Chapter 4 OK1

ZIKMUND BABIN
CARR GRIFFIN
Chapter 4
BUSINESS The Business
Research Process:
MARKET An Overview
RESEARCH
EIGHTH EDITION
©
© 2010
2010 South-Western/Cengage
South-Western/Cengage Learning.
Learning. All
All rights
rights reserved.
reserved. May
May
not
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be scanned,
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copied or
or duplicated,
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or posted
posted to
to aa publicly
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LEARNING
LEARNING OUTCOMES
OUTCOMES
After studying this chapter, you should
1. Define decision making and understand the
role research plays in making decisions
2. Classify business research as either
exploratory research, descriptive research, or
causal research
3. List the major phases of the research process
and the steps within each
4. Explain the difference between a research
project and a research program
© 2010 South-Western/Cengage Learning. All rights reserved. May not be
scanned, copied or duplicated, or posted to a publically accessible
website, in whole or in part. 4–2
Introduction
• Key ways in which researchers contribute to
decision making:
1. Helping to better define the current situation
2. Defining the firm—determining how consumers, competitors,
and employees view the firm
3. Providing ideas for enhancing current business practices
4. Identifying new strategic directions
5. Testing ideas that will assist in implementing business
strategies for the firm
6. Examining how correct a certain business theory is in a
given situation

Contribution of the Researchers

Decision Making Terms
• Business opportunity
 A situation that makes some potential competitive
advantage possible.
• Business problem
 A situation that makes some significant negative
consequence more likely.
• Symptoms
 Observable cues that serve as a signal of a problem
because they are caused by that problem.
 Ex- employee turnover
4–5
Decision Making Terms
 Businesses that assume cash flow is the problem. Is it a
Problem????
 But if they just looked at their pricing and margins (and
sorted them out), their cash flow problem would disappear
• poor cashflow can be caused by:
 Poor sales
 Too much stock
 Outstanding debtors
 Too much debt
 Too many drawings
 Not enough leads

Decision Making
• Decision making defined
 The process of developing and deciding among
alternative ways of resolving a problem or choosing
from among alternative opportunities.
• Research’s role in the decision making process
 Recognizing the nature of the problem or opportunity.
 Identifying how much information is currently
available and how reliable it is.
 Determining what information is needed to better deal
with the situation.

Conditions Affecting Decision Making
• Certainty
 The decision maker has all information needed to
make an optimal decision.
• Uncertainty
 The manager grasps the general nature of desired
objectives, but the information about alternatives is
incomplete.
• Ambiguity
 The nature of the problem itself is unclear such that
objectives are vague and decision alternatives are
difficult to define.
EXHIBIT 4.1 Describing Decision-Making Situations

Types of Business Research
• Business research is undertaken
 To reduce uncertainty
 Focus on decision making
• More ambiguous the circumstances managers may be

totally unaware about the problem or scan the
environment for opportunity.
 Example – demand for new business or when demand is sufficient then
want to be sure about best location, actual services, desire hours of
operations
• When researchers exactly know the problem and
design study to test hypothesis
 Example- when the problem is health care benefit, researchers test
which policy is desirable
Types of Business Research
• Three types of business research
 Exploratory
 Descriptive
 Causal

Exploratory Research
• Exploratory Research
 Conducted to clarify ambiguous situations or discover
ideas that may be potential business opportunities.
 Initial research conducted to clarify and define the
nature of a problem.
 Does not provide conclusive evidence
 Subsequent research expected

Descriptive Research
• Describes characteristics of objects, people,
groups, organizations, or environments.
 Addresses who, what, when, where, why, and how
questions.
 Considerable understanding of the nature of the
problem exists.
 Does not provide direct evidence of causality.
• Diagnostic analysis
 Seeks to diagnose reasons for market outcomes and
focuses specifically on the beliefs and feelings
consumers have about and toward competing
products.

Descriptive Research (cont’d)
• Examples
 The average Weight Watchers’ customer
 Is a female about 40 years old
 Has a household income of about $50,000
 Has at least some college education
 Is trying to juggle children and a job
 Characteristics of leaders
 Empathetic
 Resourceful
 Ability to delegate

Causal Research
• Research conducted to identify cause and effect relationships
(inferences).
• Evidence of causality:
 Temporal sequence—the appropriate causal order of events.

It deals with the time order of events—the cause must occur
before the effect.
 Concomitant variation—two phenomena vary together. It

occurs when two events “covary,” meaning they vary
systematically

Causal Research
 Nonspurious association—an absence of alternative plausible
explanations.
 Often, a causal inference cannot be made even though
the other two conditions exist because both the cause
and effect have some common cause; that is, both may
be influenced by a third variable.
 For instance, there is a strong, positive correlation between ice
cream purchases and murder rates—as ice cream purchases
increase, so do murder rates.

EXHIBIT 4.2 The Spurious Effect of Ice Cream

Degrees of Causality
• Absolute Causality
 The cause is necessary and sufficient to bring about
the effect. Ex- smoking & cancer
• Conditional Causality
 A cause is necessary but not sufficient to bring about
an effect.
• Contributory Causality
 A cause need be neither necessary nor sufficient to
bring about an effect.
 Weakest form of causality.

Experiments
• Experiment
 A carefully controlled study in which the researcher manipulates
a proposed cause and observes any corresponding change in
the proposed effect.
• Experimental variable
 Represents the proposed cause and is controlled by the
researcher by manipulating it.
• Manipulation
 The researcher alters the level of the variable in specific
increments.
• Test-market
 An experiment that is conducted within actual market conditions.

EXHIBIT 4.3 Testing for Causes with an Experiment

Uncertainty Influences the Type of Research Conducted
EXHIBIT 4.4
4.4 Characteristics of Different Types of Business Research

Stages in the Research Process
• Process stages:
1. Defining the research objectives
2. Planning a research design
3. Planning a sample
4. Collecting the data
5. Analyzing the data
6. Formulating the conclusions and preparing the
report
• Forward linkage—earlier stages influence later stages.
• Backward linkage—later stages influence earlier stages.

EXHIBIT 4.5 Stages of the Research Process

EXHIBIT 4.6
Flowchart of
the Business
Research
Process
Note: Diamond-shaped boxes indicate stages in the research process in which a choice of one or more
techniques must be made. The dotted line indicates an alternative path that skips exploratory research.

Defining the Research Objectives
• Research objectives
 The goals to be achieved by conducting research.
• Deliverables
 The consulting term used to describe research objectives to
a research client.
• In applied business research, the objectives cannot really be

determined until there is a clear understanding of the
managerial decision to be made.
• This understanding must be shared between the actual

decision maker and the lead researcher. We often describe
this understanding as a problem statement. 4–25
Defining the Research Objectives
• Actually, the research objective may be to simply
 clarify a situation,
 define an opportunity, or
 monitor and evaluate current business operations.
• The research objectives cannot be developed until managers

and researchers have agreed on the actual business
“problem” that will be addressed by the research.
• Thus, they set out to “discover” this problem through a series

of interviews and through a document called a research
proposal.
4–26
Defining Managerial Decision Situation
• In business research, “a problem well defined is a problem half
solved”
• Albert Einstein noted that “the formulation of a problem is often
more essential than its solution.”
• Managers often are more concerned with finding the right
answer rather than asking the right question.
• They also want one solution quickly, rather than having to
spend time considering many possible solutions.
• However, properly defining a problem can be more difficult than
actually solving it
• Frequently the researcher will not be involved until the
management team has discovered that some information about
a particular aspect of the business is needed.
4–27
Exploratory Research Techniques
• Previous Research
 Literature review
 A directed search of published works, including periodicals and
books, that discusses theory and presents empirical results that are
relevant to the topic at hand.
 Pilot Studies
 A small-scale research project that collects data from respondents
similar to those to be used in the full study.
 Pretest
– A small-scale study in which the results are only preliminary and intended
only to assist in design of a subsequent study.
 Focus Group
– A small group discussion about some research topic led by a moderator
who guides discussion among the participants.
Stating Research Objectives
• After identifying and clarifying the problem, with or without exploratory
research, the researcher must formally state the research objectives.
• This statement delineates the type of research that is needed and what
intelligence may result that would allow the decision maker to make
informed choices.
• The statement of research objectives culminates the process of clarifying

the managerial decision into something actionable.
• A decision statement expresses the business situation to the researcher

and makes sure that managers and researchers are on the same page.
• The research objectives try to directly address the decision statement or

statements, as the case may be
4–29
LINKING DECISION STATEMENTS, OBJECTIVES, AND HYPOTHESES
EXHIBIT 4.7 Example Decision Statements, Research Objectives, and

Research Hypotheses

Planning the Research Design
• Research Design
 A master plan that specifies the methods and
procedures for collecting and analyzing the needed
information.
 Basic design techniques for descriptive and causal
research:
 Surveys
 Experiments
 Secondary data
 Observation

Selection of the Basic Research Method
• Survey
 A research technique in which a sample is
interviewed in some form or the behavior of
respondents is observed and described.
 Telephone
 Mail
 Internet
 In person

Sampling
• Sampling
 Involves any procedure that draws conclusions based
on measurements of a portion of the population.
• Sampling decisions
 Who to sample?—target population
 What size should the sample be?
 How to select the sampling units?
 Random sample
 Cluster-sample

Gathering Data
• Data gathering is the process of gathering or
collecting information.
• Data may be gathered by human observers or
interviewers, or they may be recorded by
machines as in the case of scanner data and
Web-based surveys.
• Unobtrusive Methods
 Methods in which research respondents do not have
to be disturbed for data to be gathered.

Processing and Analyzing Data
• Editing
 Involves checking the data collection forms for
omissions, legibility, and consistency in classification.
• Codes
 Rules for interpreting, categorizing, recording, and
transferring the data to the data storage media.
• Data analysis
 The application of reasoning to understand the data
that have been gathered.

Drawing Conclusions and Preparing a
Report
• Steps in communicating the research findings:
 Interpreting the research results
 Describing the implications
 Drawing the appropriate conclusions for managerial decisions
• Reporting requirements
 Conclusions fulfill the deliverables promised in the research
proposal
 Consider the varying abilities of people to understand the
research results
 A clearly-written, understandable summary of the research
findings

The Research Program Strategy
• Research project
 A single study that addresses one or a small number
of research objectives.
 Uses specific techniques for solving one-dimensional
problems, such as identifying customer segments, selecting
the most desirable employee insurance plan, or determining
an IPO stock price.
• Research program
 Numerous related studies that come together to
address multiple, related research objectives.
 Because research is a continuous process,
management should view business research at a
strategic planning level.


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ZIKMUND BABIN

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

• More ambiguous the circumstances managers may be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

 Temporal sequence—the appropriate causal order of events.

 Concomitant variation—two phenomena vary together. It

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

• In applied business research, the objectives cannot really be

• This understanding must be shared between the actual

• The research objectives cannot be developed until managers

• Thus, they set out to “discover” this problem through a series

• The statement of research objectives culminates the process of clarifying

• A decision statement expresses the business situation to the researcher

• The research objectives try to directly address the decision statement or

EXHIBIT 4.7 Example Decision Statements, Research Objectives, and

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

© 2010 South-Western/Cengage Learning. All rights reserved. May not be

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