Chapter 1               Research              in BusinessMcGraw-Hill/Irwin           Copyright © 2011 by The McGraw-Hill C...
Learning ObjectivesUnderstand . . .• What business research is and how it differs from  business decision support systems ...
Data Collectors FaceResponsibilities “This is a fantastic time to be entering the business world, because business is goin...
PulsePoint:Research Revelations  34             The percent of employees who never             consider that their bosses,...
Why Study Business Research?Businessresearch providesinformation toguide businessdecisions                               1-5
Research Should HelpRespond to Change   “Enterprises have long recognized the need   to better sense and respond to busine...
Business Research•A process of determining, acquiring,analyzing, synthesizing, and disseminatingrelevant business data, in...
Research Should ReduceRisk         The primary          purpose of       research is to reduce the level of risk of a mark...
What’s Changing in Businessthat Influences Research      New                 Information    Technological   Research      ...
Computing Power and Speed                  Lower-cost                    Data                  Collection                 ...
Business Planning DrivesBusiness Research      Organizational   Business         Mission        Goals        Business     ...
Business Decisions andResearch Häagen-Dazs Tactics   – Super premium   – Dozens of flavors   – Small packages   – Signatur...
Information Sources  Decision Support         Business Intelligence        Systems                  SystemsNumerous elemen...
Sources ofBusiness Intelligence                   Government/                                               Competitive   ...
Hierarchy of Business DecisionMakers                  Visionaries                  Visionaries                Standardized...
Minute Main and BusinessResearch                           1-16
P&G has a world-class researchdepartment                                 1-17
Research May Not Be NecessaryCan It Pass These Tests?• Can information be applied to a critical  decision?• Will the infor...
Information Value Chain  Data collection/                        Data   transmission                        management    ...
The Research Process                       1-20
Characteristics of     Good ResearchClearly defined purpose  Detailed research process     Thoroughly planned design      ...
Categories of Research       Applied     Basic (Pure)                                  1-22
Types of Studies      Reporting    Descriptive     Explanatory   Predictive                                 1-23
Key Terms  pplied research        anagement dilemma  usiness intelligence   redictive studies  system (BIS)               ...
Appendix 1aHow the Research Industry Works
Who Conducts BusinessResearch?                        1-26
Some Organizations UseInternal Research Sources                            1-27
Some Organizations UseExternal Research Sources                            1-28
Business Research Firms                          1-29
Proprietary Research                   Decision Analyst,                   Inc. uses Internet-                   based con...
Syndicated ServicesNielsen MediaResearchprovides audiencedata for televisionprograms likeCourt TV                      1-31
Some Syndicated Data Providers     AC Nielsen                DoubleClick    Scarborough            Nielsen/NetRatings   Mi...
Specialty Business ResearchFirms  Methodology     Process          Industry                Participant group              ...
Communication Agencies     Sales        Advertising     Promotion       Direct       Public      Business     Relations   ...
Consultants andTrade Associations                     1-35
Trade Associations           NHRA             CASRO                  MRA                  ESOMAR                        BR...
Many Firms Conduct Research                              1-37
Key Terms       •Custom Researcher       •Full-service researcher       •Specialty researcher       •Syndicated data provi...
Chapter 1   AddendumResearch Timeline                    1-39
Information Revolution                                                      1971                           1964           ...
Information Revolution                                             1993                  2001                         1987...
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  • Use this quote to discuss why research is important in a time of change.
  • See the text Instructors Manual (downloadable from the text website) for ideas for using this research-generated statistic.
  • Business research plays an important role in an environment that emphasizes measurement. Return on investment (ROI) is the calculation of the financial return for all business expenditures and it is emphasized more now than ever before. Business research expenditures are increasingly scrutinized for their contribution to ROMI.
  • Business research is a systematic inquiry that provides information to guide business decisions. The text definition is provided in the slide. Ask students to offer examples of types of decision-making situations that could be addressed using business research.
  • Use this ad to talk about the different types of risk that organizations face. Students usually have no difficulty identifying financial/economic risk, but must stretch to identify other types of risks. Some of these include social risks (preserving their reputation), physical risk (represented by dangers to living things: product recalls in pet food and human food, pharmaceuticals, etc. provide examples.), environmental risk (preserving the organization’s relationship with their physical environment), technological risk (falling behind—or having the opportunity to leap ahead—of their competition).
  • Several factors increase the relevance for studying business research. Information overload. While the Internet and its search engines present extensive amounts of information, its quality and credibility must be continuously evaluated. The ubiquitous access to information has brought about the development of knowledge communities and the need for organizations to leverage this knowledge universe for innovation—or risk merely drowning in data. Stakeholders now have more information at their disposal and are more resistant to business stimuli. Technological connectivity. Individuals, public sector organizations, and businesses are adapting to changes in work patterns (real-time and global), changes in the formation of relationships and communities, and the realization that geography is no longer a primary constraint. Shifting global centers of economic activity and competition. The rising economic power of Asia and demographic shifts within regions highlight the need for organizations to expand their knowledge of consumers, suppliers, talent pools, business models, and infrastructures with which they are less familiar. Increasingly critical scrutiny of big business. The availability of information has made it possible for all a firm’s stakeholders to demand inclusion in company decision making, while at the same time elevating the level of societal suspicion. More government intervention. As public-sector activities increase in order to provide some minimal or enhanced level of social services, governments are becoming increasingly aggressive in protecting their various constituencies by posing restrictions on the use of managerial and business research tools. Battle for analytical talent. Managers face progressively complex decisions, applying mathematical models to extract meaningful knowledge from volumes of data and using highly sophisticated software to run their organizations. The shift to knowledge-intensive industries puts greater demand on a scarcity of well-trained talent with advanced analytical skills. Computing Power and Speed. Lower cost data collection, better visualization tools, more computational power, more and faster integration of data, and real-time access to knowledge are now manager expectations…not wistful visions of a distant future. New Perspectives on Established Research Methodologies. Older tools and methodologies, once limited to exploratory research, are gaining wider acceptance in dealing with a wider range of managerial problems.
  • An organization’s mission drives its business goals, strategies, and tactics and, consequently, its need for business decision support systems and business intelligence. Students need to understand the differences in these concepts to fully understand what drives a manager to seek solutions through research.
  • Selecting business strategies and tactics often drive research. A business strategy is defined as the general approach an organization will follow to achieve its business goals. A strategy might describe how an organization can best position itself to fulfill customer needs or establish a general approach to gaining brand equity. Haagen-Daz positioned itself with its super-premium ice-cream strategy. Business tactics are specific, timed activities that execute a business strategy. Haagen-Daz designed its ice-cream to be rich and creamy with flavors like “Peanut Butter Fudge Chunk.” It packaged the ice cream in pint size containers with signature gold and burgundy colors. It distributes the ice cream in grocery stores and franchised stores.
  • When elements of data are organized for retrieval, they collectively constitute a business decision support system (DSS). This data is often shared over an intranet or an extranet. An intranet is a private network that is contained within an enterprise and is not available to the public at large. It may consist of many interlinked local area networks. It typically includes connections through one or more computers to the Internet. The main purpose of an intranet is to share company information and computing resources among internal audiences. An extranet is a private network that uses the Internet protocols and the public telecommunication system to share an organization’s information, data, or operations with external suppliers, vendors, or customers. An extranet can be viewed as the external portion of a company’s intranet. A business intelligence system (BIS) is designed to provide ongoing information about events and trends in the technological, economic, political and legal, demographic, cultural, social, and competitive areas.
  • Exhibit 1-1 Exhibit 1-1 shows some sources of business intelligence. Sources of government information include speeches by elected officials, recordings of public proceedings, press releases, and agency websites. Sources of competitive information include presentations at conferences, literature searches, press releases, syndicated industry studies, web sites, clipping services, and business research. Sources of economic information include literature searches and government reports. Sources of cultural and social information include syndicated studies, public opinion organizations, business research, and government reports. Sources of technological information include patent filings, web sites, syndicated industry studies, presentations at conferences, literature searches, and clipping services. Sources of demographic information include syndicated studies, government reports, and business research. Remind your students that they have an extensive list of business sources on the CD that accompanied their textbook. It’s a valued resource that will be useful if you assign projects within your course structure.
  • Exhibit 1-2 Exhibit 1-2 illustrates the hierarchy of business decision makers. In the bottom tier, most decisions are based on past experience or instinct. Decisions are also supported with secondary data searches. In the middle tier, some decisions are based on business research. In the top tier, every decision is guided by business research. Firms develop proprietary methodologies and are innovative in their combination of methodologies. There is access to research data and findings throughout the organization.
  • Exhibit 1-3 Minute Maid is an example of a top-tier research organization. Ask students: “Why?”
  • Eastman Kodak has an internal research department.
  • Business research is only valuable when it helps management make better decisions. A study may be interesting, but if it does not help improve decision-making, its use should be questioned. Research could be appropriate for some problems, but insufficient resources may limit usefulness.
  • Computers and telecommunications lowered the costs of data collection. Data management is now possible and necessary given the quantity of raw data. Models reflect the behavior of individuals, households, and industries. A DSS integrates data management techniques, models, and analytical tools to support decision making. Data must be more than timely and standardized; it must be meaningful. These are all characteristics of the information value chain.
  • Exhibit 1-4 Exhibit 1-4 introduces the research process model used throughout the text and the PowerPoint slides. Instructors are encourage to give it a brief overview here, as a more detailed look is offered in chapter 4, and individual stages are discussed in subsequent chapters.
  • Exhibit 1-5 presents the characteristics of good business research and also explains what managers should look for in research done by others. You might wish to discuss the concepts here, before you discuss who actually conducts research…or you might want to discuss who conducts research first, followed by this slide to summarize.
  • Applied research applies research to discovering solutions for immediate problems or opportunities. Basic (or pure) research aims to solve perplexing questions or obtain new knowledge of an experimental or theoretical nature that has little direct or immediate impact on action, performance, or policy decisions.
  • Reporting studies provide a summation of data, often recasting data to achieve a deeper understanding or to generate statistics for comparison. A descriptive study tries to discover answers to the questions who, what, when, where, and, sometimes, how. An explanatory study attempts to explain the reasons for the phenomenon that the descriptive study only observed A predictive study attempts to predict when and in what situations an event will occur. Studies may also be described as applied research or basic research.
  • Exhibit 1a-1
  • Exhibit 1a-1, far left part Exhibit 1a-1 illustrates who conducts business research. First, researchers may be internal or external. Internal researchers are “in-house.”
  • Exhibit 1a-1, External External research suppliers can be further classified into business research firms, communication agencies, consultants, and trade associations. Each of these will be further developed in the following slides.
  • Exhibit 1a-1, Business Research Firms Business research firms may be full-service or specialty-based. Full-service firms conduct all phases of research from planning to insight development. They may offer custom projects tailored to a client’s needs and/or proprietary work. Proprietary methodologies are programs or techniques that are owned by a single firm. Exhibit 1-5 lists some of the world’s largest business research firms. Specialty firms establish expertise in one or a few research methodologies . They represent the largest number of research firms and tend to dominate the small research firms operated by a single research firm or a very small staff. Syndicated data providers track the change of one or more measures over time, usually in a given industry. Some research firms offer omnibus studies that combine one or a few questions from several business decision makers who need information from the same population.
  • Many research companies offer proprietary services for different types of research. Conceptor uses a representative sample of 150 consumers to view new product concepts.
  • Syndicated Data Providers provide comparable performance and opinion data. When firms want to evaluate themselves against others in their industry, they turn to syndicated data providers. Exhibit 1-6 provides some examples of Syndicated Data Providers.
  • Exhibit 1a-3 lists some syndicated data providers, their service, and what their service measures.
  • Firms specializing in methodology conduct only one type of research such as survey research, customer satisfaction research or ad copy testing. Firms specializing in process contribute to only one portion of the research process such as sample recruitment, telephone interviewing, or fielding Web surveys. Firms specializing by industry become experts in one or a few industries such as pharmaceutical research or telecommunications research. Firms specializing by participant group become experts in a particular participant group such as Latino-Americans. Firms specializing by geographic region operate in only one region of a country, for example, the Midwest or the Southwest, or a city, like New York.
  • Communication agencies are heavy users of syndicated research data, especially from media industry suppliers. Some agencies do extensive basic research. For direct business agencies, every single project is actually an experiment.
  • Exhibit 1a-1, consultants & Trade Associations All consultants are involved in extensive secondary data research for their clients and may also be major influencers in research design. Trade associations generally do not conduct or supply research services, but rather commission research that supports their missions.
  • This is a list of some major trade associations relevant to business research. A more comprehensive list in on the text CD. For a searchable website try: www.businessfinance.com/trade-associations.htm National Human Resources Association American Association of Public Opinion Research Council of American Survey Research Organizations Business Research Association American Marketing Association World Association of Opinion and Business Research Professionals Advertising Research Foundation Association of National Advertisers Sales Research Trust Magazine Publishers of America National Association of Broadcasters
  • This exhibit (1a-1) can be used to summarize what was just discussed in more detail.
  • Chap001

    1. 1. Chapter 1 Research in BusinessMcGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All Rights Reserved.
    2. 2. Learning ObjectivesUnderstand . . .• What business research is and how it differs from business decision support systems and business intelligence systems.• Trends affecting business research and the emerging hierarchy of business decision makers.• The distinction between good business research and research that falls short of professional quality.• The nature of the research process. 1-2
    3. 3. Data Collectors FaceResponsibilities “This is a fantastic time to be entering the business world, because business is going to change more in the next 10 years than it has in the last 50.” Bill Gates, entrepreneur and founder Microsoft 1-3
    4. 4. PulsePoint:Research Revelations 34 The percent of employees who never consider that their bosses, clients, or colleagues think before posting to a blog, discussion forum, or social network. 1-4
    5. 5. Why Study Business Research?Businessresearch providesinformation toguide businessdecisions 1-5
    6. 6. Research Should HelpRespond to Change “Enterprises have long recognized the need to better sense and respond to business change. What’s different today is that ubiquitous access to information and real-time communications have fostered an ‘always on’ business culture where decision making has become a ‘just-in-time process.’” Business Performance Management Forum 1-6
    7. 7. Business Research•A process of determining, acquiring,analyzing, synthesizing, and disseminatingrelevant business data, information, andinsights to decision makers in ways thatmobilize the organization to takeappropriate business actions that,in turn, maximize business performance 1-7
    8. 8. Research Should ReduceRisk The primary purpose of research is to reduce the level of risk of a marketing decision 1-8
    9. 9. What’s Changing in Businessthat Influences Research New Information Technological Research Overload Connectivity Perspectives Computing Shifting Power & Global Speed Economics Factors Battle for Critical Analytical Scrutiny of Talent Business Government Intervention 1-9
    10. 10. Computing Power and Speed Lower-cost Data Collection Better Integration of Visualization Data Tools Factors Real-time Powerful Access Computation 1-10
    11. 11. Business Planning DrivesBusiness Research Organizational Business Mission Goals Business Business Strategies Tactics 1-11
    12. 12. Business Decisions andResearch Häagen-Dazs Tactics – Super premium – Dozens of flavors – Small packages – Signature colors on packaging – Available in franchise and grocery stores 1-12
    13. 13. Information Sources Decision Support Business Intelligence Systems SystemsNumerous elements of Ongoing information data organized for collection retrieval and use in Focused on events, business decision trends in micro and making macro-environmentsStored and retrieved via – Intranets – Extranets 1-13
    14. 14. Sources ofBusiness Intelligence Government/ Competitive Regulatory Demographic Economic Business Intelligence Technological Cultural/ Social 1-14
    15. 15. Hierarchy of Business DecisionMakers Visionaries Visionaries Standardized Decision Makers Intuitive Decision Makers 1-15
    16. 16. Minute Main and BusinessResearch 1-16
    17. 17. P&G has a world-class researchdepartment 1-17
    18. 18. Research May Not Be NecessaryCan It Pass These Tests?• Can information be applied to a critical decision?• Will the information improve managerial decision making?• Are sufficient resources available? 1-18
    19. 19. Information Value Chain Data collection/ Data transmission management Characteristics Decision Data support systems interpretation Models 1-19
    20. 20. The Research Process 1-20
    21. 21. Characteristics of Good ResearchClearly defined purpose Detailed research process Thoroughly planned design High ethical standards Limitations addressed Adequate analysis Unambiguous presentation Conclusions justified Credentials 1-21
    22. 22. Categories of Research Applied Basic (Pure) 1-22
    23. 23. Types of Studies Reporting Descriptive Explanatory Predictive 1-23
    24. 24. Key Terms pplied research anagement dilemma usiness intelligence redictive studies system (BIS) ure research usiness research eporting studies ontrol eturn on Investment ecision support (ROI) 1-24
    25. 25. Appendix 1aHow the Research Industry Works
    26. 26. Who Conducts BusinessResearch? 1-26
    27. 27. Some Organizations UseInternal Research Sources 1-27
    28. 28. Some Organizations UseExternal Research Sources 1-28
    29. 29. Business Research Firms 1-29
    30. 30. Proprietary Research Decision Analyst, Inc. uses Internet- based concept testing called Conceptor to examine new product concepts 1-30
    31. 31. Syndicated ServicesNielsen MediaResearchprovides audiencedata for televisionprograms likeCourt TV 1-31
    32. 32. Some Syndicated Data Providers AC Nielsen DoubleClick Scarborough Nielsen/NetRatings Millward Brown Taylor Nelson Sofres Nielsen Media Intersearch Research J.D. Power Associates Roper ASW MediaMark CSA TMO Simmon (SMRB) Yahoo! BRMB ORC International Information Resources Inc. 1-32
    33. 33. Specialty Business ResearchFirms Methodology Process Industry Participant group Geographic Region 1-33
    34. 34. Communication Agencies Sales Advertising Promotion Direct Public Business Relations 1-34
    35. 35. Consultants andTrade Associations 1-35
    36. 36. Trade Associations NHRA CASRO MRA ESOMAR BRA AMA WAOBRP MPA NAB 1-36
    37. 37. Many Firms Conduct Research 1-37
    38. 38. Key Terms •Custom Researcher •Full-service researcher •Specialty researcher •Syndicated data provider •Omnibus researcher •Omnibus study 1-38
    39. 39. Chapter 1 AddendumResearch Timeline 1-39
    40. 40. Information Revolution 1971 1964 1973 First CATI OCR UPC bar-code survey shows scanning 1979 conducted promise introduced First U.S. DOD VisiCalc commissions ships 1968 1972 1975 forerunner of Word processing Optical laser Microsoft Internet first demonstrated disk revealed is born1960 1980 1968 1973 1980 1964 SPSS created Basic ideas of Apple owns IBM Internet created 50% of introduces pc market model 360 1971 Intel introduces first 1976 microprocessor Apple I released 1-40
    41. 41. Information Revolution 1993 2001 1987 2003 WWW experiences Online survey First Wal-Mart commits 3,400X growth software widely Internet To use RFID in service traffic available survey 1981 1994 2002 IBMPC 1990s Greenfield Online Web-conferencing released OCR used for Introduces Software data entry online focus group introduced1980 2010 1991 2009 WWW 1996 76.3% in 1987 Internet developed US have IRI conducts World Exposition first scanner Internet held access tracking study 2002 High-speed chip technology for servers 1-41
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