The Business Research Process: An Overview Chapter 3 The Business Research Process: An Overview This chapter provides an overview of the research process and sets the stage for coming chapters.

Learning Objectives Understand that research is decision- and dilemma-centered that the clarified research question is the result of careful exploration and analysis and sets the direction for the research project

Learning Objectives how value assessments and budgeting influence the process for proposing research, and ultimately, research design what is included in research design, data collection, and data analysis which research process problems to avoid

The primary purpose of research is to reduce the level of risk of a business decision This ad from Greenfield Online suggests that well-executed research can save a company from making a costly mistake on new product introductions.

The Business Research Process Exhibit 3-1 The Business Research Process Exhibit 3-1 models the sequence of stages in the research process. It also organizes this chapter and the introduces the remaining chapters in the book. Chapter 5 focuses on Stage 2: Proposing Research. Chapters 6-15 focus on Stage 3: Research Design. Chapter 16 focuses on Stage 4: Data Collection. Chapters 17-20 focus on Stage 5: Data Analysis. Chapter 21 focuses on Stage 6: Reporting.

Stage 1 Clarifying the Research Question A useful way to approach the research process is to state the basic dilemma that prompts the research and then try to develop other questions by progressively breaking down the original question into more specific ones. This process can be thought of as the management-research question hierarchy. The process begins at the most general level with the management dilemma. This is usually a symptom of an actual problem, such as rising costs, declining sales, or a large number of defects. Exhibit 3-2 illustrates the formulation of the research question for MindWriter. A management question is a restatement of the manager’s dilemma in question form. A research question is the hypothesis that best states the objective of the research; the question that focuses the researcher’s attention. An investigative question is the question the researcher must answer to satisfactorily answer the research question. A measurement question is the question asked of the participant or the observations that must be recorded. Management-research question hierarchy Begins with management dilemma

Exhibit 3-2 Management-Research Question Hierarchy The management-research question hierarchy process is designed to move the researcher through various levels of questions, each with a specific function within the overall marketing research process. This multi-step process is illustrated in the slide. An example is provided on the following slide. The role of exploration in this process is depicted in Exhibit 3-4, located on Slide 3-9.

Exhibit 3-5 SalePro’s Hierarchy Declining sales is one of the most common symptoms serving as a stimulus for a research project. SalePro, a large manufacturer of industrial goods, faces this situation. Exploration 1 reveals that sales should not be declining in the South and Northeast. Environmental factors there are as favorable as in the growing regions. Subsequent exploration leads management to believe that the problem is in one of three areas: salesperson compensation, product formulation, or trade advertising. Further exploration (4) has SalePro management narrowing the focus of its research to alternative ways to alter the sales compensation system, which (5) leads to a survey of all sales personnel in the affected regions.

Exhibit 3-3 Formulating the Research Question This slide depicts how exploration leads back into the formulation of management questions and research questions. Examples of management questions are provided on the next slide.

Types of Management Questions This exhibit shows examples of management questions that might flow from general questions.

Determine necessary evidence The Research Question Examine variables Break questions down Fine-Tuning Determine necessary evidence Set scope of study A research question best states the objective of the marketing research study. Incorrectly defining the research question is the fundamental weakness in the marketing research process. After the exploration process is complete, the researcher must fine-tune the research question. At this point, the research question will have evolved in some fashion. It will have better focus. In addition to fine-tuning the original question, other research question-related activities should be addressed in this phase to enhance the direction of the project. Examine variables to be studied and assess whether they are operationally defined. Review the research questions to break them down into second and third-level questions. If hypotheses are used, be sure they meet the quality tests. Determine what evidence must be collected to answer the various questions and hypotheses. Set the scope of the study by stating what is not a part of the research question. Evaluate hypotheses

Investigative Questions Performance Considerations Attitudinal Issues   Investigative questions represent the information that the marketing decision maker needs to know. In developing a list of investigative questions, keep these things in mind. Behavioral Issues © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Harris Interactive answers “Why?” for its research clients This ad from Harris Interactive promises that if this guy is your customer, you’ll actually understand what makes him tick.

Stage 2 Proposing Research Exhibit 3-7 Budget Types Rule-of-thumb Departmental Task Once the research is defined, the research must be proposed in order to allocate resources to the project. There are three types of budgets in organizations where research is purchased and cost containment is crucial. Rule-of-thumb budgeting involves taking a fixed percentage of some criterion. For example, a percentage of the prior year’s sales revenues may be the basis for determining the business research budget for a manufacturer. Departmental (functional area) budgeting allocates a portion of total expenditures in the unit to research activities. This allows units like human resources and marketing to have the authority to approve their own projects Task budgeting selects specific research projects to support on an ad hoc basis. This is the least pro-active form but permits definitive cost-benefit analysis.

Exhibit 3-6 Gantt Chart MindWriter Project Plan A Gantt chart is a common project planning tool that reveals summary tasks, benchmarking milestones, and detailed tasks against a time frame for the overall project. Tasks may be color coded to indicate a particular team member’s responsibilities. Many project-management software packages include Gantt charting. The chart may be used to monitor projects to keep them on time, as well as to alert the client or manager to steps requiring their approval—and what happens to the project’s schedule if approval is not forthcoming when it is needed.

Evaluating the Value of Research Option Analysis Decision Theory Prior or Interim Evaluation Managers are increasingly asked to prove that research meets ROI objectives. Conceptually, the value of research is not difficult to determine. It may be judged in terms of the difference between the result of decisions made with the information and the result that would be made without it. This application cannot be measured, though. Option analysis: Managers conduct formal analysis of each alternative research project judged in terms of estimated costs and associated benefits and with managerial judgment playing a major role. Decision theory: The focus is on trying to assess the outcomes of each action. The manager chooses the action that affords the best outcome – the action criteria that meets or exceeds whatever criteria are established. Each criterion is a combination of a decision rule and a decision variable. The decision rule is a criterion for judging the attractiveness of two or more alternatives when using a decision variable. The decision variable is a quantifiable characteristic, attribute, or outcome on which a choice decision will be made. The evaluation of alternatives requires that each alternative is explicitly stated, a decision variable is defined by an outcome that may be measured, and a decision rule is determined by which outcomes may be compared. Prior or Interim Evaluation: In this case, managers decide to control the research expenditure risk by doing a study in stages. Costs are then reviewed at each stage. Ex Post Facto Evaluation: This form occurs after the research is conducted but can be useful in guiding future decisions. Ex Post Facto Evaluation

The Research Proposal Written proposals establish Purpose Methods Extent Legally-binding contract Timing Written proposals establish A written proposal is often required and is desirable for establishing agreement on a number of issues. These issues are named in the slide. A research proposal may also be oral. This is more likely when a manager directs his or her own research. Students have an example of an external proposal on their text CD. Obligations Delivery Budgets

Stage 3 Research Design Designing the Research Project Sampling Design Stage 3 encompasses the design of the research project. There are three components to this stage: research design, sampling design, and pilot testing. Research design is the blueprint for fulfilling objectives and providing the insight to answer the management dilemma. There are many methods, techniques, procedures, and protocols possible. Chapter 6 identifies various research designs and Chapters 7-14 discuss specific methodologies. Another step in planning the research project is to identify the target population and determine whether a sample or census is desired. A census is a count of all elements in a population. A sample is a group of cases, participants, events, or records that constitute a portion of the target population. The researcher must determine whether to choose a probability or nonprobability sample. Types of samples, sample frames, how samples are drawn, and the determination of sample size are discussed in Chapters 15. A pilot test is conducted to test weaknesses in the research methodology and the data collection instrument and to provide proxy data for selection of a probability sample. Chapter 14 focuses on instrument development and pilot testing is discussed. Pilot Testing

Stage 4 Data Collection Data Characteristics Abstractness Verifiability Elusiveness Closeness Stage 4 deals with data collection and preparation. Data may be characterized by their abstractness, verifiability, elusiveness, and closeness to the phenomenon. As abstractions, data are more metaphorical than real. For instance, the growth in GDP cannot be readily observed. Second, data are processed by our senses. When sensory experiences consistently produce the same result, our data are said to be trustworthy. Capturing data is elusive. Secondary data are originally collected to address a problem other than the one which require the manager’s attention at the moment. Primary data are data the research collects to address the specific problem at hand.

Stage 5 Data Analysis and Interpretation Reducing data to manageable size Developing summaries Looking for patterns Data analysis usually involves these four actions. Researchers then interpret their findings in light of the research questions and hypotheses. The raw data alone cannot provide the insights necessary to improve decision-making. Motorola and Rock the Vote teamed up during the 2004 presidential election to use cell phone surveys to track young voters’ changing perceptions during the campaign. The PicProfile on this research is on p. 88.   Applying statistical techniques © 2002 McGraw-Hill Companies, Inc., McGraw-Hill/Irwin

Stage 6 Reporting the Results Research Report Executive Summary Overview Technical Appendix Implementation Strategies In reporting the results, the researcher should strive to provide insightful information adapted to the client’s needs and to choose words carefully when crafting interpretations, conclusions, and recommendations. The research report should include an executive summary, research overview, implementation strategies, and a technical appendix. The executive summary consists of a synopsis of the problem, findings, and recommendations. The overview of research explains the background, exploratory findings from secondary data, the research design and procedures, and the conclusions. The implementation strategies section expands on recommendations. A technical appendix contains all the materials necessary to replicate the project.

The Research Overview Problem’s background Summary of exploratory findings Research design and procedures This slide presents the components of the research overview section of a research report. Conclusions

Research Process Issues The Favored-Technique Syndrome Company Database Strip-Mining Unresearchable Questions Ill-Defined Management Problems Politically Motivated Research Researchers must remain objective. The slide presents common problems in the research process. The favored-technique syndrome occurs when researchers are method-bound. They recast management questions so that it is amenable to their favorite method. Company database strip-mining means that managers may feel that they do not want to collect more data until they have thoroughly evaluated all existing data. While data mining can be a good starting point, it will rarely address all questions related to a specific management dilemma. Not all management questions are researchable and not all research questions are answerable. An ill-defined problem is one that addresses complex issues and cannot be expressed easily or completely. Sometimes a research study is intended to win approval for a pet idea or to protect a decision maker. In these cases, it may be more difficult to get support for the most appropriate research design.

Key Terms Census Data Primary data Secondary data Data analysis Decision rule exploration Investigative questions Management dilemma Management question Management-research question hierarchy Measurement questions Pilot test Research design Research process Research questions Sample