Research Methodology

Business Problems & Decision Making

Business today is problem resolution

management.
There are several major problems that have
to be resolved both at the global and
national levels, the industry and
corporation level and the internal
departmental and divisional/functional
levels.

Decision Making
Some times in the midst of last century

Chester Barnard, a retired telephone

executive and author of The Functions of the
Executive, imported the term decision
making from the lexicon of public
administration into the business world.
Replace narrower descriptors such as
resource allocation and policy making.

Decision Making
Decisions are the essence of management.

Theyre what managers dosit around all day

making (or avoiding) decisions.
Decision making is a kind of fortune-telling, a
bet on the future.

 Making Decision is the most important job

of any executive. Its also the toughest and

the riskiest. Bad decisions can damage a
business and a career, sometimes
irreparably.
Decision making is an art and science.

 Every problem or decision-making situation

has some aspects of it certain, some

uncertain and some ambiguous.

 Complete certainty implies that all the

information that the decision maker needs

is available, reliable and accurate, and
hence, the exact nature of the problem can
be easily defined, classified, formulated
and specified.
You do not need research here.

 But most business problems are vexed

with uncertainty: that is, information about

solution-alternatives is incomplete, and
hence, research is needed to gather
additional information to clarify the nature of
the problem.

 Many business problems are even vexed with

ambiguity: that is, the nature of the problem

to be solved is unclear.
Hence, research objectives are vague and
decision alternatives are difficult to define.
Ambiguous problems need more serious and
prolonged research.

What is Research?
All progress is born of inquiry. Doubt is

often better than overconfidence, for it

leads to inquiry, and inquiry leads to
invention

What is research?
Research simply means a search for facts.
Answers to questions and solutions to

problems.
It is purposive investigation. It is an organized
inquiry.

 When we do research, we seek to know what

is in order to understand, explain, and predict

phenomena.
E.g -We might want to answer the question
What will be the departments reaction to the
new flexible work schedule?

Business Research
Managers have to make sense of what is

going on both within their organization and in

its environment in order to take effective
decisions..
Business Research is about the process of
collecting, analyzing and interpreting the
information needed for this.

 Systematic inquiry that provides information

to guide managerial decisions.

It is a process of planning, acquiring,
analysing, and disseminating relevant data,
information and insights to decision makers in
a ways that mobilize the organisation to take
appropriate actions that in turn, maximise
business performance

Minute Maids Research Based Decision

Making
Leverage consumer, customer and marketplace

knowledge to identify ,develop and influence

business strategies and tactics that will generate
growth in operating income year after year.
Acquisition

Activation

Analytics

Insights

Knowledge

Research Methodology & Methods

In general, methodology is the study of

process in a research inquiry.

Methodology seeks to determine the most

appropriate methods of inquiry for a given

disciplinary research (e.g., business
research, marketing research, HR research).

 In general, methods are approaches to

scientific inquiry in any discipline

There are several complementary analytic
approaches to scientific inquiry such as
quantitative methods, qualitative methods,
historical methods, case studies

 Methodology refers to the entire scientific

quest of research.
Methodology constitutes a whole range of

strategies and procedures.

Hence, methods per se are only one small
part of the methodological endeavor.

Types of Research
Identify the difference between these two..

A Researcher wants understand consumer

perception about the New iPhone 5 of
Apple.
ii) Apple wants to understand consumer
perception about its New iPhone5 as it is
planning to relaunch the product.
i)

Types of Research
Basic (pure) Research and
Applied Research

Basic Research
Attempts to expand the limits of knowledge.
Conducted to verify the acceptability of a

given theory or to discover more about a

certain concept.
Theory building and verifying the theory is the
major objective of basic research
Mostly academic in nature.
Ex-expansion in Marketing Ps

 Typical basic Research

Mr X wanted to verify the law of diminishing

marginal utility.
Mr.Y wants study the relationship between
non-monetary benifts and employee
motivation
Mr.Z wants to verify Herzbergs motivation
theory.

Applied Research
AR is conducted when decision must be

made about a specific real life problem.

Encompasses those studies undertaken to
answer questions about a specific problems.
Business research is always an applied
research
Is primarily driven by a need to address a
particular organizational issue.

 Typical Applied research

A company is looking at whether to invest in one

substantial development project or several

smaller projects.
A company is experiencing labor turnover
because recent recruits seem to be leaving not
long after completing their initial training.
A company is loosing its market share in a
particular market segment.

Basic & Applied Research Compared.

Basic Research

Theoretical

Applied Research

Academic

Problem Solving
Practitioner

Generalisable

Specific

Seeking understand

Seeking to

change

Types of Business Research

Business Research is further classified into 3

types;
Exploratory Research
Descriptive Research
Causal Research

Exploratory Research
If the problem is ambiguous, then we need

exploratory research to clarify ambiguous

problems.
Example-Entering into a new unknown
market segment (Somalian Market)
Ambiguous problems need more serious and

prolonged research by multi-disciplinary

researchers.

 It rarely involves structured questionnaire,

large samples and other methods.

Exploratory research is used to understand

and define the problem

 Company could explore the somalian market

using below tools;

A review of academic & trade literature to
identify the relevant demographic &
psychographic of somalians
Interview with experts to determine the business
environment.
Comparatively analysis of the best and worst

companies operating in that country

Focus group to understand the consumer

behavior.

 Exploratory research does not provide

concluding evidence for a particular actionsolution; it helps to crystallize a problem and

identify information needed for further
research.
Helps to generate hypothesis for further
research.
Hypothesis Somalia market has potential
for soft drinks

 Expert surveys, Pilot surveys, secondary data

analysis are the methods used in exploratory

research.

Descriptive Research
When the problem is defined but the

variables that constitute it are uncertain, then

we need descriptive research that describes
the characteristics of a population or
phenomenon that circumscribe the problem.
DR seeks to determine the answers to who,
what, when, where and how questions

 Descriptive research assumes that

researcher has much prior knowledge about

the problem.
Thus information needed is clearly defined &

as a result it is preplanned & well structured.

 Descriptive research helps in decision

making.
DR research leads to conclusive evidence for
making decisions. Hence accuracy is of
paramount importance in DR.
It also tells us the correlation between
variables.(if the objective of the research is to
find out the relationship)
Requires planned & structured design

Descriptive Research questions

Impact of training on employee performance.
Impact of advertisement on demand or sales
An analysis of market potential of Somalian

market for soft drinks.

Causal Research
Given exploratory research and descriptive

research, we may have by now several sets of

conclusive evidence regarding the nature of
the research problem in terms of the
variables that compose it, and the
relationships between variables.
The stage is now set for causal research that

identifies cause-and-effect relationships among

variables.

 In business mangers continually make decisions

based on the assumed causal relationship

between variables.
Validity of the causal research should be via
formal research.
Under causal research independent variables
are manipulated in a relatively controlled
environment.
Example - Causal relationship between
advertisement & sales.
Training and employee performance.

 What might happen to product sales if changes

are made to products package?

What might happen to the performance of

employees if flexi time is introduced?

Causal Research helps us to predict the

phenomenon.

Deduction and Induction Methods

Meanings are conveyed through 2

types of discourse:
1. Exposition: consists of statements
that describe without attempting to
explain
2. Argument: allows to explain, defend
and challenge meaning.
Two types of arguments:
3. deduction &
4. induction methods

Deduction and Induction Methods

In research, we often refer to the two broad

scientific methods as the deductive and

inductive approaches.
In research, argument is used in an attempt
to convince the reader of the truth or falsity of
some thesis. Two of the methods used are
induction and deduction.

Deduction Method
Deduction is the identification of an

unknown particular, drawn from its

resemblance to a set of known facts.
Deductive reasoning works from the more

general to the more specific..

 A process of reasoning that starts with a

general truth, applies that truth to a

specific case (resulting in a second piece of
evidence), and from those two pieces of
evidence (premises), draws a specific
conclusion about the specific case.

 Arguments based on laws, rules and

accepted principles are generally used for

Deductive Reasoning.

Testing the theory

Example
All employees at BankOne can be trusted to

observe the ethical code (Major Premise )

Sara is an employee of BankOne (Specific
Case)
Sara Can be trusted to observe the ethical code.

 Example:

Free access to public education is

a key factor in the success of industrialized
nations like the United States.
(major premise)
India is working to become a successful,
industrialized nation. (specific case)
Therefore, India should provide free access to
public education for its citizens.
(conclusion)

 Deductive method of research is basically a

pure research.
But business decision making is (should be)
evidence based.
Hence deducing from general theory without
testing may lead to poor decision making.

Induction Method
Process of reasoning (arguing) which infers a

general conclusion based on individual

cases, examples, specific bits of evidence,
and other specific types of premises.
Process of establishing a general proposition
on the basis of observation of particular facts.

 Induction occurs when we observe a fact and

ask, Why is this?

In answer to this question, we advance a
tentative explanation (hypothesis).
The hypothesis is plausible if it explains the
event or condition (fact) that prompted the
question.

Inductive Reasoning

Theory
Hypothesis
Pattern
Observatio
n

 suppose a firm spends $1 million on a

regional promotional campaign and sales did

not increase.
Under such circumstances, we ask, Why
didnt sales increase?
Promotional campaign was poorly executed.
Sales will not increase if the promotion
campaign is poorly executed

 The conclusion explains the facts and facts

support the conclusion.

Combining induction & deduction

Induction and deduction are used together in

research reasoning.
Over the course of time,theory construction is
often the result of a combination of deductive
and inductive reasoning.
Our experiences lead us to draw conclusions that
we then try to verify empirically using the
scientific method

Research Language
Concept
Construct
Definitions
Operational Definitions
Variables
Propositions & Hypothesis

Concept
Concept provides common ground to

understand and communicate information

about objects and events.
A concept is a generally accepted
collection of meanings or characteristics
associated with certain events, objects,
conditions, situations, and behaviors.

 Classifying and categorizing objects or events

that have common characteristics beyond

any single observation creates concepts.

Constructs
Concepts have progressive levels of abstraction

that is, the degree to which the concept does

or does not have something objective to refer to.
Table is an objective concept.
An abstraction like personality is much more
difficult to visualize.
Such abstract concepts are often called
constructs.

 A construct is an image or abstract idea

specifically invented for a given research.

We build constructs by combining the

simpler, more concrete concepts,

especially when the idea or image we intend
to convey is not subject to direct
observation.

 For example - Heather is a human resource

analyst at CadSoft, an architectural software

company that employs technical writers to
write product manuals, and she is analyzing task
attributes of a job in need of redesign.
She knows the job description for technical
writer consists of three components:
presentation quality, language skill, and job
interest.
Her job analysis reveals even more
characteristics.

 Heather has not yet measured the last construct,

job interest.
It is the least observable and the most difficult to

measure.
It will likely be composed of numerous concepts
many of which will be quite abstract.
Researchers sometimes refer to such entities as
hypothetical constructs because they can be
inferred only from the data.

 A Researcher would like to measure

Environmental Friendliness of Consumers

Definitions
Confusion about the meaning of concepts

can destroy a research studys value

without the researcher or client even
knowing

it.

If

words

have

different

meanings to the parties involved, then the

parties are not communicating well.
Definitions are one way to reduce this

danger.

Researchers struggle with two types of

definitions:
Dictionary Definitions
Salary - A fixed regular payment, typically paid
on a monthly or biweekly basis but often
expressed as an annual sum, made by an
employer
Operational Definitions.
In research, we measure concepts and
constructs, and this requires more rigorous
definitions.

 An operational definition is a definition

stated in terms of specific criteria for

testing or measurement.
These terms must refer to empirical
standards (i.e., we must be able to count,
measure, or in some other way gather the
information through our senses).
The operational definitions must be so clear
that any competent person using them would
classify the object in the same way.

Example

During her research project with the military,

Myra observed numerous shells that, when

fired, did not explode on impact.
She knew the Army called this as dud shell.
But if asked, Myra applied the operational
term dud shell only to a shell that, once fired
from a cannon, could not be made to explode
by any amount of manipulation, human or
mechanical.
Based on her operational definition, the
towns residents rarely encountered duds
during their excursions onto the firing range.

 Variables
What things should be studied to address a

problem?
A variable is anything that varies or
changes from one instance to another.
A characteristic, number, or quantity

that increases or decreases over time,

or takes different values in different situations.

Discrete & Continuous Variable

If avariablecan take on any value between

two

specified

values,

it

is

called

acontinuous variable
Income, temperature, age, and a test score are
examples of continuous variables.
These variables may take on values within a
given range or, in some cases, an infinite set.

 Discrete Variable
Discrete variables are also called categorical

variables. A discrete variable, X, can take on

a finite number of numerical values,
categories or codes.
Discrete variables do not have decimals.
Color, Gender, preferences etc..

 Independent and dependent variables

Researchers are most interested in relationships

among variables.
For example, does a newspaper coupon
influence product purchase.

 The dependent variable -- also called the

response variable -- is the output of a process or

statistical analysis.
Its name comes from the fact that it depends on
or responds to other variables.
Typically, the dependent variable is the result we
want to achieve.

 An independent variable is an input to a process

or analysis that influences the dependent

variable.
While there can only be one dependent variable
in a study, there may be multiple independent
variables.
Example -The introduction of a four-day
working week (IV) will lead to higher
productivity (DV).

Moderating or Interaction Variables

A moderating or interaction variable is a second

independent variable that is included because it

is believed to have a significant contributory on
the original IVDV relationship.
The introduction of a four-day working week (IV)
will lead to higher productivity (DV), especially
among younger workers (MV).

Extraneous Variables
A large number of extraneous variables (EVs)

exists that might conceivably affect a given

relationship.
Some can be treated as IVs or MVs, but most
must either be assumed or excluded from the
study.
Fortunately, an infinite number of variables has
little or no effect on a given situation.

 Still, we want to check whether our results are

influenced by them.
Therefore, we include them as control

variables (CVs) in our investigation to ensure

that our results are not biased by not including
them.

Intervening Variables
An intervening variable facilitates a better

understanding of the relationship between the

independent and dependent variables when the
variables appear to not have a definite
connection.
Thus, while we may recognize that a four-day
working week results in higher productivity, we
might think that this is not the whole story.
Working week length affects some intervening
variable (IVV) that, in turn, results in higher
productivity.
One might view the intervening variable (IVV) to
be job satisfaction.

 Hence the new hypothesis is;

The introduction of a four-day working week (IV)

will lead to higher productivity (DV) by increasing

job satisfaction (IVV).
An intervening variable is an internal state that
is used to explain relationships between
observed variables.

Propositions and Hypotheses

We define a proposition as a statement about

observable phenomena (concept) that may

be judged as true or false
When a proposition is formulated for empirical
testing, we call it a hypothesis.
As a statement about the variable or the
relationship between two or more variables, a
hypothesis is of a tentative and conjectural
nature.

Descriptive Hypotheses
Descriptive Hypotheses state the existence,

size, form, or distribution of some variable.

For Example;
In Detroit , our potato chip market share stands
at 13.7 percent.
American cities are experiencing budget
difficulties.
Majority of Company Z stockholders favor
increasing the companys cash dividend.

Relational Hypotheses
These are statements that describe a

relationship between two variables with respect

to some case.
For example, Foreign (variable) cars are
perceived by American consumers to be of
better quality (variable) than domestic cars.

 Relational hypotheses are of two types

Correlational hypotheses state that the

variables occur together in some specified

manner without implying that one causes the
other.
By labeling these as Correlational hypotheses,
we make no claim that one variable causes the
other to change or take on different values.
Ex- There is high correlation between
advertisement and demand

 With causal (explanatory) hypotheses, there

is an implication that the existence of or a

change in one variable causes or leads to a
change in the other variable.
An increase in family income (IV) leads to an

increase in the percentage of income saved

(DV).

Research Process
Business research is in fact the process of

business problem resolution.

This process follows scientific method which

includes following major steps;

Steps in Research Process

1.Problem Identification & Definition
2.Problem Formulation
3.Problem Specification
4.Planning Research Methods-Survey,
questionnaire, sampling, data collection &
analysis & interpretation.
5. Problem-resolution Alternatives Investigation
6.Best Resolution Selection - implementation

Step 1 Problem Identification &

Definition
If I were given one hour to save the planet, I

would spend 59 minutes defining the

problem and one minute resolving it, Albert
Einstein.
A problem definition indicates a specific
managerial decision area to be clarified or
problem to be solved.
It specifies the research questions to be

answered & the objectives of the research.

 A problem is a system at unrest.

A system is anything (subject, object, property

or event) that is made of two or more parts.

Business is a system- any of these systems
could be at unrest at a given time .
(marketing,HR,finance,legal,envionmental
etc.)

 A problem is a deviation from some standard

or norm of desired performance.

Hence, problems should be distinguished
from decisions.
Decisions always involve a choice among
various ways of getting a particular problem
resolved or a task accomplished.

Problems & Opportunities

A problem exists when a gap exists between

what was supposed to happen and what did

happen, i.e., failure to meet an objective.
An opportunity occurs when there is a gap

between what did happen and what could

have happened called an opportunity.

Problem Identification

Mechanisms for identifying the

problem in an organization
Balanced Score Card Techniques
SWOT Analysis
Dash Boards
Performance Appraisals

Problem identification through

BSC
Balanced Score Card
conceptual framework which translates an

organization's strategic planning into a set of

performance indicators distributed among
four perspectives.
(Financial,Customer,Internal Business
Processes & Learning & Growth)

 Kaplan and Norton have rightly said, "The

balanced scorecard is like the dials in an

airplane cockpit; it gives managers complex
information at a glance.

 In each perspective the organisation must

define;
-Strategic Objectives Strategy for achieving
that perspective
-Measures How progress is achieved
-Targets - Target values for each measure
- Initiatives What will be done to reach the
goal

 SWOT Analysis
Strategy is a match which org. makes

between internal resources & External

opportunities & Risks
Assesses the organization in terms of internal
& External factors
Directly aids the strategic formulation of any
organization

Dash Boards
Helps to understand the problems at

departmental level.
Dashboards often provide at-a-glance views
of KPIs relevant to a particular
department(e.g. sales, marketing, human
resource, or production etc..)

Dash Board

Performance appraisal
Helps identify problems at individual level
Identifying the gaps in desired and actual

performance.

Problem definition
Problem definition refers to the process of

defining and developing a decision statement

and the steps involved in translating it into more
precise research terminology, including a set
of research objectives.
A decision statement is a written expression

of the key question(s) that a research user

wishes to answer.
It is the reason that research is being
considered. It must be well stated and relevant.

 Problem definition involves stating the general

problem & identifying the specific components of

the problem.

 The researcher then further expresses these in

precise and research terminology by creating

research hypotheses from the research
objectives.
These are expressed as deliverables in the
research proposal.

Importance of problem definitions

Organizational teams speed toward a

solution, fearing that if they spend too much

time defining the problem, their superiors will
punish them for taking so long to get to the
starting line- Dwayne Spradlin
Todays solution becomes tomorrows
problem.

 Problem well identified & defined is

problem half solved.

If problem is not identified and defined
properly lead to Type III error.
Research can be designed and conducted

properly only when the research problem is

properly defined.
When we describe the problem precisely,
then we do not need to gather all the facts
and figures about the problem, but just the
relevant ones

 Likely to waste time and money and reduce

the odds of success than one that strives at

the outset to achieve an in-depth
understanding of the problem.

 We must describe or define a problem precisely;

even properly frame the problem and draw a

boundary around it e.g., this is the domain
(the what) of the problem, and this is not its
domain; this is where the problem occurred
and this s where it did not; this is when the
problem occurred; this is the extent to which
the problem occurred, and so on

Situation Analysis

Situation Analysis
.
A situation analysis involves the gathering of

background information to familiarize researchers

and managers with the decision-making
environment.

 Interviews with key decision makers can be one

of the best ways to identify key problem

symptoms.
Once symptoms are identified, then the

researcher must probe to identify possible

causes of these changes.

 Probing is an interview technique that

tries to draw deeper and more elaborate

explanations from the discussion.
This discussion may involve potential
problem causes.
This probing process will likely be very helpful
in identifying key variables that are prime
candidates for study.

 One of the most important questions the

researcher can ask during these interviews is,

what has changed just before the
symptom?
Then, the researcher should probe to identify
potential causes of the change

Consider the Case.

James: David, it is clear that your recruitment

costs have been increasing since the start of the

year. What other changes have occurred inside
of your business within the past year?

David: We are facing high labor turnover. We

are struggling to retain our drivers. Hence we

have to recruit drivers regularly just to replace
left drivers.

 James (probing): Tell me, what led to this high

labor turnovers?
David: I wish I knew.
James: Have you noticed changes in your
customers?
David: We do see that they are a little irritated
due to some of the problems of getting their
freight delivered successfully.

 James: Has there been a change in personnel?

David: Yes, morale of employees is very low.

They seemed to be dissatisfied with their job.

 Researchers should make sure that they

have uncovered all possible relevant

symptoms and considered their potential
causes.
Pilot study (interview with few
employees,customers,distributors etc) is
also helpful at this stage to identify some
potential causes of the problem.
The situation analysis ends once researcher
has a clear idea of the problem.

Step 2 Problem Formulation

Any problem can be expressed in the

following simple structure: P = f (X, Y),

where X is a set of controllable variables, Y is

a set of uncontrollable variables.

 Need to identify the major sets of variables

that compose or constitute the problem.

Identify almost all the relevant variables
that cause the problem.
Categorize variables into controllable
and uncontrollable from the companys
viewpoint.

 Controllable variables are those the company

can handle and control given its current

resources.

Uncontrollable variables are related to the

competitors, markets, legal environments

and global factors.

Potential causes for Driver

Turnover ..
Controllable

Uncontrollable

variable
Lack of
incentives
Poor working
environment
Poor Welfare
facilities
Low salary

Variables
Attractive employment
in competitors
Attractive alternative
employment
Personal problems like
health etc

Step 2 Problem Specification

Explain inter-variable relationship.
Relationship between controllable variable

and uncontrollable variables.

Turnover at Deland Trucking

Controllable

Uncontrollable

variable
Lack of
incentives
Poor working
environment
Poor Welfare
facilities
Low salary

Variables
Attractive employment
in competitors
Attractive alternative
employment
Personal problems like
health etc

Develop Research Questions,

Research Objectives & Hypotheses
Decision statements must be translated into

research objectives.
At this point, the researcher is starting to
visualize what will need to be measured and
what type of study will be needed.
Decision Statement To reduce driver
turnover
Research objectives- T o analyse the
reasons behind high turnover at Deland?

Step -4 Data Collection and Analysis

Determine the unit of analysis based on the

problem at hand.
Survey the unit of analysis
Analyze the data
Interpret the data

Step -5 Alternate Problem

Resolution Techniques
Based on the step 4,generate problem

resolution techniques.
Specify the solutions that would eliminate the
symptoms.

Step 6 -Selection of Best Problem

Resolution Technique for
Implementation
Based on the analysis of the alternate

resolution techniques ,select the best one

which maximizes companys objective.
Choose the alternative which is Viable &
feasible.
Which would increase consumer satisfaction
& consumer loyalty
Which would increase employee satisfaction
& employee loyalty.

Primary Data Collection -Overview of

Survey Research
Source of data
Data -Facts collected for reference or

analysis.
Constitutes the foundation of statistical
analysis and interpretation.
Required test the validity of hypothesis.

 Data can be obtained from 3 imp.sources

a) Secondary source
b)Internal Source
c) Primary source

Secondary Data
When the investigator uses the data which

has already been collected by others, such

data are called secondary data.
Journals,Reports,Govt publications,
publications of research organizations,
trade and professional bodies

Internal Data
Internal data are the by-product of routine

business record keeping like

accounting,finance,production,personnel,
quality control etc.
If a researcher is able to detect the actual
problem from the internal data, then research
is not required.

Primary data
Measurement observed and recorded as part

of an original study.
When the data required for a particular study
can be found neither in internal records nor in
secondary sources need to collect primary
data.

Survey Research
The purpose of survey research is to collect

primary datadata gathered and assembled

specifically for the project at hand.
Often research entails asking peoplecalled
respondentsto provide answers to
written or spoken questions.
Thus, a survey is defined as a method of
collecting primary data based on
communication with a representative sample
of individuals.

Sampling & Sampling Procedures

Survey Research

Census

Sample Survey

Sampling & Sampling Procedures

A population (universe) is any complete

groupfor example, of people, sales

territories, stores, or college studentsthat
shares some common set of characteristics.
Population possess the information needed
by the researcher
The term population element refers to an
individual member of the population.

 A census is an investigation of all the

individual elements that make up the

populationa total enumeration rather than a
sample.
Census is required when organizations need
information every individual units.
Government census

 This method is very expensive and

cumbersome.
Therefore census is not a practical method of
gathering information.

Sample & Sampling

A sample is a subset, or some part,of a

larger population.
The purpose of sampling is to estimate an
unknown characteristic of a population.

 The process of selecting a sample from

population is called sampling

Why sampling?
In a scientific study in which the objective is

to determine an unknown population value,

why should a sample rather than a complete
census be taken?

Pragmatic Reasons
Applied business research projects usually

have budget and time constraints.

If Ford Motor Corporation wished to take a
census of past purchasers reactions to the
companys recalls of defective models, the
researchers would have to contact millions of
automobile buyers.

 Sampling cuts costs, reduces labor

requirements, and gathers vital information

quickly.

Accurate and Reliable Results

Another major reason for sampling is that

most properly selected samples give results

that are reasonably accurate.
A sample may on occasion be more accurate
than a census.
Interviewer mistakes, tabulation errors, and
other non sampling errors may increase
during a census because of the increased
volume of work.

 In a sample, increased accuracy may

sometimes be possible because the fieldwork

and tabulation of data can be more closely
supervised.
In a field survey, a small, well-trained, closely
supervised group may do a more careful and
accurate job of collecting information than a
large group of nonprofessional interviewers
who try to contact everyone.

Destruction of Test Units

Many research projects, especially those in

quality-control testing, require the destruction

of the items being tested.
If a manufacturer of firecrackers wished to
find out whether each unit met a specific
production standard, no product would be left
after the testing.
So census is impractical in such cases.

The sample Designing process

Step 1-Define the target population
Step 2 Select a sampling frame
Step 3 Select sampling method
Step 4 Determine sample size
Step 5 Select actual units & conduct fieldwork

Step 1-Define the target population

Target population possess the information

required by the researcher.

The target population should be defined in
the light of research objective.
Target population is often implied in research
objective itself.
The question to answer is, Whom do we
want to talk to?
For example Drivers who have completed
atleast one years of service at Deland
Trucking

Step 2Select a sampling frame

In practice, the sample will be drawn from a

list of population elements that often differs

somewhat from the defined target population.
A list of elements from which the sample may
be drawn is called a sampling frame.
Sampling is carried out on the sampling
frame & not on target population
Theoretically ,the target population and
sampling frame are the same

Sampling frame error

 The sampling unit is a single element or

group of elements subject to selection in

the sample.

Step 3 Select sampling method

- Several alternative ways to take a sample are
available.
-These alternatives are classified as;
- probability techniques and nonprobability
techniques.

Probability Sampling Techniques

In probability sampling, every element in

the population has a known, nonzero

probability of selection.
In nonprobability sampling, the probability
of any particular member of the population
being chosen is unknown.

 Because the probability sampling process is

random, the bias inherent in nonprobability

sampling procedures is eliminated.
Probability sampling has 4 major
methods;
Simple Random Sampling
Systematic Random Sampling
Stratified Sampling &
Cluster Sampling

Simple Random Sampling

The sampling procedure that ensures each

element in the population will have an equal

chance of being included in the sample is
called simple random sampling

-Two ways of selecting random samples from

population;
-Lottery Method
-Random Tables

Lottery Method
- When the sample size is small we use lottery
method of random sampling.
Suppose a researcher is interested in
selecting a simple random sample of all the
Maruthi Suzuki dealers in Karnataka.(select
35 of 100 dealers).
Each dealers name is assigned a number
from 1 to 100.

 The numbers can be written on paper slips,

and all the slips can be placed in a bowl.

After the slips of paper have been thoroughly
mixed, one is selected for each sampling unit.
Mixing the slips after each selection will
ensure that those at the bottom of the bowl
will continue to have an equal chance of
being selected in the sample.

Random Tables
-When the sample size is very large, lottery
method may be very difficult & time
consuming.
- We use random table to select the samples

Systematic (Quasi-Random) Sampling

Sample elements are selected from the

population at uniform intervals.

This interval is known as sample fraction
Example- Researcher wants to take a sample
size of 30 from a population of 900;
Sample fraction = N/n (N-total no.of units in
the population; n-sample size).
Sample fraction = 900/30 = 30

For obtaining the sample the first member can

be selected randomly & after that every 30 th
member of the population is included in the
sample.

Stratified Random Sampling

- Under stratified sampling the population is
divided into various strata and sampling is
drawn from each strata using simple random
sampling
Suppose a firm wishes to investigate
consumers who currently subscribe to an
HDTV (high definition television) service.
The researchers may wish to ensure that
each brand of HDTV televisions is included
proportionately in the sample

 Strict probability sampling procedures would

likely under represent certain brands and

overrepresented other brands.
Population (owners of HDTV)
Sony
Samsung Panasonic Videocon
(25)
(25)
(25)
(25)
- Simple random is used to select 25 samples
from each strata

Cluster (area) Sampling

An economically efficient sampling technique

in which the primary sampling unit is not the

individual element in the population but a
large cluster of elements.
Useful when the population element is
scattered.
Consider a researcher who would like study
the labor problems faced the employees of IT
industry.

- So the researcher first obtains the sampling

frame of IT firms in India.( say 500
companies).
-Further among 500 companies he selects 50
companies randomly.
- Then he selects sample employees from each
companies through random sampling.

 Ideally a cluster should be as heterogeneous

as the population itselfa mirror image of the

population.
A problem may arise with cluster sampling if
the characteristics and attitudes of the
elements within the cluster are too similar
This problem may be mitigated by selecting a
large number of sampled clusters.

Multistage Area Sampling

Multistage area sampling involves two or

more steps that combine some of the

probability techniques already described.
Typically, geographic areas are randomly
selected in progressively smaller (lowerpopulation) units.

 Example Researcher wants to study the

impact of organized retail on unorganized

retail in India.
He would first randomly select 10 states.
Then he would randomly select 5 major cities

from each state.

Finally he would randomly select 50

unorganized retailers from each city.

Non Probability sampling

Nonprobability sampling - A sampling

technique in which units of the sample are

selected on the basis of personal judgment or
convenience; the probability of any particular
member of the population being chosen is
unknown.

 Probability sampling has 4 techniques;

1.Convenience Sampling
2.Judgement Sampling
3.Quota Sampling
4.Snowball Sampling

Convenience Sampling
Convenience sampling refers to sampling

by obtaining people or units that are

conveniently available.
A research team may determine that the most
convenient and economical method is to set
up an interviewing booth from which to
intercept consumers at a shopping center.

 Researchers generally use convenience

samples to obtain a large number of

completed questionnaires quickly and
economically.
Convenience sampling is also used when
sampling frame is not available

 The user of research based on a

convenience sample should remember that

projecting the results beyond the specific
sample is inappropriate.
Convenience samples are best used for
exploratory research when additional
research will subsequently be conducted with
a probability sample.

Judgment(Purposive) Sampling
Judgment (purposive) sampling is a

nonprobability sampling technique in

which an experienced individual selects the
sample based on his or her judgment about
some appropriate characteristics required of
the sample member.
Researchers select samples that satisfy their
specific purposes, even if they are not fully
representative

 The Wholesale price index (WPI) is based

on a judgment sample of market-basket

items, expected to reflect a representative
sample of items consumed by most Indians.
Test-market cities often are selected
because they are viewed as typical cities
whose demographic profiles closely match
the national profile

 In a study of labor problems ,you want to talk

only with those who have experienced onthe- job discrimination & other problems.

Quota Sampling
Quota sampling is very similar to stratified

random sampling.
In quota sampling, the population is first
segmented into mutually exclusive subgroups.
Then judgment or convenience sampling is
used to select the subjects or units from each
segment based on a specified proportion.

Population (owners of HDTV)

Sony
Samsung Panasonic Videocon
(25)
(25)
(25)
(25)
- Convenient or judgment sampling is used to
select the quota for each strata

 In quota sampling, the interviewer has a

quota to achieve.
For example, an interviewer in a particular
city may be assigned 100 interviews, 35 with
owners of Sony TVs, 30 with owners of
Samsung TVs, 18 with owners of Panasonic
TVs, and the rest with owners of other brands

 The interviewer is responsible for finding

enough people to meet the quota.

Snowball Sampling
Snowball sampling is useful when

respondents are difficult to identify and are

best located through referral network.
In this method individuals are discovered
through network referals.
The group is then used to refer the
researcher to others who possess similar
characterstics,who in turn identify others

 Snowball sampling is used study very unique

problems like drug culture, teenage gang

activities, insider trading,HIV patients etc.

Step 4 Determine sample size

Researcher should select reasonable size of

sample to get accurate results.

Too small sample size would not represent
the population sample errors
Too large sample size would result in
administrative errors affecting the results.
The rule thumb is to take 10% of the
population as sample.

Sampling size based on judgement;

The importance of the decision.
The nature of research
Nature of analysis multivariate analysis
Sample size used in similar studies
Resource constraints
The greater the number of sub groups of

interest within sample, the greater the sample

size must be, as each subgroup must meet
minimum sample size requirements

Factors in Determining Sample Size for

Questions Involving Means
Three factors are required to specify sample size:
(1) the heterogeneity (i.e., variance) of the

population;)
(2) the magnitude of acceptable error (i.e., some
amount)
(3) the confidence level (i.e., 90 percent, 95
percent, 99 percent).

1. the heterogeneity
The determination of sample size heavily

depends on the variability within the sample

Only a small sample is required if the
population is homogeneous.
For example, predicting the average age of
college students requires a smaller sample
than predicting the average age of people
who visit the zoo on a given Sunday
afternoon.

2.The magnitude of error

the magnitude of error indicates how precise

the estimate must be.

A range values within which the value of a
parameter lies.
From a managerial perspective, the
importance of the decision in terms of
profitability will influence the researchers
specifications of the range of error.
If, for example, favorable results from a testmarket sample will result in the construction
of a new plant, the acceptable range of error
probably will be small.

3.Confidence level
The third factor of concern is the confidence

level.
confidence level Statistical measure of the
number of times out of 100 that test results
can be expected to be within a specified
range.
Higher the confidence level, larger the
sample required.
In most business research, we will typically
use the 95 percent confidence level.

Estimating Sample Size for Questions

Involving Means
1. Estimate the standard deviation of the

population.
2. Make a judgment about the allowable
magnitude of error(E).
3. Determine a confidence level.
The judgment about the allowable error and

the confidence level are the managers

decision to make.

Calculating E

Confidence interval E can be calculated using

formula;

 where

__
X sample mean
E range of error
Zcl = Z value associated with confidence

interval

Standard error of the mean.

The standard error is the standard deviation

of the sampling distribution of statistic

 Standard error can be calculated using the

formula;

Where ,
S= Standard deviation of the sample
n = sample size

 Suppose you are a financial planner and are

interested in knowing how long investors tend to

own individual stocks. In a survey of 100 investors,
you find that the mean length of time a stock is
held is is 37.5 months, with a standard deviation
(S) of 12.0 months. Even though 37.5 months is
the expected value and the best guess for the
true mean in the population , the likelihood is that
the mean is not exactly 37.5. Compute the
confidence interval at 95% confidence level.

 E can be obtained using the formula

 Find Standard Error;

Thus;
E = 1.96 x 1.2
E = 3.252

We can thus expect that u is in the range

from 35.148 to 39.852 months.(95 % of the
time)

 The other problem is estimating the standard

deviation of the population.

Ideally, similar studies conducted in the past
will give a basis for judging the standard
deviation.
In practice, researchers who lack prior
information may conduct a pilot study to
estimate the population parameters

 The formula for sample size is;

n= (ZS/E)2
Z standardized value that corresponds to the

confidence level
S sample standard deviation or estimate of
the population standard deviation
E acceptable magnitude of error

 Suppose a survey researcher studying

annual expenditures on lipstick wishes to

have a 95 percent confidence level (Z 1.96)
and a range of error (E) of less than $2. If the
estimate of the standard deviation is $29,
calculate the sample size.

 If a range of error (E) of $4 is acceptable, the

necessary sample size will be reduced:

Factors in Determining Sample Size

for Proportions
Researchers frequently are concerned with

determining sample size for problems that involve

estimating population proportions or percentages.
To determine sample size for a proportion, the
researcher must make a judgment about confidence
level and confidence interval.
An estimate of the expected proportion of successes
must be made, based on intuition or prior information.

 Sample size is calculated using the formula;

n number of items in sample

-Square of the confidence level in standard

error units.
p estimated proportion of successes
q 1 p, or estimated proportion of failures
E 2 - square of the allowance for error between th
true proportion and the sample proportion,

 Confidence interval (E) for population

Proportion

Example The human resource director of a

large organisation wanted to know what

proportion of all population who had ever been
interviewed for a job with his organisation had
been hired.He was willing to settle for 95%
confidence interval . A random sample of 50
interviews revealed that 15.2% of the persons in
the sample had been hired. Calculate E.

 Suppose a researcher believes that a simple

random sample will show that 60 percent of the

population (p) recognizes the name of an
automobile dealership. The researcher wishes
to estimate with 95 percent confidence (Zc.l.
1.96) that the allowance for sampling error is not
greater than 3.5 percentage points (E).

Step 5 Select actual units &

conduct fieldwork
After sample technique and sample is

decided, researchers actually collects the

data from the unit of analysis through
fieldwork.
Researcher uses various tools like
questionnaire,interview,observation,
experience survey & focus group to collect
the data from target population.

Errors in Survey Research

Statistical error is the difference between

the value of a sample statistic of interest and

the value of the corresponding population
parameter.

Total error = Sampling error + systematic

error

Sampling error

An estimation made from a sample is not the

same as a census count.

Sampling error is the difference between the
sample result and the result of a census
conducted using identical procedures.
The sampling units, even if properly selected
according to sampling theory, may not
perfectly represent the population.
Random sampling error occurs because of
chance variation in the scientific selection of
sampling units.

 Random sampling error is a function of

sample size.
As sample size increases, random sampling
error decreases.

Systematic(non-sampling) Error
Systematic error, results from some

imperfect aspect of the research design or

from a mistake in the execution of the
research.
Systematic error is classified into:
respondent error and
administrative error.

Respondent error
Surveys ask people for answers.
If people cooperate and give truthful answers,

a survey will likely accomplish its goal.

 Nonresponse Error
The statistical differences between a survey

that includes only those who responded and

a survey that also included those who failed
to respond are referred to as nonresponse
error.
People who are not contacted or who refuse
to cooperate are called nonrespondents.

 Non response error is very high in email

survey and telephonic interview.

 Response Bias
A response bias occurs when respondents

tend to answer questions with a certain slant.

People may consciously or unconsciously
misrepresent the truth.
If a distortion of measurement occurs
because respondents answers are falsified or
misrepresented, either intentionally or
inadvertently, the resulting sample bias will be
a response bias.

 Deliberate Falsification
Occasionally people deliberately give false

answers.
A response bias may occur when people
misrepresent answers to appear intelligent,
conceal personal information, avoid
embarrassment, and so on.

 Unconscious Misrepresentation
Even when a respondent is consciously trying

to be truthful and cooperative, response bias

can arise from the question content, or some
other stimulus.

 In many cases consumers cannot adequately

express their feelings in words.

The cause may be questions that are vague
or ambiguous.
Researchers may ask someone to describe
his or her frustration when using a computer.
The problem is, the researcher may be
interested in software problems while the
respondent is thinking of hardware issues.

 A survey in the Philippines found that, despite

seemingly high toothpaste usage, only a tiny

percentage of people responded positively
when asked, Do you use toothpaste?.
As it turned out, people in the Philippines
tend to refer to toothpaste by using the brand
name Colgate.
When researchers returned and asked, Do
you use Colgate? the positive response
rate soared.

 As the time following a purchase or a

shopping event increases, people become

more likely to underreport information about
that event.
Time lapse influences peoples ability to
precisely remember and communicate
specific factors.

 Types of Response Bias

Response bias falls into four specific

categories:
Acquiescence bias
Extremity bias
Interviewer bias, and
Social desirability bias.

 Acquiescence bias
Some respondents are very agreeable.
They seem to agree to practically every

statement they are asked about.

A tendency to agree with all or most
questions is known as acquiescence bias.

 Extremity Bias.
Some individuals tend to use extremes when

responding to questions.
For example, they may choose only 1 or
10 on a ten-point scale.
Others consistently refuse to use extreme
positions and tend to respond more neutrally
I never give a 10 because nothing is really
perfect.

 Interviewer Bias.
Response bias may arise from the interplay

between interviewer and respondent.

If the interviewers presence influences
respondents to give untrue or modified
answers interviewer bias
The interviewers age, gender, style of dress,
tone of voice, facial expressions, or other
nonverbal characteristics may have some
influence on a respondents answers.

 Social Desirability Bias.

Social desirability bias may occur either

consciously or unconsciously because the

respondent wishes to create a favorable
impression or save face in the presence of an
interviewer.

Administrative error
DATA PROCESSING ERROR
Processing data by computer, like any

arithmetic or procedural process, is subject to

error because data must be edited, coded,
and entered into the computer by people.
The accuracy of data processed by computer
depends on correct data entry and
programming.
can be minimized by establishing careful
procedures for verifying each step in the data
processing stage.

 INTERVIEWER ERROR
Interviewer error is introduced when

interviewers record answers wrongly or are

unable to write fast enough to record answers
verbatim.
INTERVIEWER CHEATING
Interviewer cheating occurs when an
interviewer falsifies entire questionnaires or
fills inanswers to questions that have not
been answered.

Tools of data collection

Questionnaires,
Interviews,
Observation,
Case study;
Experience Survey;
Focus Groups;

Questionnaire

In the J.D. Power survey, consumers were

asked whether they were familiar with

twenty-two different emerging
technologies.
Then they were asked about their interest in
each technology, rating their interest using a
scale (definitely interested, probably
interested, and so on).
Next, the study indicated the likely price of
each technology, and consumers were again
asked their interest, given the price.

 Learning price information often changed

consumers interest levels.

Night vision systems appealed to 72
percent of consumers, placing it in second
place in the rankings.
But when consumers learned the systems
would likely add $1,500 to the price of a car,
this technology dropped to a rank of 17, near
the bottom.

 In contrast, HD radio ranked in sixteenth

place until consumers saw a price tag of just

$150. That price pushed the feature up to
third place.
Shows how extremely useful information can
be gathered with a questionnaire.
It also shows how results can differ by exactly
what question is asked and the amount of
information provided.

Questionnaire
Questionnaire is a formalized set of questions

for obtaining information from respondents.

The research questionnaire development
stage is critically important as the
information provided is only as good as
the questions asked.

Objectives of a questionnaire
Any questionnaire has three specific

objectives
First, it must translate the information
needed into a set of specific question that
respondents can and will answer.
Second, a questionnaire must motivate and
encourage the respondents to become
involved in the process of data collection
reduce non response error.

 Thirdly, the questionnaire should minimize

the response error.

A questionnaire can be a major source of
response error.
Minimizing this error is an important objective
of questionnaire designing.

Guidelines for Constructing

Questions
Few hard and-fast rules exist in guiding the

development of a questionnaire.
Fortunately, research experience has yielded

some guidelines that help prevent the most

common mistakes.

Specify the information needed

As the research progresses, the information

needed becomes more and more clearly

defined.
Questionnaire depends the information
needed for the research

Individual Question content

Once the information needed is clear,

researcher has to decide upon the individual

questions.
Is the question necessary?
Every question should contribute to the
information needed or serve specific
purpose.
In certain situations it is useful to ask some
neutral questions to build the rapport.

 Avoid asking unnecessary and

embarrassing questions.

 Are several questions needed instead of

one?
Once ascertain that the question is
necessary, make sure that it is sufficient to
get the required information.
Sometimes, several questions are needed to
obtain required information in an
unambiguous manner

 Consider the question;

Do you think Coca Cola is tasty and

refreshing?
Known as double-barreled questions.
To obtain the required information two distinct
questions should be asked.
Do you think Coca Cola refreshing?
Do you think Coca Cola is tasty?

 Another example of multiple question is the

Why question.
Why do you shop at Nike Town?
The possible answers may include: to buy
athletic shoes, its more conveniently
located, it was recommended by my best
friend

 The first answer tells why the respondent

shop.
Second answer reveals what respondents
like about Nike Town
Third tells how the respondents learned about
Nike Town.
Why question about the use of the product
involves two aspects: 1) Attribute of the
product, and 2)influences leading to
knowledge of it.

 What do you like about Nike Town as

compared other stores?

How did you first happen to shop in Nike
Town?

Choosing Question Structure

A question may be open ended or closed

ended.
Open ended questions are free answer

question that respondents answer in their

own words.
What names of local banks can you think of?
What comes to mind when you look at this
advertisement?
In what way, if any, could this product be
changed or improved?

 Open-ended response questions are most

beneficial when the researcher is conducting

exploratory research, especially when the
range of responses is not yet known.
Also, open-ended response questions are
valuable at the beginning of an interview.
They are good first questions because they
allow respondents to warm up to the
questioning process.

 They are also good last questions for a fixed-

alternative questionnaire.
For example, an employee satisfaction survey

may collect data with a series of fixed-alternative

questions, then conclude with Can you provide
one suggestion on how our organization can
enhance employee satisfaction?

 The cost of administering open-ended

response questions is substantially higher

than that of administering fixed-alternative
questions because the job of editing,
coding, and analyzing the data is quite
extensive.
As each respondents answer is somewhat
unique, there is some difficulty in
categorizing and summarizing the answers

 Another potential disadvantage of the open-

ended response question is the possibility

that interviewer bias will influence the
answer.
While most interviewer instructions state that
answers are to be recorded verbatim, rarely
does even the best interviewer get every
word spoken by the respondent.

 Interviewers have a tendency to take

shortcuts.
When this occurs, the interviewer may well
introduce error because the final answer may
reflect a combination of the respondents and
interviewers ideas.

 In addition, articulate individuals tend to

give longer answers to open-ended

response questions.
Such respondents often are better educated
therefore may not be good representatives of
the entire population.
Increase in non-response error.

 Jet Airways wants to ascertain the image

it has in the minds of its patrons. Develop

some open ended questions to
understand the image of patrons.

 Using Fixed Alternative Questions

In contrast, fixed-alternative questions require

less interviewer skill, take less time, and are

easier for the respondent to answer.
Closed questions are classified into
standardized groupings prior to data
collection.

 However, when a researcher is unaware of

the potential responses to a question, fixed

alternative questions obviously cannot be
used.
Unanticipated alternatives emerge when
respondents believe that closed answers do
not adequately reflect their feelings.
Therefore, a researcher may find exploratory
research with open-ended responses
valuable before writing a fixed answer
questionnaire.

Types of Fixed-Alternative
Questions
The simple-dichotomy (dichotomous)

question requires the respondent to

choose one of two alternatives. The answer
can be a simple yes or no or a choice
between this and that.
Did you have any overnight travel for workrelated activities last month?
Yes
No

 Several types of questions provide the

respondent with multiple-choice alternatives

Determinant-choice question requires the
respondent to choose oneand only one
response from among several possible
alternatives.
Please give us some information about your
flight. In which section of the aircraft did you
sit?
First class
Business class
Coach class

 The frequency-determination question is a

determinant-choice question that asks for an

answer about the general frequency of
occurrence.
How frequently do you watch MTV?
Every day
56 times a week
24 times a week
Once a week
Less than once a week
Never

 The checklist question allows the

respondent to provide multiple answers to a

single question.
Please check which, if any, of the following
sources of information about investments you
regularly use.
Personal advice of your broker(s)
Brokerage newsletters
Brokerage research reports
Investment advisory service(s)
Conversations with other investors
Web page(s)
Other (please specify) __________

 Attitude rating scales, such as the Likert

scale, semantic differential, Stapel scale, and

so on, are also fixed-alternative questions.

 A major problem in developing dichotomous

or multiple-choice alternatives is establishing

the response alternatives.
Alternatives should be totally exhaustive,
meaning that all the response options are
covered and that every respondent has an
alternative to check.
The alternatives should also be mutually
exclusive, meaning there should be no
overlap among categories and

Example (incorrect classification)

$10,000$30,000
$30,000$50,000
$50,000$70,000
$70,000$90,000
$90,000$110,000
Over $110,000

Correct classification
Less than $10,000
$10,000$29,999
$30,000$49,999
$50,000$69,999
$70,000$89,999
$90,000$109,999
Over $110,000

Choosing question wording

Avoid Complexity: Use Simple,

Conversational Language
Use ordinary words should match the
vocabulary of the respondents.
Technical jargons should also be avoided.
For Example,
Do you think the distribution of soft drinks is
adequate?
Do you think soft drinks are readily available
when you want to buy them?

Use unambiguous words

Words used should have single meaning that is

known to the respondents.

Consider the question;
In a typical month how often do you shop in
dept. stores?
Never
Occasionally
Sometimes
Often
Regularly

 The answer to this question are fraught with

response bias.
Three respondents who shop once a month
may check three different categories:
Occasionally, sometimes, and often.
Less than once
1 or 2 times
3 or 4 times
More than 4 times

 Provides consistent frame of reference for

all the respondents.

Categories are objectively defined and,
respondents are no longer free to interpret
them in their own way.

Avoid leading & biased question

A leading question is one that clues the

respondent to what answer is desired or

leads the respondent to answer in a certain
way.
Ex,
Do you think that patriotic Indians should buy
imported automobiles when that put Indians
labor out of work?
Yes
No
Dont Know

 This question would not help determine the

preferences of Indians for imported Versus

domestic car.
A better question would be;
Do you think Indians should buy imported
automobiles?

 Bias may also arise when the respondents

are given clues about the sponsor of the

project.
Is Colgate your favorite toothpaste?
More unbiased way of asking this question;
What is your favorite toothpaste brand?

 Likewise, the mention of prestigious or

nonprestigous name can bias the response

Example,
Do you agree with American Dental
Association that Colgate is effective in
preventing cavities?
An unbiased question would be;
Is Colgate effective in preventing cavities?

Avoid loaded questions.

They also contain researcher bias.
Loaded questions suggest a socially

desirable answer or are emotionally charged.

Examples: Intelligent people can see
meaning and opportunity in today economic
chaos: Do you?
Most of our MBA students are rank holders.
What rank did you get and when and in which
subjects?

 If you have to ask them, ask them at the end

of the Questionnaire.
By then, initial mistrust has been overcome,
rapport has been created, and respondents
may be more willing to share delicate
information.

Avoid Implicit Assumptions

Questions should not be worded so that answer is

dependent upon implicit assumption about what

will as a consequence.
1.Are you in favor of a balanced budget?
2.Are you in favor of a balanced budget if it would

result in an increase in the personal income tax?

Are you interested in Night Vision System?
Are you interested in Night Vision System if it

would cost $1500?

Avoid Complex calculation

Suppose we were interested in households

annual per capita expenditure on groceries. If

we asked the question
What is the annual per capita expenditure on

groceries in your household?

The better way would be ask two question
What is the monthly(weekly) expenditures on
groceries in your households
How many members are there in your
household?

Determining the order of the question

Opening Questions
Opening question opens the door to

cooperation.
Opening question should be simple and
interesting.
Not to include too many open ended
questions in the beginning.
Questions that ask respondents for their open
ions can be good opening questions.

Type of information required

The type of information obtained may be
classified as:
1) Basic Information information directly
related to research problem.
2) Classification information- Consists of
socio-economic and demographic
characteristics
3) Identification Information: name, address,
email, telephone etc..

 As general guideline, basic information

should be obtained first, followed by

classification, finally identification information.

Logical Order
All the questions that deal with particular topic

should be asked before beginning a new

topic.

Pretesting the questionnaire

Pretesting refers to the testing of the
questionnaire on a small sample of
respondents to identify and eliminate
potential problems.
Questionnaire should not be used without
pretesing.
All aspects of the questionnaire to be tested.
Respondents for the pretest and for the
actual survey to be drawn from the same
population.

 Pretest are best done by personal interviews,

researcher can observe respondents

reactions and attitude.
After the necessary changes have been
made another pretest could be conducted by
mail, telephone etc.. If those methods are to
be used.
Ordinarily pretest sample size is small varying
from 15 to 30 respondents.
Pretesting should be continued until no
further changes are needed.

Attitude measurement Scales

Attitudes are Hypothetical Constructs
cannot directly be observed.
For example - attitude toward working

environment, towards a brand etc..

We can measure an attitude by making an

inference based on the way an individual

responds to multiple scale indicators.

 Attitudes are subjective and personal. Attitude

influences the behaviour. Purchase decisions

are based upon the attitudes.
Attitude has three components, namely

cognitive, affective and the behavioural.

 Cognitive
This refers to the respondents beliefs,

knowledge or awareness about an event or

an object.
This is usually acquired from friends,
periodicals etc. Sometimes, it is also known
as the belief component. Statements like
(a) I am aware of the product X (b) I have no
idea about the product B (c) That institute is
excellent.

 Affective
This refers to the respondents liking or

preferences for an object.

This is also known as the feeling component.
(a) I like the product A
(b) Advertisement X is poor.
This component reveals the buyers positive
or negative attitude towards the product.

 Behavioral
This refers to the respondents intention to

buy.
This is a situation prior to the purchase. In
marketing, the usage and buying pattern
depends on this component.
This is also known as action component.

 For each of the following statements,

identify the appropriate component of

attitude;
I do not like carrot juice:
The compensation package for MBA
graduates has gone down because of the
recession
I like the recent airtel advertisement on TV
I understand that Santro gives a better
mileage than Wagon R
I prefer plastic bottles than glass bottles
Mohan says that he loves britannia biscuits
because they are tastier and will always eat
them.

Importance of Measuring Attitudes

Most managers hold the intuitive belief that

changing consumers or employees attitudes

toward their company or their companys
products or services is a major goal.
Because modifying attitudes plays a
pervasive role in developing strategies to
address these goals, the measurement of
attitudes is an important task.

Attitude rating scale

Rating asks the respondent to estimate the

magnitude or the extent to which some

characteristic exists.
The rating task involves marking a response

indicating ones position using one or more

attitudinal scales

Simple Attitude Scales

In its most basic form, attitude scaling

requires that an individual agree or disagree

with a statement or respond to a single
question.
For example, respondents in a political poll
may be asked whether they agree or
disagree with the statement The president
should run for re-election.

 This type of rating scale merely classifies

respondents into one of two categories, thus

having only the properties of a nominal
scale, and the types of mathematical
analysis that may be used with this basic
scale are limited.

Category Scales

A rating scale that consists of several

response categories, often providing

respondents with alternatives to indicate
positions on a continuum.

 By having more choices for a respondent, the

potential exists to provide more information.

However, if the researcher tries to represent

something that is truly bipolar (yes/no,

female/male, member/nonmember, and so
on) with more than two categories, error may
be introduced.

Method of Summated Ratings:

The Likert Scale

Summated ratings was developed by Rensis

Likert.
With the Likert scale, respondents indicate
their attitudes by checking how strongly they
agree or disagree with carefully constructed
statements, ranging from very positive to
very negative attitudes toward some
object.
Individuals generally choose from
approximately five response alternatives
strongly agree, agree, uncertain, disagree,
and strongly disagree

 Researchers assign scores, or weights, to

each possible response.

These scores are summated to get one score
to analyze the result.

EXAMPLE

Evaluation of Globusthe
Super Market by
respondent

Likert scale items

Salesmen at the shopping mall

are nice
Shopping mall does not have
enough parking space
Prices of items are reasonable.

2
3
4
5
6

Mall has wide range of products

to choose
Mall
operating
hours
are
inconvenient
The arrangement of items in the
mall is confusing

Strongly Disag
Neither
disagree ree
agree nor
disagree

Agree Strongly
agree

 Each

degree of agreement is given a

numerical score and the respondents total
score is computed by summing these scores.
This total score of respondent reveals the
particular opinion of a person.
Likert Scale are of ordinal type, they enable one
to rank attitudes, but not to measure the
difference between attitudes.
The higher the respondents score, the more
favourable is the attitude. For example, if there are
two shopping malls, ABC and XYZ and if the scores
using the Likert Scale are 30 and 60 respectively, we
can conclude that the customers attitude towards
XYZ is more favourable than ABC.

REVERSE RECODING
If a statement is framed negatively the

numerical scores would need to be reversed.

This organization ignores employee
welfare
Strongly Agree 1
Agree 2
Neutral 3
Disagree 4
Strongly disagree 5
This is done by reverse recoding the
negative item so that a strong agreement
really indicates an unfavorable response
rather than a favorable attitude.

Semantic Differential Scale

Semantic differential scale is 7 point rating

scale with endpoints associated with bipolar

labels that have semantic meanings.
Respondents rate the objects on a number of
itemized, 7 point scale bounded at each
stage by one of the two bipolar adjectives
Bipolar adjectivessuch as good and bad,
modern and old fashioned, or clean and
dirtyanchor the beginning and the end (or
poles) of the scale.

 Example rate the President of India

Strong --- ---- ---- ---- --- ---- --- Weak
Decisive --- ---- ---- ---- --- ---- --- Indecisive
Good --- ---- ---- ---- --- ---- --- Bad
Cheap -- ---- ---- ---- --- ---- --- Expensive
Active --- ---- ---- ---- --- ---- --Passive
Lazy --- ---- ---- ---- --- ---- ---

Industrious

 The blanks are numbered from 1 to 7 and

then the responses are averaged for each

dimension.
The average is plotted on the form and
provides a profile of the connotation of the
target concept.

Suppose Jet Airways wants to ascertain the image it

has in the minds of its patrons. Construct a seven-item
Likert scales and Semantic Deferential Scale to
measure the perceived image of the airlines. Make
sure that the seven items under each format
correspond to the same seven dimensions.
[For the sake of simplicity, we will use all favorable
statements in case of Likert scale]

Likert Scale Please state your degree of

agreement/disagreement on a 5-point scale,
where 1 = strongly disagree,
2 = disagree,
3 = neutral,
4 = agree, and
5 = strongly agree for the following statements.
S.No.

i)
ii)
iii)
iv)
v)
vi)
vii)

Statement

Strongly
disagree

Disagree Neutral

Agree

Strongly
agree

Semantic Differential Scale In semantic differential scale,

the above-mentioned seven items/statements are put in the
form of bipolar adjectives/phrases. It is shown below like
this.
1

Stapel Scale
Stapel scale is used as an alternative to the

semantic, especially when it is difficult to find

bipolar adjectives, that match the
investigative question.
The scale is composed of word(phrase)
identifying the different dimensions of the
construct studied and set of 10 response
categories.

 This scale has some distinctive features: Each item has only one word/phrase
indicating the dimension it represents.
Each item has ten response categories.

The response categories have numerical

labels but no verbal labels.

Criteria for good measurement

The selected scale should result in

valid,reliable and generalizable result.

Three criteria for good measurement are,
Reliability
Validity &
Generalizability

Reliability
Extent to which scale produces consistent

results if repeated measurements are done.

A measure is reliable when different attempts

at measuring something converge on the

same result.
the concept of reliability revolves around
consistency.

 Think of a scale to measure weight. You

would expect this scale to be consistent from

one time to the next.
If you stepped on the scale and it read 140
pounds, then got off and back on, you would
expect it to again read 140.
If it read 110 the second time, the scale would
not be reliable.

 Reliability has three approaches

Test-Retest Reliability
Alternative-Forms Reliability
Internal Consistency Reliability

Test-Retest Reliability
The test-retest method of determining

reliability involves administering the same

scale or measure to the same respondents
at two separate times to test for stability.
If the measure is stable over time, the test,
administered under the same conditions each
time, should obtain similar results.
Test -retest reliability represents a measures
repeatability.

 Suppose a researcher at one time attempts to

measure buying intentions and finds that 12

percent of the population is willing to
purchase a product. If the study is repeated
a few weeks later under similar conditions,
and the researcher again finds that 12
percent of the population is willing to
purchase the product, the measure appears
to be reliable.

 The degree of similarity between the two

measurements is determined by computing

correlation coefficient.
The higher the correlation coefficient, the
greater the reliability.

 Test-Retest has two major problems;

First it is sensitive to the time interval. Longer

the time interval, lower the reliability. Attitude

may change between measurements.
Second, it may be impossible to make
repeated measurements .

Alternative Forms Reliability

In alternative Forms reliability ,two

equivalent forms of the scale are constructed.

The same respondents are measured at two
different times with different scale form being
administered each time.
The scores from the administration of the
alternative scale-forms are correlated to
assess reliability.

 Two major problems;

It is very difficult and time consuming to

construct an equivalent form of the scale.

It may be impossible to make repeated
measurements.

Internal Consistency Reliability

Used to assess the reliability of a summated

scale
In multiple item measure each respondents
answer to each question are aggregated to
form overall score.
It is possible that the indicators do not relate
the same thing they lack coherence.
We need to be sure that all the items are
related to each other.
If they are not some of the items may be
unrelated and therefore indicative of
something else

 Opinion leadership in technology adoption

1.My opinion on hardware seem not to count

with other people.

2.When other people choose to adopt a
hardware/software product, they turn to me
for advice.
3.Other people select hardware/software
rarely based on what I have suggested to
them.
4.I often persuade other people to adopt
software/hardware that I like
5.Other people rarely come to me for advice
about choosing HW/SW products.

 One popular way of testing internal reliability

is split half method.

If the research has 12 items ,split half method
randomly splits these 12 items into two
groups of 6 items each.
Then the degree of correlation between the
scores of the halves are calculated.
If there is strong positive correlation then the
scale is reliable.

 Cronbachs alpha is a commonly used test

of internal reliability.
The computed alpha varies between 0 to 1.
In business research if Cronbachs alpha is
more than 0.70,scale is considered to be
reliable.

Validity
Validity has to do with whether or not a

measure of a concept really measures that

concept
Perfect validity requires that there be no
measurement error.
Researchers distinguish between number of
types of validity.

 Face Validity
At the very minimum, a researcher who

develops a new measure should establish

that it has face validity.
The measure apparently reflects the content
of the concept in question.
Thus a scale designed to measure employee
satisfaction would be considered inadequate
if it omitted any of the major dimension.

 The content validity might be established by

asking other people whether or not the

measure seems to be getting at the concept.
Possibly people with expertise in a field might
be asked to act as judges.
Face validity is an essentially intuitive
process.

 Content validity
Content validity refers to the degree that a

measure covers the domain of interest.

Do the items capture the entire scope, but not
go beyond, the concept we are measuring?
If an exam is supposed to cover chapters 1
5, it is fair for students to expect that
questions should come from all five chapters,
rather than just one or two.(FV)

 It is also fair to assume that the questions will

not come from chapter 6.

Thus, when students complain about the
material on an exam, they are often claiming
it lacks content validity.
Similarly, an evaluation of an employees job
performance should cover all important
aspects of the job, but not something outside
of the employees specified duties.

 It has been argued that shoppers receive

value from two primary elements.

Hedonic shopping value refers to the
pleasure and enjoyment one gets from the
shopping experience.
While utilitarian shopping value refers to
value received from the actual acquisition of
the product desired.

 If a researcher assessing shopping value only

asked questions regarding the utilitarian

aspects of shopping, we could argue the
measure lacks content validity

 Construct validity exists when a measure

reliably measures and truthfully represents a

unique concept.
we must be sure our measures look like they
are measuring what they are intended to
measure (face validity) and cover only the
domain of interest (content validity).
If so, we can assess convergent validity
and discriminant validity.

 These forms of validity represent how

unique or distinct a measure is.

Convergent validity requires that concepts
that should be related are indeed related.
For example, in business we believe
customer satisfaction and customer loyalty
are related. If we have measures of both, we
would expect them to be positively correlated.

 If we found no significant correlation between

our measures of satisfaction and our

measures of loyalty, it would bring into
question the convergent validity of these
measures.
On the other hand, our customer satisfaction
measure should not correlate too highly with
the loyalty measure if the two concepts are
truly different.

 As a rough rule of thumb, when two scales

are correlated above 0.75,discriminant

validity may be questioned.

Observation in Business Research

In business research, observation is a

systematic process of recording behavioral

patterns of people, objects, and occurrences
as they happen to obtain information about the
phenomenon of interest.
No questioning or communicating with people
is needed.
Researchers who use observation as a method
of data collection either witness and record
information while watching events take
place or take advantage of some tracking
system such as CCTV.

 In survey research the finding is based on

what people say and not what people do.

Eg- In the field of leadership research
researchers have relied heavily on the
responses of subordinates and what they say
leaders do rather than what leaders actually
do.

 The major advantage of observation studies

over surveys, which obtain self-reported data

from respondents, is that the data are free
from distortions, inaccuracies, or other
response biases due to memory error,
social desirability bias, and so on.
The data are recorded when the actual
behavior takes place.

Observation is the only method

to study animal behavior.

To study child behavior..

Study consumer behavior

What can be observed?

The Nature of Observation

Studies
Business researchers can observe people,

objects, events, or other phenomena using

either human observers or machines
designed for specific observation tasks.
Human or mechanical observation is
generally unobtrusive, meaning no
communication with a respondent takes
place.

 For example, rather than asking an employee

how long it takes to handle an insurance

claim, a researcher might observe and
record the time it takes for different steps in
this process.
Or, rather than ask a consumer how long they
spend shopping for produce, a researcher
can watch shoppers in a supermarket and
note the time each spends in the produce
area
The unobtrusive or nonreactive nature of the
observation method often generates data
without a subjects knowledge.

 A situation in which an observers presence is

known to the subject involves visible

observation.
A situation in which a subject is unaware that
observation is taking place is hidden
observation.
Hidden, unobtrusive observation
minimizes respondent error.
Asking subjects to participate in the research
is not required when they are unaware that
they are being observed.

 Covert observational research - The

researchers do not identify themselves. Either

they mix in with the subjects undetected, or
they observe from a distance.
The advantages of this approach are: (1) It is
not necessary to get the subjects
cooperation, and
(2) The subjects behaviour will not be
contaminated by the presence of the
researcher.

 Overt observational research - The

researchers identify themselves as

researchers and explain the purpose of their
observations.
The problem with this approach is subjects
may modify their behaviour when they
know they are being watched.
They portray their ideal self rather than
their true self.

 Natural and Contrived Observation

Natural observation involves observing

behavior as it takes place in the environment.

Ex-One could observe the behavior of
respondents eating fast food at KFC.
Observe behavior of consumers at a Mall.

 Contrived observation - respondents

behavior is observed in an artificial

environment such as test kitchen.
Natural environment but artificial participant.Mystery Shopping
Corporate dinner-observe the table etiquettes
of participants.

Observation of Human Behavior

Whereas surveys emphasize verbal

responses, observation studies emphasize

and allow for the systematic recording of
nonverbal behavior.
Behavioral scientists have recognized that
nonverbal behavior can be a communication
process by which meanings are exchanged
among individuals.
Head nods, smiles, raised eyebrows, and
other facial expressions or body
movements have been recognized as
communication symbols.

 For example, a hypothesis about customer-

salesperson interactions is that the

salesperson would signal status based on
the importance of each transaction.
In low-importance transactions, in which
potential customers are plentiful and
easily replaced ,the salesperson may show
definite nonverbal signs of higher status
than the customer.
When customers are scarce, as in big-ticket
purchase situations, the opposite should be
true.

 One way to test this hypothesis would be with

an observation study using the nonverbal

communication

Complementary Evidence
The results of observation studies may

extend the results of other forms of research

by providing complementary evidence
concerning individuals true feelings.
Focus group interviews often are conducted
For the interpretation of nonverbal
behavior such as facial expressions or head
nods to supplement information from
interviews.

Observation of Physical Objects

Physical phenomena may be the subject of

observation study.
Researcher observes physical evidence of

past behavior - trace analysis

 A classic example of physical-trace evidence

in a nonprofit setting was erosion on the

floor tiles around the hatching-chick
exhibit at Chicagos Museum of Science and
Industry.
These tiles had to be replaced every six
weeks; tiles in other parts of the museum did
not need to be replaced for years.
The selective erosion of tiles, was a
measure of the relative popularity of exhibits.

 Parlin designed an observation study to

persuade Campbells Soup Company to

advertise in the Saturday Evening Post.
Campbells was reluctant to advertise
because it believed that the Post was read
primarily by working people who would prefer
to make soup.
To demonstrate that rich people werent the
target market, Parlin selected a sample of
Philadelphia garbage routes

 Garbage from each specific area of the city

that was selected was dumped on the floor of

a local National Guard Armory.
Parlin had the number of Campbells soup
cans in each pile counted.
The results indicated that the garbage from
the rich peoples homes didnt contain many
cans of Campbells soup.
The garbage piles from the blue-collar area
showed a larger number of Campbells soup
cans.

 What is most interesting about the garbage

project is that observations can be compared

with the results of surveys about food
consumptionand garbage does not lie.

Content Analysis
Besides observing people and physical

objects, researchers may use content

analysis, which obtains data by observing
and analyzing the contents or messages
of advertisements, newspaper articles,
television programs, letters, and the like.
Content analysis studies the message itself
and involves the design of a systematic
observation and recording procedure for
qualitative description of the manifest content
of communication.

 For example, content analysis of

advertisements might evaluate their use of

words, themes, characters etc..
Content analysis might be used to investigate
questions such as whether some advertisers
use certain themes, appeals, claims, or
deceptive practices more than others.
Content analysis also can explore the
information content of television commercials
directed at children, the company images
portrayed in ads, and numerous other
aspects of advertising.

Focus Group Method

A focus group interview is an

unstructured, free-flowing interview with a

small group of people, usually between six
and ten.
An interview conducted by a trained
moderator in a non-structured manner with
the small group of respondents.
The value of findings lies in the
unexpected findings often obtained from a
free flowing group discussion.

Characteristics of the group

Group Size
Group Composition
Physical Setting
Time Duration
Recoding
Moderator

6 -10
Homogenous; Prescreened
Relaxed, Informal
1 to 3 hours
Use of audio/ Vedio device
Interpersonal and

communication skills of the

moderator

Broad Framework
Topic Agenda
1.Introduction(15 minutes)
Serve Tea/coffee
Introduce the research team
Aim of the focus group
Conventions( Confidentiality, speak one at
time, open debate, everybodys views etc)
2.Discussion Topics
i) Current Trading Climate (15 Minutes)
ii) Main Challenges in the business environment
(20 Minutes)

iii) Government policies and small firms( 20

minutes)
iv) Globalization and small firms (20 minutes
V) Succession problem of small firms (20
minutes)
3.Summing Up
Thanks for participation
Invite back to next event
Reimburse expenses
4.Lunch/Dinner

Application of focus group

Can be used in exploratory research

requiring some preliminary understanding

& insights.
Can be conducted to analyse & interpret
the observation data.
Is very useful to get in-depth
understanding.

Some of the areas

Understanding consumers perceptions,

preferences concerning a product.

Generating new product concepts
Generating new ideas about older products.
Developing creative concepts for
advertisements
Obtaining preliminary consumer reaction to
specific marketing program.

Experimental Research
Ideally, managers want to know how a

change in one event will change another

event of interest.
Causal research attempts to establish that
when we do one thing, another thing will
follow.
While we use the term cause frequently in
our everyday language, scientifically
establishing something as a cause is not so
easy.

 A causal inference can only be supported

when very specific evidence exists.

Three critical pieces of causal evidence are:
1. Temporal Sequence
2. Concomitant Variance
3. Nonspurious Association

 Temporal Sequence
Temporal sequence deals with the time order

of events.
In other words, having an appropriate

causal order of events, or temporal

sequence, is one criterion for causality.
Simply put, the cause must occur before
the effect.

 It would be difficult for a restaurant manager

to blame a decrease in sales on a new chef

if the drop in sales occurred before the new
chef arrived.
If a change in the CEO causes a change in
stock prices, the CEO change must occur
before the change in stock values.

 Concomitant variation
occurs when two events covary or

correlate, meaning they vary

systematically.
In causal terms, concomitant variation means
that when a change in the cause occurs, a
change in the outcome also is observed.
A correlation coefficient is used to represent
concomitant variation.
Causality cannot possibly exist when there is
no systematic variation between the
variables.

 For example, if a retail store never changes

its employees vacation policy, then the

vacation policy cannot possibly be
responsible for a change in employee
satisfaction.

 Nonspurious Association
Nonspurious association means any co

variation between a cause and an effect is

true, rather than due to some other variable.
A spurious association is one that is not true.
Often, a causal inference cannot be made
even though the other two conditions exist
because both the cause and effect have
some common cause.

 For instance, there is a strong, positive

correlation between ice cream purchases and

murder rates.
Do people become murderers after eating ice
cream?
Should we outlaw the sale of ice cream?
A third variable is actually important here.
People purchase more ice cream when the
weather is hot. People are also more active
and likely to commit a violent crime when it is
hot.

 In summary, causal research should do all of

the following:
1. Establish the appropriate causal order or
sequence of events
2. Measure the concomitant variation between
the presumed cause and the presumed effect
3. Examine the possibility of spuriousness by
considering the presence of alternative
plausible causal factors

Degrees of Causality
Absolute causality means the cause is

necessary and sufficient to bring about

the effect.
For example, a warning label used on
cigarette packages claims smoking causes
cancer.
Is this true in an absolute sense?
Thus, if we find only one smoker who does
not eventually get cancer, the claim is false.

 Conditional causality means that a cause

is necessary but not sufficient to bring

about an effect.
One way to think about conditional causality
is that the cause can bring about the effect,
but it cannot do so alone.
If other conditions are right, the cause can
bring about the effect.
This is a weaker causal inference.

Experimental Research
Experiments are widely used in causal

research designs.
Experimental research allows a researcher to
control the research situation so that causal
relationships among variables may be
evaluated.
The experimenter manipulates one or more
independent variables and holds constant
all other possible independent variables while
observing effects on dependent variable(s).

 Independent variables are expected to

determine the outcomes of interest.

In an experiment, they are controlled by the
researcher through manipulations.
Dependent variables are the outcomes of
interest to the researcher and the decision
makers.

 A famous experiment in the marketing field

investigated the influence of brand name on

consumers taste perceptions.
An experimenter manipulated whether
consumers preferred the taste of beer in
labeled or unlabeled bottles.
One week respondents were given a sixpack containing bottles labeled only with
letters (A, B, C).

 The following week, respondents received

another six-pack with brand labels (like

Budweiser, Coors, Miller, and so forth).
The experimenter measured reactions to the
beers after each tasting and observed
difference taste. In every case, the beer itself
was the same.
Therefore, the differences observed in taste,
the key dependent variable, could only be
attributable to the difference in labeling.

 There is atleast one independent variable (IV)

and one dependent variable(DV).

Researcher hypothesizes that in some way
the IV causes the DV to occur.
The researcher manipulates the independent
variable and then observes whether the
hypothesized dependent variable is affected
by the intervention.

Designing an Experiment to
Minimize Experimental Error
Experimental designs involve no less than

four important design elements. These issues

include
(1) manipulation of the independent
variable(s);
(2) selection and measurement of the
dependent variable(s);
(3) selection and assignment of experimental
subjects; and
(4) control over extraneous variables

 Manipulation of the Independent Variable

The thing that makes independent variables

special in experimentation is that the

researcher actually creates his or her
values.
This is how the researcher manipulates, and
therefore controls, Independent variables.
Experimental independent variables are
hypothesized to be causal influences.

 Experimental variables can be categorical

as well as continuous variables.

In branding and taste perception experiment
variables are categorical.
In sales and advertisement causation,
variables are continuous.
The task for the researcher is to select
appropriate levels of that variable as
experimental treatments.

 For example, consumers might not perceive a

difference between $1.24 and $1.29, but

likely will notice the difference between $1.29
and $2.5
The levels should be noticeably different and
realistic.

EXPERIMENTAL AND CONTROL GROUPS

An experimental group is one in which an

experimental treatment is administered.

A control group is one in which no

experimental treatment is administered.

Experimental treatment -The term referring

to the way an experimental variable is

manipulated.

 The experimental groups, or treatment

group, receives the treatment, and it is

compared against the control group, which
does not.

Selection and Measurement of the

Dependent Variable
Unless the dependent variables are relevant

and truly represent an outcome of interest,

the experiment will not be useful.
In some situations, however, clearly defining
the dependent variable is not so easy.
If researchers are experimenting with different
forms of advertising appeals, defining the
dependent variable may be more difficult.

 For example, measures of advertising

awareness, recall, changes in brand

preference, or sales might be possible
dependent variables.
Choosing the right dependent variable is part
of the problem definition process.
The experimenters choice of a dependent
variable determines what type of answer is
given to assist managers in decision
making.

 The introduction of the original Crystal Pepsi

illustrates the need to think beyond

consumers initial reactions.
When Crystal Pepsi was introduced, the initial
trial rate was high, but only a small
percentage of customers made repeat
purchases.
The brand never achieved high repeat sales
within a sufficiently large market segment.

 Brand awareness, trial purchase, and repeat

purchase are all possible dependent

variables in an experiment.
The dependent variable therefore should be
considered carefully.

Selection and Assignment of Test Units

Test units are the subjects or entities

whose responses to the experimental

treatment are measured or observed.
Individual consumers, employees,
organizational units, sales territories, market
segments,or other entities may be the test
units.
People, whether as customers or employees,
are the most common test units in most
organizational behavior, human resources,
and marketing experiments.

Randomization
Randomizationthe random assignment

of subject and treatments to groupsis

one device for equally distributing the effects
of extraneous variables to all conditions.
These nuisance variables, items that may
affect the dependent measure but are not of
primary interest, often cannot be eliminated.
However, they will be controlled because they
are likely to exist to the same degree in every
experimental cell if subjects are randomly
assigned.

Matching
Matching the respondents on the basis of

pertinent background information is another

technique for controlling the extraneous
variables by assigning subjects in a way that
their characteristics are the same in each
group.
This is best thought of in terms of
demographic characteristics.
If a subjects sex is expected to influence
dependent variable responses then the
researcher may make sure that there are
equal numbers of men and women in each
experimental cell.

 In general, if a researcher believes that

certain extraneous variables may affect the

dependent variable, he or she can make sure
that the subjects in each group are the
same on these characteristics.

Control Over Extraneous Variable

Systematic error can occur when the

extraneous variables are allowed to

influence the dependent variables.
When the extraneous variables have not
been controlled or eliminated, the results will
be confounded.
A confound means that there is an
alternative explanation beyond the
experimental variables for any observed
differences in the dependent variable.

 Once a potential confound is identified, the

validity of the experiment is severely

questioned.
In a simple experimental groupcontrol group
experiment, if subjects in the experimental
group are always administered treatment in
the morning and subjects in the control group
always receive the treatment in the afternoon,
a systematic error occurs.
In such a situation, time of day represents a
confound.

 Since extraneous variables can produce

confounded results, they must be identified

before the experiment if at all possible.
One issue with significant business and
public policy implications is cigarette
smoking.
Does cigarette advertising cause young
people to smoke?

 One of the primary reasons for the

inconclusiveness of this debate is the failure

for most of the research to control for
extraneous variables
For instance, consider a study in which two
groups of U.S. high school students are
studied over the course of a year.
One is exposed to foreign television media in
which American cigarettes are more often
shown in a flattering and glamorous light.

 The other group is a control group in which

their exposure to media is not controlled.

At the end of the year, the experimental group
reports a greater frequency and incidence of
cigarette smoking.
Did the increased media exposure involving
cigarettes cause smoking behavior?

 Was the demographic makeup of the two

groups the same?

it is well known that different ethnic groups
have different smoking rates. Approximately
28 percent of all high school students report
smoking, but the rate is higher among
Hispanic teens.
Similarly, smoking varies with social class.
Were the two groups comprised of individuals
from comparable social classes?

 Because an experimenter does not want

extraneous variables to affect the results, he

or she must eliminate or control such
variables.
It is always better to spend time thinking
about how to control for possible extraneous
variables before the experiment

Editing, Coding and Data

Analysis
Types of Data Mining
Frequency Distribution
Descriptive statistics
Associative Statistics
Difference Statistics
Inferential Statistics

 Frequency Distribution
Simply report the number of responses

received into any category by counting

responses in each response category.
Compare numbers in each category by
frequencies or percentage frequencies.
Can display by charts.
If the data is only nominal, only frequency
distribution can be used.
And the analysis just stops here.

 Descriptive Statistics
If the data under observation are interval-

scaled, then the frequency distribution can be

summarized by the following measures;
a) measures of central tendency
b) Measures of dispersion
c)Measures of shape

 Associative statistics
Procedures investigate systematic

relationship among two or more variables.

In general one may be interested in
magnitude and direction of association.
Correlation and cross tabulation(chi square,
phi, eta, Cramer V etc) are the usual
procedures of associative analysis

 Difference Statistics
These procedures analyze statistically

significant differences between statistics such

as means of a two or more groups in a
sample.
A common test is t test, or the analysis of
variance.

 Inferential Statistics
These statistical procedures allow

researchers to draw general conclusion from

the sample.
Inferential analysis includes hypotheses
testing and estimating the true population
values based on sample information.

Multivariate Data Analysis

Research that involves three or more

variables, or that is concerned with

underlying dimensions among multiple
variables, will involve multivariate statistical
analysis.
Multivariate statistical methods analyze
multiple variables simultaneously.

Classifying Multivariate Techniques

 Dependence Techniques When hypotheses

involve distinction between independent and

dependent variables, dependence
techniques are needed.
Predicting the dependent variable sales on
the basis of numerous independent variables
is a problem frequently investigated with
dependence techniques.
Multiple regression analysis, multiple
discriminant analysis, multivariate analysis of
variance,and structural equations modeling
are all dependence methods.

 Interdependence Techniques
When researchers examine questions that do

not distinguish between independent and

dependent variables, interdependence
techniques are used.
No one variable or variable subset is to be
predicted from or explained by the others.
The most common interdependence methods
are factor analysis,cluster analysis, and
multidimensional scaling.

 A manager might utilize these techniques to

determine which employee motivation items

tend to group together (factor analysis), to
identify profitable customer market segments
(cluster analysis), or to provide a perceptual
map of cities being considered for a new
plant (multidimensional scaling).

Influence of Measurement Scales

Which interdependence techniques

should I use?

Multiple Regression Analysis

Multiple regression analysis is an

extension of simple regression analysis

allowing a metric dependent variable to be
predicted by multiple independent variables.
In simple regression model one dependent
variable (sales) is explained by one
independent variable(price).
Yet reality is more complicated and several
additional factors probably affect sales.

 The simple regression equation can be

expanded to represent multiple regression

analysis:
Y = b0 + b1X1 + b2X2 + b3X3 + . . . + bnXn.

 In general regression analysis requires

metric data(interval or ratio).

Less-than interval (nonmetric) independent
variables can be used in multiple regression.
This can be done by implementing dummy
variable coding.
A dummy variable is a variable that uses a
0 and a 1 to code the different levels of
dichotomous variable.
Multiple dummy variables can be included in
a regression model

 Assume that a toy manufacturer wishes to

explain store sales (dependent variable)

using a sample of stores from Canada and
Europe. Several hypotheses are offered:
H1: Competitors sales are related negatively
to our firms sales.
H2: Sales are higher in communities that
have a sales office than when no sales office
is present.
H3: competitors price is related positively to
sales.

 Regression equation:
Y = 102.18 + 0.387X1 + 115.2X2 + 6.73X3
All the signs in the equation are positive.

Thus, the regression equation indicates that

sales are positively related to X1, X2, and X3.
The coefficients show the effect on the
dependent variable of a 1-unit increase in any
of the independent variables.

REGRESSION COEFFICIENTS IN MULTIPLE

REGRESSION
in simple regression, the coefficient b1

represents the slope of X on Y.

Multiple regression involves multiple slope
estimates, or regression weights.
One challenge in regression models is to
understand how one independent variable
affects the dependent variable, considering
the effect of other independent variables

 When the independent variables are related

to each other, the regression weight

associated with one independent variable is
affected by the regression weight of another.
Regression coefficients are unaffected by
each other only when independent variables
are totally independent.

 When the independent variables are related

to each other, the regression weight

associated with one independent variable is
affected by the regression weight of another.
This is called multicollinearity.
Most regression programs can compute

variance inflation factors (VIF) for each

variable.
As a rule of thumb, VIF above 5.0 suggests
problems with multicollinearity

R 2 MULTIPLE REGRESSION
The coefficient of multiple determination in
multiple regression indicates the percentage
of variation in Y explained by the combination
of all independent variables.
For example, a value of R2 = 0.845 means
that 84.5 percent of the variance in the
dependent variable is explained by the
independent variables.

 If two independent variables are truly

independent (uncorrelated with each other),

the R2 for a multiple regression model is
equal to the separate R2 values that would
result from two separate simple regression
models.

Cluster Analysis
Cluster analysis is a multivariate approach

for identifying objects or individuals that are

similar to one another in some respect.
Cluster analysis classifies individuals or
objects into a small number of mutually
exclusive and exhaustive groups.
Objects or individuals are assigned to groups
so that there is great similarity within groups
and much less similarity between groups.

 What is Cluster?
A group of relatively homogeneous cases or

observations.
Similar to one another within the same cluster
Dissimilar to the objects in other clusters
Cluster analysis
Finding similarities between data according to
the characteristics found in the data and
grouping similar data objects into clusters

 Groupingof data objects such that the

objects within a group are similar(or

related) to one another and different from
(or unrelated to) the objects in other
groups

 The cluster should have high internal

(within-cluster) homogeneity and high

external (between-cluster) heterogeneity.
An important tool for the business researcher.
For example, an organization may want to
group its employees based on their
insurance or retirement needs, or on job
performance dimensions.
Similarly, a business may wish to identify
market segments by identifying subjects or
individuals who have similar needs, lifestyles,
or responses to marketing promotions.

 For example, imagine four clusters or market

segments in the vacation travel industry.

They are: (1) The elite they want top level
service and expect to be pampered;
(2) The escapists they want to get
away and just relax;
(3) The educationalist they want to see
new things, go to museums, have a safari, or
experience new cultures;
(4) the sports person they want the golf
course, tennis court, surng, deep-sea
shing, climbing, etc. Different brochures and
advertising is required for each of these.

 For example Vacation behavior is represented on two

dimensions: number of vacation days and

dollar expenditures on vacations during a
given year.
The scatter diagram represents the distance
between each individual in two-dimensional
space.

 The diagram portrays three clear-cut clusters.

The first subgroupconsisting of individuals

L, H, and Bsuggests a group of individuals

who have many vacation days but do not
spend much money on their vacations.
The second clusterrepresented by
individuals A, I, K, G, and Frepresents
intermediate values on both variables:
average amounts of vacation days and
average dollar expenditures on vacations.

 The third groupindividuals C, J, E, and D

consists of individuals who have relatively few

vacation days but spend large amounts on
vacations.
The logic of cluster analysis is to group
individuals or objects by their similarity to or
distance from each other

 Managers frequently are interested in finding

test-market cities that are very similar so

that no extraneous variation will cause
differences between the experimental and
control markets.
In this study the objects to be clustered were
cities.
The characteristics of the cities, such as
population, retail sales, number of retail
outlets, and percentage of nonwhites, were
used to identify the groups.

 Cities such as Omaha, Oklahoma City,

Dayton, Columbus, and Fort Worth were

similar
And cities such as Newark, Cleveland,
Pittsburgh, Buffalo, and Baltimore were
similar, but individual cities within each group
were dissimilar to those within other
groups or clusters.

 The purpose of cluster analysis is to

determine how many groups really exist and

to define their composition.

Factor Analysis
Factor analysis is a prototypical

multivariate, interdependence technique.

Factor analysis is a technique of
statistically identifying a reduced number of
factors from a larger number of measured
variables
Factors are usually latent constructs like
attitude satisfaction, personality etc.
A researcher need not distinguish between
independent and dependent variables to
conduct factor analysis.

 Factor Analysis is a data reduction

technique
Multivariate statistical approach that
summarizes the information from many
variables into a reduced set of variables.

 Rule of parsimony
The rule of parsimony suggests that an

explanation involving fewer components is

better than one involving more.
The Big five personality traits were extracted
using Factor Analysis.(OCEAN).
Beneath each factor, a cluster of correlated
specific traits is found.
For example, extraversion includes such
related qualities as gregariousness,
assertiveness, excitement seeking, warmth,
activity etc

 A common usage of FA is in developing

objective instruments for measuring

constructs which are not directly observable.

 Factor analysis can be divided into two types:

1. Exploratory factor analysis (EFA)

performed when the researcher is uncertain

about how many factors may exist among a
set of variables.
2. Confirmatory factor analysis (CFA)
performed when the researcher has strong
theoretical expectations about the factor
structure (number of factors and which
variables relate to each factor) before
performing the analysis.

 Suppose a researcher is asked to examine

how feelings of nostalgia in a restaurant

influence customer loyalty.
Three hundred fifty customers at restaurants
around the country are interviewed and asked
to respond to the following Likert scales (1 =
Strongly Disagree to 7 = Strongly Agree):

 X1I feel a strong connection to the past

when I am in this place.

X2This place evokes memories of the past.
X3I feel a yearning to relive past
experiences when I dine here.
X4This place looks like a page out of the
past.
X5I am willing to pay more to dine in this
restaurant.
X6I feel very loyal to this establishment.
X7I would recommend this place to others.
X8I will go out of my way to dine here.

 EFA provides two important pieces of

information:
1. How many factors exist among a set of

variables?
2. What variables are related to or load on
which factors?

 Factor Loadings
Correlation between a variable and a

factor.
A factor loading indicates how strongly
correlated a measured variable is with that
factor. In other words, to what extent does a
variable load on a factor?
EFA depends on the loadings for proper
interpretation.

 A latent construct can be interpreted based

on the pattern of loadings and the content of

the variables.
In this way, the latent construct is measured
indirectly by the variables.

 The thick arrows indicate high loading

estimates and the thin dotted lines

correspond to weak loading estimates.

 Factors are interpreted by examining any

patterns that emerge from the factor results.

Here, a clear pattern emerges.
The first four variables produce high loadings
on factor 1 and the last four variables
produce high loadings on factor 2.
The first four variables all have content
consistent with nostalgia and the second four
variables all have content consistent with
customer loyalty, the two factors can easily be
labeled.

 Factor one represents the latent construct

nostalgia and factor 2 represents the latent

construct customer loyalty.

Factor Analysis in SPSS

In SPSS, the click-through sequence is as

follows:
ANALYZE
DATA REDUCTION
FACTOR ANALYSIS
This produces a dialog box. Now follow the
steps below to get results :
Highlight variables X1 to X8 (either
individually or in multiples).

 Click the to move them into the Variables

window.
Click ROTATION.
Select VARIMAX.
Optional: Click OPTIONS.
Select SORTED BY SIZE.
Select SUPPRESS ABSOLUTE VALUES
LESS THAN.
Click CONTINUE.
Click OK.

Quoting Reference/Bibliography.
Generally, a reference list contains only those

sources researcher actually referred to in his

research.
So, for each resource on researchers list,
there will be some citation in his research.
For Example
expected to increase to USD 750850 billion by 2015 (Deloitt,2013).
Deloitte (2013),Indian Retail Market Opening
more doors, Deloitte, January 2013.

 A bibliography contains those sources

researcher consulted but didn't actually cite in

his research + reference.

APA Style: Handling Quotations, Citations,

and References
In-Text Quotations
When using APA format, follow the author-

date method of citation.

This means that the author's last name and

the year of publication for the source should

appear in the text, and a complete reference
should appear in the reference list.

 Examples:
Smith (1970) compared reaction times . . .
In a recent study of reaction times (Smith,

1970), . . .
In 1970, Smith compared reaction times . . .

Short Quotations
To indicate short quotations (fewer than 40

words) in the text, enclose the quotation

within double quotation marks.
Provide the author, year, and specific page
citation in the text, and include a complete
reference in the reference list.

 Examples:
She stated, "The placebo effect disappeared

when behaviors were studied in this manner"

(Miele, 1993, p. 276),but she did not clarify
which behaviors were studied.
According to Miele (1993), "The placebo
effect disappeared when behaviors were
studied in this manner" (p.276).
Miele (1993) found that "the placebo effect
disappeared" in this case (p. 276), but what
will the next step in researching this issue be?

 A long quotation
A quotation of 40 or more words should be

formatted as a freestanding, indented block of

text without quotation marks.

Weston (1948) argues that:

One of the most important phases of our
special guests was to get information that
would throw light on degeneration of the facial
pattern that occurs so often in our modern
civilization. This has its expression in the
narrowing and lengthening of the face and
the development of crooked teeth. (p. 174)

 A quotation with no page numbers

If you quote from online material and there

are no page numbers (e.g. HTML based

document), use the paragraph number (para.)
instead.
"Prevalence rates of antenatal major and
minor depression have been estimated in
community-based studies to range from 7%
to 15% of all pregnancies" (Grote, Swartz,
Geibel & Zuckoff, 2009, para. 2).

Citing from a secondary source

When you find a quote (e.g. Arnett) within in a

work that you have read (e.g. Claiborne &

Drewery) and you wish to refer to the original
quote (Arnett), this is called citing from a
secondary source.
Arnett (2000, as cited in Claiborne &
Drewery, 2010) suggests there is an
emerging adult stage in the lifespan of
humans, covering young people between the
ages of 18 and 25 years.

APA Reference Style

Your reference list should appear at the end

of your essay. It provides the information

necessary for a reader to locate and retrieve
any source you cite in the essay.
Each source you cite in the essay must
appear in your reference list; likewise, each
entry in the reference list must be cited in
your text.

Some Basic rules

All references should be double-spaced.
Capitalize only the first word of a title or

subtitle of a work.
Italicize titles of books and journals.
Each entry is separated from the next by a
double space
Authors' names are inverted (last name first)

 Your reference list should be alphabetized by

authors' last names.

If you have more than one work by a
particular author, order them by publication
date, oldest to newest (thus a 1991 article
would appear before a 1996 article).

 Basic Forms for Sources in Print

An article in a periodical (such as a

journal, newspaper, or magazine).

Author, A. A., Author, B. B., & Author, C. C.
(Year of Publication, add month and day of
publication for daily, weekly, or monthly
publications). Title of article. Title of
periodical, Volume Number, pages.
Ex Harlow, H. F. (1983). Fundamentals for
preparing psychology journal articles. Journal
of Comparative and Physiological
Psychology, 55, 893-896.

 Magazine/Newspaper
Henry, W. A., III. (1990, April 9). Making the

grade in today's schools. Time, 135, 28-31.

 A non periodical (such as a book, report,

et c)
Author, A. A. (Year of Publication). Title of
work. Location: Publisher.
Ex Calfee, R. C., & Valencia, R. R. (1991). APA
guide to preparing manuscripts for journal
publication. Washington,DC: American
Psychological Association.

 A government publication
National Institute of Mental Health. (1990).

Clinical training in serious mental illness

Washington, DC: U.S. Government Printing
Office.

 Part of a non-periodical (such as a book

chapter or an article in a collection)

Author, A. A., & Author, B. B. (Year of
Publication). Title of chapter. In A. Editor & B.
Editor (Eds.), Title of book (pages of chapter).
Location: Publisher.
Ex-O'Neil, J. M., & Egan, J. (1992). Men's
and women's gender role journeys: Metaphor
for healing, transition, and transformation. In
B. R. Wainrib (Ed.), Gender issues across the
life cycle (pp. 107-123). New York: Springer.

Basic Forms for Electronic Sources

A web page
Author, A. A., & Author, B. B. (Date of

Publication or Revision). Title of full work

[online]. Retrieved month, day, year, from
source Web site: URL.

 Chou, L., McClintock, R., Moretti, F. & Nix, D.

H. (1993.) Technology and education: New

wine in new bottles:Choosing pasts and
imagining educational futures. Retrieved
August 24, 2000, from Columbia University,
Institute for Learning Technologies Web site:
http://www.ilt.columbia.edu/publications/papers/
newwine1.html.

 An online journal or magazine

Author, A. A., & Author, B. B. (Date of

Publication). Title of article. Title of periodical,

Retrieved month, day, year, from URL..

 Frederickson, B. L. (2000, March 7).

Cultivating positive emotions to optimize

health and well-being. Prevention &
Treatment, 3 Article. Retrieved November 20,
2000, from
http://journals.apa.org/prevention/volume3/pr
e0030001a.html