Business Research

Methods
Research

In common language, Research refers to “Search

for Knowledge”. It is an art of scientific
investigation.
It is also a systematic design, collection, analysis
and the reporting the findings and solutions for the
marketing problems of a company. Research is
required because of the following reasons:
◦ To identify and find solutions to the problems
◦ To help making decisions:
◦ To develop new concepts
◦ To find alternate strategies
BRM
 1. To identify and find solutions to the problems
Understand the problem in depth. By identifying the problem precisely it is
easy to collect the relevant data to solve the problem.
Ex: Why Demand for a particular product is falling?

 2. To help making decisions:

Research provides answers to certain decisions.
Ex: Is the same advertising budget maintained?

 3. To develop new concepts:

Ex: Horizontal Marketing, MLM etc.

 4. To find alternate strategies

Ex: Should we follow pull strategy or push strategy to promote the product?
Business Research

Introduction

 Business research is a means of providing management with

information.
 The main purpose is to reduce uncertainty at the time when business
strategy is being planned, and to monitor performance after the
strategy has been implemented.
 It has crucial role in aiding decision making, by ensuring continuous
flow of data or information.
 The information collected from business research and its contribution
to decision making, depends largely on the nature of the problem.
 If the problem is not correctly defined the information collected can go
waste or may be irrelevant.
 Any approach to designing a research project therefore should start
from defining the problem carefully.
Few questions must be assured
Few questions must be assured before one conducts
research:

1. What information will aid decision making?

2. What are we going to do with this information?
3. How should we collect this information?
4. What are we going to measure?
5. How should we analyze results?
6. How much should we spend on the entire
research process?
cost and value of information
It is important to consider the cost and value of information that
may be obtained before going in for research. The management
also has to weigh upon the outcome of not using research,
against the likely results of using it and therefore should address
the following questions:

1. What decision are we faced with?

2. What are the implications of taking wrong decisions?
3. What is the risk of taking a wrong decision based
on available information?
4. How can we justify the decision without collecting data?
Concept

 Business research is intended to find out things about business matters in a systematic way.
 The purpose is to advance knowledge and increase understanding by providing procedures
that help managers to solve business problems.
 The most notable twenty-first century business environment characteristics are: a fast-
changing global market place and the need for cost-effective, accurate information and timely
decision-making.
 Management has to take decisions in an uncertain environment that is influenced by many
factors.
 Business research aims to provide management with information that can serve as a basis
for sound decision-making.
 Research Methodology provides a tool for management to meet the information
requirements of key decision-makers.
 Business research methods can provide management with reliable information if data are
collected in a scientific manner.
 Through research, new knowledge is discovered that aids management in finding solutions
to specific business problems. This requires the development of an effective research process.
Meaning

 Business research refers to any type of researching done when starting or running
any kind of business.
 For example, starting any type of business requires research into the target
customer and the competition to create a business plan.
 Conducting business market research in existing businesses is helpful in keeping
in touch with consumer demand.
 Small business research begins with researching an idea and a name and continues
with research based on customer demand and other businesses offering similar
products or services.
 All business research is done to learn information that could make the company
more successful.
 The task of business research is to generate accurate information for use in
decision making.
 The emphasis of business research is on shifting decision makers from intuitive
information gathering to systematic and objective investigation.
Definition

To McDaniel and Gates “Business research is the

planning, collection and analysis of data relevant to
business decision-making and the communication of the
result in this analysis to management”.
In the words of John W Best, “Research is the
systematic and objective analysis and recording of
controlled observations that may lead to the development
of generalizations, principles, or theories, resulting in
prediction and possibly ultimate control of events”.
Nature or Characteristics of Business Research

 Covering business region

 Judging problem
 Flexible
 Deciding how to produce the product
 Promoting Business
Nature or Characteristics of Business Research

1. Promoting Business
The aim of any business research is how to better promote the business in an
economically sound manner and to increase the businesses net profit,
exposure and ensure its continuity.

2. Covering business region

It includes all the regions in which the business operates, locally and
internationally. Example: Setting-up a hotel means knowing local conditions
such as attractions and competing establishments but also problems such as
crime or obtaining supplies.

3. Judging problem
One of the natures of business research is judging local problems of the
environment in which our establishment is going to operate.
4. Flexible
Another characteristic of business research objectives is flexibility. The
research may be programmed for one area and then something shows-up.
If that “something” is pertinent, it should be investigated and included in
the research. Research is discovering new things and factors, it should
not be easily sidetracked but it also should not be inflexible.

5. Deciding how to produce the product

Business research should include the use of the internet. If the business is
manufacturing a specific product, look at the market size and options on
how to produce the product.
This is part of knowing who is competitor , but slightly different as
it helps to best determine how to produce the product.
Scope of business research

◦ Production and producing Methods

◦ Personal and Industrial Relations
◦ Purchasing and Inventory
◦ Financing, Investment and credit
◦ Market, the consumer and Marketing procedure
◦ Economic conditions and Tendencies
◦ Public and Government Relations
1.Production and producing Methods:
 Business research is used in production cost analysis, time and motion
studies, machine depreciation and obsolescence; production stabilization.

2.
Personal and Industrial Relations
 It is used in Aptitude and attitude tests, fatigue studies, wage
employment, and retirement plans, employee organizations and activities,
death and sickness disability benefit plans, and group insurance.

3. Purchasing and Inventory

 It is used for sources and prices of materials, purchasing methods and
procedures, inventory control and storage.
4. Financing, Investment and credit:

 It is used for financial methods and operations, budget planning,

investment of reserves divided policies, credit sources and costs.
5.Market, the consumer and Marketing procedure
 It is used for Market potentials, trading areas and sales quotas,
distribution channels, distribution cost, price policies and competition,
credit and collection, advertising, warehousing and transportation,
consumer identity and attitudes.

6.Economic conditions and Tendencies

 It is used for Measurement and forecast of economic and business
conditions, general price structure and price movements; trade and
production changes; rates of return on investments and of profits on
sales, national income estimates, taxation.

7.Public and Government Relations

 It is used for Relation of concern and its industry to public weal; public
attitudes, exchange of information with government agencies; regulations
by statute and administrative order.
Need of Business Research:

A manager faced with two or more possible courses of

action faces the initial decision of whether or not research
should be conducted. The determination of the need for
research centers on:

Time Constraints
Availability of Data
Nature of the Decision
Benefit versus Costs
1. Time Constraints:
 Systematic Research doing takes time. In many instances, management concludes that
because a decision must be made immediately, there will be no time for research.
 As a result, decisions are sometimes made without adequate information or thorough
understanding of the situation.
 Although such rapid decision-making is not ideal, sometimes the urgency of a situation
precludes the use of research.
  
 2. Availability of Data:
 Often Managers already possess enough information to make sound decisions with no
business research. When they lack adequate information, however, research must be
considered.
 Managers must ask themselves if the research will provide the information needed to
answer the basic questions about a decision.
 Furthermore if a potential source of data exists, managers will want to know, how much
it will cost to obtain the data. If the data cannot be obtained, research cannot be
conducted.
 3. Nature of the Decision:
 The value of business research will depend on the nature of the managerial

decision to be made. A routine tactical decision that does not require a substantial
investment may not seem to warrant a substantial expenditure for research. For
example, a computer company must update its operator’s instruction manual when
it makes minor product modifications.

 The research cost of determining the proper wording to use in updating the manual
is likely to be too high for such a minor decision.

 The nature of the decision is not totally independent of the next issue to be
considered, the benefits versus the costs of the research.

 In general, however the more strategically or tactically important the business

decision, the more likely it is that research will be conducted.
Benefit versus Costs:

◦ Conducting research activities to obtain these benefits requires

expenditure, thus there are both costs and benefits in conducting business
research.
◦ In any decision-making situation, managers must identify alternative
courses of action, then weigh the value of each alternating against its cost.
It is useful to think of business research as an investment alternative.
◦ When deciding whether to make a decision without research or to
postpone the decision in order to conduct research, managers should ask,
 Will the pay-off or rate of return be worth the investment?
 Will the information gained by business research improve the quality of the
decision to an extent sufficient to warrant the expenditure? And
 Is the proposed research expenditure the best use of available funds?
Types of Business Researches

Basically it is of four types. They are,

 Marketing Research:
 Market Research:
 Product Research
 Advertising Research:
1. Marketing Research:
Consumer Research or Marketing Research includes a form of applied sociological
study, which concentrates on understanding the behaviors, whims and preferences,
mainly current and future of consumers in a market based economy.
 
2. Market Research:
Market research has a broad scope and includes all aspects of the business
environment.
It asks questions about competitors, market structure, government regulations,
economic trends, technological advances and numerous other factors that make up
the business environment.
Sometimes the term refers more particularly to the financial analysis of companies,
industries or sectors.
In this case, financial analysts usually carry out the research and provide the
results to investment advisors and potential investors.
3. Product Research:
This looks at what products can be
produced with available technology, and what
new product innovations near-future
technology can develop.

4. Advertising Research
It attempts to assess the likely impact of
an advertising campaign in advance, and also
measure the success of a recent campaign.
Significance or Importance of Business Research

The prime managerial value of business research is that it

reduces uncertainty by providing information that improves the
decision-making process. This process associated with the
development and implementation of a strategy involves four
interrelated stages.

 Identifying problems or opportunities

 Diagnosing and Assessing Problems or Opportunities
 Selecting and Implementing a course of Action
 Evaluating the course of Action:

1. Identifying problems or opportunities:
• Business research can help managers to plan strategies by determining the nature of situations
or by identifying the existence of problems or opportunities present in the organization.
• It can be used as a scanning activity to provide information about what is occurring with an
organization or in its environment.
• The mere description of some social or economic activity may familiarize managers with
organizational and environmental occurrences and help them to understand a situation.

 2. Diagnosing and Assessing Problems or Opportunities

• After an organization recognizes a problem or identifies a potential opportunity, an important
aspect of business research is the provision of diagnostic information that clarifies the situation.
• Managers need to gain insight about the underlying factors causing the situation.
• If there is a problem, they need to specify what happened and why. If an opportunity exists they
may need to explore, clarify and refine the nature of the opportunity.
• If multiple opportunities exist research may be conducted to set priorities.
• Quantitative or qualitative investigations may help managers to better understand what alternative
courses of action are practical
3. Selecting and implementing a Course of Action
◦ After the alternative courses of action have been clearly identified business research is often conducted to obtain
specific information that will aid in evaluating the alternatives and in selecting the best course of action.
◦ Opportunities may be evaluated through the use of various performance criteria. For example, estimates of
market potential allow managers to evaluate the revenue that will be generated by each of the possible
opportunities.
◦ A good forecast supplied by business researchers is among the most useful pieces of planning information a
manager can have.

4. Evaluating the course of Action

◦ After a course of action has been implemented, business research may serve as a tool to inform managers
whether planned activities were properly executed and whether they accomplished what they were expected to
accomplish.
◦ Evaluation research is formal, objective measurement and appraisal of the extent to which a given activity,
project or program has achieved its objectives.
◦ In addition to measuring the extent to which completed programs achieved their objectives or whether continuing
programs are presently performing as projected, evaluation research may provide information about the major
factors influencing the observed performance levels.
◦ Performance-Monitoring research is a specific type of evaluation research that regularly perhaps routinely
provides feedback for the evaluation and control of recurring business activity.
Types of Research
Types of Research
On the basis of Intent
1. Pure
2. Applied research
3. Descriptive research
4. Exploratory research
5. Diagnostic Research
6. Conceptual research
7. Action research
8. Evaluation research
1. Pure Research
 Pure research is also called as fundamental research. This is conducted with view for the sake of
the knowledge having no intention of its application.
 This study is conducted for generalized which will help us to form certain theory.
 In pure research if study is conducted to assess human behavior, it may provide us generalization
in relation to normal human behavior.
 Pure research offer solutions to many practical problems. It helps us to find out various crucial
factors. It develops many alternative solutions.

2. Applied research
 Applied research is carried out when any real-life problem or social problem requires immediate
solution which can be helpful in policy formulation by the concerned agency. This is considered
problem oriented and action directed activity in which immediate and practical results are
required.
 There is vast scope for applied research in the field of technology, management, commerce and
economics, as it contributes to the development of new facts or testing of new theory.
 Applied research can put theory to the test, it may add to conceptual clarification and integrate
previous existing theories.
3. Descriptive research:

 Descriptive research is termed as Ex-post-facto research.

 This type of research is mainly concerned with description of facts only.
 It is an expiration of state of affairs as they exists. This includes surveys and facts
findings enquiries.
 The main important aspect of this type of the study is that researcher has no
control on the variables under investigation; he can only describe things as they
exist and discover the causes.

4. Exploratory Research or Formulative research:

 It helps us to investigate any problem with suitable hypothesis.
 This research on social science is particularly important for clarification of any
concept and throwing new light for further research on principles of developing
hypothesis and its testing with statistical tools.
 5. Diagnostic Research
This is similar to descriptive study but with a different focus. It is directed towards discovering
what is happening, why is it happening/ and what can be done about. It aims at identifying the
causes of a problem and the possible solutions for it

 Purpose: A diagnostic study may also be concerned with discovering and testing whether certain
variables are associated, e.g., are persons hailing from rural areas more suitable for managing the
rural branches of banks? Do more villagers than city-voters vote for a particular party?

 Requirements: Both descriptive and diagnostic studies share common requirements, viz., prior
knowledge of the problem, its thorough formulation, clear-cut definition of the given population,
adequate methods for collecting accurate information, precise measurement of variables,
statistical analysis and test of significance. As the aim is to obtain complete and accurate
information about a given situation/phenomenon, the research design must make much more
provision for protection against bias than is required in an exploratory study. Moreover, the
amount of work involved is considerable and so concern with economy of research effort is
extremely important.
6. Conceptual Research:
Conceptual research is conducted by the thinkers and philosophers for developing new theories or for
reinterpreting old one. In this type of research the researcher should collect the data to prove or
disapprove his hypothesis. The various ideologies are examples of conceptual research.

7. Action Research:
When researcher is conducted for the survey in a single workplace, than action research is commonly
used in such cases. The focus in action research is given in improving working practices. The action
research has practical purpose and it is directed towards organizational changes in managerial set-up.
The action research theories are valid through practice, rather than applied independently to practice.
It is conducted through direct action. In action research is conducted in various phases like, base line
survey, systematic action and periodical assessment.

8. Evaluation Research
This is an example of applied research. This research is conducted to find out how well a planned
programme is implemented. Therefore, evaluation research deals with evaluating the performance or
assessment of a project. Example: “Rural Employment Programme Evaluation” or “Success of
Midday Meal Programme”.
II. On the basis of nature of data

Quantitative research and Qualitative research

 It denotes to methods that generate data comprising of numbers. This research is

conducted for the measurement of quantity and it is applicable to the work which can
be expressed in terms of quantity only.
 Qualitative research relates to quality involved in assessment. It generates the data that
is verbal. Assessment of human behavior is a qualitative research.
 It is difficult to find out which research is quantitative and which one is qualitative.
There are four main methods for these types of research work namely – interview,
questionnaires, observations and documents analysis. On the basis of their explanation
none of this can be exclusively labeled as quantitative or qualitative. Accordingly the
labels of quantitative and qualitative should be applied to data rather than to methods.
 Motivation research is important type of qualitative research, which is conducted to
assess the motive or desire of human behavior. Likewise Opinion research is also
qualitative research conducted to know how people feel about particular subject.
III. On the basis of methods of study

1. Analytical Research
It relates to critical evaluation of the existing facts and information
which is used in order to draw certain conclusions.

2. Empirical Research
Empirical research is based on observation or experience without due
regards to theories. In this type of research working hypothesis is
provided and then data is collected to prove or disprove this. Researcher
here sets up the design for desired results.

3. Formalized Research
When hypothesis is tested in the research study it is known as formalised
research.
4. Survey Research
A survey is conducted with an object to understand specific aspect in defined
population. Usually the population in study is so large that the access to all the
elements is impossible. Therefore sample taken from the population will make it
possible to draw the conclusions regarding population. The purpose of the survey is
to understand phenomena by identifying influencing factors.
Survey are normally conducted through questionnaires but sometimes interview
method is used to collect necessary information. The method of conducting survey
may also be applied to analyzing large data files in an organization by using sample
form. Survey method is widely accepted for following reasons.
1. Greater amount of objectivity
2. Greater reality in findings and conclusions.
3. It is most scientific method for obtaining data and dependable result.
4. Direct observation of the population has possibility of getting accurate results.
5. Survey is extensively used in all the areas for its merit.
 5. Case study
 It is very difficult to define, when the phenomena under investigation are not readily form its context in such situation
case study becomes appropriate. It is characterized by in-depth study of organization. It is a concept and intensive study
of business situation.
 Case study is method of investigation for exploring a live situation it is a in-depth study of situation as whole. It is in the

form of qualitative and quantitative analysis where careful observation of situation is done.
 A case study uses various methods for collecting information may be in form of interview, questionnaires, observation

and documentary analysis. By this, wide variety of relevant dta is collected.

 A case is report containing facts and opinions expressed by the people. The cases are designed to acclimatize the situation

to participant. This provides the description of the decision taken in particular situation.

6. Field Investigation
 The field investigation is conducted in the assessment of actual situations. The results in this type of work is more

realistic. In order to have these results accuracy is required to be maintained by making selection of proper sample. In
field investigation it is very difficult to control variables and informants in the field.
7. Library Research
 When secondary data is reliable enough to be used for drawing conclusions than library research is very useful. This type

of research is based on the assessment of the data available from books, periodicals and journals available in the library.
 The observations and conclusions drawn in these cases may be bias if data is not used carefully. As this is only

compilation of available data it is not considered as actual research work. If systematic investigation is made it can also
be very useful research study.
Exploratory Research

 The major emphasis in exploratory research is on converting broad, vague

problem statements into small, precise sub-problem statements which is done in
order to formulate specific hypothesis.
 The hypothesis is a statement that specifies, “how two or more variables are
related?” In the early stages of research, we usually lack from sufficient
understanding of the problem to formulate a specific hypothesis. Further, there are
often several tentative explanations.
 Example: “Sales are down because our prices are too high”, “Our dealers or
sales representatives are not doing a good job”, “Our advertisement is weak” and
so on.
 In this scenario, very little information is available to point out, what is the
actual cause of the problem.
 We can say that the major purpose of exploratory research is to identify the
problem more specifically. Therefore, exploratory study is used in the initial stages
of research.
Causal Research

 Causal research refers to the existence of a cause and effect

relationship.
 This research provides evidence that suggests whether a cause and

effect relationship exists or does not exist.

 It describes whether an independent variable directly influences the

behavior of a dependent variable.

 This can be explained with an example. Suppose managers at a hospital

want to know the extent to which advertising creates revenue for

hospitals, they can go in for causal research.
 This information will enable them to decide how much money to

allocate towards advertising for hospitals.

 Cross- Sectional Research

 A cross-sectional study is concerned with a sample of elements from a given population. Thus, it may
deal with households, dealers, retail stores, or other entities.
 Data on a number of characteristics from the sample elements are collected and analysed. The cross-
sectional study is the most frequently used descriptive design in marketing research.
 Cross-sectional design involves the collection of information from any given sample of population
elements only once.
 They may be either single cross-sectional or multiple cross-sectional. In single cross-sectional designs,
only one sample of respondents is drawn from the target population and information is obtained from
this sample only once.
 These designs are also called sample survey research designs.

Time Series Research

 Time-series design is an additional evaluation research design type. This design type entails
measurements made over a fixed time period, such as the study of traffic accident rates before and after
the lowering of the speed limit in an area.
Research Questions

 A research question is the hypothesis of choice that best states the objective of the research study. It is a more
specific management question that must be answered. It may be more than one question, or just one.
 A research process that answers this more specific question provides the manager with the information
necessary to make the direction he or she is facing.

Fine tuning the research question

• The term fine-tuning might seem to be an odd usage for research, but it creates an image that most researchers
come to recognize. Fine-tuning the question is precisely what a skilful practitioner must do after the
exploration is complete.
• At this point, a clearer picture of the management and research questions begins to emerge. After a
preliminary review of the literature, a brief exploratory study, or both the project begins to crystallize in one of
two ways:
 1. It is apparent the question has been answered and the process is finished.
 2. A question different from the one originally addressed has appeared.
 The research question does not have to be materially different, but it will have evolved in some fashion. This

is not cause for discouragement.

 The refined research questions will have better focus and will move the research forward with more clarity

than the initially formulated questions.

 In addition to fine-tuning the original question, other research question-related activities should be addressed
in this phase to enhance the direction of the project:

• Examine the concepts and constructs to be used in the study. Are they satisfactorily defined? Have
operational definitions been employed where appropriate?
• Review the research questions with the intent of breaking them down into specific second and third level
question.
• If hypotheses are used, be certain they meet the quality tests.
• Determine what evidence must be collected to answer the various questions and hypotheses.
• Set the scope of the study by stating what not a part of the research question is. This will establish a
boundary to separate contiguous problems from the primary objective.

When the characteristics or plausible causes of the problem are well defined and the research question is
clearly states, it is possible to deduce the essential sub questions that will guide the project planning at this
stage of the research process.

However, if the research question is somewhat or very poorly defined, the researcher will need further
exploration and question revision to refine the original question and generate the material for constructing
investigative questions.
Investigative Questions:

 Investigative questions are questions the researcher must answer to satisfactorily arrive
at a conclusion about the research question.
 To formulate them, the researcher takes a general research question and breaks it into
more specific questions about which to gather data.
 This fractionating process can continue down through several levels of increasing
specificity.
 Investigative questions should be included in the research proposal, for they guide the
development of the research design. They are the foundation for creating the research
data collection instrument.

In developing your list of investigative questions, include:

 Performance considerations (like the relative costs of the options, the speed of packing
serviced lap-tops and the condition of test laptops packaged with different materials).
 Attitudinal issues (like perceived service quality),
 Behavioral issues (like employees’ ease of use in packing with the considered materials).
Measurement Questions

 Measurement questions should be outlined by completion of the project-planning activities

but usually await pilot testing for refinement.
 There are two types of measurement questions: predesigned, pretested questions and

custom-designed questions.
 Predesigned measurement questions are questions that have been formulated and tested by

previous researchers, are recorded in the literature, and may be applied literally or be adapted
for the project at hand. Some studies lend themselves to the use of these readily available
measurement devices. This provides enhanced validity and can reduce the cost of the project.
 More often however, the measurement questions should be custom-tailored to the

investigative questions. The resources for this task will be the collective insights from all
the activities in the research process completed to this point, particularly insights from
exploration.Later, during pilot testing of the data collection instrument(s) these custom-
designed questions will be refined.
 In surveys, measurement questions are the questions we actually ask the respondents. They

appear on the questionnaire. In an observation study, measurement questions are the

observations researchers must record about each subject studied.
Research Problems

 The entire research activity is based on the proper identification of the research problem.
Unless the researcher diagnoses the problem correctly no appropriate solution can be provided.
 Therefore research activities form a cycle which starts with identification of research problem
and ends on the solution to the problem. It means research problem is an axis, where a whole
research activity revolves. This research problem will speak out the aims and objectives of the
research work.
 Research problem is the situation that causes researcher to feel confused. It is the demarcation
of the problem area within the context of the problem situation. It is the problem situation
which may give rise to research problem.
 The researcher who is conducting research study experiences some difficulties in relations to
solutions to be sought. Therefore sources usually contribute to identification, selection and
formulation of the research problem.
 The research problem forms a cycle, as research start with problem and ends on the problem.
The problem arises on account of difficulties in research faced by the researchers and he has
definite objectives to be attended by the research.
 As there are various alternative available for research and researcher has to opt for one. In this
case he is totally undecided about selection of the alternatives.
In precise

 A research problem refers to some difficulty which an

organization faces and wishes to obtain a solution for the same.
 While doing research, defining the problem is very important
because “problem clearly stated is half-solved”. This shows
how important it is to “define the problem correctly”.
 While defining the problem, it should be noted that definition
should be ambiguous. If the problem defining is ambiguous,
then the researcher will not know “what data is to be collected”
or “What technique is to be used” etc.
Need of defining a problem:

The definition of a problem serves the following purposes:

1. The definition of a problem sets the direction of the study.
2. The definition reveals the methodology or procedure of the
study.
3. The definition helps the researcher to control subjectivity or
biases of the researcher.
4. The definition of the problem suggests and specifies the
variables to be taken-up into the investigation through a
problem involved into so many variables.
5. The definition makes the researcher work practicable.
Components of a Research Problem

 There must be an individual or a group, which has some difficulty or the problem.
 There must be some objective to be attained at. If one wants nothing, one cannot have
a problem.
 There must be alternative means for obtaining the objectives one wished to attain.
This means that there must be at least two means available to a researcher for if he has
no choice of means, he cannot have a problem.
 There must remain some doubt in the mind of as researcher with regard to the
selection of alternatives. This means that research must answer the question
concerning the relative efficiency of the possible alternatives.
 There must be some environment(s) to which the difficulty pertains.
 Thus, a research problem is one, which requires a researcher to find out the best
solution for the given problem, i.e., to find out by which course of action the objective
can be attained optimally in the context of a given environment.
Criteria for selecting Research Problem

Researcher should take utmost care in selecting research problem. It should be his
independent thinking in relation to the problem. The necessary guidance can be sought
to work out the problem and following facts must be given due consideration while
selecting research problem.

o The subjects which are overdone and on which sufficient work has already been conducted in
particular area should be normally avoided by the researcher. It will be very difficult to throw
new light on such type of the topics.
o There are certain topics which are controversial in nature and in spite of our all efforts no
purposeful conclusions can be drawn.
o While selecting research problem, the problem which is very narrow or very vague should be
avoided for the purpose of the study.
o Whatever subject is selected for the study must have the resources available, which should be
within the reach of the researcher.
o Selection of research problems require due consideration for time, training and cost involved
in the research project.
o No research problem should be selected without having primary study of the subject.
Identification of the problem

The desire to solve research problem or to know more about the fact is the main
motivation for which the research study is conducted. Therefore it is necessary for
researchers to identify the research problem.
The identification of research problem can be classified as under
a. Conceptual Problem:
This type of problem can be solved by creative thinking for the problem.
b. Empirical Problem:
This type of problems can be solved by inductive reasoning, which should be based
on the observation made.
c. Logical Problem:
This problem can be solved by deductive methods.

Now it is very clear from the above expiation of the fact that identification of the
research problem means clear and accurate assessment of the research problem. In
order to solve the research problem.
Selection of the Research Problem:

 The problem which is selected on specific rational helps us to complete the project in stipulated time
period and within the prescribed financial outlay. In order to boost up the moral of the researcher proper
selection of the problem is essential.
 The factors which requires due consideration for selecting research problems are stated as below:

1. Interest of the researcher:

The interest of the researcher is the main factor while selecting problem. It is the attitude, spirit and
dedication of the researcher towards his research study, that will generate the interest in the research
study. Therefore the personal interest of the researcher is very much essential in any of the research
study.
2. Importance of the topic of the study
Topic selected for the study should not only be socially relevant but it must be useful for the society. It
should be having the reference to the practical field. The results of this type of social relevant study will
be used by the concerned individual or group of the individuals.
3. Avoid the selection of the monotonous problem
The researcher should avoid to use monotonous problem for the purpose of the research study. Such
topic for the research may not be able to generate solution for utility of the subject matter. Therefore
there should be novelty of ideas in the subject so as to have the proper utility of the research study.
 Research Problems in Management/ Types of Business Problems Encountered by Researchers:
 Business executives in each of eh functional areas of management, viz, marketing, production, finance

and personnel are confronted with several interacting decision-making problems in their day-to-day
operation. Many of these problems demand a systematic research which will aid the executives to take
optimal and effective decisions.
Marketing: Different research topics studied under marketing management are:
 1. Product identification

 2. Demand-supply analysis
 3. Market Segmentation

 4. Pricing
 5. Design of advertisements

Production:
 1. Forecasting
 2. Inventory control
 3. Line of balance

 4. Project management
 5. Modern production system design, like JIT, computer integrated manufacturing, flexible

manufacturing, agile manufacturing, logistics management, total quality management etc.

3. Finance:

 Economic evaluation of alternatives

 Portfolio management
 Primary market study.
 Inflation
 Economic growth models

4. Personnel:

 Manpower planning
 Conflict management
 Leadership styles
 Training methods
 Labour welfare study.
Research Objectives

 Promoting better decision-making

 Research is the basis for innovation
 Research helps in the optimal utilization of resources
 Research identifies the problem areas
 Research helps in forecasting, which is very useful for managers
 Research helps in formulation of policies and strategies
 Research helps in identifying marketing opportunities and constraints.
 Research helps in evaluating marketing plans
 Research helps in the development of new products or in modifying
existing products and in understanding the competitive environment.
 Research Hypotheses
HYPOTHESIS
Meaning of hypothesis
It is considered as main instrument in research. The formulation of hypotheses plays an important part in the
growth of knowledge in every science.
A hypothesis is a tentative proposition relating to certain phenomenon, which the researcher wants to verify when
required.

Meaning of Null hypothesis:

A null hypothesis is a statement about the population, whose credibility or validity the researcher wants to assess
based on the sample.
It is formulated specifically to test for possible rejection or nullification. Hence it is named as ‘null hypothesis’.
Null hypothesis always states “no difference”. It is this null hypothesis that is tested by the researcher.
Types of Hypothesis
Hypotheses are classified in several ways. With reference to their function, hypotheses are of two types: 1.
Descriptive Hypothesis 2.Relational Hypothesis.

Another approach is to classify them into 1.Working hypotheses, 2.Null hypotheses and 3.Statistical hypotheses.

Third approach is to divide them on the basis of the level of abstraction. Three broad levels may be distinguished:
1. Simple description 2. Logical derivation, and 3. Abstraction. Accordingly there are three types of hypotheses
Common-sense hypotheses, Complex hypotheses and Analytical hypotheses.
A good hypothesis
The skill of researcher is an important factor on which usefulness of hypotheses is
based. Hypotheses being basis of research study it should be developed with
thoughtful consideration.

A good hypothesis should have following contents:

Content of Hypotheses:
1. It should have logical consistency.
2. It must provide good rational for stepping away from main stream.
3. It must be able to test. A hypothesis is meaningful only when we design to
conduct research.
4. It should be stated in simple and clear term to avoid confusion.
Steps involved in hypothesis testing

Steps involved in hypothesis testing

Formulate the Null hypothesis, with H0 and HA, the alternate hypothesis. According to the
given problem, H0 represents the value of some parameter of population.

Select on appropriate test assuming H0 to be true.

Calculate the value.

Select the level of significance other at 1% or 5%.

Find the critical region.

If the calculated value lied within the critical region, then reject H 0.

State the conclusion in writing.

 There are two types of tests.
One-tailed and two-tailed tests

A hypothesis test may be one-tailed or two-tailed.

In one-tailed test the test-statistic for rejection of null hypothesis falls only in one-tailed of
sampling distribution curve.

Example: In a right side test, the critical region lies entirely in the right tail of the sample
distribution. Whether the test is one-sided or two-sided depends on alternate hypothesis.

Example: A tyre company claims that mean life of its new type is 15,000 km. Now the
researcher formulates the hypothesis that type life is =15,000 km.

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 A two-tailed test is one in which the test statistics leading to rejection of null hypothesis falls
on both tails of the sampling distribution curve as shown.

When we should apply a hypothesis test that is one-tailed or two-tailed depends on the
nature of the problem.
One-tailed test is used when the researcher’s interest is primarily on one side of the issue.
Example: “Is the current advertisement less effective than the proposed new
advertisement”?
A Two tailed test is appropriate, when the researcher has no reason to focus on one side
of the issue. Example: “Are the two-markets – Mumbai and Delhi different to test market a
product?”

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 Example: A product is manufactured by a semi-automatic machine. Now, assume
that the same product is manufactured by the fully automatic machine. This will be two-
sided test, because the null hypothesis is that the “Two methods used for manufacturing
the product do not differ significantly”.
H0 = µ1 = µ2

Sign of alternative hypothesis Type of Test

= Two-sided
> One-sided to right
< One-sided to left

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 Degree of freedom

It tells the researcher the number of elements that can be chosen freely.
Example: a+b/2=5. Fix a=3, b = 7. Therefore the degree of freedom is 1.

Compute
Carry out computation.

Make Decisions:

Accepting or rejecting of the null hypothesis depends on whether the

computed value falls in the region of rejection at a given level of significance.

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 Errors in Hypothesis testing

There are two types of errors:

1. Hypothesis is rejected when it is true.
2. Hypothesis is not rejected when it is false.

First one is called Type 1 error (α) , and the second is called Type 2 error(β).

When a= 0.10 it means that true hypothesis will be accepted in 90 out of 100
occasions. Thus, there is a risk of rejecting a true hypothesis in 10 out of every 100
occasions.

To reduce the risk, use a= 0.01 which implies that we are prepared to take a 1%
risk i.e. the probability of rejecting a true hypothesis is 1%.

It is also possible that in hypothesis testing, we may commit Type 2 error (β) i.e
accepting a null hypothesis which is false. The only way to reduce Type 1 and Type
2 error is by increasing the sample size.

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   Example of Type 1 and Type 2 error:

Type 1 and Type 2 error is presented as follows. Suppose a marketing

company has 2 distributors (retailers) with varying capabilities. On the basis of
capabilities, the company has grouped them into two categories (1) Competent
retailer (2) Incompetent Retailer. Thus R1 is a competent retailer and R2 is an
incompetent retailer.

When the firm has failed to reward a competent retailer, it has committed type
-2 error. So also, when it was rewarded to an incompetent retailer, it has
committed type- 1 error.

The firm wishes to award a performance bonus (as a part of trade promotion)
to encourage good retailer ship. Assume that two actions A1 and A2 would represent
whether the bonus or trade incentive is given and not given. This is shown as
follows:

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 Action (R1) Competent retailer (R2) Incompetent Retailer
A1 Performance bonus is
awarded Correct Decision In Correct Decision Error (β).

A2 Performance bonus is not

awarded In Correct Decision Error (α) Correct Decision

When the firm has failed to reward a competent retailer, it has

committed type -2 error. So also, when it was rewarded to an
incompetent retailer, it has committed type- 1 error.

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Types of Tests:
• Parametric test
• Non-parametric Test
Parametric Test:
• Parametric tests are more powerful. The data in this test is derived from interval
and ratio measurement.
• In parametric tests, it is assumed that the data follows normal distributions.
Examples of parametric tests are Z-test, T-test, F-test.

•Z-test: when sample size is > 30.

• Prof.R.A. Fisher has developed the z-test.
• It is based on the normal distribution; it is widely used for testing the significance
of several statistics such as mean, median, mode, coefficient of correlation and
others.
• This test is used even when binomial distribution or‘t’ distribution is applicable
on the presumption that such a distribution tends to approximate normal
distribution as the sample size becomes larger.
• The relevant test statistic z is calculated and compared with its probable value (to
be read from the normal distribution table) at a specified level of significance for
judging the significance of the measure concerned.

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T- test when sample size is <30

The t test was developed by W.S. Gosset around 1915. Since he published his
findings under a pen name ‘student’. it is known as Student’s t-test.
It is suitable for testing the significance of a sample mean or for judging the

significance of difference between the means of two samples, when the samples
are less than 30 in number and when the population variance is not known.
When two samples are related, the paired t-test is used. The t-test can also be used

for testing the significance of the coefficients of simple and partial correlations.
The relevant test statistic t, is calculated from the sample data, and it is compared

with its corresponding critical value in the t-distribution table for rejecting or
accepting a null hypothesis.

F-test
The F-test is based on F distribution (which is a distribution skewed to the right
and tends to be more symmetrical, as the number of degrees of freedom in the
numerator and denominator increases).
The F-test is used to compare the variances of two independent samples.
It is also used in analysis of variance (ANOVA) for testing the significance of

more than two sample means at a time. It is also used for judging the significance
of multiple correlation coefficients.

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Non-Parametric Test
Non-parametric tests are used to test the hypothesis with normal and ordinal data.
•We do not make assumptions about the shape of population distribution.
•These are distribution-free tests.
•The hypothesis of non-parametric test is concerned with something other than the value of a population
parameter.
•Easy to compute. There are certain situations particularly in marketing research, where the assumptions of
parametric tests are not valid. Example: In a parametric test, we assume that data collected follows a normal
distribution. In such cases, non-parametric-tests are used.
•Example: non-parametric tests are (a) chi-square test (c) Mann-Whitney U test (d) sign test.

Chi-square Test:
•It is used in several circumstances.
•Sample observations should be independent i.e. two individual items should be included twice in a sample.
•The sample should contain at least 50 observations or Total frequency should be greater than 50.
•There should be a minimum of five observations in any cell. This is called cell frequency constraint.

Example:

Age Group
Persons Total
Under 20-40 20-40 41-50 51 & above
Liked the Car 146 78 48 28 300
Disliked the
Car 54 52 32 62 200

Total 200 130 80 90 500

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 Mann Whitney “U” Test

This test is used to determine whether two independent samples have been drawn from the same
population. Suppose an experiment has obtained two sets of samples from two populations and the
study wishes to examine whether the two populations are identical.

Example; A computer company XYZ would like to choose the performance of programmers,
working in 2 braches, located in different cities. The performance indices of employees.

Branch – A Branch - B
84 76
68 77
78 64
49 62
45 53

To find out whether there is any difference in the performance indices of employees of the
two branches.

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 Sign Test:

Sign-test is used with matched pair. The test is used to identify the pairs and decide
whether the pair has more or less similar characteristics.
Example: Suppose, an experiment on the effect of brand name on quality
perceptions is to be conducted. 10 persons are selected and asked to taste and compare
the two products (beverage).
One of them is identified as branded well known beverage, and the other is a new
beverage. In reality, the samples are identical. The respondents who tested were asked
to rate the two samples on an ordinal scale. Two hypotheses are set up as follows:

H0 – There is no difference between the perceived qualities of two beverages.

HA – There is a difference in the perceived qualities of two beverages.

Advantages
1. They are quick and easy to use.
2. When data are not very accurate, these tests produce fairly good results.

Disadvantages:
Non-parametric test involves the greater risk of accepting a false hypothesis and
thus committing a Type 2 error.

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 Sign Test:

 Sign-test is used with matched pair. The test is used to identify the pairs and decide whether the pair has more or
less similar characteristics.
 Example: Suppose, an experiment on the effect of brand name on quality perceptions is to be conducted. 10

persons are selected and asked to taste and compare the two products (beverage).
 One of them is identified as branded well known beverage, and the other is a new beverage. In reality, the samples

are identical. The respondents who tested were asked to rate the two samples on an ordinal scale. Two hypotheses
are set up as follows:

 H0 – There is no difference between the perceived qualities of two beverages.

 HA – There is a difference in the perceived qualities of two beverages.

 Advantages
 1. They are quick and easy to use.
 2. When data are not very accurate, these tests produce fairly good results.

 Disadvantages:
 Non-parametric test involves the greater risk of accepting a false hypothesis and thus committing a Type 2 error.