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 didn’t work. Why?

• The research was erroneous/ interpretations were wrong

• They didn’t 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

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

Business Research

• A process of determining, acquiring,analyzing, synthesizing, and disseminatingrelevant business data, information, andinsights to decision makers in ways thatmobilize the organization to take appropriate business actions that, in turn, maximize business performance

Relevance & Significance of Research

Relevance• It’s very useful in solving operational and planning problems of

industry and business

• It’s a necessity in today’s business environment as it has become essential for surviving in today’s 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

Organizational Mission

BusinessGoals: sales, productivity,profitability, efficiency etc.

BusinessStrategies

BusinessTactics:

Activities executing a strategy

Decision Support :DSS, BIS

DSS:Numerous elements of data

organized for retrieval and use inBusiness decision making;

Stored and retrieved via Intranets,Extranets

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

Intuitive Decision Makers

Standardized Decision Makers

Visionaries

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?

Is sufficient time

available before

a managerial decision

must be made?

Is the information already on

hand inadequate for making the decision?

Is the decision

of considerableStrategic or

Tactical importance?

Does the Value of the

ResearchInformationExceed the

Cost of Conducting research?

ConductBusinessResearch

Business Research Should Not be Conducted

Yes Yes YesYes

No No No No

Time Constraint

Availability of data

Nature of decision

Benefits vs costs

Characteristics of Good 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

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 Café

Coffee Day?

Problem No. 4

• Kellogg’s 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 ProblemsResearch 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 ProblemsExamples of Research ProblemsMarketing 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 ObjectiveFormulation of a Research ProblemPreparation of the Research Design

• Operation

Data CollectionAnalysis of DataInterpretation of Results

• Reporting

Drafting: a summary of the processFindingsSuggestion 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

Inner-city household interviewing is especially

difficult and expensive

This survey involves substantial inner-city

household interviewing

This survey involves substantial inner-city

household interviewing

The interviewing in this survey will be especially difficult and expensive

The interviewing in this survey will be especially difficult and expensive

Inductive Reasoning

• Why didn’t 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 Didn’t Sales Increase?

Basic Tenets of Research• Language of Research

– Concepts– Constructs – Definitions – Variables– Propositions

& Hypothesis– Theory– Models

A Variable Is the Property Being Studied

VariableVariable

EventEvent ActAct

CharacteristicCharacteristic TraitTrait

AttributeAttribute

Types of Variables

DichotomousDichotomousMale/Female

Employed/ UnemployedMale/Female

Employed/ Unemployed

DiscreteDiscreteEthnic backgroundEducational level

Religious affiliation

Ethnic backgroundEducational level

Religious affiliation

ContinuousContinuous

IncomeTemperature

Age

IncomeTemperature

Age

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

•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?

•Proposition and Hypothesis

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 store’s private brand products.

The Role of Hypotheses

Guide the direction of the studyGuide the direction of the study

Identify relevant factsIdentify relevant facts

Suggest most appropriate research designSuggest most appropriate research design

Provide framework for organizing resulting conclusions

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 stocks……this 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