Lecture 4b

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Lecture 4b

• Research Design

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Research Design Definition

• A research design is a framework or blueprint for
  conducting the business research project. It
  details the procedures necessary for obtaining
  the information needed to structure or solve
  business research problems.

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Components of a Research Design

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

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A Classification of Business Research Designs
Research Design
Conclusive Research Design
Exploratory Research Design
Descriptive Research
Causal Research
Cross-Sectional Design
Longitudinal Design
Single Cross-Sectional Design
Multiple Cross-Sectional Design
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Exploratory Conclusive Research Differences
Exploratory
Conclusive
Objective Character-istics Findings
/Results Outcome
To provide insights and understanding. Informatio
n needed is defined only loosely. Research
process is flexible and unstructured. Sample is
small and non-representative. Analysis of
primary data is qualitative. Tentative. Genera
lly followed by further exploratory or conclusive
research.
To test specific hypotheses and examine
relationships. Information needed is clearly
defined. Research process is formal and
structured. Sample is large and representative.
Data analysis is quantitative. Conclusive. Fi
ndings used as input into decision making.
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A Comparison of Basic Research Designs
Exploratory
Descriptive
Causal
Discovery of ideas and insights Flexible,
versatile Often the front end of total
research design Expert surveys Pilot
surveys Secondary data Qualitative research
Describe market characteristics or
functions Marked by the prior formulation of
specific hypotheses Preplanned and structured
design Secondary data Surveys Panels Observation
and other data
Determine cause and effect relationships Manipula
tion of one or more independent
variables Control of other mediating
variables Experiments
Objective Characteristics Methods
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Uses of Exploratory Research

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

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Methods of Exploratory Research

• Survey of experts
• Pilot surveys
• Secondary data analyzed in a qualitative way
• Qualitative research

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Use of Descriptive Research

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

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Methods of Descriptive Research

• Secondary data analyzed in a quantitative as
  opposed to a qualitative manner
• Surveys
• Panels
• Observational and other data

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Cross-sectional Designs

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

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Consumption of Various Soft Drinksby Various Age
Cohorts
Percentage consuming on a typical day
Age
1960
1969
1979
1950
8-19 20-29 30-39 40-49 50
52.9 45.2 33.9 23.2 18.1
73.2 76.0 67.7 58.6 50.0 C2
81.0 75.8 71.4 67.8 51.9 C3
62.6 60.7 46.6 40.8 28.8 C1
C8 C7 C6 C5 C4
C1 cohort born prior to 1900 C2 cohort born
1901-10 C3 cohort born 1911-20 C4 cohort born
1921-30
C5 cohort born 1931-40 C6 cohort born
1940-49 C7 cohort born 1950-59 C8 cohort born
1960-69
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Longitudinal Designs

• A fixed sample (or samples) of population
  elements is measured repeatedly on the same
  variables
• A longitudinal design differs from a
  cross-sectional design in that the sample or
  samples remain the same over time

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Relative Advantages and Disadvantages of
Longitudinal and Cross-Sectional Designs
Evaluation Criteria
Cross-Sectional Design
Longitudinal Design
Detecting Change Large amount of data
collection Accuracy Representative
Sampling Response bias
- - -
- -
Note A indicates a relative advantage over
the other design, whereas a - indicates a
relative disadvantage.
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Cross-Sectional Data May Not Show Change
Brand Purchased Time Period
Period 1 Period 2 Survey Survey
Brand A 200 200 Brand B 300
300 Brand C 500 500 Total
1000 1000
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Longitudinal Data May ShowSubstantial Change
Brand Purchased in Period 1
Brand Purchased in Period 2
Brand A Brand B Brand C Total
Brand A Brand B Brand C Total
100 25 75 200
50 100 150 300
50 175 275 500
200 300 500 1000
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Uses of Casual Research

• To understand which variables are the cause
  (independent variables) and which variables are
  the effect (dependent variables) of a phenomenon
• To determine the nature of the relationship
  between the causal variables and the effect to be
  predicted
• METHOD Experiments

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Potential Sources of Error in Research Designs
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Errors in Business Research

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

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Errors in Business Research

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

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Errors in Business Research

• c) Population definition error the variation
  between the actual population relevant to the
  problem at hand and the pop. as defined by the
  researcher (e.g., how to define a population of
  affluent households?)
• a) income of 50K or more?
• b) the top 20 of households as measured by
  income?
• c) with net worth over 250,000?

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Errors in Business Research

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

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Errors in Business Research

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

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Errors in Business Research

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

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Citicorp Banks on Exploratory, Descriptive,and
Causal Research
Business Research at Citicorp is typical in that
it is used to measure consumer awareness of
products, monitor their satisfaction and
attitudes associated with the product, track
product usage and diagnose problems as they
occur. To accomplish these tasks Citicorp makes
extensive use of exploratory, descriptive, and
causal research. Often it is advantageous to
offer special financial packages to specific
groups of customers. In this case, a financial
package is being designed for senior citizens.
The following seven-step process was taken by
business research to help in the design.
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Citicorp Banks on Exploratory, Descriptive,and
Causal Research
1) A taskforce was created to better define the
market parameters to include all the needs of the
many Citicorp branches. A final decision was
made to include Americans 55 years of age or
older, retired, and in the upper half of the
financial strata of that market.
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Citicorp Banks on Exploratory, Descriptive,and
Causal Research
2) Exploratory research in the form of secondary
data analysis of the mature or older market was
then performed and a study of competitive
products was conducted. Exploratory qualitative
research involving focus groups was also carried
out in order to determine the needs and desires
of the market and the level of satisfaction with
the current products.
In the case of senior citizens, a great deal of
diversity was found in the market. This was
determined to be due to such factors as
affluence, relative age, and the absence or
presence of a spouse.
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Citicorp Banks on Exploratory, Descriptive,and
Causal Research
3) The next stage of research was brainstorming.
This involved the formation of many different
financial packages aimed at the target market.
In this case, a total of 10 ideas were generated.
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Citicorp Banks on Exploratory, Descriptive,and
Causal Research
4) The feasibility of the 10 ideas generated in
step 3 was then tested. The ideas were tested on
the basis of whether they were possible in
relation to the business. The following list of
questions was used as a series of hurdles that
the ideas had to pass to continue on to the next
step. Can the idea be explained in a manner
that the target market will easily
understand? Does the idea fit into the overall
strategy of Citicorp?
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Citicorp Banks on Exploratory, Descriptive,and
Causal Research

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

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Citicorp Banks on Exploratory, Descriptive,and
Causal Research
5) A creative work-plan was then generated. This
plan was to emphasize the competitive advantage
of the proposed product as well as better
delineate the specific features of the
product. 6) The previous exploratory research
was now followed up with descriptive research in
the form of mall intercept surveys of people in
the target market range. The survey showed that
the list of special features was too long and it
was decided to drop the features more commonly
offered by competitors.
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Citicorp Banks on Exploratory, Descriptive,and
Causal Research
7) Finally, the product was test marketed in six
of the Citicorp branches within the target
market. Test marketing is a form of causal
research. Given successful test marketing
results, the product is introduced nationally.
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Business Research Proposal

• Executive Summary
• Background
• Problem Definition/Objectives of the Research
• Approach to the Problem
• Research Design
• Fieldwork/Data Collection
• Data Analysis
• Reporting
• Cost and Time
• Appendices

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The Greenfield of Online Research
Greenfield Online Research Center, Inc.
(http//www.greenfieldonline.com), based in
Westport, Connecticut, is a subsidiary of the
Greenfield Consulting Group. The Online Research
Center conducts focus groups, surveys, and polls
over the Internet. The company has built up a
panel of close to 200,000 Internet users, from
which it draws survey samples. The samples may be
used for descriptive research designs like single
or multiple cross-sectional designs, as well as
longitudinal designs. Causal designs can also be
implemented. Respondents may also be chosen from
the registered Internet users.
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The Greenfield of Online Research
Internet users wishing to take part in surveys
and other projects begin by registering online at
the companys Web site. The registration consists
of a sign-up survey that asks for e-mail
address, type of computer used, personal
interests and information about the respondents
household. Once an Internet user is registered,
Greenfield Online matches the user with research
studies that are well-suited to his or her
interests. Incentives to take part in focus
groups or special surveys are offered by the
companies whose products or services are being
researched. This incentive is cash or valuable
prizes. Incentives are also offered to Internet
users to encourage them to register with
Greenfields Internet panel. New registrants
automatically qualify for prizes that are awarded
in monthly drawings.