Business Research Methods Introduction to Research Varsha Varde

Business Research Methods Introduction to Research Varsha Varde 1

A Corporate Problem +Newly appointed VP (Finance) strongly believes that staffing her accounts dept only with CAs (instead of commerce or management graduates) will grossly improve its performance. +On what basis can the Company accept or reject her idea? Varsha Varde

A Corporate Problem +An expensive Ad campaign is running on TV for 3 weeks. +Not produced expected jump in sales in major sales territories +Marketing manager has to decide whether to discontinue campaign, change it or reconfirm that it is good +If Ad campaign is good it is some other marketing variable such as price, or distribution or strong competitive promotion are reasons for low sales +On what basis can the manager take this decision ? Varsha Varde

A Corporate Problem +A company wants to launch a new brand of deodorant in the market +It desires to know how to position the brand in the market +It needs estimate of market size in the chosen segment +How to fulfil the information need of the company? Varsha Varde

A Corporate Problem +A company has launched a new brand of frost free refrigerator +After six months it wants to determine customer satisfaction with the new brand +How to determine the customer satisfaction in an authentic manner? Varsha Varde

A TV Channel Problem +A popular music channel on TV desire information on +Who is the most popular video jockey? +Which show is most watched? +How to fulfil this requirement? Varsha Varde

A Public Utility Problem ìBEST wants to increase occupancy ìShould it drop fares by 5%, 7. 5%, or 10%? ìOn all days, only weekends, or weekdays? ìFor AC buses, express, or ordinary buses? ìIn city, west suburbs, or east suburbs? Varsha Varde

A Union Budget Problem d. Would a 10% reduction in excise duty lead to more than 10% increase in demand & production of manufactured goods? d. For which product categories? d. For large companies, or SMEs, or both? Varsha Varde

Traditional Real Life Riddle Are bullion, real estate and commodities supplementary or complementary to Indian private equity (PE) market in short term? In medium term? In long term? Varsha. Varde 9

Real Life Problems + All these problems are too important to be tackled in a naïve manner. + They need a systematic research study. Varsha Varde

Definition • Business research is defined as the systematic and objective process of gathering , recording and analysing data that generates information to guide business decisions. Varsha Varde 11

USE OF BUSINESS REASEARCH • BR is used to help solving operational and planning problems in various functional areas in a business organisation • Marketing: • To understand market trends • To Gain Competitive advantage • Finance: • To find the best investment option • HR : • To devise effective HR policies • Manufacturing : • To find optimal product mix Varsha Varde 12

Business Research Types Basic research Applied research

Basic Research • Attempts to expand the limits of knowledge. • Not directly involved in the solution to a specific problem. • Concerned with generalizations and formulation of theory

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? • Understanding consumer buying process • Research conducted at universities by academic researchers

Applied Research • Conducted when a decision must be made about a specific real-life problem

Applied Research Examples • Should Mc. Donalds add Italian pasta dinners to its menu? • Business research told Mc. Donald’s it should not? • Should Procter & Gamble add a highpriced home teeth bleaching kit to its product line? • Evaluating impact of a training programme on employee performance

Techniques for research • Both the research forms use scientific methods in various stages of research process Varsha Varde 18

Scientific Method • Scientific method is method of all logically trained minds • It involves the analysis and interpretation of empirical evidence (facts from observation or experimentation) to confirm or disprove prior conceptions.

Use Of Scientific Method • Basic Research : testing prior conception making inferences establishing general laws • Applied Research : assures objectivity in gathering facts and testing creative ideas for alternative business strategy Varsha Varde 20

Role of Business Research in decision Making • It provides accurate , timely and relevant information to the Top Management in various stages of decision making process Varsha Varde 21

Stages in Decision Making • • • Identifying problems and opportunities Diagnosis and assessment Selecting a course of action Implementing a course of action Evaluating the course of action

Identifying problems and opportunities • BR helps in identifying problems and opportunities through scanning internal & external business environment • Problems: Loss of market share : Decline in profits : IR problems : Ad campaign not effective • Opportunities: To tap a new market : To introduce a new product : To seek a new investment opportunity : To take over a new unit Varsha Varde 23

Diagnosis and assessment • After identifying problem/opportunity BR helps in provision of diagnostic information • For problems specify what happened & why • For opportunities explore , clarify & refine the nature of opportunity • For multiple opportunities set priorities • For prioritization of problems study its influence on business operations & time factor • Quantitative and qualitative investigations are carrie out to identify alternative courses of action Varsha Varde 24

Assessment of problems and opportunities • Indian apparel company that wants to enter US market can undertake BR in -Identifying fashion trends in the market -Determining brand awareness about the company among customers -Perception about the company among the potential employees -Examining competitors and their characteristics -Understanding American consumer behaviour Varsha Varde 25

Selecting a course of action • After identifying alternative courses of action BR is conducted to obtain specific information that will aid in evaluating alternatives & selecting the best course of action -Selection of a marketing strategy using results of consumer-jury test -Selection of investment option using results of forecasts of revenue potential Varsha Varde 26

Implementing & Evaluating a course of action • After selecting the best course of action it has to be effectively implemented. At this stage BR is mainly used to evaluate , monitor and control the programmes that are being implemented. • BR serves as a tool to find out -Whether planned activities were properly executed -Whether they accomplished what they were expected to accomplish • Tools used : Performance Monitoring Research : Evaluation Research Varsha Varde 27

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. -Evaluation of discount coupon scheme is carried out by comparing coupon redemption rate with the objectives set for the scheme

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” -Continuously tracking sales at retail stores to identify products with high sales , buying behaviour of consumers and consumer preferences towards its products

Determining When to Conduct Business Research • • Time constraints Availability of data Nature of the decision Benefits versus costs

Determining When to Conduct Business Research Availability of Benefits Time Constraints Data Nature of the Decision vs. Costs Is the infor. Does the value Is sufficient time Is the decision Yes mation already Yes of the research. Yes available before of considerable on hand information a managerial strategic inadequate exceed the cost decision or tactical for making of conducting must be made? importance? the decision? research? No No Do Not Conduct Business Research Conducting Business Research

Value versus Costs • Potential Value of a Business Research Effort Should Exceed Its Estimated Costs Varsha Varde 32

Value Should Exceed Estimated Costs Value • Decreased uncertainty • 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

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

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 21 st Century • Increased globalization • Growth of the Internet and other information technologies Varsha Varde 36

Global Research • Business Research is increasingly global • Market knowledge is essential • A. C. Nielsen - more that 67% international business • Indian Companies. ORG_MARG IMRB

Global Business Research • General information about country economic conditions and political climate • Cultural and consumer factors • Market and competitive conditions demand estimation Varsha Varde 38

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. Varsha Varde 39

Internet Research • Seeking facts and figures about an issue • Surveys on Web sites Varsha Varde 40