BRM Module 3

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Module 3

Business Research Designs

Topics to be covered
Business Research Design : Exploratory, Descriptive & Causal Research Exploratory Research: Meaning, suitability, collection, hypothesis formulation Descriptive Research: Meaning, Types of Descriptive studies, data collection methods Causal Research: Meaning, various types of experimental designs, types of errors affecting research design

Business Research Methods-Research Design

Business Research Design


A research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the information needed to structure and/or solve marketing research problems. A research design lays the foundation for conducting the project. A good research design will ensure that the marketing research project is conducted effectively and efficiently.
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A research design involves the following components:


Define the information needed. Design the exploratory, descriptive and/or causal phases of the researches. 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 sampling size. Develop a plan of data analysis.

Business Research Methods-Research Design

Uncertainty Influences The Type Of Research

CAUSAL, COMPARATIVE, COMPLETELY CERTAIN ASSOCIATIONAL, OR DESCRIPTIVE


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ABSOLUTE AMBIGUITY

EXPLORATORY

Classification of Marketing Research Designs


Research Design

Exploratory Research Design

Conclusive Research Design

Descriptive Research CrossSectional Design 6

Causal Research

Longitudinal Design

Business Research Methods-Research Design

Comparison of Basic Research Designs


Paramete rs Objectiv e Exploratory
Discover ideas and insights. Flexible, Versatile Often the front end of total research design Uses nonprobability sampling. No preplanned analysis techniques. Uses method of expert survey, Secondary data, Case Studies,

Descriptive
Describe market characteristics or functions. Marked by the prior formulation of specific hypothesis. Preplanned and structured design. Probability sampling design. Data collected through Surveys, Panels and Secondary data

Causal
Determine cause and effect relationships. Manipulation of one or more independent variables. Control of other mediating variables. Well-defined sampling plan and data is collected through experiments under controlled or natural conditions.

Characteristi cs

Methods

Exploratory Research
Say it backwards: research that explores Initial research conducted to explore (clarify and define) the nature of a problem Does not provide conclusive evidence so subsequent research is expected Helps to diagnose a situation Screen alternatives Discover Design Business Research Methods-Researchnew ideas

Exploratory Research: Pilot Study

The Effects of Assignment Timelines on Student Procrastination 22 individuals took part in the study; 7 turned the assignment in early, 15 turned in the assignment on or after the due date. The findings using a Chi Square were significant (p=.033) indicating procrastination is 16 indicative of student behavior.
14 12 10

8 6 4 2 0 Early Due date

Business Research Methods-Research Design

Exploratory Research
The major emphasis in exploratory research is on converting broad, vague problem statements into small, precise subproblem statements, which is done in order to formulate specific hypothesis.

Characteristics of Exploratory Research:


Exploratory research is flexible and very versatile. For data collection, structured forms are not used. Experimentation is not a requirement. Cost incurred to conduct study is low. This type of research allows very wide exploration of views. Research is interactive in nature and also it is open ended.

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Purpose of Exploratory Research


Formulate a problem or define a problem more precisely. Identify alternative courses of action. Develop hypothesis. Isolate key variables and relationships for further examination. Gain insights for developing an approach to the problem. Establish priorities for further research. Appropriate to any problem about which very little is known. The research is the foundation for any future study.

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Exploratory Research Methods


Literature Search This refers to referring to a literature to develop a new hypothesis. The literature referred are: trade journals, professional journals, market research finding publications, statistical publications, etc. Example: Suppose a problem is Why are sales down? This can quickly be analyzed with the help of published data which should indicate whether the problem is an industry problem or a firm problem. Three possibilities exist to formulate the hypothesis. The companys market share has declined but industrys figures are normal. The industry is declining and hence the companys market share is also declining. The industrys share is going up but the companys share is declining. If we accept the situation that our companys sales are down despite the market showing an upward trend, then we need to analyze the marketing mix variables. Business Research Methods-Research Design 12

Expert Surveys In expert surveys, it is desirable to talk to persons who are well informed in the area being investigated. These people may be company executives or persons outside the organization. Here, no questionnaire is required. The approach adopted in an experience survey should be highly unstructured, so that the respondent can give divergent views. Example :1. A group of housewives may be approached for their choice for a Ready to Eat product. 2. A publisher might want to find out the reason for poor circulation of newspaper introduced recently. He might meet a) Newspaper sellers b) Public reading room c) General Public d) Business community etc.

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Secondary Data Analysis Secondary data refers to literature, published or unpublished, available as a result of studies made by others for their own purposes. A researcher may review the literature with the purpose of framing a hypothesis, or he may review hypothesis already developed for further study by others to see their applicability. The sources of data can be bibliographies available on the topic, journals, magazines, newspapers, reports and books, special catalogues, subject guides, online on the Internet, digital libraries, edatabases maintained by the organization, guides, directories, indexes, Statistical data, Census data and other government publications.

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Case- Study Analysis Analyzing a selected case sometimes gives an insight into the problem which is being researched. Case histories of companies which have undergone a similar situation may be available. These case are well suited to carry out exploratory research. For e.g., Case Study on Mumbai Dabbawalas gives an insight into the problem of Supply Chain. A company implementing the practice of Supply Chain can take useful inputs from the case.

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A Case in Point A company manufacturing electric shavers, known for its brand, wanted to introduce the product in Japan. Before the launch, the company made sure that all the 4Ps are acceptable to customers. When the product was launched, it met with failure. The company wondered what went wrong. Later investigations revealed that Japanese palms were very small and hence the product was not convenient for use. All possible causes were not listed and examined. This shows the importance of listing all factors during an exploratory research.

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Qualitative & Quantitative Research


Qualitative Research An unstructured, exploratory research methodology based on small samples that provides insights and understanding of the problem setting. Quantitative Research A research methodology that seeks to quantify the data and typically applies some form of statistical analysis.

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Qualitative Vs. Quantitative Research


Paramete rs Research Objectiv e Qualitative Research To gain a qualitative understanding of the underlying reasons and motivations Small number of non representative cases Unstructured Non statistical Quantitative To quantify the data and generalize the results from the sample to the population of interest. Large number of representative cases Structured Statistical

Sample Data collectio n Data analysis Outcom e Business Research Methods-Research Design

Develop an initial understanding 18

Recommend a final course of action

Qualitative Research Methods

Depth Interview

Delphi Technique

Focus Group

Projective Technique

Word Association Test


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Completion Technique Expressive Technique

Thematic Apperceptio n Test

Depth Interview An unstructured, direct, personal interview in which a single respondent is probed by a highly skilled interviewer to uncover underlying motivations, beliefs, attitudes and feelings on a topic. The interview may be conducted in a casual and informal manner in which the flow of the conversation determines what questions are to be asked and the order in which they should be asked.

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Depth Interview Techniques: Laddering

In laddering, the line of questioning proceeds from product characteristics to user characteristics. This technique allows the researcher to tap into the consumer's network of meanings. Wide body aircrafts (product characteristic) I can get more work done I accomplish more I feel good about myself (user characteristic) Advertising theme: You will feel good about yourself when flying our airline. You're The Boss.

Depth Interview Techniques: Hidden Issue Questioning

In hidden issue questioning, the focus is not on socially shared values but rather on personal sore spots; not on general lifestyles but on deeply felt personal concerns. fantasies, work lives, and social lives historic, elite, masculine, competitive activities Advertising theme: communicate aggressiveness, high status, and competitive

Delphi Technique This is a process where a group of experts in the field gather together. They may have to reach a consensus on forecasts. In the Delphi approach, the group members are asked to make individual judgments about a particular subject, say sales forecast. These judgments are compiled and returned to the group members, so that they can compare their previous judgment with those of others. Then they are given an opportunity to revise their judgments, especially if it differs from the others. After 5 to 6 rounds of interaction, the group members reach conclusion.

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Focus Group Another widely used technique in exploratory research is the focus group. In a focus group, a small number of individuals are brought together to study and talk about some topic of interest. The discussion is coordinated by a moderator. The group usually is of 8-12 persons. While selecting these persons, care has to be taken to see that they should have a common background and have similar experiences in buying. This is required because there should not be a conflict among the group members on the common issues that are being discussed.

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Projective Techniques These are indirect method of gathering information/ indirect interview and are unstructured and involve indirect form of questioning. 1. Word Association Test This test consists of presenting a series of stimulus words to the respondent, who is asked to answer quickly with the first word that comes to his mind. The respondent, by answering quickly, gives the word that he or she associates most closely with the stimulus word. Eg. 1. Shopping, Location, parking, brand, price, quality 2. What brand of detergent comes to your mind first, when I mention washing of an expensive cloth? Surf, Tide, Ariel. 3. GSSS............. 4. VTU.............. 5. MBA

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Word Association
EXAMPLE

STIMULUS washday fresh pure scrub filth bubbles outing family towels

MRS. M MRS. C everyday ironing flowers clean air water don't; husband does clean this neighborhood dirt bath soap and water shopping holiday squabbles children dirty wash

2. Completion Techniques Sentence completion Here the respondents have to finish a set of incomplete sentences. E.g.. For providing a basis for developing advertising appeal for a brand of cooking oil, the following sentence may be used: People use cooking oil .. Costliest cooking oil .. Most of the new cooking oil A person who shops in Shoppers Stop is .......... When I think of shopping in departmental store, I........ When I think of holidays............... Story Completion A situation is described to a respondent who is asked to complete the story based on his opinion and attitude.

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3. Thematic Apperception Test(TAT) It is used to measure the attitude and perception of the individual. Some picture cards are shown to respondents. The respondent is required to tell the story by looking at the picture. When the subjects start telling the story, the researcher notices the respondents expression, pauses and emotions to draw the inference. 4. Expressive Technique Respondents are presented with a verbal or visual situation and asked to relate the feelings and attitudes of other people to the situation. The techniques are role playing (Respondents are asked to play the role of someone else.) and Third-Person (Respondent is presented with a verbal or visual situation and asked to relate the beliefs and attitudes of a third person.)

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TAT

Inkblot Test

Comparison of Focus Groups, Depth Interviews, and Projective Techniques Criteria


1. Degree of Structure 2. Probing of individual respondents 3. Moderator bias 4. Interpretation bias 5. Uncovering subconscious information 6. Discovering innovative information 7. Obtaining sensitive information 8. Involve unusual behavior or questioning 9. Overall usefulness

Focus Groups
Relatively high Low Relatively medium Relatively low Low High

Depth Interviews
Relatively medium High Relatively high

Projective Techniques
Relatively low Medium Low to high Relatively high High

Relatively medium Medium to high Low High Medium Yes Medium Somewhat useful

Low No Highly useful

To a limited extent Useful

Hypothesis Formulation
Hypothesis is an unproven statement or proposition about a factor or phenomenon that is of interest to the researcher. It may be a tentative statement about relationships between two or more variables as stipulated by the theoretical framework or the analytical model.

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Components of the MARKETING Research Problem Objective/ Theoretic al Framewor k Research Questions

Analytical Model

Hypothesis

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At exploratory stage:
Sometimes, it may not be possible to develop any hypothesis at all, if the situation is being investigated for the first time. This is because no previous data is available. Sometimes, some information may be available and it may be possible to formulate a tentative hypothesis. In other cases, most of the data is available and it may be possible to provide answers to the problem.

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Examples

Sl. No. 1.

Research Purpose What product feature, if stated, will be most effective in the advertisement? What new packaging is to be developed by the company?

Research Question What benefit do people derive from this Ad appeal? What alternatives exist to provide a container for soft drink? What is the nature of customer dissatisfactio n? 35

Hypothesis No hypothesis formulation is possible.

2.

Paper cup is better than any other forms, such as a bottle. Impersonaliza tion is the problem.

3.

How can our insurance service be improved?

Business Research Methods-Research Design

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

Conclusive Research
Provide specific information that aids the decision maker in evaluating alternative courses of action Sound statistical methods & formal research methodologies are used to increase the reliability of the information Data sought tends to be specific & decisive Also more structured & formal than exploratory data

Descriptive Research
Research that describes Describes attitudes, perceptions, characteristics, activities and situations. Some understanding of the nature of the problem Deals with the who, what, where, when, howbut not the why?
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Descriptive Research
Descriptive Research is to describe something usually market characteristics or functions. It can describe the characteristics of a group such as, customers, organizations, markets etc. It provides association between two variables, like income and place of shopping, age and preferences. Inform us about the proportions of high and low income customers in a particular territory Requires a clear specification of Who, what, when, where, why and how of the research.

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Hypothesis Study at the Descriptive Research Stage


Management problem How should a new product be distributed? Research problem Where do customers buy a similar product right now? Hypothesis Upper class buyers use Shoppers Stop and middle class buyers buy from local departmental stores.

What will be the target segment?

What kind of people Senior citizens buy buy our product our products. Young now? and married buy our competitors products.

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Reasons for conducting 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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Descriptive research is marked by a clear statement of the problem, specific hypotheses and detailed information needs. Examples of descriptive research are: 1. Market studies, which describe the size of the market, buying power of the consumers, availability of distributors and consumer profiles. 2. Market share studies, which determine the proportion of total sales received by a company and its competitors. 3. Sales analysis studies, which describe sales by geographic region, product line, type and size of the account.

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Examples Cont.
4. Image studies, which determine consumer perceptions of the firm and its products. 5. Product usage studies, which describe consumption patterns. 6. Distribution studies, which determine traffic flow patterns and the number and location of distributors. 7. Pricing studies, which describe the range and frequency of price changes and probable consumer response to proposed price changes. 8. Advertising studies, which describe media consumption habits and audience profiles for specific television programs and magazines.

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Types of Descriptive Studies


Cross-Sectional Designs A type of research design involving the collection of information from any given sample of population elements only once. Longitudinal Designs A type of research design involving a fixed sample of population elements that is measured repeatedly. The sample remains the same over time, thus providing a series of pictures which, when viewed together, portray a vivid illustration of the situation and the changes that are taking place over time. For e.g.., How did the Indian people rate the character of ministers immediately after CWG games? would be addressed using a cross-sectional design. However, a longitudinal design would be used to address the question, How did the Indian people change their view of ministers character during CWG Games?
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Methods of Data Collection


There are mainly two methods of data collection In Descriptive Research: Survey Method A structured questionnaire given to respondents and designed to elicit specific information. Observation Method The recording of behavioral patterns of people, objects and events in a systematic manner to obtain information about the phenomenon of interest.

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TYPES OF SURVEY
True Survey This involves repeat measurement of the same variables. E.g.. Perception towards frozen peas . Each member of the panel is examined at a different time to arrive at a conclusion on the above subject. Omnibus Survey A sample of elements is being selected and maintained, but the information collected from the member varies. At a certain point of time, the attitude of panel members towards an advertisement may be measured. At some other point of time the same panel member may be questioned about the product performance.

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Classification of Survey Methods


Survey Methods

Telephone Interviewin g

Personal Interviewing

Mail Interviewin g

Electronic Interviewi ng

Tradition al

Comput InerHom Assisted e

Mall Comput Interce erpt Assisted


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Ma il

Mail E- Intern Pan ma et il el

s Research Methods-Research Design

Survey Methods
Traditional Telephone Interviews Phoning a sample of respondents and asking them a series of questions. Computer-Assisted Telephonic Interviewing Uses a computerized questionnaire administered to respondents over the telephone. The interviewer sits in front of a computer terminal and wears a mini headset. When contact is made, the interviewer reads questions posed on the computer screen and records the respondents answers directly into the computer memory bank.

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Personal In-Home Interviews Respondents are interviewed face-to-face in their home. Mall Intercept Personal Interviews Respondents are intercepted while they are shopping in malls and brought to test facilities in the malls. Computer-Assisted Personal Interviewing The respondent sits in front of a computer terminal and answers a questionnaire on the computer screen by using the keyboard or a mouse.

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Mail Interviews Questionnaires are mailed to preselected potential respondents. A typical mail interview package consists of the outgoing envelope, cover letter, questionnaire, return envelope and possibly an incentive. The respondents complete and return the questionnaires. Mail Panels A mail panel consists of a large, nationally representative sample of households that have agreed to participate in periodic mail questionnaires and product tests.

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E-mail Interviews To conduct an e-mail survey, a list of email addresses is obtained. The survey is written within the body of the e-mail message. The e-mails are sent out over the internet. Respondents type the answers to either closed-ended or open-ended questions at designated places, and click on reply. Internet Interviews Internet or Web surveys use hypertext markup language and are posted on a Website. Respondents are asked to go to a particular Web location to complete the survey.

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Classification of Observation Methods


Observation Methods

Personal Observati on

Mechanical Observation

Audit

Content Analysis

Trace Analysis

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Observation Methods
Personal Observation A researcher observes actual behavior as it occurs. The observer does not attempt to control or manipulate the phenomenon being observed. Mechanical Observation Mechanical devices, rather than human observers, record the phenomenon being observed. Devices are: Audiometer Attached to a television set to continually record what channel the set is tuned to. People Meters Attempt to measure not only the channels to which a set is tuned but also who is watching. Turnstiles Record the number of people entering or leaving a building.

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On-site cameras Used by retailers to assess package designs, counter space, floor displays and traffic flow patterns. UPC Allows for mechanized information collection regarding consumer purchases by product category, brand, store type, price and quantity. Eye-tracking monitors Records the gaze movements of the eye. Used to determine how a respondent reads an advertisement and views a TV commercial. Pupilometer Measures changes in the diameter of the pupils of the respondents eye.

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Psycho-galvanometer Measures changes in the electrical resistance of the skin. Voice pitch analysis Measures emotional reactions through changes in the respondents voice. Response latency Time a respondent takes before answering a question. Audit The researcher collects data by examining physical records or performing inventory analysis of inventory of brands, quantities and package sizes in a consumers home or at a retail store.

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Content Analysis Objective, systematic and quantitative description of the manifest content of a communication. The unit of analysis may be words, characters, themes, space and time measures or topics. Trace Analysis Data collection is based on physical traces or evidence of past behavior. E.g.. No. of different fingerprints on a page was used to find out the readership of various advertisements in a magazine.

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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

Causal Research
Causal research is used to obtain evidence of cause and effect relationships. It is appropriate for the following purposes: 1. To understand which variables are the cause (independent variables) and which variables are the effect ( dependent variables) of a phenomenon. 2. To determine the nature of the relationship between the causal variables and the effect to be predicted.

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Causal Research Research that

looks at cause & effect Conducted to identify cause and effect relationships Statistics: Correlations, regression, ttest, ANOVA, etc.

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Causal Causal Research Research


Associational Research Looks for relationships Comparative Comparative Research Research Looks for Looks for differences differences

Designs: Experimental Quasiexperimental Ex post facto Time series Predictive Correlational Comparative Surveys Multivariate Longitudinal
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Business Research Methods-Research Design

Stats: T-test ANOVA Correlation Multiple regression Chi Square Spearman Rho Phi Cramer's V Etc., etc., etc.

Causal Study
In this study the effects of a training program administered with 360 feedback are evaluated using pre- and postobservations of the participants' managerial skills. A pre-test- and post-test control group design was chosen for this field study because it is classified as an experimental designThe control group received no management training. The experimental group received feedback and management trainingThe results of the study indicate partially that training enhanced the effectiveness of the 360 feedback in the development of managerial skills.
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For e.g.. In the context of department store project, a researcher wishes to determine whether the presence and helpfulness of salespeople(causal variable) will influence the sales of housewares (effect variable). A causal design could be formulated in which two groups of otherwise comparable housewares departments of a particular chain are selected. For four weeks, trained salespeople are stationed in one group of housewares departments but not in the other. Sales are monitored for both groups, while controlling for other variables. A comparison of sales for the two groups will reveal the effect of salespeople on housewares sales in department stores.

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Classification of Experimental Designs


Experimental Designs

Preexperimen tal One- Shot Case Study One Group PretestPosttest Static Group

True Experimental PretestPosttest Control Group Posttest-Only Control Group

QuasiExperimen tal

Statistical

Time Series Multiple Time Series

Latin Square Factorial

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Various Types of Errors


Total Error

Random Sampling Error

Non sampling Error Response Error Nonrespons e Error Respondent error Inability Error Unwillingness Error

Researcher Errors

Interviewer Error Respondent Selection Error Questioning Error 64 Recording Error

Surrogate Information Error Measurement Error Population Definition iness Research Methods-Research Design Error Sampling Frame Error

Total error is the variation between the true value in the population of the variable of interest and the observed value obtained in the research project. Random Sampling Error occurs because the particular sample selected is an imperfect representation of the population of interest. Non sampling error can be attributed to sources other than sampling like error in problem definition, approach, scales, questionnaire design, interviewing methods etc. Nonresponse error arises when some of the respondents included in the sample do not respond.

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Response Error arises when respondents give inaccurate answers or their answers are mis-recorded or mis-analyzed. Surrogate Information Error may be defined as the variation between the information needed for the marketing research problem and the information sought by the researcher. Measurement Error may be defined as the variation between the information sought and information generated by the measurement process employed by the researcher. Seeking to measure consumer preferences, the researcher employs a scale that measures perceptions rather than preferences. Population Definition Error may be defined as the variation between the actual population relevant to the problem at hand and the population as defined by the researcher.

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Sampling Frame Error may be defined as the variation between the population defined by the researcher and the population as implied by the sampling frame used. For e.g.. The telephone directory used to generate a list of telephone numbers does not accurately represent the population due to disconnected and new numbers. Data analysis error encompasses errors that occur when raw data from questionnaires are transformed into research findings due improper statistical analysis. Respondent selection error occurs when interviewers select respondents other than those specified by the sampling design.

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Questioning Error denotes errors made in asking questions of the respondents or in not probing when more information is needed. Recording error arises due to errors in hearing, interpreting and recording the answers given by the respondents. Cheating error arises when the interviewer himself fills the answers to a part or all of the interview. Inability Error results from the respondents inability to provide accurate answers due to unfamiliarity, fatigue or boredom. Unwillingness error arises from the respondents unwillingness to provide accurate information because of a desire to provide socially acceptable answers, avoid embarrassment or please the interviewer.

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Deduction and Induction


Deduction The basic concept in deduction is from Many to One or Population to Sample In this type of logic, we are given information about a population, and we deduce the information about a sample or just one unit. Deduction reasoning works from the General to the Specific. It may also be termed as top-down approach. It is analogous to Brand Image wherein conclusions are drawn just by the name of the brand.

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Induction The basic concept of induction is from: One to Many or Sample to Population Induction could also refer to Generalization, from what we observe or know. Induction involves reasoning about the future from the past, but in a broad sense, it involves reaching conclusions about unobserved things on the basis of what is actually observed. Induction starts from Specific observations or set of observations to Generalized Theory or Law. It could be termed as bottom-up approach. It can also be considered as divergent thinking. It is used when nothing or little is known, and we wish to expand our knowledge.

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Deduction Vs. Induction


Inductive research is a model in which theories are developed from specific observations. In deductive research, the specific expectations of a hypothesis are developed on the basis of general principle: we start from existing theory and find its proof. Inductive reasoning is open-ended and exploratory especially in the beginning. Deductive reasoning is specific in nature and is concerned with testing or confirming hypothesis.

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For example, in Chennai, a social researcher observes that in a restaurant people from north India prefer to take tea over coffee. He extrapolates or uses inductive logic to conclude that all north Indians prefer tea over coffee. In deductive logic, a researcher starts from the hypothesis that north Indians prefer tea over coffee, and then starts collecting observations to prove or disprove this hypothesis.

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Variables
A business research study involves study of characteristics of an individual/ item/ unit/ entity etc. These characteristics are represented by variables. A variable changes values for different individual/ item at the same time. E.g.. Income of individuals for the year 2009-2010, prices of stocks on a day or for the same individual/ item at different time. E.g.. Income of an individual, sales of a company. The income of an individual is a quantitative variable, gender is a qualitative variable.

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Categories of Variables
Independent Variable Variable which influences or explains the variation in the other variables, under consideration, in the study. The value of this variable can be decided or controlled by the researcher. For e.g.. If a company increases the number of its branches, it will also increase the business as well as manpower in the company. The number of branches in this study is termed as independent variable.

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Dependent Variable A dependent variable is one which depends on an independent variable defined in a study. For e.g.. Expenditure on R&D could be taken as independent variable , in pharmaceutical firms and sales could be termed as dependent variable. The value of dependent variable is not manipulated or controlled in a research study, it changes due to the change in the independent variable.

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Moderating Variable In a study, involving an independent variable and a dependent variable, a relationship could be established through a variable. However, we may come across a third variable, which is not an independent variable but forms strong contingent effect on the relationship of the independent and dependent variables.

Training (Independent Variable) Willingness to learn (Moderating Variable)

Performance (Dependent Variable)

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Intervening Variables In a study involving independent and dependent variables, there could be a variable/ factor which might affect the dependent variable, but it cannot be directly observed or measured. For e.g.. The sales of a retail store might increase with increasing discounts and a relationship could be established. Suppose, a scheme is introduced that monthly prizes will be given to randomly selected customers, this might increase the sales of a store but it cannot be measured, only its impact can be observed. Thus, monthly prizes scheme is an intervening factor.

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Extraneous Variables Extraneous variable is one that is outside or external to the situation under study, and its impact on dependent variable is beyond the scope of the study. For e.g. the family income of students could be taken as extraneous variable while studying performance of MBA students. The value of extraneous variable may be controlled to neutralize its impact.

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Categories of Extraneous Variable


History Refers to specific events that are external to the experiment but occur at the same time as the experiment.eg. Downfall in sales can not only be due to poor advertisement but also due to economic downturn. Maturation Refers to changes in the test units themselves like the people become older, experienced, tired or bored. Testing Effects Caused by the process of experimentation. Instrumentation Refers to changes in the measuring instrument(questionnaire), observer or the interviewer. Control Variable This variable is held constant in order to assess or clarify the relationship between two other variables.

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