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h   Give a note on hypothesis is formation and testing?

  A hypothesis is an assumption about relationships between variables. It is a tentative

explanation of the research problem or a guess about the research outcome. Before starting the
research, the researcher has a rather general, diffused, even confused notion of the problem. It
may take a long time for the researcher to say what questions he had been seeking answers to.
Hence, an adequate statement about the research problem is very important. What is a good
problem statement? It is an interrogative statement that asks what relationship exists between
two or more variables. It then further asks questions like: Is A related to B or not? How are A
and B related to C? Is A related to B under conditions X and Y? Proposing a statement pertaining
to a relationship between A and B is called a hypothesis.

According to Theodorson and Theodorson, ³a hypothesis is a tentative statement asserting a

relationship between certain facts´. Kerlinger describes it as ³a conjectural statement of the
relationship between two or more variables´. Black and Champion have described it as ³a
tentative statement about something, the validity of which is usually unknown´. This statement is
intended to be tested empirically and is either verified or rejected. If the statement is not
sufficiently established, it is not considered a scientific law. In other words, a hypothesis carries
clear implications for testing the stated relationship, i.e., it contains variables that are measurable
and specify how they are related. A statement that lacks variables, or that does not explain how
the variables are related to each other is no hypothesis in a scientific sense.

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To test a hypothesis means to tell (on the basis of the data the researcher has collected) whether
or not the hypothesis seems to be valid. In hypothesis testing, the main question is whether or not
to accept the null hypothesis. The procedure for hypothesis testing refers to all those steps that
we undertake for making a choice between the two actions i.e., rejection and acceptance of a null
hypothesis. The various steps involved in hypothesis testing are stated below:

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 : The step consists in making a formal statement of the null
hypothesis (Ho) and also of the alternative hypothesis (Ha). This means that the hypothesis
should be clearly stated, considering the nature of the research problem. For instance, if Mr.
Mohan of the Civil Engineering Department wants to test the load bearing capacity of an old
bridge which must be more than 10 tons, in that case he can state his hypotheses as under:

Alternative hypothesis Ha: µ >10 tons

Take another example. The average score in an aptitude test administered at the national level is
80. To evaluate a state¶s education system, the average score of 100 of the state¶s students
selected on a random basis was 75. The state wants to know if there is a significant difference
between the local scores and the national scores. In such a situation the hypotheses may be stated
as under:

Alternative hypothesis Ha: µ  80

The formulation of hypotheses is an important step which must be accomplished with due care,
in accordance with the object and nature of the problem under consideration. It also indicates
whether we should use a one-tailed test or a two-tailed test. If Ha is of the type greater than, we
use a one-tailed test, but when Ha is of the type ³whether greater or smaller´, then we use a two-
tailed test.

        : The hypotheses are tested on a pre-determined level of
significance and as such the same should be specified. Generally, in practice, either 5% level or
1% level is adopted for the purpose. The factors that affect the level of significance are:

d) Whether the hypothesis is directional or non-directional (A directional hypothesis is one

which predicts the direction of the difference between, say, means). In brief, the level of
significance must be adequate in the context of the purpose and nature of enquiry.

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"    : After deciding the level of significance, the next step in
hypothesis testing is to determine the appropriate sampling distribution.The rules for selecting
the correct distribution are similar to those which we have stated earlier in the context of
estimation.

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  : Another step is to select a
random sample(s) and compute an appropriate value from the sample data concerning the test
statistic, utilizing the relevant distribution. In other words, draw a sample to furnish empirical
data.

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"": One has then to calculate the probability that the sample
result would diverge as widely as it has from expectations, if the null hypothesis were in fact
true.

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"": Yet another step consists in comparing the probability thus
calculated with the specified value for Į, the significance level. If the calculated probability is
equal to smaller than the value in case of one tailed test (and Į/2 in case of two-tailed test), then
reject the null hypothesis (i.e. accept the alternative hypothesis), but if the probability is greater,
then accept the null hypothesis. In case we reject H0 we run a risk of (at most level of
significance) committing an error of type I, but if we accept H0, then we run some risk of
committing error type II.

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Hypothesis testing determines the validity of the assumption (technically described as null
hypothesis) with a view to choosing between the conflicting hypotheses about the value of the
population hypotheses and about the value of the population parameter. Hypothesis testing helps
to determine on the basis of sample data, whether a hypothesis about the population is likely to
be true or false. Statisticians have developed several tests of hypotheses (also known as tests of
significance) which can be classified as:

b) Non parametric tests or distribution-free tests of the hypotheses.

Parametric tests usually assume certain properties of the parent population from which we draw
samples. Assumptions like observations come from a normal population, sample size is large,
assumptions about the population parameters like mean, variants, etc. must hold good before
parametric tests can be used. However, there are situations when the researcher cannot or does
not want to make assumptions. In such situations we use statistical methods for testing
hypotheses which are called non-parametric tests, because such tests do not depend on any
assumption about the parameters of parent population. Besides, most non-parametric tests
assume only nominal or original data, whereas parametric tests require measurement equivalent
to at least an interval scale. As a result, a non-parametric test needs more observation than a
parametric test to achieve the same size of Type I and Type II error.

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The important parametric tests are:

1) z-test
2) t-test

3) x2-test

4) f-test

All these tests are based on the assumption of normality, i.e., the source of data is considered to
be normally distributed. In some cases the population may not be normally distributed, yet the
test will be applicable on account of the fact that we mostly deal with samples and the sampling
distributions closely approach normal distributions.

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Based on the objective of the research, marketing research can be grouped into three major
categories: programmatic, selective or evaluative.

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is performed to develop marketing options through market
segmentation, market opportunity analysis, or consumer attitude and product usage studies.

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is done to test different decision alternatives such as new product concept
testing, advertising copy testing, pre-test marketing, and test marketing.

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is carried out to evaluate performance of programs, including tracking
advertising recall, corporate and brand image studies, and measuring customer satisfaction with
the quality of the product and service.

Marketing research has many different applications and covers different areas such as the
following -

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± This refers to research to determine the structure for a given market (e.g.
the two wheeler market), which would include gathering information on the number of players in
the market, market shares of the different players, growth rate of the market, latest trends and
developments in the market, market feasibility or potential for new products launched, etc.

2. )
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± This includes testing of new products through methods such as test
marketing (introducing a new product in one or two select markets and evaluating the response
in those markets), and concept testing (testing consumer reactions to a description of a product
concept, rather than the actual product); testing of alternative packaging concepts (e.g. iced tea in
cans vs. tetra packs), brand name testing, product attribute/feature testing (e.g testing different
combinations of product features among consumers, such as level of sweetness and level of fizz
in an iced tea drink) and assessing consumer perceptions of a product¶s strengths and
weaknesses. In addition, product research also includes research on services, since service
industries are also users of marketing research.
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± This refers to research to determine the pricing strategy for both new and
existing products, research on the price elasticity of demand (i.e., how sensitive is demand to
variations in price) and competitors¶ pricing strategy analyses.

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± This type of research includes logistics, or the physical aspects of
distribution, such as identifying the least cost locations of warehouses, the size and number of
locations, and analyzing the cost of alternative methods of transportation, so as to deliver the
product at least cost to the consumer. It also includes analyses of the effectiveness of different
distribution channels and of competitor strategies with reference to distribution margins and
incentives.

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, This refers to research on the different elements of the promotion mix,
i.e., advertising, sales promotion, personal selling and publicity. The main areas of advertising
research are message/copy testing and media research. Research on personal selling includes
sales force effectiveness studies, while sales promotion research includes testing different
techniques of sales promotion, the timings of the sales promotion and the size of the incentives.

6. &  

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, This type of research includes gathering information on consumer
they buy. It may be done for both existing as well as for new products.

It must be emphasized that marketing research is need driven and that all the above mentioned
applications need not be carried out at the same time Which of the types of research described
above would be carried out would depend on the specific problem or opportunity that arises at
any given time.

h   What are the needs and characteristics of good research design?

 Highlights the merits and demerits of primary data collection methods?

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A research design is a logical and systematic plan prepared for directing a research study. It
specifies the objectives of the study, the methodology and techniques to be adopted for achieving
the objectives. It constitutes the blue print for the collection, measurement and analysis of data. It
is the plan, structure and strategy of investigation, conceived so as to obtain answers to research
questions. The plan is the overall scheme or program of research. A research design is the
program that guides the investigator in the process of collecting, analyzing and interpreting
observations. It provides a systematic plan of procedure for the researcher to follow.

According to Selltiz, Jahoda and Destsch and Cook, ³A research design is the arrangement of
conditions for collection and analysis of data in a manner that aims to combine relevance to the
research purpose with economy in procedure.´
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1) In many a research inquiry, the researcher has no idea as to how accurate the results of his
study ought to be in order to be useful. In such a case, the researcher has to determine how much
inaccuracy may be tolerated. In quite a few cases, he/she may be in a position to know how much
inaccuracy his/her method of research will produce. In either case he/she should design his/her
research if he/she wants to assure himself/herself of useful results.

2) In many research projects, the time consumed in trying to ascertain what the data mean after
they have been collected is much greater than the time taken to design a research which yields
data whose meaning is known as they are collected.

3) The idealized design is concerned with specifying the optimum research procedure that could
be followed, where there are no practical restrictions.

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4) It should be a tentative plan which undergoes modifications as circumstances demand, when

the study progresses, new aspects, new conditions and new relationships come to light and
insight into the study deepens.

5) It should be geared to the availability of data and the cooperation of the informants.

6) It should also be kept within manageable limits.

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Primary sources are original sources from which the researcher directly collects data that have
not been previously collected e.g.., collection of data directly by the researcher on brand
awareness, brand preference, brand loyalty and other aspects of consumer behaviour from a
sample of consumers by interviewing them,. Primary data are first hand information collected
through various methods such as observation, interviewing, mailing etc.

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 It is original source of data

 It is possible to capture the changes occurring in the course of time.
 It flexible to the advantage of researcher.
 Extensive research study is based of primary data
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1. Primary data is expensive to obtain

2. It is time consuming
3. It requires extensive research personnel who are skilled.
4. It is difficult to administer.

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Primary data are directly collected by the researcher from their original sources. In this
case, the researcher can collect the required date precisely according to his research
needs, he can collect them when he wants them and in the form he needs them. But the
collection of primary data is costly and time consuming. Yet, for several types of social
science research required data are not available from secondary sources and they have to
be directly gathered from the primary sources.

In such cases where the available data are inappropriate, inadequate or obsolete, primary
data have to be gathered. They include: socio economic surveys, social anthropological
studies of rural communities and tribal communities, sociological studies of social
problems and social institutions. Marketing research, leadership studies, opinion polls,
awareness practice (KAP) studies, farm managements studies, business management
studies etc.

There are various methods of data collection. A Method¶ is different from a Tool¶ while
a method refers to the way or mode of gathering data, a tool is an instruments used for the
method. For example, a schedule is used for interviewing. The important methods are

(a) observation, (b) interviewing, (c) mail survey, (d) experimentation,

(e) simulation and (f) projective technique.

h ! Discuss the different types of direct response attitude scales with examples?

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There are many ways to present a respondent with a continuum of numbered categories that
represent the range of possible attitude judgments. They can be generally classified as single
item scales and multiple item scales.

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Single item scales are those that have only one item to measure a construct. Under the single
item scales, the itemized category scale is the most widely used by marketing researchers. In
some situations, comparative scales, rank order scales, or constant-sum scales have advantages.

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There are four categories from which respondents can choose to indicate their overall level of
satisfaction with their present health insurance plan.

± Very satisfied

± Quite satisfied

± Somewhat satisfied

· All categories are labeled.

· The respondent is forced to make a choice; there is no provision for neutral opinion or don¶t
know¶ response.

· There are more favorable than unfavorable categories, so the scale is unbalanced.

· There is no explicit comparison of respondents¶ present plan with other health insurance plans.

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Another version of the preceding scale would label the categories ³excellent´, ³very good´,
³fair´ and ³poor´, thereby eliminating the implicit comparisons. The problem with a comparative
scale is that the reference point is unclear and different respondents may use different reference
points or standards.

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Rank order scales require the respondent to arrange a set of objects with regard to a common
criterion: advertisements in terms of interest, product features in terms of importance, or new-
product concepts with regard to willingness to buy in the future. The result is an ordinal scale
with the inherent limitations of weak scale properties. Ranking is widely used in surveys,
however, because it corresponds to the choice process occurring in a shopping environment,
where a buyer makes a direct comparison among competing alternatives (brands, flavors, product
variations, and so on).

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When the number of objects or characteristics that are to be rated or ranked is very large, it
becomes rather tedious for the respondents to rank order or to do pair-wise comparisons. If the
respondent is forced to do rank ordering or a pair-wise comparison, a number of problems and
biases creep into the study. To deal with such situations, the Q-sort scaling process is used. In
Q-sort scaling, the respondents are asked to sort the various characteristics or objects that are
being compared into various groups, such that the distribution of the number of objects or
characteristics in each group follows a normal distribution. For example, let us take the case of a
toy manufacturing company such as Toys R us¶ developing a new product. After a marathon
brain storming session, the new product team has come up with a hundred different products,
each with minor variations in features, and wants to test and find out from consumers which
feature combination is most preferred and will generate maximum sales. The best scaling
procedure that can be used in this context is Q-sort scaling.

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Constant sum scales require respondents to allocate a fixed number of rating points (usually
hundred) among several objects, to reflect the relative preference of each object. It is widely used
to measure the relative importance of attributes.

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In the pictorial scales, the various categories of the scale are depicted pictorially. The
respondents are shown a concept, or read an attitudinal statement and are asked to indicate their
degree of agreement or interest, by indicating the corresponding position on the pictorial scale.

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The brands to be rated are presented two at a time, so each brand in the category is compared
once to every other brand. In each pair, the respondent is asked to divide ten points among the
brands on the basis of how much they like one compared to the other. A score is then totaled for
each brand. Although, this scale performs well on the criteria, it is cumbersome to administrate.
Another possible limitation is that the frame of reference is always the other brands in the set
being tested. These brands may change over time.

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Attitudes towards complex objects such as health plans, automobiles, credit instruments, or
transportation modes have many facets. Thus, it is often unrealistic to attempt to capture the full
picture with one overall attitude-scale question. For example, the public appears to support the
general idea of income tax reforms, but opposes the elimination of the most popular tax
loopholes. The most frequently employed of these methods are the Likert, Thurstone and
semantic-differential scales.

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The Likert scale requires a respondent to indicate a degree of agreement or disagreement with a
variety of statements related to the attitudes or objects. They are also called summated scales,
because the scores on the individual terms are summed up to produce a total score for the
respondent. A Likert scale usually consists of two parts, the item part and the evaluative part.
The item part is essentially a statement about a certain product, event, or attitude. The evaluative
part is a list of response categories ranking from ³strongly agree´ to ³strongly disagree´. An
important assumption of this scaling method is that each of the items (statements) measures some
aspects of a single common factor, otherwise, the items cannot be legitimately summed up. In
other words, the resulting scale is one-dimensional.

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The procedure of Thurstone scale is also known as the method of equal appearing intervals, since
the objective is to obtain a one-dimensional scale with interval properties. The first step is to
develop a large number of statements or adjectives, reflecting all degrees of favorableness
toward the attitude objects. Then a group of judges is given this set of items and asked to classify
them according to their favorableness or unfavorableness.

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Semantic differential scales are used widely to describe the set of beliefs that comprise a
person¶s image of an organization or brand. The procedure is also insightful for comparing the
images of competing brands, stores, or services. Respondents are asked to rate each attitude
object in turn, on a number of five or seven point rating scales, bounded at each end by polar