Business Research Methods

Business ResearchMeaning, scope, objectives, process

Dunkin Donuts: Dunking the Competition

1950 founded by Bill Rosenberg in Quincy, Massachusetts1975 1000 locations in USA2007 partnership with Proctor & Gamble( sales of $5.3 billion in 2007)2008 7988 stores worldwide2012 10,500 stores worldwidelisten to what the customer wants

Extensively used marketing research in the form of focus groups and survey research and realised that customers select a coffee and donut based on five factors : - AccessibilityQuality (freshness for donuts / coffee )Variety (52 flavors)Image Affordability

Dunkin Donuts: Dunking the Competition

The Company launched Dunkin Donuts in India in April 2012 in Delhi. The Company has 16 Dunkin Donuts restaurants in India (as of 7th August 2013).

Business ResearchIs a systematic inquiry that provides information to guide managerial decisions. It is a process of planning, acquiring, analyzing, and disseminating relevant data and insights to decision makers so that they can maximize business performance.

This enquiry might lead to validating existing postulates or arriving at new theories and models.

Objective To help in Decision Making

Example TVSNestleBoeing (preference for smaller planes developing a new version of 737 100 215 seat market)Toyota (Lexus under 30s group ---- Scion ---live concerts)

ParrysTI cyclesP & GLever Samsung

Samsung

42,000 employees focused on product research and development each year, surveying customers, conducting focus groups, and analyzing market trends. ----Samsung Galaxy S 3 one of the most popular smartphones of 2012.

Basic research : The basic premise is the need to KNOW and the concern is primarily academic in nature.For example A research scientist wants to investigate the question: What is the most effective way for an organization to recover from a service failure? Her objective is to provide guidelines for establishing the proper "fit" between service failure and service recovery that will generalize across a variety of service industries.

Applied research: Solution or action oriented research, that is contextual and practical in approach.

For example :A university professor wanted to analyze in depth the reasons for absenteeism of employees in organizations. Fortunately, a company within 20 miles of the campus employed her as a consultant to study that very issue.

Exploratory research is loosely structured and the basic premise is to provide direction to subsequent, more structured method of enquiry.Conclusive research is structured and definite in orientation. These studies are usually conducted to validate formulated hypotheses and specified relationships.

Descriptive research: The main goal of this type of research is to describe the data and characteristics about what is being studied.Causal research: Explores the effect of one or more variables on other variable(s), with reasonable level of certainty by controlling the impact of other influencing variables

Marketing Market & consumer analysis, Product research, Pricing research, Promotional researchNew product research (idea generation / screening / concept development / business analysis / product development / test marketing / launch)Product life cycle researchProduct Mix Research (package designs / branding / after sales service)

In financeAsset pricing, capital markets and corporate finance, Financial derivatives and credit risk modeling research, Market-based accounting research , Auditing and accountability, financial forecasting, behavioural finance, volatility analysis

In human resourcesTraining & development studies

Selection and staffing studies

Performance appraisaldesign and evaluation

Organization planning and development

Incentive and benefits studies

Emerging areascritical factor analysis, employer branding studies

In production & operations management Operation planning and designDemand forecasting and demand estimationProcess planningProject management and maintenance effectiveness studiesLogistics and supply chain-design and evaluation Quality estimations and assurance studies

Business Research is used to Make GoalsDecision supportBusiness IntelligenceStrategy

Research MethodsAll those methods / techniques that are used for conduct of research. These include the methods of collection of data, methods of establishing relationships and evaluating the accuracy of the same.

Research MethodologyIs a way to systematically solve the research problem. It includes research methods and the logic behind the methods used in the context of the research study

Ethics Treatment of RespondentsAnonymity protectedCollection of data correctedNo use of ultra violet ink / one way mirrors / hidden tape recorders / fake long distance calls Fake research firms

Treatment of ClientsConfidentiality Methods accurately mentionedCompetitors research not undertakenObjectivity Right to Quality Research

Research Process

Defining and Identifying The Problem

Harley Davidson comeback in 2000s

2007 revenues were $6 billion plusMarket share 50 % in the heavyweight categoryDistributors were pushing build moreCo. mgt was more risk averse than risk proneDiscussion with experts brand loyalty was imp

Conducted focus groups - bikes were for recreation (also owned SUVs)Forecasts - consumer spend to increase till 2015

MQ : should HD invest to produce more motorcycles ?Wanted to find out Who ? What ? How ? Loyal ?

Research QuestionsCan the motorcycle buyers be segmented based on psychographic characteristics ?H1 : there are distinct segments of motorcycle buyersH2 : each segment is motivated to own a Harley for a different reasonH3: Brand loyalty is high among HD customers in all segments

Qualitative & quantitative research was conductedFocus groups & 16,000 mailers

Results - Seven categories of customers could be distinguishedAdventure lover traditionalistThe sensitive pragmatistStylish status seekerLaid back camperClassy capitalistLonerMisfit Hence H1 was accepted

All customers wanted to own a Harley signified independence, freedom and powerH2 not acceptedH3 acceptedDecision taken to invest in a larger production facility

Management - Research QuestionManagement Dilemma (declining sales,employee turnover,manufacturing defects,customer dissatisfaction)Management Question (why )Research Question (which courses of action can be considered to improve the problem)

Defining the research problemA research problem can be defined as a gap or uncertainty in the decision makers existing body of knowledge which inhibits efficient decision making. The gap could be academic & theoretical (basic) or real time and action oriented (applied).

Elements of a research problemUnit of analysis (sample point)

Independent variable

Dependent variable

Extraneous independent variable (boss behaviour, family pressures)

Intervening variables

Moderating variables (education, age)

Example There is an increase in in job satisfaction (IVV) of each individual worker, subsequent to the introduction of a flexi time work schedule (IV), which eventually affects the individuals productivity (DV), especially among women employees (MV)

Techniques involved in Defining the Research ProblemSituation Analysis : the circumstances under which the research is being conducted - product - industry and competition - MarketChannel distributionSales organisation (sales promotion)Advertising

ContdInformal Investigation (pilot survey) discussion with selected customers, dealers, top management personnel and others connected to the problem.

Formulation of HypothesisA tentative theory or supposition provisionally adopted to explain certain facts and guide the investigation of others.Descriptive Hypothesis : Is over half of MR book sales to MBA students ?Relational Hypothesis :High MR book sales MBA students is due to it being a 3 credit course

Problem identification process

Decision problems Research problems

SEC codeCreated in 1988 by IMRB; was ratified by Market Research Society of India (MRSI) Classification of Indian consumers on the basis of Occupation and Education of the chief wage earner (Head) of the households.Used by most media researchers and brand managers to understand the Indian consuming class & for market segmentation

Research DesignBasic framework which provides guidelines for the rest of the research process

Essentials of Research DesignAn activity and time based planAlways based on the research questionA guide for selecting sources and types of informationA framework for specifying relationshipsA procedural outline for every activity

Types of Research Designs

Exploratory ( more Qualitative in nature)Conclusive Descriptive (more Quantitative in nature )Conclusive - Causal

Exploratory Research DesignDiscovery of ideasBreaks vague problems into identifiable sub problems Establishes prioritiesIncreases the analysts familiarity with the problem ( gathers practical difficulties)

Can be qualitative / quantitative in nature . Mostly qualitative

Qualitative Research- Tells the researcher how(process) and why(meaning) things happen as they doDevelops understandingActs as a guide for Quantitative Research

A Classification of Qualitative Research Procedures

Via Secondary data (Internal & external / syndicated data/ databases)Literature surveysExperience surveysAnalysis of selected casesFocus groups

Personal Interviews( face to face / internet / telephone) Expert opinion survey

FOCUS GROUP DISCUSSIONS

A focus group is an interview conducted by a trained moderator in a non structured and natural manner with a small group of respondents.The moderator leads the discussionPurpose gain insights by listening to a group of people from the appropriate target market about issues of interest to the moderator.

Eg : Ford (Taurus) door latchesWhirlpool : new refrigerator a quieter one the quietest one ever

2009 Honda Pilot SUV Baby boomers : family life was imp / friendships / getaway vacations / fitness /no midlife crisis

you will be ready for anything in the 2009 pilot

Characteristics 8 12 membersHomogeneous, members screened1-3 hoursRecorded (audio / video)Moderator observational, interpersonal and interpersonal skills , knowledge Relaxed informal setting

Moderator Detached / empatheticPermissive but alertMust encourage people to talkPeople should be more specificEncourage unresponsive members to talkShould be one with the group no distance

Methodology for conducting a focus group

Outline - handoutResult is reviewed Reports specific comments, concerns suggested by facial expressions and body languageCannot report in frequencies / % most participants thought

Projective TechniquesFocus groups and depth interviews are direct approaches / PT disguise the purpose Association techniquesCompletionConstructionExpressive

Association techniques Respondent is presented with a stimulus and asked to respond with the first thing that comes to mind

Example word association

Stimulus Mrs MMrs CwashdayeverydayironingfreshAnd sweetcleanPure airsoiledscrubHusband doesCleanfilthThis neighborhooddirtfamilysquabbleschildrentowelsdirtywash

Tide fragrance ( launched a detergent bar in India Focus GD)

P & G 44% of detergent market in the year 2009

Word or Picture association

Provide a prompt in the form of a word, phrase, or sentence and ask respondents to associate something with it. Tell me what you think of when you think of Kelloggs cornflakesWhen you think of your service provider, what is the first thing that comes to mind? What comes to mind when you hear the term customer service?

Imagery Associations

Show people an image, or ask them to bring or select an image. Images are pictures, drawings, or illustrations. Then, ask people to describe the image. Ask how it links to a product, brand, object, or person. Also, ask the respondents to imagine an image and describe it.

Please select a picture that best represents product X. How does the picture speak about product X? How does the image describe product X?What does each person in this picture feel about brand Y?Ask several follow-up questions about how the association relates, and probe to clarify.

Personification Associations

Personification asks respondents to give human characteristics to products, services, or brands. If your Volvo could talk, what would it say to you? If brand X were a person, what would he or she look like?

How does your digital camera feel about you? Personification is fun. The challenge of personification is interpretation of data and analysis. Use associations to understand imagery and stimulate memory recall.

Projective Techniques completion My cell phone is like a

A cell phone is like a best friend. My cell phone is part of my body.A cell phone is like my wallet. I would never leave home without it. A cell phone is like a lifeline now. Leaving it behind is like cutting off the oxygen supply.A cell phone is like a leash.

The results show cell phones are a necessity for a segment of consumers. A minority find them annoying.

Projective Techniques completion Sentence completion people who shop online are . People who shop at Big bazar are .

Story Completion

Qualitative Research MethodsStory completionA man was shopping for a business suit in his favorite department store. After spending 45 minutes and trying several suits, he finally picked one he liked. As he was proceeding to the check-out counter, he was approached by the salesperson who said: Sir, at this time we have higher quality suits for the same price. Would you like to see them?

What is the customer response? Why?

Qualitative Research Methods

Construction Techniques With a picture response, the respondents are asked to describe a series of pictures of ordinary as well as unusual events. The respondent's interpretation of the pictures gives indications of that individual's personality.

A Cartoon TestLets see if we can pick up some house wares at Auchan Auchan

In cartoon tests, cartoon characters are shown in a specific situation related to the problem. The respondents are asked to indicate what one cartoon character might say in response to the comments of another character. Cartoon tests are simpler to administer and analyze than picture response techniques.

Qualitative Research MethodsWhen I eat pizza I love drinking coke

Qualitative Research Methods

Expressive Techniques

Expressive TechniquesIn expressive techniques, respondents are presented with a verbal or visual situation and asked to relate the feelings and attitudes of other people to the situation.

The subject may express himself more freely than when expressing his own beliefs. However, societal norms may also influence research subjects why may not have given much thought to their own attitudes. One way of using a construction projective technique is for the researcher to ask a subject to fill in a bubble to represent what a certain character is thinking.

Role playingThird Party Technique

Role Playing

Ask respondents to assume a role and act the part. If you were the product manager, what would you do to improve the product? If you were the CEO of this company, what would you do to reduce customer complaints?

If you were the creative director, what would your ad say? If you were in your friends shoes, what would you do?Use role-playing when asking for product or advertising recommendation

Third-person techniqueThe respondent is presented with a verbal or visual situation and the respondent is asked to relate the beliefs and attitudes of a third person rather than directly expressing personal beliefs and attitudes. This third person may be a friend, neighbor, colleague, or a typical person.

With this technique, you ask respondents to describe what other people are doing, thinking, feeling, believing, and saying. Ask respondents to project to a third-party. What does your friend think about brand X? What does company X think about you? Who uses brand X? What is the real reason they use it?

Ask follow-up questions and probe answers, using the third person. Use third-party projections for sensitive subjects. In other words, when people hide or deny their real thoughts, feelings, or beliefs.

CaseThe fear of flying increased in the US after the Sept 11, 2001 hijackings.Air Transport Association (ATA) reported that passenger bookings were down.Continental Airlines suffered a much lower drop.

Respondents were asked Are you afraid of flying . Most respondents said no.Reasons for not flying were cost , bad weather etc.A follow up study was conducted Do you feel your neighbor is afraid to fly? Answer was affirmative.

CA addressed the fear of flying by stressing heightened security measures and enhanced cabin comforts for passengers

Depth Interviews

Privasys

Credit CardsStudy designed to come up with new credit card featuesWhen questioned in a structured way, respondents listed existing features.Depth interviews were asked questions like What is imp to me ?How do I wish I could live ?

Result :An intelligent credit card could keep track of credit cards, bank balances, investments and telephone numbers.Privasys and First Data introduced a battery powered electronic credit card with an internal chip capable of holding all credit, debit and loyalty cards.

One to one interaction between the investigator and the respondent. It is semi structured, direct, conversational and recorded.

Open-ended Questions: Questions should be worded so that respondents cannot simply answer yes or no, but must expound on the topic.

Semi-structured Format: Some pre-planned questions are asked during the interview, questions must be allowed to flow naturally, based on information provided by the respondent. A specific order may not be maintained. In fact, the flow of the conversation dictates the questions asked and those omitted, as well as the order of the questions

Seek understanding and interpretation: You should try to interpret what you are hearing, as well as seek clarity and a deeper understanding from the respondent throughout the interview.

Conversational: You should be conversational, but your role is primarily that of a listener. There should be smooth transitions from one topic to the next.

Recording responses: The responses are recorded, typically with audio/ video tape and written notes (i.e., field notes)

Record observations: Observe and record non-verbal behaviors on the field notes as they occur.

Record reflections: Record your views and feelings immediately after the interview as well

Additional depth interview techniquesLadderingHidden issue questioning Symbolic analysis

Laddering Specific probing techniques --- develop a mental map of the consumer--- mental map of consumers who are similar why people purchase a certain product

Move from attributes ---- user

Maybelline Q : Why do you buy Maybelline CosmeticsAnswer : It is a good brand at a reasonable priceQ : why are reasonably priced cosmetics so important to you ?A : it makes me feel I made a wise decision

Study on attitudes toward airlines among male middle managers Laddering :Q why do you like to travel in wide body aircrafts ?-- work done accomplish more -- feel good

Hidden issuesQuestions on work and social lifeA : glamorous, historic, elite, masculine friendships, Grand prix racing, Eg : Lufthansa campaign

Symbolic AnalysisQ : What would it be like if you could no longer use an airplane ?A: I would have to rely on email, letters, Vcs, calls.Analysis : airlines sell face to face communicationUsing these inputs United Airlines (2009) administered the Business ExtrAA program.

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