RESEARCH METHODS

MODULE 1
CONTENTS
 Meaning & Definition
 Types
 Process of research- management problem, defining the
research problem, formulating the research Hypothesis,
developing the research proposals, research design
formulation, sampling design, planning and collecting the
data for research, data analysis and interpretation.
 Research Application in business decisions,
 Features of good research study.
 INTRODUCTION
 In common man’s language research refers to “search for
knowledge”

 Research is an art of scientific investigation

 A systematic design, collection, analysis and reporting the

findings and solutions for the marketing problems of an
organization.

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 Definition
Business research can be defined as a systematic and objective
process of gathering, recording, and analyzing data that
provides information to guide business decisions.

 A scientific undertaking which by means of logical and

systematic techniques, aims to:
1. Discover new facts or verify and test old facts.
2. Analyze their sequences, interrelationships and causal
explanations.
3. Develop new scientific tools, concepts and theories, which
would facilitate valid and reliable study of human behavior.
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Definition
 Business Research may be defined as the “systematic and objective
process of gathering, recording and analyzing data for aid in
making business decisions”
(Zikmund, Business Research Methods, 2002, p. 6)

 Research is a process through which we attempt to

achieve systematically and with the support of data the
answer to a question, the resolution of a problem, or a
greater understanding of a phenomenon.
Where Research in Business is Used?
 Typically, business research methods are used in situations of
uncertainty, that is, when decision-makers face two or more
courses of action and seek to select the best possible alternative
under the circumstances.

 It is used either to understand the market trends, or find the

optimal marketing mix, devise effective HR policies or find
the best investment policies.

 Has got “OMNIPRESENCE”

 Typical Users of Business Research Methods

 Businesses and Corporations

 Public-Sector Agencies

 Consulting Firms

 Research Institutes

 Non-Governmental Organizations

 Non-Profit Organizations

 Independent Researchers and Consultants

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 Fields Where Business Research is Often Used
General Business Conditions and Financial and Accounting Research
Corporate Research
 Forecasts of financial interest rate trends,
 Short- & Long-Range Forecasting,  Stock,bond and commodity value predictions
 Business and Industry Trends  capital formation alternatives
 Global Environments  mergers and acquisitions
 Inflation and Pricing  risk-return trade-offs
 Plant and Warehouse Location  portfolio analysis
 Acquisitions  impact of taxes
 research on financial institutions
Management and Organizational  expected rate of return
Behaviour Research  capital asset pricing models
 credit risk
• Total Quality Management
 cost analysis
• Morale and Job Satisfaction
• Leadership Style
• Employee Productivity
• Organizational Effectiveness
• Structural ssues
• Absenteeism and turnover
8 • Organizational Climate
Continued....
Sales and Marketing Research
 Market Potentials
 Market Share
 Market segmentation
 Market characteristics
 Sales Analysis
 Establishment of sales quotas
 Distribution channels
 New product concepts
 Test markets
 Advertising research
 Buyer behaviour
 Customer satisfaction
 Website visitation rates
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Information Systems Research
 Knowledge and information needs assessment
 Computer information system use and
evaluation
 Technical suppot satisfaction
 Database analysis
 Data mining
 Enterprise resource planning systems
 Customer relationship management systems
Corporate Responsibility Research
 Ecological Impact
 Legal Constraints on advertising and promotion
 Sex, age and racial discrimination / worker
equity
 Social values and ethics
 Selected Examples of Real-Life Situations in Which
Business Research Methods are Used
 A firm wants to produce and market a new product but first wants to ascertain if there is a
potential consumer demand for this product in markets x,y and z
 a multinational firm wants to establish a production facility in another country after
determining its technical and economic feasibility
 A government agency wants to ascertain the satisfaction level of its employees, the causes for
any possible discontent, and propose a scheme for enhancing this level
 A financial institution wants to invest in commodities and commissions a study to determine
the past trends and forecast future returns in a portfolio of commodities
 The CEO of a firm wants to undertake a SWOT-Analysis as part of his plan to redefine his
organization’s priorities

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TYPES OF RESEARCH
 TYPES
 Exploratory Research
 Descriptive Research
 Applied Research
 Pure/Fundamental or Basic Research
 Conceptual Research
 Causal Research
 Historical Research
 Ex-post Facto Research
 Action Research
 Evaluation Research
 Library Research
 Quantitative Research
12  Qualitative Research
 Exploratory Research
 Provides insights and comprehension of an issue or situation

 Relies on secondary research such as available literature

review, informal discussions with consumers, employees,
experts, in-depth interviews etc..

 Results are used further for the future studies

 Provides a future direction

 Eg; Role of micro finance, reasons for decline in sales

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 DESCRIPTIVE RESEARCH
 Fact finding investigation, also called statistical research,
describes data and demography of the population or
phenomenon being studied.
 Answers the questions who, what, where, when and how.
 Deals with specific predictions like behaviour, preferences
etc..

 Eg;Trends
 in the consumption of soft drink with respect to socio-
economic characteristics such as age, family, income,
education, gender etc..
 Degree of use of TV for different viewers

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 Applied Research
 This refers to investigation undertaken to discover the
applications and uses of theories, knowledge, and principles
in actual work or in solving problems.
Examples
 Evaluating the impact of a training program on employee
performance
 Examining consumer response to direct marketing programs.

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 Basic Research
 Gathering knowledge for the sake of knowledge

 Do not involve directly with practical problem

 There is no intention to apply this research in practice

 Tata Institute of Fundamental Research conducts such studies

 Theory of Relativity (by Einstein)

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 Conceptual Research
 Generally used by philosophers

 The researcher collects data to prove or disprove his

hypothesis

 Psychological, psychometry research

 Eg: Study of personality built

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 Causal Research
 Conducted to determine the cause and effect relationship
between two variables
 A way of seeing how actions now will affect a business in the
future

 Impact of promotion on sales

 Impact of Microfinance on SHGs

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 Historical Research
 Study of past records and data in order to understand the
future trends and development of the organization or
market.
 Main aim is to derive the generalization or explanation in
order to understand the present and future.

 Studying the past-economy during recession

 Investor’s study of share market

 Accuracy of measurement is doubtful

 Verification of records are doubtful

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 Ex-post Facto Research
 Empirical research

 To examine the relationship between the two variables

 The researcher will not have control over the independent

variable means “from what is done afterwards”

 The researcher can only report “what has happened” and

“What is happening”

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 Action Research
 Conducted to solve the problem

 Test Marketing of a product

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 Evaluation Research
 Example of applied research

 Used to evaluate the planned program implemented, that

means deals with evaluating the performance or assessment
of a project

 Eg; To evaluate the govt. Program

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 Library Research
 To gather the secondary data

 To review reports

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Quantitative Research:

Quantitative research is based on the measurement of quantity or

amount. It is applicable to phenomena that can be expressed in
terms of quantity.

This method deals with collecting all the objective and numerical
data from various resources.
Questionnaire is the basic tool, which provides adequate
information about customer behavior and their approach towards
a particular product or company. Compiling complete statistical
investigation is the basic aim of quantitative analysis.

Hence, the questions are also in objective sorts that draw yes and
no responses from the customers chosen for the tests
Qualitative Research:

Qualitative research is concerned with qualitative phenomena i.e.,

phenomena relating to or involving quality or kind.

For instance, when we are interested in investigating the reasons

for human behaviour, we quite of talk about ‘motivation research’,
an important type of qualitative research.
This type of research aims at discovering the underlying motives
and desires, using in depth interviews for the purpose.

Qualitative research is especially important in the behavioral

sciences where the aim is to discover the underlying motives of
human behaviour. Through such research we can analyze the
various factors which motivate people to behave in a particular or
which make people like or dislike a particular thing.

Ex; Brand Celebrities, Psychological pricing, Socio-Cultural

Influence in Ads (Cadbury Mother-In-Law and Daughter-In-Law )
Process of Research
1. Management problem
2. Defining the research problem
3. Formulating the research Hypothesis
4. Developing the research proposals
5. Research design formulation
6. Sampling Design
7. Planning and collecting the data for research
8. Data analysis and interpretation
9. Preparing the Report and Presentation
1. Management problem:
The process begins with the management dilemma—the problem or
opportunity that requires a business decision.

The management dilemma is usually a symptom of an actual problem,

such as:
 Rising costs / Declining sales.
 The discovery of an expensive chemical compound that would increase
the usefulness of a drug.
 Increasing tenant move-outs from an apartment complex.
 A larger number of product defects during the manufacture of an
automobile.
 An increasing number of letters and phone complaints about post
purchase.
2. Defining the Research Problem:
It is important to define the problem in a precise manner. A
well-defined problem gives the researcher a proper direction for
carrying out investigation. It also helps in utilizing the resources
provided for the research effectively. A researcher can focus his
efforts on collecting relevant information, if the problem is
defined properly.
 Some research problems such as conducting a survey on the
newspaper reading habits of a given set of the population can be
clearly defined. But if a company wants to define a research
problem such as declining sales, it needs to explore the research
problem further through exploratory research.
3. Formulating the Research Hypothesis:
A hypothesis is a statement based on some presumptions about the
existence of a relationship between two or more variables that can
be tested through data. For instance, the exploratory research for
the above problem may have resulted in the hypothesis that
consumers perceive that the radiations emanating from the cell
phone are harmful. When a researcher is developing a hypothesis,
he/ she will try to assume an answer for a particular research
question and then test it for its validity.
A hypothesis normally makes the research question clearer to the
researcher. For instance, if the research question is—‘Why are the
sales of refrigerators going up in winter? In this case, the
hypothesis could be—‘The sales of refrigerators are going up
during winter due to off-season discounts’ This makes the research
question much clearer.

The formulation of a hypothesis allows the researcher to make a

presumption or ‘guess’ and can thus ensure that all the relevant
aspects of the research are included in the research design.
However, a hypothesis cannot be developed for every research
question. Moreover, a vague hypothesis may be of no use at all.
4. Developing Research Proposals:
Various research proposals must be developed in order to find the
solution to a problem more accurately.
Before proceeding to the next stage, it is essential to consider two
points. The first one is to assess the value of information that is
being sought. In this stage, it is important to conduct a cost-
benefit analysis, wherein the costs incurred on obtaining the
needed information are compared with the benefits accruing to
the organization.
If the costs are more than the benefits, then it is better to halt the
research, while the subsequent phases of the research process can
be carried on if the benefit is greater than the cost. The second
point is to ensure that the required information does not already
exist as it would make the research effort futile.
5. Research Design Formulation
Planning the research design is a crucial step in the research
process. A research design is the actual framework of a research
that provides specific details regarding the process to be followed
in conducting the research.

The research is designed based on the objectives formulated

during the initial phases of the research.
The research design includes all the details regarding the research
such as where the information should be obtained from, the time
and budget allotted for conducting the research, the appropriate
measurement techniques and the sampling process.

Factors like the research objective, the importance of the decision,

costs involved in conducting the research and the availability of
data sources determine the selection of an appropriate research
design.
6. Sampling Design:
Sampling is a process that uses a small number of items or a small
portion of a population to draw conclusions regarding the whole
population. Alternately, a sample can be considered as a subset of a
larger set called the population.
A well-defined sample has the same characteristics as the
population as a whole, and therefore, when a research is
conducted on such sample, the results obtained will represent the
characteristics of the whole population.
But if errors are made in selecting the sample, then the research
results will be wrong, since a wrongly selected sample does not
represent the characteristics of the population as a whole.

For instance, to study the petrol and diesel consumption patterns

of people.
If a sample is selected from a list of vehicle owners, it may not
represent the whole population, since there are several others who
use petrol or diesel for running generators or for purposes other
than travelling.
It is therefore very important to define the population before
selecting the sample; otherwise, the research results may not be
helpful for the manager in taking effective decisions.
Another important aspect of sampling is to decide the size of the
sample. How big should a sample be? The bigger the sample size
the greater will be its precision. But for practical reasons, it is not
feasible to select large samples.

Therefore, a sample that is selected using probability sampling

techniques will be sufficient for getting effective results.
7. Planning and Collecting the Data for
Research:
After preparing a suitable sample, the researcher collects the data
from the units in this sample. As there are several research
techniques, there are a number of data collection methods as well.

For instance, in the survey method, the data are collected by

asking the respondents to fill out a questionnaire administered to
them.

While in the observation technique, the respondents are just

observed without their direct participation in the research.
Whatever the method used to collect the data, it is very important
that the data are collected without any errors.

Errors may creep in during the data collection process in several

forms. Potential data collection errors may arise if the interviewee
does not understand the question or if the interviewer records the
answers inaccurately.
Data collection is done in two stages—pre-testing and the main
study.

Pre-testing involves collecting data from a small sub-sample to test

whether the data collection plan for the main study is appropriate.
This helps the researchers to minimize any potential errors that
may crop up during the main study.

The pre-test results may also be used to decide on a way of

tabulating the collected data. If the results of a pre-test are not
appropriate for decision-making, then the researcher may consider
altering the research design.
8. Data Analysis and Interpretation:
The interpretation of the data that have been collected by using
different analytical techniques according to the requirements of
the management is called analysis.

Several statistical tools are used for data analysis, in order to make
the analysis suitable for effective decision-making. The statistical
analysis of the data may range from simple frequency distribution
tables to complex multivariate analysis.
After the evaluation of the data, the last and the major phase that
comes into picture is the preparation of a research report.

The research reports can be presented either in oral or in written

format. The research report should contain a brief description of
the objectives of the research, a summary of the research design
adopted, a summary of the major findings and conclude with the
limitations and recommendations.
The purpose of conducting any research is to obtain information
that can aid in efficient decision-making.

Therefore, it is very important to carefully analyze the information

obtained and present it according to the requirements of the
management of the company.
Preparing the Report and Presentation
 The layout of the report should be as follows: (i) the preliminary
pages; (ii) the main text, and (iii) the end matter.
 The main text of the report should have the following parts:
 (a) Introduction: It should contain a clear statement of the objective of the
research and an explanation of the methodology adopted in
accomplishing the research. The scope of the study along with
various limitations should as well be stated in this part.
 (b) Summary of findings: After introduction there would appear a
statement of findings and recommendations in non-technical
language. If the findings are extensive, they should be summarized.
 (c) Main report:The main body of the report should be presented in logical
sequence and broken-down into readily identifiable sections.
 (d) Conclusion:Towards the end of the main text, researcher should again
put down the results of his research clearly and precisely.
Research Application in Business Decisions
Research is a strategy that seeks to make basic discoveries
and uncover new principles or factors so far not known or
unrecognized.

A business research program is an increasingly popular way

for companies to train and educate their managers and other
employees in a vast array of different fields.
Business research can pertain to economics, business strategy and
ethics, in fact, anything related to modern business and trade.

Research is applicable in business decisions in many different ways

as follows:

 Testing a new product or service

 Development of new product
 Adequate distribution of the products
 Identification of new risks, if any.
 To study the competition
Contd….
 Serves as a decision making tool
 Degree of dependence on research v/s cost of decision (To produce
or outsource)

 Facilitates Large scale Production

 Eg; what to produce? How much to produce and when to produce?

 To determine pattern of consumption

 Depending upon the demography of customer (Sachet market in
India)
 Research helps to identify
 Consumption pattern, Brand Loyalty, Market Trends etc.. (Car market in
India)
Contd….
 Complex Market
 Research serves as bridge between consumer and the producer
 Helps to understand the need of the consumer
 Problem Solving
 Focuses on Short Range and Long range plans (Viz.. 4Ps of Marketing,
Product, Price, place and promotion, eg;Cable Operators- Digitalization)
 Distribution
 WALMARTS decision to be the middle between Manufacturer and the
retailer in India to open “Best Price” (Consumer Buying Behaviour)
 Sales Promotion
 In Advertising, personal Selling, Publicity (Emotional concept of Sharukh
Khan in Dish TV, Aamir Khan in Titan)
 To understand the attitude of customer etc…
Criteria of Good Research
(Pre-requisites of Research)
 1. The purpose of the research should be clearly defined and
common concepts be used.
 2. The research procedure used should be described in
sufficient detail to permit another researcher to repeat the
research for further advancement, keeping the continuity of
what has already been attained.
 3. The procedural design of the research should be carefully
planned to yield results that are as objective as possible.
 4. The researcher should report with complete frankness,
flaws in procedural design and estimate their effects upon the
findings. (transparency)
 5. 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.
 6. 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.
 7. Greater confidence in research is warranted if the
researcher is experienced, has a good reputation in research
and is a person of integrity.
Features of a Good Research
 1. Good research is systematic: It means that research is structured with
specified steps to be taken in a specified sequence in accordance with
the well defined set of rules. Systematic characteristic of the
research does not rule out creative thinking but it certainly does
reject the use of guessing and intuition in arriving at conclusions.

 2. Good research is logical:This implies that 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 to the whole whereas
deduction is the process of reasoning from some premise to a
conclusion which follows from that very premise. In fact, logical
reasoning makes research more meaningful in the context of
decision making.
 The logical process used could be induction or deduction.
 Induction is process of reasoning from the part to the whole. To
induce means to draw conclusions from one or more facts or
pieces of evidence.
 Eg: Gathering information about market requirement from
retailers/users from a small test market. And based upon the
findings say ‘price’ generalization is made regarding “what is the
acceptable market price?’ or “Is the customer price sensitive?”
 Deduction is a process of reasoning some premise and then
reaching the conclusion which follows from that premise. In
deduction, the conclusion drawn must necessarily follow the
reason stated.
 Eg; “All products made by Reebok Company are good. This
leather wallet is a product of Reebok, so it must be good”
 3. Good research is empirical: It implies that research is related
basically to one or more aspects of a real situation and deals with
concrete data that provides a basis for external validity to
research results.

 4. Good research is replicable:This characteristic allows research

results to be verified by replicating the study and thereby
building a sound basis for decisions.