Business Research Methods FIN 324: Session 1

Business Research Methods
FIN 324
Session 1
01/05/22 Dr. Rajeev Sirohi LBSIM 1

Research
• “systematic method consisting of defining the
problem, formulating a hypothesis, collecting the
data, analyzing the data and reaching certain
conclusions either in the form of solution towards
the concerned problem or in certain generalizations
for some theoretical formulation.”

Applied and Basic Business
Research
• Applied business research
– conducted to address a specific business decision
for a specific firm or organization.
– Example:
• Should McDonald’s add Italian pasta dinners to its
menu?
• Which health insurance plan should a business provide
for its employees?

Applied and Basic Business
Research
• Basic business research (also called pure research)
– conducted without a specific decision in mind that usually
does not address the needs of a specific organization.
• Attempts to expand the limits of knowledge in general.
• Not aimed at solving a pragmatic problem.
– Example:
• Do consumers experience cognitive dissonance in low-
involvement situations?
• Does employee tenure with a company influence productivity?

Research Process

Defining the Research Problem
“ A problem well defined, is half solved.”
Research Problem refers to some difficulty which a

researcher experiences in the context of either
theoretical or practical situation and wants to obtain
a solution for the same

Techniques/Tasks Involved in Designing a
Problem
• Discussion with decision makers
• Interview with industry experts
• Secondary data analysis
• Qualitative research

Defining the Research Objectives
• Research objectives
– The goals to be achieved by conducting research.

Formulate Hypotheses
• Hypothesis
– Formal statement of an unproven
proposition that is empirically testable.
• Example: Giving employees one Friday off each
month will result in lower employee turnover.

Research Design
• A research design is the conceptual structure within

which research is conducted.
• A research design is a framework or blueprint for
conducting the research project. It details the
procedure necessary for obtaining the information
needed to structure and/or to solve research problem.

Components of Research Design
• Design the exploratory, descriptive, and/or causal

phases of the research
• Sampling design
• Data collection design
• Measurement design
• Statistical design
• Software selection
When is Business Research
Needed?
• The determination of the need for research centers on:
1. Time constraints
2. The availability of data
3. The nature of the decision to be made
4. Benefits versus costs (the value of the research
information in relation to costs)
• Will the payoff or rate of return be worth the investment?
• Will the information improve the quality of the managerial
decision enough to warrant the expenditure?
• Is the expenditure the best use of the available funds?

EXHIBIT 1.3 Determining When to Conduct Business Research

Session 2

Types of Research (Design)

Types of Business Research
• Exploratory
• Descriptive
• Causal

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

Why Conduct Exploratory Research
(Purpose or Objective)
Exploratory research is used:

• Formulate or define a problem more precisely
• Develop working hypotheses from operational point of view.
• Gain insights for developing an approach to the problem
• Establish priorities for further research
• Identify and define the variables under study.

Techniques of Exploratory Research
• Secondary Data Analysis (The survey of concerning literature)
• Expert Surveys
• Case Studies
• Pilot Studies for Qualitative Analysis
-Direct or Non disguised techniques
-Indirect or Disguised Techniques

Descriptive Research Design
• Describes characteristics of objects, people, groups,
organizations, or environments.
– Considerable understanding of the nature of the
problem exists.
– Does not provide direct evidence of causality.

Why Conduct Descriptive Research
The objective of such a study is to answer the (Six Ws)

“Who, What, When, Where, Why, and Way (How)”
of the subject under investigation.
• To describe the characteristics of relevant groups,
such as consumers, salespeople, organizations,
market areas.
e.g. we could develop a profile of the “heavy users” of
prestigious department store.

• To estimate the percentage of units in a specified
population exhibiting a certain behaviour.
e.g. we might be interested in estimating the heavy

users of prestigious department stores who also
patronize discount stores.

• To determine the perception of product
characteristics.
e.g. how do households perceive the various

department stores in terms of salient features of the
choice criteria?

• To determine the degree to which marketing variables
are associated.
e.g. to what extent is shopping at department stores

related to eating out.
• To make specific predictions.
e.g. what will be the retail sales of specific store for

specific product category in specific region.
The research design in such studies must be rigid and well
structured, and must contain the following:
• Formulating the objective of the study
• Designing the methods of data collection
• Selecting the sample
• Collecting the data
• Processing and analysing the data
• Reporting the findings

• Cross-sectional design involves the collection of
information from any given sample of population
elements only once.
-Single cross-sectional design: Only one sample of

respondent is drawn from the target population, and
information is obtained from this sample only once.

-Multiple cross-sectional design: There are two or more
sample of respondents, and information from each
sample is obtained only once.
e.g. How did Indian people rate the performance of

Narendra Modi immediately after the demonetization?

• Longitudinal design: A fixed sample (or samples) of

population elements is measured repeatedly on the
same variables.
e.g. How did Indian people change their view of Modi’s

performance during the demonetization?

Causal research Design
A causal research investigates the cause and effect

(causal) relationship between two or more variables.
The Researcher try to understand the phenomena in

terms of conditional statements of the form “If x,
then y.”

Causal research is appropriate for the following

purposes:
• To understand which variables are the causes
(independent variables) and which variables are the
effect (dependent variables) of a phenomenon.
• To determine the nature of relationship between the
causal variables and the effect to be predicted.
Causal research requires a planned and structures

design. In causal research, independent variables
(causes) are manipulated in relatively controlled
environment. The effect of this manipulation on one
or more dependent variables is then measured to
infer causality. The main method of causal research
is experimentation.

Comparison of Basic Research Design
Exploratory Descriptive Causal
Objective Discover ideas and Describe market Determine cause
insights characteristics or and effect
functions relationships
Characteristics Flexible, Versatile, Rigid, Marked by the Manipulation of
often the front end prior formulation of one or more
of total research specific hypothesis, independent
design preplanned and variables, control of
structured design other mediating
variables
Methods Expert surveys, Secondary data Experiments
Secondary data Surveys/Interview
analysis, Observational and
Pilot studies for other data
qualitative
analysis, Case
studies
Comparison of Basic Research Design
Exploratory Descriptive Causal
Example “Our sales are “What kind of “Will consumer buy
declining for no people patronize our more products in
apparent reason?” stores compared to blue package?”
“What kinds of our primary “Which of two
new products are competitor?” advertising
fast-food “What product campaign will be
customers features are most more effective?”
interested in?” important to our
customers?”

Session 3

Problem Definition: The foundation of
business research
© 01/05/22 Dr. Rajeev Sirohi LBSIM 1–3535

The Problem-Definition Process
• Problems Mean Gaps
A problem occurs when there is a difference
between the current conditions and a more
preferable set of conditions.
– Business performance is worse than expected
business performance.

EXHIBIT 6.2 The Problem-Definition Process

Understand the situation (Business
Decision)
• Situation Analysis
– The gathering of background information to
familiarize researchers and managers with the
decision-making environment.
– Starts with an interview between the researcher
and management

Understand the Business Decision
• Identifying Symptoms
– Interrogative techniques
• Asking multiple what, where, who, when, why,
and how questions about what has changed.
– Probing
• An interview technique that tries to draw
deeper and more elaborate explanations from
the discussion.

Writing Managerial Decision Statements
and Corresponding Research Objectives
• Decision statements must be translated into
research objectives.
– Once the decision statement is written, the
research essentially answers the question, “What
information is needed to address this situation?”
• Research objectives are the deliverables of
the research project.

Determine the Unit of Analysis
• Unit of Analysis
– Indicates what or who should provide the data and at
what level of aggregation.
• Individuals (such as customers, employees, and owners)
• Households (families, extended families, and so forth)
• Organizations (businesses and business units)
• Departments (sales, finance, and so forth)
• Geographical areas
• Objects (products, advertisements, and so forth).

Writing Research Questions and
Research Hypotheses
• Research Questions
– Express the research objectives in terms of
questions that can be addressed by research.
– Help to develop well-formulated, specific
hypotheses that can be empirically tested.
– Help the researcher design a study that will
produce useful results.

EXHIBIT 6.4 Symptoms Can Be Confusing

EXHIBIT 6.5 Translating Decision Statements

Management Decision Problem Vs
Research Problem
Management Decision Problem Research Problem
1. Asks what the decision maker 1. Asks what information is needed
needs to do. and how it should be obtained.
2. Action oriented 2. Information oriented
3. Focuses on symptoms 3. Focuses on underlying causes
4. Examples 4. Examples
•Should a new product be • To determine consumer preferences
introduced? and purchase intentions for the
•Should the advertising campaign be proposed new product.
changed? •To determine the effectiveness of
•Should the price of brand be the current advertising campaign
increased? •To determine the price elasticity of
demand and the impact on sales and
profits of various level of prices

Session 4

Qualitative Research Tools

Qualitative Research
• Provides insights and understanding of the
problem setting.
• Is used for generating hypotheses and
identification of variables.

What is Qualitative Research?
• Qualitative business research
– addresses business objectives through techniques that
allow the researcher to provide elaborate
interpretations of phenomena without depending on
numerical measurement
• Its focus is on discovering true inner meanings and new
insights.
• Researcher-dependent
– Researcher must extract meaning from unstructured
responses such as text from a recorded interview etc.
Uses of Qualitative Research
• Qualitative research is useful when:
– People are unwilling to give truthful answers to questions
– People may be unable to provide accurate answers to
questions
– It is difficult to develop specific and actionable problem
statements or research objectives.
– The research objective is to develop a detailed and in-depth
understanding of some phenomena (human motivations).
– The research objective is to learn how a phenomenon occurs in
its natural setting (how do consumers use a product?).

Qualitative “versus” Quantitative
Research
• Quantitative business research
– Descriptive and conclusive
• Addresses research objectives through empirical
assessments that involve numerical measurement and
statistical analysis.
• Qualitative business research
– Exploratory
• Uses small versus large samples
• Asks a broad range of questions versus structured questions
• Subjective interpretation versus statistical analysis

Contrasting Exploratory and
Confirmatory Research
• Qualitative data
– Data that are not characterized by numbers but
rather are textual, visual, or oral.
• Focus is on stories, visual portrayals, meaningful
characterizations, interpretations, and other
expressive descriptions.
• Quantitative data
– Represent phenomena by assigning numbers in
an ordered and meaningful way.
Qualitative “versus” Quantitative Research
Qualitative Research Quantitative Research
Objective To gain a qualitative To quantify the data
understanding of the and generate results
underlying reasons from the sample to the
and motivations population of interest
Research design Exploratory Descriptive and causal
Sample Small Large
Data collection Unstructured Structured
Data analysis Non statistical Statistical

outcome Develop an initial Recommend a final
understanding course of action

Qualitative Research Techniques
• Non disguised (direct) approach
-Focus group interview
-Depth interview
• Disguised (indirect) approach
-Projective techniques
Association technique
Completion technique
Construction technique
Expressive technique

Focus Group Interview
• An unstructured, free-flowing interview with a small
group (6-10 people) led by a moderator who
encourages dialogue among respondents (advertising
themes, new product concepts).
• Advantages:
1. Relatively fast
2. Easy to execute
3. Allow respondents to piggyback off each other’s ideas
4. Provide multiple perspectives
5. Flexibility to allow more detailed descriptions
6. High degree of scrutiny
Focus Group Respondents
• Group Composition
– 6 to 10 people
– Relatively homogeneous
– Similar lifestyles and
experiences

The Focus Group Moderator
• Moderator
– A person who leads a focus group interview and
insures that everyone gets a chance to speak and
contribute to the discussion.
• Qualities of a good moderator:
– Develops rapport with the group
– Good listener
– Tries not to interject his or her own opinions
– Controls discussion without being overbearing
Disadvantages of Focus Groups
• Focus groups:
– Require objective, sensitive, and effective
moderators.
– May not be useful for discussing sensitive topics in
face-to-face situations.
– Cost a considerable amount of money (renting
facilities and equipment, recruiting of
respondents, paying respondents, researcher
costs etc.)
Depth Interviews
• Depth interview
– A one-on-one interview between a professional
researcher and a research respondent conducted
about some relevant business or social topic.
– Laddering: a particular approach to probing,
asking respondents to compare differences
between brands at different levels.

Projective Techniques
• Association techniques
An individual is presented with a stimulus and
asked to respond with the first things that
comes to mind.
-Word association
E.g. in the department store study, some of the
test words might be location, parking,
shopping, quality, and price.

• Completion techniques
Respondent is asked to complete an incomplete
stimulus situation.
Sentence completion and story completion.
E.g. When I think of shopping in a department
store, I ______.

• Construction techniques
Respondent is asked to construct a response in
the form of story or description from the
picture or cartoons

• Expressive techniques
Respondents are presented with a verbal or
visual situation and asked to relate the
feelings and attitudes of the other people to
the situation.
Role playing

Secondary Data Research

• Secondary Data
Secondary data are those which have already been
collected by someone else prior to and for a
purpose other than the current problem at hand.

• Advantages
 Easily accessible or available
 Relatively inexpensive (economical) than acquiring
primary data
 Quickly obtained (save time in data collection)
 Requires no access to subjects
 Wide coverage (space and time)

• Disadvantages
 Data may not suitable or relevant to the current
problem
 Data may be lacking in accuracy
 Inappropriate units of measurement
 Too old

Secondary Data Research (cont’d)
• Data conversion
– The process of changing the original form of the
data to a format suitable to achieve the research
objective
• Also called data transformation
• Cross-checks
– The comparison of data from one source with
data from another source to determine the
similarity of independent projects.
EXHIBIT 8.2 Common Research Objectives for Secondary-Data Studies
Classification of Secondary Data
(Sources of Secondary Data)
• Internal data
-Ready to use
-Require further processing
Example Sales invoice, Customer complaints and service record,

Accounting information
• External data
-Published materials
-Computerized data bases

Published Material
• Government Sources
Census data: demographic information about population of country
CSO: National Accounts Statistics once a year – national income
The Director General of Commercial Intelligence: Monthly statistics about foreign trade of
India
Annual publication of planning commission: Statistics relating to the Indian economy
RBI Bulletin: Merger and acquisition
• Non Government Sources
Business publication: books, periodicals, journals, newspaper, magazines, reports, and
trade literature
Directories

End Term Project Report
• Title
• Introduction
– Background of the selected topic
– Importance/Significance of the study
• Literature Review
• Objectives
• Hypotheses

End Term Project Report
• Research Methodology
– Research design
– Sample design
– Data collection
– Statistical techniques
• Data collection
• Data analysis & Data Interpretation
• Results/Findings
• Conclusions
• References

Session 5
Collecting Data: Survey Research

Survey Research
• Purpose: to collect primary data – data
gathered and assembled specifically for the
project at hand.

Survey Research
• Survey Objectives
– Surveys attempt to describe what is happening,
what people believe, what they are like, or to
learn the reasons for a particular business activity.
– Most survey research is descriptive research:
• Identifying characteristics of target markets
• Measuring consumer attitudes
• Describing consumer purchase pattern
– Surveys can be both quantitative and qualitative.

Errors in Survey Research
• Random Sampling Error
– A statistical fluctuation that occurs because of chance
variation in the elements selected for a sample.
• Systematic Error (non sampling errors)
– Error resulting from some imperfect aspect of the
research design that causes respondent error or from
a mistake in the execution of the research.
– Sample Bias: A persistent tendency for the results of
a sample to deviate in one direction from the true
value of the population parameter.
– Two types: Respondent error and Administrative error
EXHIBIT 9.1 Categories of Survey Errors

Respondent Error
• Respondent Error
– A category of sample bias resulting from some
respondent action or inaction such as
nonresponse or response bias.
• Nonresponse Error
– The statistical differences between a survey that
includes only those who responded and a perfect
survey that would also include those who failed to
respond.

Respondent Error
• Nonrespondents
– People who are not contacted or who
refuse to cooperate in the research.
• No contacts: people who are not at home or
who are otherwise inaccessible on the first and
second contact.
• Refusals: People who are unwilling to
participate in a research project.

Response Bias
• Deliberate Falsification
– Occasionally people deliberately give false answers.
• Misrepresent answers to appear intelligent
• Conceal personal information
• Avoid embarrassment
– Average-person hypothesis:
• Individuals may prefer to be viewed as average, so they
alter their responses to conform more closely to their
perception of the average person.

Response Bias
• Unconscious Misrepresentation
– Response bias can arise from the question format,
the question content, or some other stimulus that
affects their response to a question.
– Sources of misrepresentation:
• Misunderstanding the question
• Unable to recall details
• Unprepared response to an unexpected question
• Inability to translate feelings into words
• After-event underreporting

Types of Response Bias
• Acquiescence Bias
– A tendency to agree with all or most questions.
• Extremity Bias
– The tendency of some Individuals to use extremes when
responding to questions.
• Interviewer Bias
– The presence of the interviewer influences respondents’
answers.
• Social Desirability Bias
– Bias in responses caused by respondents’ desire, either
conscious or unconscious, to gain prestige or appear in a
different social role.
Administrative Error
• An error caused by the improper administration
or execution of the research task.
– Data-processing error: incorrect data entry, incorrect
computer programming, or other procedural errors
during data analysis.
– Sample selection error: improper sample design or
sampling procedure execution.
– Interviewer error: mistakes made by interviewers
failing to record survey responses correctly.
– Interviewer cheating: filling in fake answers or
falsifying questionnaires by an interviewer.
Interviews as Interactive Communication
• Interactive Survey Approaches
– Those that allow spontaneous two-way
interaction between the interviewer and the
respondent.
– Can be either personal or electronic.
• Noninteractive Media
– Those that do not facilitate two-way
communication and are largely a vehicle by which
respondents give answers to static questions.
• Self-administered mail and Internet surveys
Personal Interviews
• A personal interview is a form of direct
communication in which an interviewer asks
respondents questions face-to-face.
– Versatile and flexible
– Truly interactive

Advantages of Personal Interviews
Opportunity
for Feedback
High Probing Complex
Participation Answers
Personal
Personal
Props and Interviews
Interviews Length of
Visual Aids Interview
Completeness of
Questionnaire

Disadvantages of Personal
Interviews
Lack
Lackof
of
Interviewer
Interviewer Anonymity
Anonymityof
of
Influence
Influence Respondent
Respondent
Personal
Personal
Interviews
Interviews
Cost
Cost

Door-to-Door Interviews
• Personal interviews conducted at
respondents’ doorsteps in an effort to
increase the participation rate in the survey.
• Callbacks
– Attempts to recontact individuals selected for a
sample who were not available initially.

Mall Intercept Personal Interview
• Personal interviews conducted in a shopping
mall.
• Interviewers typically intercept shoppers at a
central point within the shopping center or at
the main entrance.

Telephone Interviews
• Telephone Interviews
– Personal interviews conducted by telephone.
– The mainstay of commercial survey research.
– “No-call” legislation has limited this capacity.

Self-Administered Questionnaires
• Surveys in which the respondent takes the
responsibility for reading and answering the
questions.

EXHIBIT 10.1 Self-Administered Questionnaires Can Be Either Printed or Electronic

Mail Questionnaires
• Characteristics of Mail Questionnaires
– Geographical flexibility
– Cost
– Respondent convenience
– Anonymity of respondent
– Absence of interviewer
– Standardized questions
– Length of mail questionnaire
Self-Administered Questionnaires
• Response Rate
– The number of questionnaires returned or
completed divided by the number of eligible
people who were asked to participate in the
survey.

Fax Surveys
• A survey that uses fax machines as a way for
respondents to receive and return
questionnaires.
• Advantages
– Reduce sender’s printing and postage costs
– Is quicker than traditional mail surveys
• Disadvantage
– Only respondents with fax machines who are willing
to exert the extra effort will return questionnaires.
E-Mail Surveys
• Surveys distributed through electronic mail.
• Ways to contact respondents:
– Include a questionnaire in the body of an e-mail.
– Distribute questionnaire as an attachment.
– Include a hyperlink within the body of an e-mail.
• Advantages
– Speed of distribution
– Lower distribution and processing costs
– Faster turnaround time
– More flexibility
– Less handling of paper questionnaires
• Disadvantage
– Not all e-mail systems have the same capacity

Internet Surveys
• A self-administered questionnaire posted on a
Web site.
– Respondents provide answers to questions
displayed online by highlighting a phrase, clicking
an icon, or keying in an answer.

Selecting the Appropriate Survey
Approach
• Questions to be answered:
– Is the assistance of an interviewer necessary?
– Are respondents interested in the issues being
investigated?
– Will cooperation be easily attained?
– How quickly is the information needed?
– Will the study require a long and complex
questionnaire?
– How large is the budget?

Selecting the Appropriate Survey
Approach
Parameters Telephone Personal Mail-
Interview Interview Questionna
Method Method ire Method
Funds Restricted Available Limited
Time Restricted Available Sufficient
Precision Average High Low
Informatio Less More More

n information information information
01/05/22 is desired is desired
Dr. Rajeev Sirohi LBSIM is desired 100
Session 6

Observation Methods

Mystery Dine at Seasons
Restaurant
• Mystery shoppers (or
mystery diners or mystery
employees) can help
inspect and evaluate a
variety of activities.
• Over 400 companies
belong to the Mystery
Shopping Providers
Association (MSPA)
located around the world.

Observation in Business Research
• Observation
– a systematic process of recording behavioral
patterns of people, objects, and events as they
happen.
• The observer does not question or communicate
with the people.
• It is the most commonly method in studies relating
to behavioral science.

What Can Be Observed

Observation Method
Advantages:
• The information obtained relates what is currently
happening.
• The method is independent of respondent’s
willingness to respond.
• Data are free from distortions, inaccuracies, or other
response biases.
• This method is suitable in studies which deals with
the respondents who are not capable of giving verbal
reports of their feelings.

Observation Method
Disadvantages:
• It is an expensive method.
• The information provided by this method is very
limited.
• Training is required for data collection.
• Less validity.
• Cognitive phenomena such as motivations,
intentions, or attitudes can not be observed.

Observing and Interpreting Nonverbal Communication

Observation of Human Behavior
• Complementary Evidence
– Observation provides an additional source of
information that helps explain other research
findings.
– Focus group interviews

Direct and Contrived Observation
• Direct Observation
– A straightforward attempt to observe and record
what naturally occurs.
• Contrived Observation
– Observation in which the investigator creates an
artificial environment in order to test a
hypothesis.

Ethical Issues in the Observation of
Humans
• Issues
• Respondent’s right to privacy
• Contrived observation as entrapment
• Researchers feel comfortable collecting
observational data if:
• The observed behavior is commonly performed in
public where others can observe the behavior.
• The behavior is performed in a setting that assures
the anonymity of the person being observed.
• The observed person has agreed to be observed.
11–111
01/05/22 Dr. Rajeev Sirohi LBSIM
Observation of Physical Objects and
Content Analysis
• Physical-Trace Evidence
• A visible mark of some past event or
occurrence.
• Example:
• Wear on library book
• Packages in trash
• Content Analysis
• Obtains data by observing and analyzing the
content of advertisements, letters, articles,
etc.
11–112
Mechanical Observation
• Television Monitoring
– Computerized mechanical observation used to
obtain television ratings.
• Monitoring Website Traffic
– Hits and page views
• Unique visitors
– Click-through rate (CTR)
• Proportion of people exposed to an Internet ad who
actually click on its hyperlink to enter the Web site.
11–113
Mechanical Observation (cont’d)
• Scanner-Based Research
– Scanner-based consumer panel
• A type of consumer panel in which participants’
purchasing habits are recorded with a laser scanner
rather than a purchase diary.
11–114
Measuring Physiological Reactions
• Eye-Tracking Monitor
– Records how the subject actually reads or views
an advertisement.
– Measures unconscious eye movements.
• Pupilometer
– Observes and records changes in the diameter of
the subject’s pupils.
11–115
Measuring Physiological Reactions
• Psychogalvanometer
– Measures galvanic skin response—involuntary
changes in the electrical resistance of the skin.
– Assumes that physiological changes accompany
emotional reactions.
• Voice Pitch Analysis
– Measures emotional reactions through
physiological changes in a person’s voice.
11–116
Session 7

Measurement and Scaling

Money Matters?
• A company wants to
perform a customer
relationship
management (CRM)
employee evaluation
process that will allow
an overall ranking of all
CRM employees.
• Key question is, “What is
performance?”
What Do I Measure?
• Measurement
– The process of describing some property of a
phenomenon, usually by assigning numbers in a
reliable and valid way.
• Concept
– A generalized idea about a class of objects,
attributes, occurrences, or processes
• Constructs
– Concepts measured with multiple variables.
Primary Scales of Measurement
Nominal Scale:
– Assigns a value to an object for identification or
classification purposes.
– Most elementary level of measurement.
e.g. numbers assigned to football
players

Nominal Scale
• For E.g-
Categorization
• Male 1
&
Gender Identification
Female 2
The numbers do not tell here which is better gender

Your Bank Account no. Does not indicate about your
Bank balance

Ordinal Scale:
– Ranking scale in which numbers are assigned to
objects to indicate the relative extent to which the
objects posses some characteristics.
– Indicates relative position, not the magnitude of
the differences between the objects.
– Have nominal properties.
– e.g. Ranking of teams in a tournament

Interval Scale:
– Numerically equal distances on the scale represents
equal values in the characteristics being measured.
– Contains all the information of nominal and ordinal
scale, but it also allow to compare the differences
between objects.
– There is constant or equal interval between scale values.
e.g. Temperature Scale, Calendar Time

Ratio Scale:
– Highest form of measurement.
– Have all the properties of the nominal, ordinal,

and interval scales with the additional attribute of
representing absolute quantities.
– Absolute zero.
e.g. Height, Weight, Age, Sales, Stock Price

EXHIBIT 13.5 Facts About the Four Levels of Scales

Classification of Scaling Techniques
• Comparative Scales involve the direct comparison of
stimulus objects with one other. E.g. respondents
may be asked whether they prefer Coke or Pepsi.
Comparative scale must be interpreted in relative

terms and have only ordinal properties and hence it
is referred as non-metric scaling.

• Paired Comparison Scaling (Attitude Measurement Scale)
In paired comparison scaling, a respondent is presented with
two objects at a time, and asked to select one object in the
pair according to some criterion.
Suppose the respondent is asked to show his preference from
amongst five brands of tea A,B,C,D and E with respect to the
flavour.
Number of pairs= [(n)(n-1)/2]
Where n is number of brands

• Rank Order Scaling
In rank order scaling, respondents are presented with

several objects simultaneously and asked to order or
rank them according to some criterion.
e.g. respondents may be asked to rank brands of

toothpaste according to overall preference

• Rank Order Scaling
Brand Rank
Colgate ___
Closeup ___
Pepsodent ___
Babul ___
Rank 1 means most preferred brand
Rank 4 means least preferred brand

• Constant Sum Scaling
A comparative scaling technique in which respondents

are required to allocate a constant sum of units such
as points among a set of stimulus objects with
respect to some criterion.

Example:
• Divide 100 points among each of the following
attributes of two-wheeler according to your preference:
• Price ______
• Mileage _____
• Quality _________
• Power _______

• Non Comparative Scaling Techniques
The scaling technique in which each stimulus object is scaled

independently of the other objects in the stimulus set. The
resulting data are generally assumed to be interval or ratio
data. Non comparative scales also referred as metric scales.

• Continuous Rating Scale or Graphic Rating Scale or

Thurstone Interval Scale (Attitude Measurement Scale)
Respondents rate the objects by placing a mark at the
appropriate position on a line that runs from one
extreme of the criterion variable to the other.

• Continuous Rating Scale or Graphic Rating Scale or Thurstone
Scale (Attitude Measurement Scale)
e.g.
Q How would you rate Vishal Mega Mart as a department store?
Probably the worst ______________ Probably the best

• Likert Scale (Attitude Measurement Scale)
The respondents are asked to indicate a degree of agreement

or disagreement with each of a series of statements about
the stimulus objects.
Typical five response categories: “strongly disagree,”

“disagree,” “neither agree nor disagree,” “agree,” and
“strongly agree.”

• Likert Scale (Attitude Measurement Scale)
Example:
It is more fun to play a tough, competitive tennis match
than to play an easy one.
___Strongly Disagree ___Disagree ___Neither Agree

nor Disagree ___Agree ___Strongly Agree

• Semantic Differential Scale (Attitude Measurement Scale)
The semantic differential is a seven-point rating scale with

endpoints associated with bipolar levels that have
semantic meaning.
Individual items on a semantic differential scale may be

scored on either a -3 to +3 or 1 to 7 scale.

• Semantic Differential Scale (Attitude Measurement
Scale)
Example
Fun & Food is

Exciting ___ : ___ : ___ : ___ : ___ : ___ : ___ Calm
Interesting ___ : ___ : ___ : ___ : ___ : ___ : ___ Dull

• Stapel Scale
It is a unipolar rating scale with 10 categories numbered from

-5 to +5, without a neutral point (zero). This scale is usually
presented vertically. Respondents are asked to indicate how
accurately or inaccurately each term describes the object by
selecting an appropriate numerical response category.

• Stapel Scale
e.g. Please evaluate how accurately each word or phrase describes

VMM. You can select any number, from +5 for phrases you think
are very accurate, to -5 for phrases you think are very inaccurate.

+5 +5
+4 +4
+3 +3
+2 +2 x
+1 +1
High Quality Poor Service
-1 -1
-2 -2
-3 -3
-4 x -4
-5 -5

Three Criteria for Good
Measurement
Reliability
Reliability Validity
Validity
Good
Good
Measurement
Measurement
Sensitivity
Sensitivity

Reliability
• Reliability
– The degree to which measures are free from
random error and therefore yield consistent
results.
– An indicator of a measure’s internal consistency.
• Split-half Method
– Assessing internal consistency by checking the
results of one-half of a set of scaled items against
the results from the other half.

Reliability
• Coefficient alpha (α)
– The most commonly applied estimate of a
multiple item scale’s reliability.
– Alpha value ranges from 0 to 1.
• Test-retest Method
– Administering the same scale or measure to the
same respondents at two separate points in time
to test for stability.
– Represents a measure’s repeatability.

Validity
• Validity
– The accuracy of a measure or the extent to which a
score truthfully represents a concept.
• Does a scale measure what was intended to be
measured?
• Establishing Validity:
– Is there a consensus that the scale measures what it is
supposed to measure?
– Does the measure correlate with other measures of
the same concept?
– Does the behavior expected from the measure predict
actual observed behavior?
Validity (cont’d)
• Face Validity (subjective agreement among professional)
– A scale’s content logically appears to reflect what was intended to be
measured.
• Content Validity
– The degree that a measure covers the breadth of the domain of
interest.
• Criterion Validity
– The ability of a measure to correlate with other standard measures of
similar constructs or established criteria.
• Construct Validity
– Exists when a measure reliably measures and truthfully represents a
unique concept.
13–147
Validity (cont’d)
• Convergent Validity
– Another way of expressing internal consistency;
highly reliable scales contain convergent validity.
• Discriminant Validity
– Represents how unique or distinct is a measure; a
scale should not correlate too highly with a
measure of a different construct.
13–148
Reliability and Validity on Target

Sensitivity
• Sensitivity
– A measurement instrument’s ability to accurately
measure variability in stimuli or responses.
– Generally increased by adding more response
points or adding scale items.

Session 8

Questionnaire Design
A questionnaire is a formalized set of questions for obtaining information from the

respondents.

Objectives of Questionnaire
• It must translate the information needed into a set of specific questions.
• A questionnaire must uplift, motivate, and encourage the respondents to become involved in the
interview, to cooperate, and to complete the interview.
• A questionnaire must minimize response error.

Questionnaire Design Process
1. Specify the information needed
2. Specify the type of interviewing method
3. Determine the content of individual questions

• Is the question necessary?
• Are several questions needed instead of one?

e.g. “Do you think Coca-Cola is a tasty and refreshing soft drink?”
Double-barreled question: A single question that attempts to cover two issues. Such
questions can be confusing to respondents and results in ambiguous responses.

To obtain the required information, two distinct questions should be asked:
“Do you think Coca-Cola is a tasty soft drink?”
“Do you think Coca-Cola is a refreshing soft drink?”

4. Design the questions to overcome the respondent’s inability and unwillingness to answer
(a)Overcoming inability to answer

• Is the respondent informed?
Filter question: An initial question in a questionnaire that screens potential respondents to ensure they meet the
requirement of the sample

• Can the respondent remember?
e.g. How much soft drinks did you consume during the last four weeks?
How often do you consume soft drinks in a week?
(i) Once in a week (ii) 2 to 3 times
(iii) 4 to 5 times (iv) 6 or more

• Can the respondent articulate (responses)?
(b) Overcoming unwillingness to answer

• Effort required of the respondents
e.g. please list all the departments from which you purchased merchandise on your most recent shopping trip to a
department store. (Incorrect)

In the list that follow, please check all the departments from which you purchased merchandise on your recent shopping trip
to a department store. (Correct)
(i) Women’s dress
(ii)Men’s apparel
(iii)Children’s apparel
(iv)Cosmetics
(v)Other (please specify)

• Legitimate purpose
• Sensitive information
5. Choosing question structure
(i)Unstructured questions: Unstructured questions are open-ended questions that respondents answer in their own words,
also referred as free- response or free-answer questions.
e.g. Who is your favourite political figure?

(ii) Structured questions: Structured questions specify the set of response alternatives and the response
format. A structured question may be multiple choice questions , dichotomous questions.
Multiple choice questions: The researcher provides a choice of answers and respondents are asked to select
one or more of the alternatives given.

e.g. How did you make your reservation?
(i) Airline website
(ii)Airline ticket office
(iii)Travel agent
(iv)Other (Please specify)

Dichotomous questions: A dichotomous question has only two response alternatives. Yes or no, agree or disagree ,
and so on. Often, the two alternatives are supplemented by a neutral alternative, such as “no opinion”, “don’t
know”, “both”, or “none”.
e.g. Do you intend to buy a new car within the next six months?
(i) Yes (ii) No (iii) Don’t know

6. Choosing question wording
• Define the issue
e.g. Which brand of shampoo do you use?
Which brands of shampoo have you personally used in home during the last month?

• Use ordinary words
e.g. Do you think distribution of soft drinks is adequate?
Do you think soft drinks are readily available when you want to buy them?

• Use unambiguous words
e.g. In a typical month, how often do you shop in department stores?
(i) Never
(ii)Occasionally
(iii)Sometimes
(iv)Often
(v)Regularly

e.g. In a typical month, how often do you shop in department stores?
(i) Less than once
(ii)1 or 2 times
(iii)3 or 4 times
(iv)More than 4 times

• Avoid leading or biasing questions
e.g. Do you think that patriotic Indians should buy imported products when that would Indian labour out of work?
(i) Yes
(ii)No
(iii)Don’t know

e.g. Do you think that Indians should buy imported products?
(i) Yes
(ii)No
(iii)Don’t know

7. Determining the order of questions
• Basic information
• Classification information
• Identification information
8. Form and Layout
9. Reproduction of the Questionnaire

10. Pretesting
Pretesting refers to the testing of the questionnaire on a small sample of respondents to identify and
eliminate potential problems.

Questionnaire
Questions about Advertising
Awareness, recall, recognition, attitude, readership
Questions about Ownership and Product Usage
Ownership, purchase behavior, usage

Questionnaire
Questions about Goods and Services
Ease of use, uniqueness, attribute rating/Importance of characteristics, interest, like/dislike, expectations, satisfaction,
quality, problems, benefits, improvements, buying intentions for existing products, buying intentions based on product
concept
Questions about Demographics
Age, education, marital status, income, occupation

Business Research Methods FIN 324: Session 1

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Business Research Methods FIN 324: Session 1

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Business Research Methods

01/05/22 Dr. Rajeev Sirohi LBSIM 1

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“ A problem well defined, is half solved.”

Research Problem refers to some difficulty which a

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• Discussion with decision makers

• Interview with industry experts

• Secondary data analysis

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• A research design is the conceptual structure within

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• Design the exploratory, descriptive, and/or causal

• Data collection design

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Exploratory research is used:

• Develop working hypotheses from operational point of view.

• Gain insights for developing an approach to the problem

• Establish priorities for further research

• Identify and define the variables under study.

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• Pilot Studies for Qualitative Analysis

-Direct or Non disguised techniques

-Indirect or Disguised Techniques

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The objective of such a study is to answer the (Six Ws)

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e.g. we might be interested in estimating the heavy

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e.g. how do households perceive the various

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e.g. to what extent is shopping at department stores

e.g. what will be the retail sales of specific store for

• Designing the methods of data collection

• Selecting the sample

• Collecting the data

• Processing and analysing the data

• Reporting the findings

-Single cross-sectional design: Only one sample of

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e.g. How did Indian people rate the performance of

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• Longitudinal design: A fixed sample (or samples) of

e.g. How did Indian people change their view of Modi’s

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A causal research investigates the cause and effect

The Researcher try to understand the phenomena in

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Causal research is appropriate for the following

Causal research requires a planned and structures

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