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Introduction to Business

Research

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Business Research Defined

Business research is defined as the


systematic and objective process of
generating information for aid in
making business decisions.
- Including financial research, operational research,
Marketing research

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Business Research

Research information is neither


intuitive nor haphazardly gathered.
Literally, research (re-search)
-search again
Business research must be objective
Detached and impersonal rather
than biased
It facilitates the managerial decision
process for all aspects of a
business.

Information
Reduces
Uncertainty

I dont know
if we
should
offer on-site
child care?

It aint the things we dont


know that gets us in trouble. Its
the things we know that aint
so.
Artemus Ward

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Business Research Types

Basic research
Applied research

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Basic Research

Attempts to expand the limits


of knowledge.
Not directly involved in the
solution to a pragmatic
problem.

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Basic Research Example

Is executive success correlated


with high need for
achievement?
Are members of highly cohesive
work groups more satisfied
than members of less cohesive
work groups?
Do consumers experience
cognitive dissonance in lowinvolvement situations?

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"The secret of success is to


know something nobody else
knows. "
Aristotle
Onassis

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Applied Research

Conducted when a decision


must be made about a specific
real-life problem

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Applied Research Examples

Should McDonalds add Italian


pasta dinners to its menu?
Business research told
McDonalds it should not?
Should Procter & Gamble add a
high-priced home teeth
bleaching kit to its product line?
Research showed Crest
Whitestrips would sell well at a
retail price of $44

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Scientific Method

The analysis and interpretation


of empirical evidence (facts
from observation or
experimentation) to confirm or
disprove prior conceptions.

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The Decision-making Process


Associated with the Development
Identifying
and
Implementation
of and
a Strategy
problems
opportunities
Diagnosis and assessment
Selecting and implementing a
course of action
Evaluating the course of action

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Evaluation Research

Evaluation research is the


formal, objective measurement
and appraisal of the extent to
which a given activity, project,
or program has achieved its
objectives.

Performance-monitoring
Research

Research that regularly


provides feedback for
evaluation and control
Indicates things are or are not
going as planned
Research may be required to
explain why something went
wrong

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Determining When to Conduct


Business Research
Time constraints
Availability of data
Nature of the decision
Benefits versus costs

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Determining When to
Conduct Business
Research
Availability of
Benefits
Time Constraints

Data

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

Is the information already


on hand
inadequate
for making
the decision?

No

Yes

No

Nature of the Decision vs. Costs


Yes

Is the decision
Yes
of considerable
strategic
or tactical
importance?

Does the value


of the research Yes
information
exceed the cost
of conducting
research?

No

Do Not Conduct Business Research

No

Conducting
Business
Research

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Value versus Costs

Potential Value of a Business


Research Effort Should Exceed
Its Estimated Costs

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Value Should Exceed


Estimated Costs
Costs
Value
Decreased certainty
Increased likelihood
of a correct decision
Improved business
performance and
resulting higher
profits

Research
expenditures
Delay of business
decision and
possible disclosure
of information to
rivals
Possible erroneous
research results

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Major Topics for Research in Business

General Business Conditions and


Corporate Research
Financial and Accounting Research
Management and Organizational
Behavior Research
Sales and Marketing Research
Information Systems Research
Corporate Responsibility Research

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Cross-functional Teams

Cross-functional teams are


composed of individuals from
various organizational
departments such as
engineering, production,
finance, and marketing who
share a common purpose.

Business Research in the 21st


Century
Increased globalization
Growth of the Internet and
other information technologies

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Global Research

Business Research is
increasingly global
Market knowledge is essential
A.C. Nielsen - more that 67%
international business

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Global Business Research

General information about


country - economic conditions
and political climate
Cultural and consumer factors
Market and competitive
conditions - demand
estimation

The Internet
Is Transforming Society
Time is collapsing.
Distance is no longer an
obstacle.
Crossing oceans is only a
mouse click away.
People are connected 24 hours
a day, seven days a week.
"Instantaneous" has a new
meaning.

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Internet Research

Seeking facts and figures


about an issue
Surveys on Web sites

What is Marketing Research?

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Redefining Marketing Research


The American Marketing Association (AMA)
redefined Marketing Research as:

The function which links the consumer, the


customer, and public to the marketer
through INFORMATION

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Redefining Marketing Research


Used to identify and
define market
opportunities and
problems
Generate, refine, and
evaluate marketing
performance
Monitor marketing
performance
Improve understanding
of marketing as a
process

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Definition of Marketing Research


Marketing research is the systematic and objective

identification
collection
analysis
dissemination
and use of information

for the purpose of improving decision making related


to the

identification and
solution of problems and opportunities in
marketing.

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Market Research

Specifies the information necessary


to address these issues
Manages and implements the data
collection process
Analyzes the results
Communicates the findings and
their implications

Classification of Marketing
Research
Problem Identification Research

Research undertaken to help identify problems


which are not necessarily apparent on the
surface and yet exist or are likely to arise in the
future. Examples: market potential, market
share, image, market characteristics, sales
analysis, forecasting, and trends research.

Problem Solving Research

Research undertaken to help solve specific


marketing problems. Examples: segmentation,
product, pricing, promotion, and distribution
research.

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A Classification of Marketing
Research

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Marketing Research

Problem
Identification Research
Market Potential Research
Market Share Research
Market Characteristics Research
Sales Analysis Research
Forecasting Research
Business Trends Research

Problem Solving
Research

Segmentation Research
Product Research
Promotion Research
Distribution Research

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Problem Solving Research


SEGMENTATION RESEARCH
Determine the basis of segmentation
Establish market potential and
responsiveness for various
segments
Select target markets
Create lifestyle profiles:
demography, media, and
product image characteristics

PRODUCT RESEARCH

Test concept

Determine optimal product design

Package tests

Product modification

Brand positioning and


repositioning

Test marketing

Control score tests

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Problem Solving Research


PROMOTIONAL RESEARCH

0.00%

APR

PRICING RESEARCH

Optimal promotional budget

Sales promotion relationship

Optimal promotional mix

Copy decisions

Media decisions

Creative advertising testing

Evaluation of advertising effectiveness

Claim substantiation

Pricing policies

Importance of price in brand selection

Product line pricing

Price elasticity of demand

Initiating and responding to price changes

$ALE

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Problem Solving Research


DISTRIBUTION RESEARCH

Determine
Types of distribution
Attitudes of channel members
Intensity of wholesale & resale
coverage
Channel margins
Location of retail and wholesale
outlets

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Research Process
Step 1: Problem Definition
Step 2: Development of an Approach to
the
Problem
Step 3: Research Design Formulation
Step 4: Fieldwork or Data Collection
Step 5: Data Preparation and Analysis
Step 6: Report Preparation and
Presentation

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The Role of Marketing Research


Customer Groups

Consumers
Employees
Shareholders
Suppliers

Uncontrollable
Environmental
Factors

Controllable
Marketing
Variables

Marketing
Research

Product
Pricing

Economy
Technology

Promotion
Distribution

Assessing
Information
Needs

Providing
Information

Marketing
Decision
Making

Marketing Managers
Market Segmentation
Target Market Selection
Marketing Programs
Performance & Control

Laws &
Regulations
Social & Cultural
Factors
Political Factors

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Marketing Research Suppliers &


Services
RESEARCH
SUPPLIERS

INTERNAL

FULL SERVICE
Syndicate
Services
Standardized
Services

Internet
Services
Customiz
ed
Services

EXTERNAL

LIMITED SERVICE
Branded
Products
and Services

Field
Services
Coding and
Data Entry
Services

Analytical
Services

Data
Analysis
Services