Research Design 3 2 Research Design Definition n

Research Design

3 -2 Research Design: Definition n A research design is a framework or blueprint for conducting the business research project. It details the procedures necessary for obtaining the information needed to structure or solve business research problems.

3 -3 Components of a Research Design n n n Define the information needed Design the exploratory, descriptive, and/or causal phases of the research Specify the measurement and scaling procedures Construct and pretest a questionnaire (interviewing form) or an appropriate form for data collection Specify the sampling process and sample size Develop a plan of data analysis

3 -4 A Classification of Business Research Design Conclusive Research Design Exploratory Research Design Descriptive Research Cross-Sectional Design Single Cross. Sectional Design Longitudinal Design Multiple Cross. Sectional Design Causal Research

3 -5 Exploratory & Conclusive Research Differences Exploratory Conclusive Objective: To provide insights and understanding. To test specific hypotheses and examine relationships. Characteristics: Information needed is defined only loosely. Research process is flexible and unstructured. Sample is small and nonrepresentative. Analysis of primary data is qualitative. Information needed is clearly defined. Research process is formal and structured. Sample is large and representative. Data analysis is quantitative. Findings /Results: Tentative. Conclusive. Outcome: Generally followed by further exploratory or conclusive research. Findings used as input into decision making.

3 -6 A Comparison of Basic Research Designs Exploratory Descriptive Causal Objective: Discovery of ideas Describe market and insights characteristics or functions Determine cause and effect relationships Characteristics: Flexible, versatile Manipulation of one or more independent variables Marked by the prior formulation of specific hypotheses Often the front end Preplanned and of total research structured design Methods: Expert surveys Pilot surveys Secondary data Qualitative research Secondary data Surveys Panels Observation and other data Control of other mediating variables Experiments

3 -7 Uses of Exploratory Research n n n Formulate a problem or define a problem more precisely Identify alternative courses of action Develop hypotheses Isolate key variables and relationships for further examination Gain insights for developing an approach to the problem Establish priorities for further research

3 -8 Methods of Exploratory Research n n Survey of experts Pilot surveys Secondary data analyzed in a qualitative way Qualitative research

3 -9 Use of Descriptive Research n n n To describe the characteristics of relevant groups, such as consumers, salespeople, organizations, or market areas. To estimate the percentage of units in a specified population exhibiting a certain behavior. To determine the perceptions of product characteristics. To determine the degree to which marketing variables are associated. To make specific predictions

3 -10 Methods of Descriptive Research n n Secondary data analyzed in a quantitative as opposed to a qualitative manner Surveys Panels Observational and other data

3 -11 Cross-sectional Designs n n Involve the collection of information from any given sample of population elements only once. In single cross-sectional designs, there is only one sample of respondents and information is obtained from this sample only once. In multiple cross-sectional designs, there are two or more samples of respondents, and information from each sample is obtained only once. Often, information from different samples is obtained at different times. Cohort analysis consists of a series of surveys conducted at appropriate time intervals, where the cohort serves as the basic unit of analysis. A cohort is a group of respondents who experience the same event within the same time interval.

Consumption of Various Soft Drinks by Various Age Cohorts 3 -12 Percentage consuming on a typical day Age 1950 1969 1979 8 -19 20 -29 30 -39 40 -49 50+ 52. 9 45. 2 33. 9 23. 2 18. 1 62. 6 60. 7 46. 6 40. 8 28. 8 C 1 73. 2 76. 0 67. 7 58. 6 50. 0 C 2 81. 0 75. 8 71. 4 67. 8 51. 9 C 3 born prior to 1900 1901 -10 1911 -20 1921 -30 C 1: C 2: C 3: C 4: cohort C 5: C 6: C 7: C 8: cohort born C 8 C 7 C 6 C 5 C 4 1931 -40 1940 -49 1950 -59 1960 -69

3 -13 Longitudinal Designs n n A fixed sample (or samples) of population elements is measured repeatedly on the same variables A longitudinal design differs from a crosssectional design in that the sample or samples remain the same over time

Relative Advantages and Disadvantages of Longitudinal and Cross-Sectional Designs Evaluation Criteria Detecting Change Large amount of data collection Accuracy Representative Sampling Response bias Cross-Sectional Design + + 3 -14 Longitudinal Design + + + - Note: A “+” indicates a relative advantage over the other design, whereas a “-” indicates a relative disadvantage.

3 -15 Cross-Sectional Data May Not Show Change Brand Purchased Time Period 1 Survey Brand A Brand B Brand C Total 200 300 500 1000 Period 2 Survey 200 300 500 1000

Longitudinal Data May Show Substantial Change Brand Purchased in Period 1 Brand A Brand B Brand C Total 3 -16 Brand Purchased in Period 2 Brand A 100 25 75 200 Brand B 50 100 150 300 Brand C 50 175 275 500 Total 200 300 500 1000

3 -17 Uses of Casual Research n n n To understand which variables are the cause (independent variables) and which variables are the effect (dependent variables) of a phenomenon To determine the nature of the relationship between the causal variables and the effect to be predicted METHOD: Experiments

3 -18 Potential Sources of Error in Research Designs Total Error Non-sampling Error Random Sampling Error Response Error Researcher Error Surrogate Information Error Measurement Error Population Definition Error Sampling Frame Error Data Analysis Error Interviewer Error Respondent Selection Error Questioning Error Recording Error Cheating Error Non-response Error Respondent Error Inability Error Unwillingness Error

3 -19 Errors in Business Research The TOTAL ERROR is the variation between the true mean value in the population of the variable of interest and the observed mean value obtained in the business research project n I. Random sampling error is the variation between the true mean value in the population and the true mean value in the original sample. n II. Nonsampling error (can be attributed to sources other than sampling) n 1) Nonresponse error: when some respondents included in the sample do not respond (refusals or not-at-homes)

3 -20 Errors in Business Research n 2) Response error: n Researcher errors n n a) Surrogate information error: the variation between the info needed and sought by the researcher (e. g. , instead of info on consumer choices, the researcher obtains info on consumer preferences because the choice process cannot be easily observed) b) Measurement error: the variation between the info sought and info generated (e. g. , measuring perceptions rather than preferences)

3 -21 Errors in Business Research n n c) Population definition error: the variation between the actual population relevant to the problem at hand the pop. as defined by the researcher (e. g. , how to define a population of affluent households? ) a) income of $50 K or more? b) the top 20% of households as measured by income? c) with net worth over $250, 000?

3 -22 Errors in Business Research n n d) Sampling frame error: the variation between the population defined by the researcher and the population as implied by the sampling frame (e. g. , the telephone directory used to generate a list of telephone numbers does not accurately represent the pop. of potential consumers due to unlisted, disconnected, and new numbers in service) e) Data analysis error: e. g. , when an inappropriate statistical procedure is used

3 -23 Errors in Business Research n Interviewer errors n n a) Respondent selection error: respondents are selected other than those specified by the sampling design (e. g. , a non-reader of a journal is selected rather than a reader to meet a difficult quota requirement) b) Questioning error: e. g. , interviewer does not use the exact wording given in a questionn. c) Recording error: errors in hearing, interpreting, and recording the answers d) Cheating error: the interviewer fabricates the answers (e. g. , does not ask about income, but then fills in the answer based on personal assessment)

3 -24 Errors in Business Research n Respondent errors n n a) Inability error: because of unfamiliarity, fatigue, boredom, faulty recall, question format, question content, etc. (e. g. , a respondent cannot recall the brand of yogurt purchased four weeks ago) b) Unwillingness error: n No answer n Intentionally wrong answer (e. g. , declares himself as a reader of a prestigious magazine rather than a tabloid)

Citicorp Banks on Exploratory, Descriptive, and Causal Research 3 -25 Business Research at Citicorp is typical in that it is used to measure consumer awareness of products, monitor their satisfaction and attitudes associated with the product, track product usage and diagnose problems as they occur. To accomplish these tasks Citicorp makes extensive use of exploratory, descriptive, and causal research. Often it is advantageous to offer special financial packages to specific groups of customers. In this case, a financial package is being designed for senior citizens. The following seven-step process was taken by business research to help in the design.

Citicorp Banks on Exploratory, Descriptive, and Causal Research 1) A taskforce was created to better define the market parameters to include all the needs of the many Citicorp branches. A final decision was made to include Americans 55 years of age or older, retired, and in the upper half of the financial strata of that market. 3 -26

Citicorp Banks on Exploratory, Descriptive, and Causal Research 2) Exploratory research in the form of secondary data analysis of the mature or older market was then performed and a study of competitive products was conducted. Exploratory qualitative research involving focus groups was also carried out in order to determine the needs and desires of the market and the level of satisfaction with the current products. In the case of senior citizens, a great deal of diversity was found in the market. This was determined to be due to such factors as affluence, relative age, and the absence or presence of a spouse. 3 -27

Citicorp Banks on Exploratory, Descriptive, and Causal Research 3) The next stage of research was brainstorming. This involved the formation of many different financial packages aimed at the target market. In this case, a total of 10 ideas were generated. 3 -28

Citicorp Banks on Exploratory, Descriptive, and Causal Research 4) The feasibility of the 10 ideas generated in step 3 was then tested. The ideas were tested on the basis of whether they were possible in relation to the business. The following list of questions was used as a series of hurdles that the ideas had to pass to continue on to the next step. • Can the idea be explained in a manner that the target market will easily understand? • Does the idea fit into the overall strategy of Citicorp? 3 -29

Citicorp Banks on Exploratory, Descriptive, and Causal Research 3 -30 § Is there an available description of a specific target market for the proposed product? § Does the research conducted so far indicate a potential match for target market needs, and is the idea perceived to have appeal to this market? § Is there a feasible outline of the tactics and strategies for implementing the program? § Have the financial impact and cost of the program been thoroughly evaluated and determined to be in line with company practices? In this study, only one idea generated from the brainstorming session made it past all the listed hurdles and on to step 5.

Citicorp Banks on Exploratory, Descriptive, and Causal Research 5) A creative work-plan was then generated. This plan was to emphasize the competitive advantage of the proposed product as well as better delineate the specific features of the product. 6) The previous exploratory research was now followed up with descriptive research in the form of mall intercept surveys of people in the target market range. The survey showed that the list of special features was too long and it was decided to drop the features more commonly offered by competitors. 3 -31

Citicorp Banks on Exploratory, Descriptive, and Causal Research 7) Finally, the product was test marketed in six of the Citicorp branches within the target market. Test marketing is a form of causal research. Given successful test marketing results, the product is introduced nationally. 3 -32

3 -33 Business Research Proposal n n n n n Executive Summary Background Problem Definition/Objectives of the Research Approach to the Problem Research Design Fieldwork/Data Collection Data Analysis Reporting Cost and Time Appendices

3 -34 The Greenfield of Online Research Greenfield Online Research Center, Inc. (http: //www. greenfieldonline. com), based in Westport, Connecticut, is a subsidiary of the Greenfield Consulting Group. The Online Research Center conducts focus groups, surveys, and polls over the Internet. The company has built up a “panel” of close to 200, 000 Internet users, from which it draws survey samples. The samples may be used for descriptive research designs like single or multiple cross-sectional designs, as well as longitudinal designs. Causal designs can also be implemented. Respondents may also be chosen from the registered Internet users.

3 -35 The Greenfield of Online Research Internet users wishing to take part in surveys and other projects begin by registering online at the company’s Web site. The registration consists of a “sign-up survey” that asks for email address, type of computer used, personal interests and information about the respondent’s household. Once an Internet user is registered, Greenfield Online matches the user with research studies that are well-suited to his or her interests. Incentives to take part in focus groups or special surveys are offered by the companies whose products or services are being researched. This incentive is cash or valuable prizes. Incentives are also offered to Internet users to encourage them to register with Greenfield’s Internet panel. New registrants automatically qualify for prizes that are awarded in monthly drawings.