BRM

Introduction

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

Stimulators for Business Research

Internet and information Stakeholders influence Competition Government intervention Complex decisions Computing power and speed

Computing Power and Speed

Lower-cost Data Collection

Integration of Data

Better Visualization Tools

Factors
Real-time Access Powerful Computation

Business Research
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

Relevance & Significance of Research

Relevance Its very useful in solving operational and planning problems of industry and business Its a necessity in todays business environment as it has become essential for surviving in todays world Significance It reduces uncertainty by providing information that improves the decision making process Its contribution is valuable to the business of the company involved because it unfolds different directions of thinking, adds to existing knowledge and leads to different findings that may be useful for implementation

How to Proceed about Business Research?

Satisfy customer groups: Consumers, Employees, Shareholders etc. Controllable variables: Product, Pricing, Promotion, Distribution Uncontrollable factors: Economy, regulations, political and social factors etc. The decision maker needs info on customers, competitors and 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

Business Planning Drives Business Research Business

Goals:

Organizational Mission

sales, productivity, profitability, efficiency etc.

DSS:
Numerous elements of data organized for retrieval and use in Business decision making; Stored and retrieved via Intranets, Extranets

Decision Support :
DSS, BIS

Business Strategies

Business Tactics:
Activities executing a strategy

BIS:
Ongoing information Collection; Focused on events, trends in micro and macro-environments

Purpose of Business Research

Identify opportunities/problems Defina/ refine strategies Define/refine tactics Improve understanding about different aspects of business

Hierarchy of Business Decision Makers

Visionaries Visionaries

Standardized Decision Makers

Intuitive Decision Makers

Who Conducts Research?

Internal Research Suppliers External Research Suppliers
Research Firms Communication Agencies Consultants

When to Conduct Research

Can It Pass These Tests?
Can information be applied to a critical decision? Will the information improve managerial decision making? Are sufficient resources available? Will the time permit?

When should Business Research be conducted?

Time Constraint Availability of data Nature of decision Yes Benefits vs costs

Is sufficient Yes time available before a managerial decision must be made?

Is the information already on hand inadequate for making the decision?

Is the decision of considerable Strategic or Tactical importance?

Yes

Does the Value of the Research Information Exceed the Cost of Conducting research?

Yes Conduct Business Research

No

No

No

No

Business Research Should Not be Conducted

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

Problem No. 1
Want to run a food stall in Alipore?

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 are quite good. Now, the company wants to explore the market for insurance through its own distribution channel. How the company will do it?

Problem No. 3

Why Consumers Prefer Barista to Caf

Coffee Day?

Problem No. 4
Kelloggs experienced a slump in the market. Why? Identification
How to solve the problem? Solution

Problem No. 5
How to recover old (disconnected) phone sets from the consumers?

Problem No. 6
A not-very-much-known pharmaceutical company wants to increase its market share and also make its presence felt in way of some other related products/ services

Research Problems
From 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

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

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

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

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

Inductive Reasoning
Why didnt sales increase during the promotional event?
Regional retailers did not have sufficient stock to fill customer requests during the promotional period 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

Why Didnt Sales Increase?

Basic Tenets of Research

Language of Research
Concepts Constructs Definitions Variables Propositions & Hypothesis Theory Models

A Variable Is the Property Being Studied

Event

Act

Variable
Characteristic Trait

Attribute

Types of Variables
Male/Female Employed/ Unemployed
Ethnic background Educational level Religious affiliation Income Temperature Age

Dichotomous

Discrete

Continuous

Independent and Dependent Variable Synonyms

Independent Variable (IV) Predictor Presumed cause Stimulus Predicted from Antecedent Manipulated Dependent Variable (DV) Criterion Presumed effect Response Predicted to. Consequence Measured outcome

Relationships Among Variable Types

Relationships Among Variable Types

Relationships Among Variable Types

Moderating Variables (MV)

The introduction of a four-day week (IV) will lead to higher productivity (DV), especially among younger workers (MV) The switch to commission from a salary compensation system (IV) will lead to increased sales (DV) per worker, especially more experienced workers (MV). The loss of mining jobs (IV) leads to acceptance of higher-risk behaviors to earn a family-supporting income (DV) particularly among those with a limited education (MV).

Extraneous Variables (EV)

With new customers (EV-control), a switch to commission 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 the firing range (MV).

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).

Hypothesis Formats
Proposition and Hypothesis

Descriptive Hypothesis
In Detroit, our potato chip market share stands at 13.7%. American cities are experiencing budget difficulties.

Research Question
What is the market share for our potato chips in Detroit? Are American cities experiencing budget difficulties?

Relational Hypotheses
Correlational
Young women (under 35) purchase fewer units of our product than women who are older 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 income saved. Loyalty to a grocery store increases the probability of purchasing that stores private brand products.

The Role of Hypotheses

Guide the direction of the study

Identify relevant facts

Suggest most appropriate research design

Provide framework for organizing resulting conclusions

 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 suggested by 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 strongly related to the research question or the problem.

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Theory & Model

Theory: a set of systematically interrelated concepts/definitions/propositions to explain facts

Model: representation of a system

Ref
Cooper and Schindler, Chaps 1 and 2