Business Research Methods

Module 1: Meaning, types, criteria of good research, marketing research, scientific approach to research in physical and management science, limitations of applying scientific methods in business research problems, ethical issues in business research. Introduction: Research refers to a search of knowledge. Research is an art of scientific investigation. Definitions: Research is the systematic and objective identification, collection, analysis, dissemination (distribution) and use of information for the purpose of improving decision making related to the identification and solution of problems and opportunities in any field. Research is a careful investigation or inquiry especially through search for new facts in any branch of knowledge. According to Clifford Woody research comprises defining and refining problems, formulating hypothesis or suggested solutions, collecting, organizing and evaluating data, making deductions and reaching conclusions and at last carefully testing the conclusions to determine whether they fit the formulating hypothesis. The manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in construction of theory or in the practice of an art. D. Slesinger and M. Stephenson. It is movement from the known to unknown. It is voyage of discovery Research is an academic activity. Research is thus, an original contribution to the existing stock of knowledge making for its advancement. Objectives of the research: The purpose of research is to discover answers to questions through the application of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet.

To gain familiarity with a phenomenon or to achieve new insights into it. Such

research is known as exploratory or formulative research studies. To portray accurately the characteristics of particular individual, situation or a group. (Descriptive research studies).

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 To determine the frequency with which something occurs or with which it is

associated with something else. (Such studies are known as diagnostic research studies) To test a hypothesis of causal relationship between variables. (Such studies are known as hypothesis testing) Importance of research (significance): Research develops scientific and inductive thinking and promotes the habit of thinking and organization. Research provides the basis fro nearly all government policies in our economic system. The government collects information on economic and social structure of the nation. Then, a diagnosis of events that are taking place and analysis of the forces underlying them, and later a prediction of future developments by allocating the nations resource etc. have to be done. Research is important is solving various operational and planning problems of business and industry. Especially, operations research and marketing research are crucial in taking business decisions. Operations research refers to the application of mathematical, logical and analytical techniques to the solution of optimization problems. (Cost minimization and profit maximization.) Marketing research is the systematic study of the facts relevant to any problem in the field of marketing. Research is important for social scientists in studying social relationships and in seeking answers to various social problems. Thus research is important for students, professionals, philosophers, thinkers, analysts, and intellectuals and for all men and women. Research is the foundation of knowledge and an important source of providing guidelines for solving different business, government and social problems. Types of research: one classification:

Basic research vs. applied research:

Basic research: it is called fundamental research, theoretical research or pure research. It is the research that is intended to expand the boundaries of knowledge itself or to verify the acceptability of a given theory. It addresses itself to more fundamental questions and not to the problems with immediate commercial potential. It is mainly concerned with generalizations and with the formulation of a theory. Research studies concerning some natural human behavior carried on with a view to make generalizations about human behavior is an example of this. E.g.: to research on the theories of general performance behavior among managers.

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Applied research: which is called decisional research, on the other hand, proceeds with a certain problems, and it specifies alternative solutions and the possible outcomes of each alternative. This is the research undertaken to answer about specific problems or to make decisions about a particular course of action or policy decisions. This is prompted by commercial considerations. E.g. an organization is planning for a paperless office and networking system for the companys person computers may conduct a research to learn the amount of time its employees spend at personal computers in an average week. Scientific method: Both the types employ scientific method to answer the questions. The scientific method refers to techniques and procedures that help the researcher to know and I\understand business phenomena. This requires systematic analysis and logical interpretation of empirical evidence to confirm or disprove prior conceptions. Types of research: another classification: Classifying business research based on purpose or function allows us to understand how the nature of problem influences the choice of research method. There are three types of research.

Exploratory research Descriptive research and Causal research Exploratory

research: initial research conducted to clarify and define the nature of the problem. This is conducted to clarify ambiguous problems. Management may have discovered general problems, but research is necessary to understand the dimensions of the problems. Exploratory studies provide information to use in analyzing a situation. Usually exploratory research is conducted with the expectation that subsequent research will be required to provide conclusive evidence. This research helps to crystallize a problem and identify information needs for future research. research: research designed to describe the characteristics of a population or a phenomenon. Descriptive research seeks to determine the answers to what, who, when, and where and how questions. Descriptive research often helps segment and target markets. For example, business researchers conduct descriptive surveys to identify the characteristics of consumers who purchase frozen foods.

Descriptive

Simply describing a situation may provide important information and that in many situations is all that needed to solve business problems- even though such research may not answer the why question.

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Accuracy is paramount importance in descriptive research. Although errors cannot be completely eliminated, good researchers strive for descriptive precision. Unlike the exploratory research, descriptive research studies are based on some previous understanding of the nature of the research problem. A variation to this is called diagnostic research, which is performed when employees are asked questions such as why do you feel that way? these are analysis used to clarify research findings, such as explanations respondents give for a behavior or attitude.

Causal

research: research conducted to identify cause-andeffect relationships among variables when the research problem has already been narrowly defined. The main goal of causal research is to identify cause and effect relationship among variables. Exploratory and descriptive research normally is precede causal studies. In causal studies, it is typical to have a relationship to be explained, such as a prediction about the influence of price, packaging, advertising and the like. Causal research attempts to establish that when we do one thing, another will follow. A typical causal study has management change one variable (e.g. training) and then observes the effect on another variable (e.g. productivity). Influence of uncertainty of type of research: The uncertainty of the research problem is related to the type of research project. The exploratory research is conducted during early stage of the decision making, when the decision situation is vague or ambiguous. When the management is aware of the problem but not completely knowledgeable about the situation, descriptive studies are conducted. Causal studies can be done only when the problem is sharply defined. Relationship of uncertainty to the type of business research Typ Exploratory Descriptive research Causal research es research (Aware of partially (Clearly E.g. (ambiguous defined problem) deafened problem) problem) Absenteeism is What kinds of Which of the two increasing, but people are joining training program we dont know trade unions? is more why. effective? Would people be interested in our new product idea? Did our last years brand image ahs an impact on our company stock price? Did the last weeks advertisement have an impact on our sales?

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Types of research: another classification: Reporting Descriptive Explanatory and Predictive.

Reporting: this is the most elementary level of the research. Here the research is made only to provide an account or summation of some data or some statistics. The data is usually readily made available. It requires knowledge and skill with information sources and gatekeepers of information sources. An entrepreneur might plan to acquire one out of six companies that are potential candidates. The researchers might examine the following. Companys annual reports, articles in business, journals companys ads etc. Such type of research requires identification of the correct source of information. This source is known as gatekeepers. Some criticize that reporting studies are not research. But investigative reporting is common in business establishments. Descriptive: these studies try to discover answers to questions who, what, when, where and how. The researcher attempts to describe or define a subject, by creating a profile of problems, people or events. Such studies involve the collection of data and creation of distribution of the number of times the researcher observes a single event or characteristic (known as research variable) or relation of two or more variables. Organizations that maintain database of their employees, customers and suppliers can conduct descriptive studies using internal information. But such studies cannot explain why an event occur or why the variables interact the way they do. Explanatory: this type of the research goes beyond description and attempts to explain the reasons for the phenomenon. These types of researchers answer the questions, why and how. Here the researcher uses theories or hypothesis to explain the force that caused certain phenomenon to occur. The researcher tests the hypothesis by analyzing the relationship between process and results. E.g.: a company that faces the problem of sales decline may assume that this is due to the ineffective selling skills of sales executive. (Hypothesis). The researcher tests this hypothesis by finding out the relationship between these two. Predictive: this goes little beyond the explanatory studies. The researcher provide an explanation for an event after it has occurred; it is desirable if he

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can predict when and in what situation the event can occur. Prediction is found in studies conducted to evaluate specific course of action or to forecast current and future values. If an event can be explains and predicted, then we can control that event. Being able to dicatat3 the outcome of an event is called control. Other types: Descriptive vs. analytical research Quantitative vs. qualitative research Conceptual vs. empirical research etc.

Descriptive vs. analytical research:

Descriptive research or ex post facto research includes surveys and factfinding enquiries of different kinds. The major purpose of descriptive research is description of the state of affairs, as it exists at present. The main characteristic of this method is that the researcher has no control over the variables; he can only report what has happened or what is happening. E.g. frequency of shopping, preferences of people etc. This is also used by researchers to discover causes even when they cannot control the variables. The methods of research in descriptive research are survey methods of all kinds, including comparative and co relational methods. Analytical research use facts or information already variable, and analyze these to make a critical evaluation of the material.

Quantitative vs. qualitative research: Quantitative research is based on the measurement of quantity or amount. It is applicable to a phenomenon that can be expressed in quantity. Qualitative research, on the other hand, is concerned with qualitative phenomenon that involves quality.
Difficulties in applying research in India:

The lack of scientific thinking in research methodology. The remedy is to

provide intensive training in the field of research methodology. There is insufficient interaction between the University research departments and business establishments. There is a need to develop satisfactory relationship between these two. Most of the business units do not have the confidence that the information passed on by the researcher will be kept secret and as such the researcher do not receive full information. This implies there is need to increase the confidence. Sometimes the research studies overlap one another.

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 There does not exist a code of conduct for researchers. Many researchers find difficulty in getting timely and adequate assistance. Library management and functioning is not satisfactory at many places. The libraries do not have enough copies of old and new reports. In many cases published data is not available.
Criteria for good research: Whatever be the types of research, it is important that they meet the common ground of scientific research methods. Following are the criteria of good research: The purpose of the research should be clearly defined and common concepts be used. The research procedure should be described in sufficient detail to permit another researcher to repeat for further advancement, keeping the continuity of what has already been attained. The procedural design of the research should be carefully planned to yield results that are as objective as possible. The researcher should report with complete frankness, flaws in the procedural design and estimate their effects upon the findings. The analysis of data should be sufficiently adequate to reveal its significance and the methods of analysis used should be appropriate. The validity and reliability of the data should be checked carefully. Conclusions should be confined to those justified by the data of the research and limited to those for which the data provide an adequate basis. Greater confidence in research is warranted if the researcher is experienced, has a good reputation in research and is a person of integrity.

In other words, we can state the qualities of a good research as under : Good research is systematic: it means that the research is structured with specified steps to be taken in a specified sequence in accordance with the well defined set of rules. Good research is logical: this implies that good research is guided by the rules of logical reasoning and the logical process of induction and deduction are of great value in carrying out research. Induction is the process of reasoning from a part of the whole whereas, deduction is the process of reasoning from some premise to conclusion, which follows from that very premise. Good research is empirical: it implies that research is related basically to one or more aspects of real situation and deals with concrete data that provides a basis for external validity to research results.

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Good research is replicable: this characteristic allows the research results to be verified by replicating the study thereby building a sound basis for decisions.

Research methods VS research methodology Research methods may be understood as all those methods/techniques that are used for conduction of research methods or techniques, thus refer to the methods the researcher use in performing research operations. In other words, all those methods which are used by the researcher during the curse of studying his research problem are termed as research methods. Research methods can be put into the following three groups: In the first group we include those methods, which are concerned with the collection of data. The second group consists of those statistical techniques, which are used for establishing relationships between the data and the unknowns. The third group consists of those methods, which are used to evaluate the accuracy of the results obtained. Research methods in the last two groups are known as analytical tools. Business Research Methods Module 1 -8-

Research methodology: is the systematic way\y to solve the research problem. It may be understood as science of studying how research is done scientifically. It is necessary for the researcher to know not only the research methods or techniques but also the methodology, i.e., how to apply particular research techniques. Research methodology has many dimensions and research methods do constitute a part of the research methodology. Research methodology implies not only the research methods but also considers the logic behind the methods we use in the context of our research study and explain why we are using a particular method or technique any why we are not using others so that research results are capable of being evaluated either by the researcher himself or others. Scientific method and research process In order to get better research results, there is a need to use scientific techniques in carrying out research. The scientific method means the use of techniques of science in research. If the research is conducted in an objective and systematic manner it can benefit the firms more. But in India, many firms are still using the traditional methods viz, intuitions, hunches, judgment, experience etc, for the research. Methods to eliminate uncertainty: In many ways businesses can minimize risks involved through scientific decisions. The methods to reduce uncertainty are; Tenacity: Tenacity (obstinacy) refers to the stubborn attitude adopted bay a decision maker. The researcher refuses to use other methods because they might conflict with his ideas and beliefs. Authority: in this case, the researcher while facing with a decision-making situation avoids making decision himself alone. He rather approaches the higher authority to avoid uncertainty. Intuition: intuition refers to the Gut feeling in selecting a particular course of action. It is defined as the power of knowing or the knowledge obtained without resource to inference or reasoning. Many mangers resort to intuition instead of research due to lack of time, lack of money, lack of expertise and ignorance. Science: science is the knowledge ascertained by observation and experiment critically tested, systemized and brought under general principles. When we apply principles of science to reduce uncertainty in problems, the technique is called scientific method. The earlier three methods are subjective and highly inflexible approaches and there is no scope for correcting decisions if they go wrong. Business Research Methods Module 1 -9-

Scientific research: the steps: Four steps are taken in applying scientific methods:

Observation Formulation of hypothesis Prediction of future, Testing hypothesis.

Relation between scientific method and Marketing: Scientific methods stages Observation Used during the following marketing research steps Problem definition Situation analysis Informal investigation Formal research Situation analysis Informal investigation Formal research planning.

Formulation of hypothesis

Prediction of the (action implications) Testing of hypothesis

future Situation analysis Information investigations Formal research. Formal research.

Distinction between scientific and non scientific methods: There are five major differences: Difficulties research: in applying scientific research methods in marketing

It is easy to explain the conceptual framework of scientific method but may not be easy to simply apply in practical marketing situations. There are six major difficulties: Greater complexity of subject: the subject of marketing is very complex and diverse. The complexity and diversity increase when attempt is made to study customers needs, wants, values, beliefs and attitudes. These aspects exist not only in customers conscious but also in his sub conscious mind. It becomes difficult to measure these factors because of their

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changing nature. It is very difficult to develop an exact science to measure these uncontrollable actors. Difficulty of obtaining accurate measurements: scientific method tries to measure the variables precisely and accurately. But, customers responses like satisfactory, very satisfactory, most satisfactory etc. are difficult to measure even with the help of well designed techniques like Likert, Thurston or other scales of attitude measurement. It is also difficult to determine whether the respondent is responding correctly. Influence of measurement process on results: it is much easier to measure the beahviour of rats and rabbits kept in cages as compared to measuring of human beings purchasing beahviour. When the respondents come to know that they are being observed with regard to a particular product purchase, they improve upon their original beahviour, during the time of observation. Therefore, the results obtained are different than the actual beahviour. Difficulty of using experiments to test hypotheses: testing of hypothesis is the core of scientific method. For this purpose, accurate measurement of the systematically collected data in a controlled laboratory environment is needed. In marketing, experimentation is not easy because the experiments are to be conducted in the open market place where so many uncontrollable cast their influence on the experiment. There for exact data cannot be obtained and hypothesis cannot be tested accurately. Difficulty of making accurate prediction: human beahviour changes vary fast. By the time study results are presented, the previous beahviour may undergo a variation. This invalidates the predictions in marketing. Problematic objectivity of the investigator: most of the times, the investigators may manipulate results rather than practically administering the questionnaire or conducting interviews. Sometimes, the bias entering the research results during interviews also can be another difficulty. It may be due to wrong wording of the questions, administering the questionnaire wrongly, or use of leading questions. Marketing Research: Definition: The systematic gathering, recording, and analyzing of data about problems relating to the marketing of goods and services. American Marketing Association The word systematic implies orderliness and impartiality.

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Definition: Marketing research is the filed which involves the diagnosis of information needs and the selection of relevant interrelated variables about which valid and reliable information is gathered, recorded and analyzed. Zaltman and Burger (1975) Scope of Market research: A wide range of research activities is covered by the marketing research.

Product and service research Market research Promotion research Distribution research Pricing research Corporate responsibility research And miscellaneous research.
Type of research Research on markets Research activities covered Analyzing market potentials for existing products and estimating demand for new products. Sales forecasting, characteristics of markets, analyzing sales potentials, studying trend in markets.

Research on products and Customer acceptance of proposed new services products, comparative studies of competitive products, determining new uses for present products, market testing of proposed products, studying customer dissatisfaction with products, product line research, packaging and design research. Research on promotion Evaluating advertising effectiveness, analyzing advertising and selling practices, selecting advertising media, motivational studies, establishing sales territories, evaluating present and proposed sales methods, studying competitive pricing, analyzing salesmens effectiveness, establishing sales quotas.

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Research on distribution

Research on pricing

Location and design of distribution centers, handling and packing of merchandise, cost analysis of transportation methods, dealer supplies and storage requirements. Demand elasticity, persevered pricing, cost analysis, margin analysis.

Importance of marketing research: Business executives are becoming increasingly dependant upon marketing research. They want quick and accurate information flow from the internal and external environments of firms to facilitate the process of decision-making. The decisions may be concerning environmental changes and probable impact on the firm, setting objectives, formulating policies, finding marketing opportunities, determine marketing sub strategies, planning marketing programs, allocating resources etc. The increasing importance of marketing research is based on the following three trends. Shift form the local to national and international markets: There is a need for expanding operations and their widening gap between the executives and markets can be fulfilled by an appropriate and timely flow of information is required by executives for effective decision-making. If the information flow is not maintained the executives at the heads office may lose contacts with the far off markets where sales are made. Transition from consumer needs to consumer wants: There is an increase in consumers real income (purchasing power). The increase in consumers discretionary income (income that can be spent for non essential items). These discretionary expenditures can be measured with the help of a planned research. Shift from price competition to non price competition: Marketers require information on the effectiveness of such marketing tools as branding, product differentiation, market segmentation, advertising and sales promotion. These are the tools, which can create differences in the minds of consumers regardless of competition. Differences between Market research and Marketing research: Market research may be regarded as a misnomer (misleading) for marketing research. Marketing research is a broad term whereas market research has narrower scope. Marketing research is defined as the systematic and objective process of identifying, formulating and objective setting of a marketing problem and

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collecting, processing, analyzing, interpreting and presenting data in order to find a justified solution for that problem. Market research may be defined as a process of collecting information about market i.e., who, what, when, why, and how of actual and potential consumers in particular market. This means the scope of marketing research is broader as it includes the study of different marketing problems relating to marketing mix elements, micro environmental variables (buyers, competitors, dealers, suppliers etc.) and macro environmental variables (economic, socio political, technical and legal). The scope of market research is narrower because it is used to collect and analyze the limited information on some specific aspects regarding a particular market. Marketing research is done to solve any problem in marketing, whereas market research can only solve a problem because of its non-systematic approach of collecting and analyzing data about a marketing problem. Uses and limitations of marketing research: Uses of marketing research: It helps in obtaining sufficient background information where absolutely nothing is known about the problem. It helps in concept identification and its exploration. It is used to identify relevant and salient behavioral patterns, beliefs, opinions, attitudes, motivation etc. MR is useful in establishing priorities amongst categories of beahviour and psychological variables like beliefs, opinions and attitudes. Quantitative MR is generally helpful in defining problem areas fully and formulating hypothesis fro further investigation and quantification. It is useful in preliminary screening process to reduce a large number of possible contenders to a smaller number. Limitations of marketing research: MR uses techniques of science but itself is not a science. MR is carried out in open market place where so many variables are acting on the research settings. MR is carried out on consumers, dealers, wholesalers, and retailers etc., who are human beings. Their tendency is to behave artificially when they know that they are being observed. It is very difficult to verify the results of the research. It takes a longer period. Researcher intentionally and unintentionally may bias the research results.

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 Lack of appropriate training to researchers leads to misinterpretation of questions to be asked during the data collection. Research problem and objectives may not be very clear.

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