BusinessResearch Methods The Role of Business Research
Business Research DefinedBusiness research is defined as thesystematic process of generatinginformation for business decisionsmaking.
Business Research Research information is neither intuitive nor haphazardly gathered. Literally, research (re-search) -“search again” Business research must be objective Detached and impersonal rather than biased It facilitates the managerial decision process for all aspects of a business.
Business Research Types Basic research Applied research
Basic Research Attempts to expand the limits of knowledge. Not directly involved in the solution to a pragmatic problem.
Basic Research Example Is executive success correlated with high need for achievement? Are members of highly cohesive work groups more satisfied than members of less cohesive work groups?
Applied Research Conducted when a decision must be made about a specific real-life problem
Applied Research Examples Should McDonalds add Italian pasta dinners to its menu? Should Procter & Gamble add a high-priced home teeth bleaching kit to its product line?
Scientific Method The analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions.
The Decision-making Process Associated withthe Development and Implementation of aStrategy Identifying problems and opportunities Diagnosis and assessment Selecting and implementing a course of action Evaluating the course of action
Major Topics for Research inBusiness General Business Conditions and Corporate Research Financial and Accounting Research Management and Organizational Behavior Research Sales and Marketing Research Information Systems Research Corporate Responsibility Research
Global Business Research General information about country - economic conditions and political climate Cultural and consumer factors Market and competitive conditions - demand estimation
Research Design: DefinitionA research design is a framework orblueprint for conducting the research project.It details the procedures necessary forobtaining the information needed to structureor solve research problems.
Components of a Research Design Define the information needed Design the exploratory, descriptive, and/or causal phases of the research Specify the measurement and scaling procedures Pretest a questionnaire (interviewing form) or an appropriate form for data collection Specify the sampling process and sample size Develop a plan of data analysis
Exploratory Research Initial research conducted to clarify and define the nature of a problem Does not provide conclusive evidence Subsequent research expected
Descriptive Research Describes characteristics of a population or phenomenon Some understanding of the nature of the problem
Causal Research Conducted to identify cause and effect relationships
A Classification of Research Designs Research Design Exploratory ConclusiveResearch Design Research Design Descriptive Causal Research Research Cross-Sectional Longitudinal Design Design Single Cross- Multiple Cross- Sectional Design Sectional Design
Exploratory & Conclusive Research Differences Exploratory ConclusiveObjective: To provide insights and To test specific hypotheses and understanding. examine relationships.Character- Information needed is defined Information needed is clearlyistics: only loosely. Research process defined. Research process is is flexible and unstructured. formal and structured. Sample is Sample is small and non- large and representative. Data representative. Analysis of analysis is quantitative. primary data is qualitative.Findings Tentative. Conclusive./Results:Outcome: Generally followed by further Findings used as input into exploratory or conclusive decision making. research.
A Comparison of Research Designs Exploratory Descriptive CausalObjective: Discovery of ideas Describe market Determine cause and insights characteristics or and effect functions relationshipsCharacteristics: Flexible, versatile Marked by the prior Manipulation of formulation of one or more specific hypotheses independent variables Often the front Preplanned and end of total structured design Control of other research design mediating variables Expert surveys Secondary dataMethods: Pilot surveys Surveys Experiments Secondary data Panels Qualitative Observation and research other data
Uses of Exploratory Research Formulate a problem or define a problem more precisely Identify alternative courses of action Develop hypotheses Isolate key variables and relationships for further examination Gain insights for developing an approach to the problem Establish priorities for further research
Methods of Exploratory Research Survey of experts Pilot surveys Secondary data analyzed in a qualitative way Qualitative research
Use of Descriptive Research To describe the characteristics of relevant groups, such as consumers, salespeople, organizations, or market areas. To estimate the percentage of units in a specified population exhibiting a certain behavior. To determine the perceptions of product characteristics. To determine the degree to which marketing variables are associated. To make specific predictions
Methods of Descriptive Research Secondary data analyzed in a quantitative as opposed to a qualitative manner Surveys Panels Observational and other data
Cross-sectional Designs Involve the collection of information from any given sample of population elements only once. In single cross-sectional designs, there is only one sample of respondents and information is obtained from this sample only once. In multiple cross-sectional designs, there are two or more samples of respondents, and information from each sample is obtained only once. Often, information from different samples is obtained at different times.
Longitudinal Designs A fixed sample (or samples) of population elements is measured repeatedly on the same variables A longitudinal design differs from a cross-sectional design in that the sample or samples remain the same over time
Uses of Casual Research To understand which variables are the cause (independent variables) and which variables are the effect (dependent variables) of a phenomenon To determine the nature of the relationship between the causal variables and the effect to be predicted METHOD: Experiments
Potential Sources of Error in Research DesignsTotal Error Random Non-sampling Sampling Error Error Response Non-response Error Error Researcher Interviewer Respondent Error Error ErrorSurrogate Information Error Respondent Selection Error Inability ErrorMeasurement Error Questioning Error Unwillingness ErrorPopulation Definition Error Recording ErrorSampling Frame Error Cheating ErrorData Analysis Error
Errors in Research The total error is the variation between the true mean value in the population of the variable of interest and the observed mean value obtained in the marketing research project. Random sampling error is the variation between the true mean value for the population and the true mean value for the original sample. Non-sampling errors can be attributed to sources other than sampling, and they may be random or nonrandom: including errors in problem definition, approach, scales, questionnaire design, interviewing methods, and data preparation and analysis. Non-sampling errors consist of non-response errors and response errors.
Errors in Marketing Research Non-response error arises when some of the respondents included in the sample do not respond. Response error arises when respondents give inaccurate answers or their answers are misrecorded or misanalyzed.
Citicorp Banks on Exploratory, Descriptive, and Causal ResearchMarketing Research at Citicorp is typical in that it is used tomeasure consumer awareness of products, monitor theirsatisfaction and attitudes associated with the product, trackproduct usage and diagnose problems as they occur. Toaccomplish these tasks Citicorp makes extensive use ofexploratory, descriptive, and causal research. Often it isadvantageous to offer special financial packages to specificgroups of customers. In this case, a financial package isbeing designed for senior citizens.The following seven-step process was taken by marketingresearch to help in the design.
Citicorp Banks on Exploratory, Descriptive, and Causal Research1) A taskforce was created to better define the marketparameters to include all the needs of the many Citicorpbranches. A final decision was made to include Americans55 years of age or older, retired, and in the upper half ofthe financial strata of that market.
Citicorp Banks on Exploratory, Descriptive, and Causal Research2) Exploratory research in the form of secondary data analysisof the mature or older market was then performed and a studyof competitive products was conducted. Exploratory qualitativeresearch involving focus groups was also carried out in order todetermine the needs and desires of the market and the level ofsatisfaction with the current products. In the case of senior citizens, a great deal of diversity was found in the market. This was determined to be due to such factors as affluence, relative age, and the absence or presence of a spouse.
Citicorp Banks on Exploratory, Descriptive, and Causal Research3) The next stage of research was brainstorming. Thisinvolved the formation of many different financialpackages aimed at the target market. In this case, atotal of 10 ideas were generated.
Citicorp Banks on Exploratory, Descriptive, and Causal Research4) The feasibility of the 10 ideas generated in step 3 was thentested. The ideas were tested on the basis of whether they werepossible in relation to the business. The following list of questionswas used as a series of hurdles that the ideas had to pass tocontinue on to the next step.• Can the idea be explained in a manner that the target market will easily understand?• Does the idea fit into the overall strategy of Citicorp?
Citicorp Banks on Exploratory, Descriptive, and Causal Research Is there an available description of a specific target market for the proposed product? Does the research conducted so far indicate a potential match for target market needs, and is the idea perceived to have appeal to this market? Is there a feasible outline of the tactics and strategies for implementing the program? Have the financial impact and cost of the program been thoroughly evaluated and determined to be in line with company practices?In this study, only one idea generated from the brainstorming sessionmade it past all the listed hurdles and on to step 5.
Citicorp Banks on Exploratory,Descriptive,and Causal Research5) A creative work-plan was then generated. This plan was toemphasize the competitive advantage of the proposed product aswell as better delineate the specific features of the product.6) The previous exploratory research was now followed up withdescriptive research in the form of mall intercept surveys of peoplein the target market range. The survey showed that the list ofspecial features was too long and it was decided to drop thefeatures more commonly offered by competitors.
Citicorp Banks on Exploratory,Descriptive,and Causal Research7) Finally, the product was test marketed in six ofthe Citicorp branches within the target market.Test marketing is a form of causal research.Given successful test marketing results, theproduct is introduced nationally.