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Chap001
1. Understand . . .
• 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.
Learning ObjectivesLearning Objectives
2. Data Collectors FaceData Collectors Face
ResponsibilitiesResponsibilities
“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
4. Why Study Business Research?Why Study Business Research?
Business
research provides
information to
guide business
decisions
5. Research Should HelpResearch Should Help
Respond to ChangeRespond 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
6. •A process of determining, acquiring,
analyzing, synthesizing, and disseminating
relevant business data, information, and
insights to decision makers in ways that
mobilize the organization to take
appropriate business actions that,
in turn, maximize business performance
Business ResearchBusiness Research
7. Research Should ReduceResearch Should Reduce
RiskRisk
The primary
purpose of
research is to
reduce the level of
risk of a marketing
decision
8. Critical
Scrutiny of
Business
Computing
Power &
Speed
Computing
Power &
Speed
Battle for
Analytical
Talent
Battle for
Analytical
Talent
FactorsFactors
Information
Overload
Shifting
Global
Economics
Shifting
Global
Economics
Government
Intervention
Government
Intervention
Technological
Connectivity
Technological
Connectivity
New
Research
Perspectives
New
Research
Perspectives
What’s Changing in BusinessWhat’s Changing in Business
that Influences Researchthat Influences Research
9. Computing Power and SpeedComputing Power and Speed
Real-time
Access
Real-time
Access
Lower-cost
Data
Collection
Powerful
Computation
Powerful
Computation
Better
Visualization
Tools
Better
Visualization
Tools
Integration of
Data
Integration of
Data
FactorsFactors
10. Business Planning DrivesBusiness Planning Drives
Business ResearchBusiness Research
Organizational
Mission
Business
Goals
Business
Strategies
Business
Tactics
11. Business Decisions andBusiness Decisions and
ResearchResearch
Häagen-Dazs Tactics
– Super premium
– Dozens of flavors
– Small packages
– Signature colors on
packaging
– Available in franchise
and grocery stores
12. Information SourcesInformation Sources
Decision Support
Systems
Numerous elements of
data organized for
retrieval and use in
business decision
making
Stored and retrieved via
– Intranets
– Extranets
Business Intelligence
Systems
Ongoing information
collection
Focused on events,
trends in micro and
macro-environments
13. Sources ofSources of
Business IntelligenceBusiness Intelligence
Business
Intelligence
Government/
Regulatory
Economic
Competitive
Demographic
Technological Cultural/
Social
14. Hierarchy of Business DecisionHierarchy of Business Decision
MakersMakers
Visionaries
Intuitive Decision Makers
Standardized
Decision Makers
Visionaries
15. Minute Main and BusinessMinute Main and Business
ResearchResearch
16. P&G has a world-class researchP&G has a world-class research
departmentdepartment
17. Research May Not Be NecessaryResearch May Not Be Necessary
Can It Pass These Tests?
• Can information be applied to a critical
decision?
• Will the information improve managerial
decision making?
• Are sufficient resources available?
18. Information Value ChainInformation Value Chain
Characteristics
Data collection/
transmission
Data
interpretation
Models
Decision
support systems
Data
management
20. Characteristics ofCharacteristics of
Good ResearchGood Research
Clearly defined purposeClearly defined purpose
Detailed research processDetailed research process
Thoroughly planned designThoroughly planned design
High ethical standardsHigh ethical standards
Limitations addressedLimitations addressed
Adequate analysisAdequate analysis
Unambiguous presentationUnambiguous presentation
Conclusions justifiedConclusions justified
CredentialsCredentials
23. Key TermsKey Terms
• Management dilemma
• Predictive studies
• Pure research
• Reporting studies
• Return on Investment
(ROI)
• Scientific method
• Strategy
• Tactics
• Applied research
• Business intelligence
system (BIS)
• Business research
• Control
• Decision support
system
• Descriptive studies
• Explanatory Studies
31. Some Syndicated Data ProvidersSome Syndicated Data Providers
AC Nielsen
Scarborough
Millward Brown
Nielsen Media
Research
Roper ASW
CSA TMO
Yahoo!
ORC International
DoubleClick
Nielsen/NetRatings
Taylor Nelson Sofres
Intersearch
J.D. Power Associates
MediaMark
Simmon (SMRB)
BRMB
Information Resources Inc.
39. Information RevolutionInformation Revolution
1960
U.S. DOD
commissions
forerunner of
Internet
1964
OCR
shows
promise
1968
Word processing
first demonstrated
1971
First CATI
survey
conducted
1972
Optical laser
disk revealed
1973
UPC bar-code
scanning
introduced
1975
Microsoft
is born
1979
First
VisiCalc
ships
1964
IBM
introduces
model 360
1968
SPSS created
1971
Intel introduces first
microprocessor
1973
Basic ideas of
Internet created
1976
Apple I
released
1980
Apple owns
50% of
pc market
1980
40. Information RevolutionInformation Revolution
1980
1981
IBMPC
released
1987
First
Internet
survey
1990s
OCR used for
data entry
1993
WWW experiences
3,400X growth
in service traffic
1994
Greenfield Online
Introduces
online focus group
2001
Online survey
software widely
available
2002
Web-conferencing
Software
introduced
1987
IRI conducts
first scanner
tracking study
1991
WWW
developed
1996
Internet
World Exposition
held
2002
High-speed
chip technology
for servers
2009
76.3% in
US have
Internet
access
2003
Wal-Mart commits
To use RFID
2010
Editor's Notes
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.