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BRM

Introduction

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Why Research in Business?

Information Interpretation

Example:New Coke in 1985: what went wrong?

Before the launch: Survey

Loyal consumers were divided about the change in taste of Coke

Loyal consumers also drink Pepsi, for its sweeter taste

Focus Group:

Dissatisfaction about the taste

After the Launch things didnt work. Why? The research was erroneous/ interpretations were wrong

They didnt attach much importance to the consumers emotional

attachment with the original brand

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Stimulators for Business Research

Internet and information

Stakeholders influence

Competition

Government intervention

Complex decisions

Computing power and speed

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Computing Power and Speed

Real-time

Access

Lower-cost

Data

Collection

Powerful

Computation

Better

VisualizationTools

Integration of

Data

Factors

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Business Research

A process of determining, acquiring,

analyzing, synthesizing, and disseminating

relevant business data, information, andinsights to decision makers in ways that

mobilize the organization to take

appropriate business actions that,in turn, maximize business performance

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Relevance & Significance of Research

Relevance

Its very useful in solving operational and planning problems ofindustry and business

Its a necessity in todays business environment as it has becomeessential for surviving in todays world

Significance

It reduces uncertainty by providing information that improves thedecision making process

Its contribution is valuable to the business of the company involvedbecause it unfolds different directions of thinking, adds to existingknowledge and leads to different findings that may be useful forimplementation

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How to Proceed about Business Research?

Satisfy customer groups: Consumers, Employees,Shareholders etc.

Controllable variables: Product, Pricing, Promotion,Distribution

Uncontrollable factors: Economy, regulations, political andsocial factors etc.

The decision maker needs info on customers, competitorsand other forces. Sound information is key to the correct

management decisions Having the info and analysing it: research can provide

meaningful insights to facilitate decision making

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Business Planning Drives Business

Research

Organizational

Mission

Business

Goals:sales, productivity,

profitability, efficiency etc.

Business

Strategies

Business

Tactics:Activities executing

a strategy

Decision Support :DSS, BIS

DSS:Numerous elements of data

organized for retrieval and use in

Business decision making;

Stored and retrieved via Intranets,

Extranets

BIS:Ongoing informationCollection; Focused on events,

trends in micro and

macro-environments

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Purpose of Business Research

Identify opportunities/problems

Defina/ refine strategies

Define/refine tactics

Improve understanding about different

aspects of business

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Hierarchy of Business Decision Makers

Visionaries

Intuitive Decision Makers

Standardized

Decision Makers

Visionaries

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Who Conducts Research?

Internal Research Suppliers

External Research Suppliers

Research Firms

Communication Agencies

Consultants

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When to Conduct Research

Can It Pass These Tests? Can information be applied to a critical

decision?

Will the information improve managerialdecision making?

Are sufficient resources available?

Will the time permit?

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When should Business Research be conducted?

Is sufficienttime

availablebefore

a managerial

decisionmust

be made?

Is theinformationalready on

hand

inadequatefor making

the decision?

Is thedecision

ofconsiderable

Strategic orTactical

importance?

Does theValue of the

ResearchInformationExceed the

Cost ofConducting

research?

Conductusiness

Research

Business Research Should Not be Conducted

Yes Yes YesYes

No No No No

Time

Constraint

Availability

of data

Nature of

decision

Benefits vs

costs

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Characteristics of

Good Research

Clearly defined purpose

Detailed research process

Thoroughly planned design

High ethical standards

Limitations addressed

Adequate analysis

Unambiguous presentation

Conclusions justified

Credentials

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Problem No. 1

Want to run a food stall in Alipore?

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Problem No. 2

A finance company has its own agents in

the rural areas as well as urban areas. Its

Fixed Deposit market in rural areas arequite good. Now, the company wants to

explore the market for insurance through its

own distribution channel. How the companywill do it?

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Problem No. 3

Why Consumers Prefer Barista to Caf

Coffee Day?

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Problem No. 4

Kelloggs experienced a slump in the

market. Why?

Identification

How to solve the problem?

Solution

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Problem No. 5

How to recover old (disconnected) phone sets

from the consumers?

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Problem No. 6

A not-very-much-known pharmaceutical

company wants to increase its market share

and also make its presence felt in way ofsome other related products/ services

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Research ProblemsFrom the research idea one has to think of a general research question and formulate a

research problem. E.g. you are interested about NGOs in India. From this you have to make

a research question like, how their work is doing good to our people and/or how their

fundings are coming

Examples of Research Problems

Marketing Market Potentials/share/segmentation/characteristics

Advertising research

Product Launching

Design of advertisements

Purchasing Pattern of Consumers

Finance Credit Card Industry

Mergers and acquisitions

General Business Forecasting

Industry trends

Global environments

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Some More Specific Business Research Topics:

Marketing

Factors Influencing Expenditure on Consumption of Milk and Milk Product in

Chennai

Demographic Factor: A Determinant for the Purchase Decision of Motorcycles

in Kanchipuram Town (Tamil Nadu)

A Survey of Consumer Awareness about Consumer Legislations in India.

Consumer Behavior towards Mobile Service Providers: An Empirical Study

Finance

Inter - Industry Differences in Capital Structure: Evidence from India

Accumulation of Market Power in Mergers and Acquisitions: Evidence from

the Indian Pharmaceutical Industry

Effect of Expiration - Day of Derivatives on Price, Volume and Volatility of

Cash Segment of Stock Market

HR

Climate Profile and Organizational Citizenship Behaviors: A Comparative

Analysis of Teachers Working in Public and Private Schools

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Steps of Research

Planning

Establish Research Objective

Formulation of a Research Problem

Preparation of the Research Design

Operation

Data Collection

Analysis of Data

Interpretation of Results

Reporting

Drafting: a summary of the process

Findings

Suggestion for further research

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Basic Tenets of Research

Scientific Method (sound reasoning)Direct observation

Clearly defined variables/methods

Empirically testable hypotheses

Statistical justification of conclusions

Self-correcting process

Sound Reasoning: Exposition and Argument

Deduction (conclusive: strong bond b/w reason

and conclusion)

Induction

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Deductive Reasoning

Inner-city household

interviewing is especially

difficult and expensive

This survey involves

substantial inner-city

household interviewing

The interviewing in this

survey will be especially

difficult and expensive

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Inductive Reasoning

Why didnt sales increase during thepromotional event?

Regional retailers did not have sufficient stock to

fill customer requests during the promotionalperiod

A strike by employees prevented stock from

arriving in time for promotion to be effective

A hurricane closed retail outlets in the region for

10 days during the promotion

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Why Didnt Sales Increase?

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Basic Tenets of Research

Language of ResearchConcepts

Constructs

Definitions

Variables

Propositions

& Hypothesis

Theory

Models

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A Variable Is the Property Being

Studied

Variable

Event Act

Characteristic Trait

Attribute

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Types of Variables

DichotomousMale/Female

Employed/ Unemployed

DiscreteEthnic background

Educational level

Religious affiliation

ContinuousIncome

Temperature

Age

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Independent and Dependent Variable

Synonyms

Independent

Variable (IV)

PredictorPresumed cause

Stimulus

Predicted fromAntecedent

Manipulated

Dependent Variable

(DV)

CriterionPresumed effect

Response

Predicted to.Consequence

Measured outcome

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Relationships Among Variable Types

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Relationships Among Variable Types

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Relationships Among Variable Types

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Moderating Variables (MV)

The introduction of a four-day week (IV)will lead to

higher productivity (DV),especially among youngerworkers (MV)

The switch to commission from a salarycompensation system (IV)will lead to increased sales

(DV)per worker, especially more experiencedworkers (MV).

The loss of mining jobs (IV)leads to acceptance ofhigher-risk behaviors to earn a family-supportingincome (DV)particularly among those with alimited education (MV).

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Extraneous Variables (EV)

With new customers (EV-control), a switch tocommission from a salary compensation system (IV)will lead to increased sales productivity (DV)per

worker, especially among younger workers (MV).

Among residents with less than a high school education(EV-control),the loss of jobs (IV)leads to high-risk

behaviors (DV),especially due to the proximity of thefiring range (MV).

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Intervening Variables (IVV)

The switch to a commission compensation system

(IV)will lead to higher sales (DV)by increasing

overall compensation (IVV).

A promotion campaign (IV) will increase savings

activity (DV), especially when free prizes are offered

(MV),but chiefly among smaller savers (EV-control).

The results come from enhancing the motivation to

save (IVV).

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Hypothesis Formats

Descriptive Hypothesis

In Detroit, our potato chip market share stands at

13.7%.American cities are experiencing budget difficulties.

Research QuestionWhat is the market share for our potato chips in Detroit?

Are American cities experiencing budget difficulties?

Proposition and Hypothesis

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Relational Hypotheses

Correlational

Young women (under 35)

purchase fewer units of our

product than women who areolder than 35.

The number of suits sold

varies directly with the level

of the business cycle.

Causal

An increase in family

income leads to an increase

in the percentage of incomesaved.

Loyalty to a grocery store

increases the probability of

purchasing that stores

private brand products.

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The Role of Hypotheses

Guide the direction of the study

Identify relevant facts

Suggest most appropriate research design

Provide framework for organizing resulting

conclusions

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Research Hypotheses:The formulation of hypotheses or propositions that

may be possible answers to research questions is an important step in the

process of formulating the research question. The hypothesis is a testable

proposition. This particular aspect needs to be discussed in some detail.Sources of Hypothesis

Theory (Testing efficient market hypothesis for Indian data)

Observation (girls are more serious about attending classes than boys)

Analogies (Loyal customers expect better post purchase service for

consumer durables..)

Intuition & experience

Previous research findings (there exists co-movement in stocksthis

motivated me in finding out whether the volatility in those stocks trigger

more volty in our market or not) Existing literature/ state of knowledge

Culture / Socio-economic environment

Continuity of research (FII nature followed by FII volatility)

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Characteristics of a good hypothesis

It should be:

Conceptually clear

Specific

Testable

Should have applicability of techniques

Theoretically relevant

Consistent

Objective

Not very complex

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How to Develop a Hypothesis: The Rules

Take the variable measurements with the most quantitative

characteristics available

Make the measurement of the scale (of the variable) explicit

and clear

Use the variables which can be clearly defined and commonly

accepted, do not use vague terms

Try to be more specific, e.g. link two or more formal

propositions through a common variable if possible

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Testing of Statistical Hypotheses

Hypothesis is only a hunch or a provisional idea that

should be tested by proper methods and the result

may be either acceptance or rejection. The researcher

should not try to prove the hypothesis, but try to

test it.Type I and Type II errors are associated with it:

Type I: Reject the hypothesis when it is true

Type II: Accept the hypothesis when it is false

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Criteria for judging hypothesis

One can evaluate the hyp. using the criteria suggestedby Goode & Hatt whether it is conceptually clear, has

empirical reference, specific, related to techniques

and related to any theory or not.

According to Clover & Basley, the criteria are:

whether all the aspects are covered, all the

possibilities considered and the hypothesis is stronglyrelated to the research question or the problem.

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Theory & Model

Theory: a set of systematically interrelatedconcepts/definitions/propositions to explain

facts

Model: representation of a system

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Ref

Cooper and Schindler, Chaps 1 and 2