1.

An automobile manufacturer observes the demand for its brand increasing as per capita income
increases. Sales increases also follow low interest rates, which ease credit conditions. Buyer purchase
behavior is seen to be dependent on age and gender. Other factors influencing sales appear to fluctuate
almost randomly (competitor advertising, competitor dealer discounts, introductions of new
competitive models).

a) If sales and per capita income are positively related, classify all variables as dependent, independent,
moderating, extraneous, or intervening.

b) Comment on the utility of a model based on the hypothesis.

Suggested Answer

A. One scheme for assessing the variables:

Car Sales (DV) Buyer gender – EV

Per Capita Income (IV) Competitor advertising - MV

Ease of credit access (EV) Competitor dealer discounts - MV

low interest rates - MV Introduction of competitor models -

MV

Buyer age - EV

Car Sales (DV) will increase as per capita income increases (IV), as long as low

interest (IVV) increase ease of access to credit among younger (EV) men (EV) and

competitors do not introduce more attractive models (EV), increase advertising

(EV), or increase their discounts (EV).

B. Given that buyer behavior is fickle with respect to ego-involved purchases

(e.g. car), and given the number of uncontrollable extraneous variables, a

model based on the above theory is unlikely to be relevant for any about of

time
2. Confronted by low productivity, the president of Oaks International, Inc. asks a research company to
study job satisfaction in the corporation. What are some of the important reasons that this research
project may fail to make an adequate contribution to the solution of management problems?

Suggested Answer

The President of Oaks International Inc. faces a management dilemma: the company is

plagued by low productivity. The management question should seek to identify the

factors that lead to low productivity and identify the strategies that can lead to

increases in productivity. In this case the President is assuming that (1) the cause

of low productivity in the organization is job satisfaction (2) there is a relationship

between job satisfaction and productivity. The latter relationship, even if partially

valid, may be largely influenced by moderating and intervening variables. For

instance, performance or productivity is an outcome of “work input” or effort, and

this becomes a key intervening variable; a similar variable may be absenteeism.

Focusing on these variables may be important, as their salience may be as high as

that of job satisfaction. Finally, the cause of low productivity may not lie in

personnel issues, but in other matters such as the plant, equipment, materials

availability, or technology. The President’s approach biases the results and an

exploratory exercise to determine possible causes of low productivity is necessary.

This may be followed up by a pilot study to narrow key research questions to factors

that have greater importance with respect to productivity.

3. You are the administrative assistant for a division chief in a large holding company that owns several
hotels and theme parks. You and the division chief have just come from the CEO’s office, where you
were informed that the guest complaints related to housekeeping and employee attitude are increasing.
Your on-site managers have mentioned some tension among workers, but have not considered it
unusual. The CEO and your division chief instruct you to investigate. Suggest at least three different
types of research that might be appropriate to the situation.

Suggested Answer

a. An exploratory investigation to determine what kind of research situation

exists. Such a study might involve field observation of:

• Complaint summaries to determine the types of complaints being logged by

guests.

• End-of-year reports citing complaint summaries from previous years to

determine the magnitude of change in complaints.

• Housekeeping division reports related to turnover, disciplinary citations to

employees, etc.

b. A longitudinal analysis of various indicators related to housekeeping

performance may be available from company records. Such an observational

case approach would use time longs, employee activity checklists, complaint

logs, etc.

c. A formal cross-sectional survey of guests registering complaints, gathering

descriptive data on situation, timing, guest attitude, purpose of guest visit,

guest demographic and economic characteristics, etc

4. In the following situations, decide whether you would use a personal interview, telephone survey, or
self-administered questionnaire. Give your reasons.

a. A survey of the residents of a new subdivision on why they happened to select that area in which to
live. You also wish to secure some information about what they like and do not like about life in the
subdivision.

b. A poll of students at Metro University on their preferences among three candidates who are running
for president of the student government.

c. A survey of 58 wholesale grocery companies scattered over the country, on their personnel
management policies for warehouse personnel.

ANSWER:

In these examples, it is often possible to use any of the three methods.

(a) A survey of the residents of a new subdivision on why they happened to select

that area in which to live. You also wish to secure some information about what they

like and do not like about life in the subdivision.

In this scenario, it is more likely that a personal interview will be used because of

the compact study area and a topic which will be of high interest to participants.

This is especially true if there are a substantial number of questions and a certain

degree of free form to the interview. Telephone interviewing would be the second

choice.

(b) A poll of students at Metro University on their preferences among

three candidates who are running for president of the student

government.

Personal interview or telephone interviews for much the same reasons as above.

The sampling approach probably will be a major factor. If it were going to be a

convenience sample then personal interviewing at several spots on campus would

be adequate. If it is a random sample it might be desirable to use telephone

interviewing where possible and personal or mail surveys where telephone

contact cannot be made.

(c) A survey of 58 wholesale grocery companies scattered over the eastern United States, on their
personnel management policies for warehouse personnel.

Probably mail survey would be the most appropriate. It is possible that some written material will be
sent (policy statements, etc.) and this must be handled by mail. Telephone surveys are possible if the
questioning is not too complex and lengthy. Personal interviews would be the high cost alternative and
probably not used unless this project had a substantial budget and was aimed as an in-depth study.

5. What type of report would you suggest be written in each of the following cases?

A. The president of the company has asked for a study of the company’s pension plan and its
comparisons to the plans of other firms in the industry.

B. You have been asked to write up a marketing experiment, which you recently completed, for
submission to the Journal of Marketing Research.

C. The National Institutes of Health has given you a grant to study the relationship between advertising
of prescription drugs and subsequent sales of those drugs.

Suggested Answer

A. A short report, informational in nature, most likely a memo. Costs,

reimbursement amounts, and employee satisfaction with the health plan are

comparative aspects that may be included in graphical form.

b. You have been asked to write up a marketing experiment, which you

recently completed, for submission to the Journal of Marketing

Research.

A technical report which follows the suggested format of the journal in question.

c. The National Institutes of Health has given you a grant to study the

relationship between advertising of prescription drugs and

subsequent sales of those drugs.

A long report. A technical report would be mandatory, a management report may

also be presented to supplement the technical report

6. In the following situations, decide whether you would use a personal interview, telephone survey, or
self-administered questionnaire. Give your reasons. (10 Marks)

a. A survey of the residents of a new subdivision on why they happened to select that area in which to
live. You also wish to secure some information about what they like and do not like about life in the
subdivision.

b. A poll of students at Metro University on their preferences among three candidates who are running
for president of the student government.

c. A survey of 58 wholesale grocery companies scattered over the country, on their personnel
management policies for warehouse personnel.

ANSWER:

In these examples, it is often possible to use any of the three methods.

(a) A survey of the residents of a new subdivision on why they happened to select

that area in which to live. You also wish to secure some information about what they

like and do not like about life in the subdivision.

In this scenario, it is more likely that a personal interview will be used because of

the compact study area and a topic which will be of high interest to participants.

This is especially true if there are a substantial number of questions and a certain

degree of free form to the interview. Telephone interviewing would be the second

choice.

(b) A poll of students at Metro University on their preferences among three candidates who are running
for president of the student government. Personal interview or telephone interviews for much the same
reasons as above. The sampling approach probably will be a major factor. If it were going to be a
convenience sample then personal interviewing at several spots on campus would be adequate. If it is a
random sample it might be desirable to use telephone interviewing where possible and personal or mail
surveys where telephone contact cannot be made.
(c) A survey of 58 wholesale grocery companies scattered over the eastern United States, on their
personnel management policies for warehouse personnel. Probably mail survey would be the most
appropriate. It is possible that some written material will be sent (policy statements, etc.) and this must
be handled by mail. Telephone surveys are possible if the questioning is not too complex and lengthy.
Personal interviews would be the high cost alternative and probably not used unless this project had a
substantial budget and was aimed as an in-depth study.

7. Consumer choice of color in fabrics is largely dependent on ethnicity, income levels, and the
temperature of the geographic area. There is detailed areawide demographic data on income levels,
ethnicity, and population, as well as the weather bureau’s historical data on temperature. How would
you identify geographic areas for selling dark-colored fabric? You have sample data for 200 randomly
selected consumers: their fabric color choice, income, ethnicity, and the average temperature of the
area where they live.

Suggested Answer:

Cluster analysis is recommended. If there are substantive cluster formations for

dark fabric buyers in particular income/ethnic groups and particular temperature

contexts, then those cluster groupings indicate the temperature, income, ethnicity

"combinations" which should be focused on. Cluster analysis also reveals the

"bases" that are not important to the formation of clusters (for instance while the

majority of people who are Asian may buy dark fabric, income may show no

relation to the clustering). The cluster identification and corresponding market

segmentation principle minimizes within cluster distance and maximizes between

cluster distance. The cluster characteristics of dark fabric buyers can then be

compared to the demographic data available for different areas, and those areas

where the chosen cluster characteristics are salient may be chosen as markets for

dark fabric.

Another way of approaching the issue would be to treat fabric color choice as the

dependent variable in a discriminant analysis, with income, temperature and

ethnicity being the explanatory or independent variables. Ethnicity is a nominal

variable and to use it in a discriminant analysis procedure would require the use of
dummy variables, in a manner similar to that used in regression analysis. In this

case the discriminant function can be used to extrapolate and "predict" the number

of dark color fabric users, when the data on income, temperature and ethnicity is

known.