one variablecauses another variable to occur or change. An example of this type of research would bealtering the amount of a treatment and measuring the effect on study participants.2. Descriptive ResearchDescriptive research seeks to depict what already exists in a group or population. An exampleof this type of research would be an opinion poll to determine which Presidential candidatepeople plan to vote for in the next election. Descriptive studies do not seek to measure the effectof a variable; they seek only to describe.3. Relational ResearchA study that investigates the connection between two or more variables is considered relationalresearch. The variables that are compared are generally already present in the group orpopulation. For example, a study that looked at the proportion of males and females that wouldpurchase either a classical CD or a jazz CD would be studying the relationship between genderand music preference. SCOPE OF RESEARCH 1. National innovative capacity: modeling, measuring and comparing national capacities 2. Designing efficient incentive systems for invention and innovation: intellectual propertyrights, prizes, public subsidies 3. Research in EPFL labs: new economics of science 4. New R&D methods and the production of reliable knowledge in sectors which laggedbehind 5. New models of innovation: open, distributed systems and the role of users 6. Other issues to be developed 36
  37. 37. 1 - National innovative capacity: modeling, measuring and comparing national capacitiesNational innovative capacity is the ability of a country to produce and commercialize a flow ofinnovative technology over the long term. It depends on: • The strength of a nations common infrastructure (basic research, education and training, intellectual property protection, R&D tax policies, venture capital, and so forth); • The cluster-specific innovation environment (one or many clusters involving particular factor (input) conditions; a local context that encourages investment in innovation-related activity; vigourous competition among locally based rivals; sophisticated local customers; presence of capable local suppliers and related companies). • The quality of linkages (relationship between the common innovation infrastructure and industrial clusters).This research strand aims at building innovation indexes and measuring various dimensionsof national innovation capacities. For instance: • Strategic capacity: it deals with the ability to mobilize and concentrate resources under some centralized decision making processes to achieve a critical scientific or technological objective. • Revolutionary capacities: it deals with the ability to shift resources out of areas of lower and into areas of higher productivity and greater yield. This is a capacity to manage transitions. The difficulty is that such a capacity involves various dimensions which can be conflicting (see Mowery and Simoe, 2001).2 - Designing efficient incentive systems for invention and innovation: intellectual property rights, prizes, public subsidiesOne central problem in the economics of knowledge is the design of incentive systems that bothreward inventors/knowledge producers and encourage dissemination of their output. Severalscholars have described the two regimes that allocate resources for the creation of newknowledge: one is the system of granting intellectual property rights, as exemplified by modernpatent and copyright systems, the other is the open science regime, as often found in the realm ofpure scientific research and sometimes in the realm of commercial technological innovation,often in infant industriesA large range of issues have to be addressed to elucidate the problem of designing efficientincentive systems: • What is the best solution in case of particular kind of new technologies (genomics, software, data bases)? 37
  38. 38. • What is the nature of the tension that arises when the two systems come up against each other? • How designing proper incentive systems to encourage research and innovation in areas of high social return and low private profitability (orphan drugs, malaria and other tropical diseases)? • In what condition a prize-based reward system provides a more efficient solution than granting intellectual property rights? • Is there an economic case for granting intellectual property rights in the domain of research tools, instruments, basic knowledge?3 – Research in EPFL labs: new economics of scienceCEMI will be at the forefront of the College to develop and undertake research in the field of"economics of science" with EPFL as the main case. In this perspective, several topics areobvious: • Assessing the impact of organizational practice on the productivity of university technology transfer offices • Measuring the social value of basic research and the local spillovers (regional impact). Accounting for the effects associated with mobility • Scale, scope and spillovers: the determinants of research productivity in several fields • Exploring the role of patents in knowledge transfer from EPFL • Exploring the effect of the patenting of research tools and biomedical innovation: transfer opportunities and social costs • Access policy for large scale research instrument, data bases.All these topic should give rise to research design (research question, data collection, analysis) inclose collaboration with the other EPFL Schools (life science, basic science, computer science,engineering science) in order to benefit from the great opportunity to be located in an Institute ofTechnology. These projects will be designed in close collaboration with Jan-Anders Manson,vice-president for Innovation and Knowledge Transfer.4 - New R&D methods and the production of reliable knowledge in sectors which lagged behindUnequal access to pertinent knowledge bases may well constitute an important conditionunderlying perceptible differences in the success with which different areas of Endeavour arepursued within the same society and the pace at which productivity advances in different sectors 38
  39. 39. of the economy during a given historical epoch. Today, it remains astonishing to observe thecontrast between fields of economic activity where improvements in practice are closelyreflecting rapid advances in human knowledge - such as is the case for information technologies,transportation, and certain areas of medical care (surgery and drug therapy) - and other areaswhere the state of knowledge appears to be far more constraining. The fact is that knowledge isnot being developed to the same degree in every sector. A major policy concern is to understandthe factors at the origin of such uneven development, and to implement a proper strategy in orderto fill the gap between sectors with fast knowledge accumulation processes and those in whichthese processes remain weak.To summarize, rapid and effective creation of know-how is most likely to occur when thefollowing conditions converge (Nelson, Seminar at CREA, Paris, 2004): • Practice in the field needs to be well specified, sustainable, replicable, imitable; • There needs to be ability to learn from experience and experiment; • The ability to experiment offline, with less expense than that would be involved in online experimentation, and to gain reliable information relevant to online use, greatly facilitates progress. • A strong body of "scientific" knowledge greatly facilitates effective offline experimentation, and also quick and reliable evaluation of varying practice online.Part of the problem in sectors which are lagging behind deals with the limited ability to conductexperiments. The main research issue here is to analyze the impact of new experimental methodsand design (essentially based on random assignment), which have the potential to profoundlytransform the way reliable knowledge is produced in these sectors. For instance, one of the mostsignificant developments in modern medicine has been the randomized controlled trial (RCT),the significance and use of which grew rapidly after its application to tuberculosis in the 1940s.Today the RCT is widely treated as the evidential gold standard for demonstrating what worksand what is medical best practice. Education might be the next sector to be profoundlytransformed through the application of RCTs. The growth of RCTs as an approach in educationalresearch has been pushed forward by three important factors: computers, statistical techniques(effect sizes and meta-analyses) and demand for accountability in both practice and research.There is, therefore, a favorable context. The question is whether this new feature can change andtransform the way knowledge is produced and distributed in a sector like education.5 – New models of innovation: open, distributed systems and the role of usersThis project involves the contribution of users in the innovation process not only in terms ofsending market signals (which is normally what users are supposed to do to help producer-innovators), but also in terms of actively contributing to the modification of the product. 39
  40. 40. This project emphasizes, therefore, the functional source of innovation: while an innovation isconsidered a manufacturers innovation when the developer expects to benefit by selling it, aninnovation is a user innovation when the user expects to benefit by using it.This research aims at understanding the capabilities and limitations of user innovation processes,which involve quite often an open and distributed system (in which innovations may be freelyrevealed to other users). Its advocates claim that user innovation, involving freely revealing, is anefficient means of producing socially desirable innovation and maximizing "spillovers," orknowledge transfer / leakage. The generation of innovation by users may be a complement or itmay compete with innovations produced by manufacturers. In its role as a complement, userinnovation may extend the diversity of products without endangering market positions ofmanufacturers and may help manufacturing firms to mitigate information asymmetry problemsvis-à-vis future market needs. As a competitor, user innovation may offer products that bettermeet user needs.The model involves two major deviations from the private investment model of innovation,which assumes that manufacturers innovate in products and processes to improve theircompetitive position and that returns to innovation result from excluding other manufacturersfrom adopting it. First, users of technologies, rather than manufacturers, are often the innovators.Second, user-innovators often freely reveal the proprietary knowledge they have developed attheir private expense.A host of empirical studies, mainly conducted by Eric von Hippel, his research group at MIT andhis colleagues, show that user innovation is an important economic phenomenon. It constitutesthe main source of knowledge in some sectors or an important contributor in others.Deepening our understanding of the conditions leading to user innovation and of its economicimpact is, therefore, a relevant issue: (i) for a better assessment both of intangibles andintellectual capital at the firm level and of innovation capacities at the national level; and (ii) fora better understanding of some new organizational forms, such as user communities, whichappear to be becoming more relevant in a knowledge society. Thus our main research questionsare the following: • What are the different channels through which user innovations influence the economy and how should manufacturers adapt and respond to user innovations? • What kinds of learning processes / dynamic capabilities do user innovations enable across product / technological generations? • What kind of policy issues and challenges pertain to user innovation? Given the fact that user innovations contribute significantly to productivity growth and national competitiveness, what kinds of policy should be devised to promote them. 40
  41. 41. 6 - Other issues to be developedThe economics of knowledge policy:While it is relatively easy to provide a long list of policy recommendations which are of somerelevance in the context of the knowledge economy (on patent, ICT, education), it is far moredifficult to develop the welfare economics of knowledge investment in order to build aframework for addressing policy issues.Methodology for the optimal allocation of R&D funds to new technologies:How does the R&D manager maximize the probability of developing a commercial abletechnology over a specific period.Tea is the most popular non-intoxicating beverage in the world enjoyed by the rich and pooralike. Tea drinking was quite common in China as early as the 6th century B.C. Over a period oftime this habit was picked up by neighboring countries in South East Asia, such as Japan.Western nations started importing tea from China only in the 17th century. The Britishdeveloped India as a sourcing base in the 19th century to reduce their dependence on China.During the late 19th century and early 20th century, tea cultivation became popular in othercolonies like Sri Lanka, Tanzania, Malawi, Kenya, etc. In the last four decades, world productionhad a growth of 3% pa, which decelerated to 1.5% pa in the last decade. Tea is a caffeinated hotbeverage, an infusion made by steeping the dried leaves or buds of the shrub Camellia sinensis inhot water. In addition, tea may also include other herbs, spices, or fruit flavors.The word "tea" is also used, by extension, for any fruit or herb infusion; for example, "rosehip tea" or "camomile tea". In cases where they contain no tea leaves, some people prefer to call these beverages "tisanes" or "herbal teas" to avoid confusion. This article is concerned with the "true" tea, Camellia sinensis. The tea plant is one of the Camellia family (Camellia Sinensis) which is indigenous to China and India. The leaves are stiff, shiny and pointed, and the flowers, which resemble the buttercup in shape, are white with golden stems. The plant requires a warm, wet climate with at least 50 inches (135mm) of rain a year and well-drained soil. It grows at varying altitudes up to 7,000 feet. The 41
  42. 42. quality of tea depends on climatic conditions. At higher altitudes the growth of the plants isslower and the crops smaller, but the quality will generally be better. Only the bud and two topleaves from each stalk are picked for processing. Like wine, each crop reflects the character of the region in which it is grown. Soil, climate, the amount of rain and time of the year the tea is plucked influences its character. China is credited with originating tea cultivation, and tea plants now grow in about30countries. However the best quality teas come from India.Tea is the agricultural product of the leaves, leaf buds, and internodes of the Camelliasinensis plant, prepared and cured by various methods. "Tea" also refers to thearomatic beverage prepared from the cured leaves bycombination with hot or boiling water, and is thecommon name for the Camellia sinensis plant itself.After water, tea is the most widely-consumedbeverage in the world. The four types of tea mostcommonly found on the market are black tea, oolongtea, green tea and white tea, all of which can be madefrom the same bushes, processed differently, and, in 42

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