Learning Objectives Understand . . . What business research is and how it differs from business decision support systems and business intelligence systems. Trends affecting business research and the emerging hierarchy of business decision makers. The distinction between good business research and research that falls short of professional quality. The nature of the research process.

Data Collectors Face Responsibilities “This is a fantastic time to be entering the business world, because business is going to change more in the next 10 years than it has in the last 50.” Bill Gates, entrepreneur and founder Microsoft Use this quote to discuss why research is important in a time of change.

PulsePoint: Research Revelations 34 The percent of employees who never consider that their bosses, clients, or colleagues think before posting to a blog, discussion forum, or social network. See the text Instructors Manual (downloadable from the text website) for ideas for using this research-generated statistic.

Why Study Business Research? Business research provides information to guide business decisions Business research plays an important role in an environment that emphasizes measurement. Return on investment (ROI) is the calculation of the financial return for all business expenditures and it is emphasized more now than ever before. Business research expenditures are increasingly scrutinized for their contribution to ROMI.

Research Should Help Respond to Change “Enterprises have long recognized the need to better sense and respond to business change. What’s different today is that ubiquitous access to information and real-time communications have fostered an ‘always on’ business culture where decision making has become a ‘just-in-time process.’” Business Performance Management Forum

Business Research A process of determining, acquiring, analyzing, synthesizing, and disseminating relevant business data, information, and insights to decision makers in ways that mobilize the organization to take appropriate business actions that, in turn, maximize business performance Business research is a systematic inquiry that provides information to guide business decisions. The text definition is provided in the slide. Ask students to offer examples of types of decision-making situations that could be addressed using business research.

Research Should Reduce Risk The primary purpose of research is to reduce the level of risk of a marketing decision Use this ad to talk about the different types of risk that organizations face. Students usually have no difficulty identifying financial/economic risk, but must stretch to identify other types of risks. Some of these include social risks (preserving their reputation), physical risk (represented by dangers to living things: product recalls in pet food and human food, pharmaceuticals, etc. provide examples.), environmental risk (preserving the organization’s relationship with their physical environment), technological risk (falling behind—or having the opportunity to leap ahead—of their competition).

What’s Changing in Business that Influences Research Critical Scrutiny of Business Computing Power & Speed Battle for Analytical Talent Factors Information Overload Shifting Global Economics Government Intervention Technological Connectivity New Research Perspectives Several factors increase the relevance for studying business research. Information overload. While the Internet and its search engines present extensive amounts of information, its quality and credibility must be continuously evaluated. The ubiquitous access to information has brought about the development of knowledge communities and the need for organizations to leverage this knowledge universe for innovation—or risk merely drowning in data. Stakeholders now have more information at their disposal and are more resistant to business stimuli. Technological connectivity. Individuals, public sector organizations, and businesses are adapting to changes in work patterns (real-time and global), changes in the formation of relationships and communities, and the realization that geography is no longer a primary constraint. Shifting global centers of economic activity and competition. The rising economic power of Asia and demographic shifts within regions highlight the need for organizations to expand their knowledge of consumers, suppliers, talent pools, business models, and infrastructures with which they are less familiar. Increasingly critical scrutiny of big business. The availability of information has made it possible for all a firm’s stakeholders to demand inclusion in company decision making, while at the same time elevating the level of societal suspicion. More government intervention. As public-sector activities increase in order to provide some minimal or enhanced level of social services, governments are becoming increasingly aggressive in protecting their various constituencies by posing restrictions on the use of managerial and business research tools. Battle for analytical talent. Managers face progressively complex decisions, applying mathematical models to extract meaningful knowledge from volumes of data and using highly sophisticated software to run their organizations. The shift to knowledge-intensive industries puts greater demand on a scarcity of well-trained talent with advanced analytical skills. Computing Power and Speed. Lower cost data collection, better visualization tools, more computational power, more and faster integration of data, and real-time access to knowledge are now manager expectations…not wistful visions of a distant future. New Perspectives on Established Research Methodologies. Older tools and methodologies, once limited to exploratory research, are gaining wider acceptance in dealing with a wider range of managerial problems.

Computing Power and Speed Lower-cost Data Collection Integration of Data Better Visualization Tools Factors Real-time Access Powerful Computation

Business Planning Drives Business Research Organizational Mission Business Goals Business Strategies Business Tactics An organization’s mission drives its business goals, strategies, and tactics and, consequently, its need for business decision support systems and business intelligence. Students need to understand the differences in these concepts to fully understand what drives a manager to seek solutions through research.

Business Decisions and Research Häagen-Dazs Tactics Super premium Dozens of flavors Small packages Signature colors on packaging Available in franchise and grocery stores Selecting business strategies and tactics often drive research. A business strategy is defined as the general approach an organization will follow to achieve its business goals. A strategy might describe how an organization can best position itself to fulfill customer needs or establish a general approach to gaining brand equity. Haagen-Daz positioned itself with its super-premium ice-cream strategy. Business tactics are specific, timed activities that execute a business strategy. Haagen-Daz designed its ice-cream to be rich and creamy with flavors like “Peanut Butter Fudge Chunk.” It packaged the ice cream in pint size containers with signature gold and burgundy colors. It distributes the ice cream in grocery stores and franchised stores.

Decision Support Systems Business Intelligence Systems Information Sources Decision Support Systems Numerous elements of data organized for retrieval and use in business decision making Stored and retrieved via Intranets Extranets Business Intelligence Systems Ongoing information collection Focused on events, trends in micro and macro-environments When elements of data are organized for retrieval, they collectively constitute a business decision support system (DSS). This data is often shared over an intranet or an extranet. An intranet is a private network that is contained within an enterprise and is not available to the public at large. It may consist of many interlinked local area networks. It typically includes connections through one or more computers to the Internet. The main purpose of an intranet is to share company information and computing resources among internal audiences. An extranet is a private network that uses the Internet protocols and the public telecommunication system to share an organization’s information, data, or operations with external suppliers, vendors, or customers. An extranet can be viewed as the external portion of a company’s intranet. A business intelligence system (BIS) is designed to provide ongoing information about events and trends in the technological, economic, political and legal, demographic, cultural, social, and competitive areas.

Sources of Business Intelligence Government/ Regulatory Competitive Economic Demographic Business Intelligence Exhibit 1-1 Exhibit 1-1 shows some sources of business intelligence. Sources of government information include speeches by elected officials, recordings of public proceedings, press releases, and agency websites. Sources of competitive information include presentations at conferences, literature searches, press releases, syndicated industry studies, web sites, clipping services, and business research. Sources of economic information include literature searches and government reports. Sources of cultural and social information include syndicated studies, public opinion organizations, business research, and government reports. Sources of technological information include patent filings, web sites, syndicated industry studies, presentations at conferences, literature searches, and clipping services. Sources of demographic information include syndicated studies, government reports, and business research. Remind your students that they have an extensive list of business sources on the CD that accompanied their textbook. It’s a valued resource that will be useful if you assign projects within your course structure. Technological Cultural/ Social

Hierarchy of Business Decision Makers Visionaries Visionaries Standardized Decision Makers Exhibit 1-2 Exhibit 1-2 illustrates the hierarchy of business decision makers. In the bottom tier, most decisions are based on past experience or instinct. Decisions are also supported with secondary data searches. In the middle tier, some decisions are based on business research. In the top tier, every decision is guided by business research. Firms develop proprietary methodologies and are innovative in their combination of methodologies. There is access to research data and findings throughout the organization. Intuitive Decision Makers

Minute Main and Business Research Exhibit 1-3 Minute Maid is an example of a top-tier research organization. Ask students: “Why?”

P&G has a world-class research department Eastman Kodak has an internal research department.

Research May Not Be Necessary Can It Pass These Tests? Can information be applied to a critical decision? Will the information improve managerial decision making? Are sufficient resources available? Business research is only valuable when it helps management make better decisions. A study may be interesting, but if it does not help improve decision-making, its use should be questioned. Research could be appropriate for some problems, but insufficient resources may limit usefulness.

Information Value Chain Data collection/ transmission Data management Characteristics Decision support systems Data interpretation Computers and telecommunications lowered the costs of data collection. Data management is now possible and necessary given the quantity of raw data. Models reflect the behavior of individuals, households, and industries. A DSS integrates data management techniques, models, and analytical tools to support decision making. Data must be more than timely and standardized; it must be meaningful. These are all characteristics of the information value chain. Models

The Research Process Exhibit 1-4 Exhibit 1-4 introduces the research process model used throughout the text and the PowerPoint slides. Instructors are encourage to give it a brief overview here, as a more detailed look is offered in chapter 4, and individual stages are discussed in subsequent chapters.

Characteristics of Good Research Clearly defined purpose Detailed research process Thoroughly planned design High ethical standards Limitations addressed Adequate analysis Unambiguous presentation Conclusions justified Credentials Exhibit 1-5 presents the characteristics of good business research and also explains what managers should look for in research done by others. You might wish to discuss the concepts here, before you discuss who actually conducts research…or you might want to discuss who conducts research first, followed by this slide to summarize.

Categories of Research Applied Basic (Pure) Applied research applies research to discovering solutions for immediate problems or opportunities. Basic (or pure) research aims to solve perplexing questions or obtain new knowledge of an experimental or theoretical nature that has little direct or immediate impact on action, performance, or policy decisions.

Types of Studies Reporting Descriptive Explanatory Predictive Reporting studies provide a summation of data, often recasting data to achieve a deeper understanding or to generate statistics for comparison. A descriptive study tries to discover answers to the questions who, what, when, where, and, sometimes, how. An explanatory study attempts to explain the reasons for the phenomenon that the descriptive study only observed A predictive study attempts to predict when and in what situations an event will occur. Studies may also be described as applied research or basic research.

Key Terms Applied research Management dilemma Business intelligence system (BIS) Business research Control Decision support system Descriptive studies Explanatory Studies Management dilemma Predictive studies Pure research Reporting studies Return on Investment (ROI) Scientific method Strategy Tactics

How the Research Industry Works Appendix 1a How the Research Industry Works

Who Conducts Business Research? Exhibit 1a-1

Some Organizations Use Internal Research Sources Exhibit 1a-1, far left part Exhibit 1a-1 illustrates who conducts business research. First, researchers may be internal or external. Internal researchers are “in-house.”

Some Organizations Use External Research Sources Exhibit 1a-1, External External research suppliers can be further classified into business research firms, communication agencies, consultants, and trade associations. Each of these will be further developed in the following slides.

Business Research Firms Exhibit 1a-1, Business Research Firms Business research firms may be full-service or specialty-based. Full-service firms conduct all phases of research from planning to insight development. They may offer custom projects tailored to a client’s needs and/or proprietary work. Proprietary methodologies are programs or techniques that are owned by a single firm. Exhibit 1-5 lists some of the world’s largest business research firms. Specialty firms establish expertise in one or a few research methodologies. They represent the largest number of research firms and tend to dominate the small research firms operated by a single research firm or a very small staff. Syndicated data providers track the change of one or more measures over time, usually in a given industry. Some research firms offer omnibus studies that combine one or a few questions from several business decision makers who need information from the same population.

Proprietary Research Decision Analyst, Inc. uses Internet-based concept testing called Conceptor to examine new product concepts Many research companies offer proprietary services for different types of research. Conceptor uses a representative sample of 150 consumers to view new product concepts.

Syndicated Services Nielsen Media Research provides audience data for television programs like Court TV Syndicated Data Providers provide comparable performance and opinion data. When firms want to evaluate themselves against others in their industry, they turn to syndicated data providers. Exhibit 1-6 provides some examples of Syndicated Data Providers.

Some Syndicated Data Providers AC Nielsen Scarborough Millward Brown Nielsen Media Research Roper ASW CSA TMO Yahoo! ORC International DoubleClick Nielsen/NetRatings Taylor Nelson Sofres Intersearch J.D. Power Associates MediaMark Simmon (SMRB) BRMB Information Resources Inc. Exhibit 1a-3 lists some syndicated data providers, their service, and what their service measures.

Specialty Business Research Firms Methodology Process Industry Firms specializing in methodology conduct only one type of research such as survey research, customer satisfaction research or ad copy testing. Firms specializing in process contribute to only one portion of the research process such as sample recruitment, telephone interviewing, or fielding Web surveys. Firms specializing by industry become experts in one or a few industries such as pharmaceutical research or telecommunications research. Firms specializing by participant group become experts in a particular participant group such as Latino-Americans. Firms specializing by geographic region operate in only one region of a country, for example, the Midwest or the Southwest, or a city, like New York. Participant group Geographic Region

Communication Agencies Direct Business Public Relations Advertising Sales Promotion Communication agencies are heavy users of syndicated research data, especially from media industry suppliers. Some agencies do extensive basic research. For direct business agencies, every single project is actually an experiment.

Consultants and Trade Associations Exhibit 1a-1, consultants & Trade Associations All consultants are involved in extensive secondary data research for their clients and may also be major influencers in research design. Trade associations generally do not conduct or supply research services, but rather commission research that supports their missions.

Trade Associations NHRA CASRO MRA ESOMAR BRA AMA WAOBRP MPA NAB This is a list of some major trade associations relevant to business research. A more comprehensive list in on the text CD. For a searchable website try: www.businessfinance.com/trade-associations.htm National Human Resources Association American Association of Public Opinion Research Council of American Survey Research Organizations Business Research Association American Marketing Association World Association of Opinion and Business Research Professionals Advertising Research Foundation Association of National Advertisers Sales Research Trust Magazine Publishers of America National Association of Broadcasters WAOBRP MPA NAB

Many Firms Conduct Research This exhibit (1a-1) can be used to summarize what was just discussed in more detail.

Key Terms Custom Researcher Full-service researcher Specialty researcher Syndicated data provider Omnibus researcher Omnibus study

Chapter 1 Addendum Research Timeline 1-39

Information Revolution 1971 First CATI survey conducted 1964 OCR shows promise 1973 UPC bar-code scanning introduced 1979 First VisiCalc ships U.S. DOD commissions forerunner of Internet 1968 Word processing first demonstrated 1972 Optical laser disk revealed 1975 Microsoft is born 1960 1980 1968 SPSS created 1980 Apple owns 50% of pc market 1973 Basic ideas of Internet created 1964 IBM introduces model 360 1971 Intel introduces first microprocessor 1976 Apple I released

Information Revolution 1993 WWW experiences 3,400X growth in service traffic 2001 Online survey software widely available 1987 First Internet survey 2003 Wal-Mart commits To use RFID 1981 IBMPC released 1994 Greenfield Online Introduces online focus group 2002 Web-conferencing Software introduced 1990s OCR used for data entry 2010 1980 1991 WWW developed 2009 76.3% in US have Internet access 1996 Internet World Exposition held 1987 IRI conducts first scanner tracking study 2002 High-speed chip technology for servers