Introduction to Business

Research

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 Business Research
Defined

Business research is defined as the systematic

and objective process of generating information
for aid in making business decisions.
– Including financial research, operational
research, Marketing research

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 Business Research
• Research information is neither intuitive nor
haphazardly gathered.
• Literally, research (re-search) -“search again”
• Business research must be objective
• Detached and impersonal rather than biased
• It facilitates the managerial decision process
for all aspects of a business.

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 I don’t know
Information if we
should
Reduces offer on-site
child care?
Uncertainty

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“It ain’t the things we don’t know
that gets us in trouble. It’s the
things we know that ain’t so.”
~Artemus Ward

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Business Research Types

Basic research
Applied research

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 Basic Research
• Attempts to expand the limits of knowledge.
• Not directly involved in the solution to a
pragmatic problem.

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 Basic Research Example
• Is executive success correlated with high
need for achievement?
• Are members of highly cohesive work groups
more satisfied than members of less
cohesive work groups?
• Do consumers experience cognitive
dissonance in low-involvement situations?

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"The secret of success is to know
something nobody else knows. "
~Aristotle Onassis

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

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 Applied Research
Examples
• Should McDonalds add Italian pasta dinners
to its menu?
• Business research told McDonald’s it should
not?
• Should Procter & Gamble add a high-priced
home teeth bleaching kit to its product line?
• Research showed Crest Whitestrips would
sell well at a retail price of $44

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 Scientific Method
• The analysis and interpretation of empirical
evidence (facts from observation or
experimentation) to confirm or disprove prior
conceptions.

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The Decision-making Process Associated with
the Development and Implementation of a
Strategy

• Identifying problems and opportunities

• Diagnosis and assessment
• Selecting and implementing a course of
action
• Evaluating the course of action

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 Evaluation Research
• Evaluation research is the formal, objective
measurement and appraisal of the extent to
which a given activity, project, or program has
achieved its objectives.

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 Performance-monitoring
Research
• Research that regularly provides feedback for
evaluation and control
• Indicates things are or are not going as
planned
• Research may be required to explain why
something “went wrong”

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

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 Determining When to
Conduct Business Research
Availability of Data Benefits
Time Constraints Nature of the Decision vs. Costs
Is the infor- Does the value
Is sufficient time Is the decision Conducting
Yes mation already Yes Yes of the research Yes
available before of considerable
a managerial
on hand
strategic
information Business
inadequate exceed the cost
decision
for making
or tactical
of conducting Research
must be made? importance?
the decision? research?

No No No No

Do Not Conduct Business Research

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

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 Value Should Exceed
Estimated Costs
Costs
Value • Research
expenditures
• Decreased
• Delay of business
certainty
decision and
• Increased
possible disclosure
likelihood of a
of information to
correct decision
rivals
• Improved business
• Possible erroneous
performance and
research results
resulting higher
profits

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 Major Topics for Research in
Business

• General Business Conditions and Corporate

Research
• Financial and Accounting Research
• Management and Organizational Behavior
Research
• Sales and Marketing Research
• Information Systems Research
• Corporate Responsibility Research

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 Cross-functional Teams
• Cross-functional teams are composed of
individuals from various organizational
departments such as engineering,
production, finance, and marketing who share
a common purpose.

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 Business Research in the 21st
Century

• Increased globalization
• Growth of the Internet and other information
technologies

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

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

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 The Internet
Is Transforming Society

• Time is collapsing.
• Distance is no longer an obstacle.
• Crossing oceans is only a mouse click away.
• People are connected 24 hours a day, seven
days a week.
• "Instantaneous" has a new meaning.

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

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What is Marketing
Research?

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 Redefining Marketing
Research
• The American Marketing Association (AMA)
redefined Marketing Research as:

The function which links the consumer, the

customer, and public to the marketer
through INFORMATION

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Redefining Marketing Research
Used to identify and
define market
opportunities and
problems
Generate, refine, and
evaluate marketing
performance
Monitor marketing
performance

Improve understanding
of marketing as a
process
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Definition of Marketing Research
Marketing research is the systematic and objective

▪ identification
▪ collection
▪ analysis
▪ dissemination
▪ and use of information
for the purpose of improving decision making related
to the
▪ identification and
▪ solution of problems and opportunities
in marketing.
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 Market Research

• Specifies the information necessary to address

these issues
• Manages and implements the data collection
process
• Analyzes the results
• Communicates the findings and their
implications

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 Classification of Marketing
Research
Problem Identification Research
• Research undertaken to help identify problems which are
not necessarily apparent on the surface and yet exist or
are likely to arise in the future. Examples: market
potential, market share, image, market characteristics,
sales analysis, forecasting, and trends research.

Problem Solving Research

• Research undertaken to help solve specific marketing
problems. Examples: segmentation, product, pricing,
promotion, and distribution research.

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 A Classification of Marketing Research

Marketing Research

Problem Problem Solving

Identification Research Research

Market Potential Research

Market Share Research
Market Characteristics Research
Sales Analysis Research
Forecasting Research
Business Trends Research
Segmentation Research
Product Research
Promotion Research
Distribution Research

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 Problem Solving Research
SEGMENTATION RESEARCH

▪ Determine the basis of segmentation

▪ Establish market potential and
responsiveness for various PRODUCT RESEARCH
segments ▪ Test concept
▪ Select target markets ▪ Determine optimal product design
▪ Create lifestyle profiles: ▪ Package tests
demography, media, and
product image characteristics ▪ Product modification
▪ Brand positioning and
repositioning
▪ Test marketing
▪ Control score tests

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 Problem Solving Research
PROMOTIONAL RESEARCH
0.00% APR ▪ Optimal promotional budget
▪ Sales promotion relationship
▪ Optimal promotional mix
▪ Copy decisions
▪ Media decisions
▪ Creative advertising testing
PRICING RESEARCH
▪ Evaluation of advertising effectiveness
▪ Pricing policies
▪ Claim substantiation
▪ Importance of price in brand selection
▪ Product line pricing
▪ Price elasticity of demand
▪ Initiating and responding to price changes
$ALE
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 Problem Solving Research
DISTRIBUTION RESEARCH

Determine…
▪ Types of distribution
▪ Attitudes of channel members
▪ Intensity of wholesale & resale coverage
▪ Channel margins
▪ Location of retail and wholesale outlets

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 Research Process
• Step 1: Problem Definition
• Step 2: Development of an Approach to the
Problem
• Step 3: Research Design Formulation
• Step 4: Fieldwork or Data Collection
• Step 5: Data Preparation and Analysis
• Step 6: Report Preparation and Presentation

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The Role of Marketing Research
Customer Groups
• Consumers
• Employees
• Shareholders
• Suppliers Uncontrollable
Controllable Environmental
Marketing Factors
Variables
Marketing •Economy
•Product
Research •Technology
•Pricing
•Laws &
•Promotion Regulations
•Distribution •Social & Cultural
Marketing Factors
Assessing Providing
Information Information Decision •Political Factors
Needs Making

Marketing Managers
• Market Segmentation
• Target Market Selection
• Marketing Programs
• Performance & Control
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 Marketing Research Suppliers &
Services
RESEARCH
INTERNAL SUPPLIERS EXTERNAL

FULL SERVICE LIMITED SERVICE

Field Branded
Syndicate Internet Products
Services
Services Services and Services

Standardized Customized Coding and

Services Services Data Entry Data
Services Analytical Analysis
Services Services
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