Business Research Methods


An audit involves a formal examination and verification of product movement by examining physical records or performing an inventory analysis. The uses of audit data include: (1) determining the size of the total market and the distribution of sales by type of outlet, region, or city, (2) assessing brand shares and competitive activity, (3) identifying shelf space allocation and inventory problems, (4) analyzing distribution problems, (5) developing sales potentials and forecasts, and (6) developing and monitoring promotional allocations based on sales volume. The advantages of audit data are that audits provide relatively accurate information on the movement of many different products at the wholesale and retail levels, and this information can be broken down by a number of important variables such as brand, type of outlets, and size of market. The disadvantages of audit data are that not all markets or operators are included in the audit, audit information may not be timely or current, and audit data cannot be linked to consumer characteristics.

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Marketing Research Suppliers

Marketing research suppliers can be classified into internal suppliers and external suppliers. An internal supplier is a marketing research department located within the firm where the research staff members are employees of the firm. External suppliers can be further classified into full-service and limited-service suppliers. Full-service suppliers can be classified as syndicated services, standardized services, customized services, and Internet services. Limited-service suppliers can be classified as field services, coding and data entry, data analysis, analytical services, and branded products.

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Ethical Issues In Marketing Research

Some of the ethical issues in marketing research that pertain to the client include protecting the public from misrepresentation. Full and accurate information should be provided to the supplier regarding the true purpose of the research, nature of the problem being addressed, time, cost, and resource constraints. Also, clients should not knowingly disseminate conclusions from a project that are inconsistent with or not warranted by the data. Additionally, they should not solicit specialized research designs or techniques from one supplier and deliver them to another for execution without the approval of the design or technique originator.

Some of the ethical issues in marketing research which pertain to the supplier include adherence to the basic and commonly accepted standards of scientific investigation: research should be conducted in an objective manner free of personal biases and motivations, the accuracy and validity of the procedures or findings should not be misrepresented, details about the procedures and techniques used should be made available to the client upon request, and the confidentiality of the client and the subjects should be maintained.

Some of the ethical issues in marketing research that pertain to the respondent include assurance of anonymity, respondents’ privacy, and the respondents’ right to be informed about the various aspects of the research.

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External Marketing Research Supplier

The guidelines for selecting an external marketing research supplier are:

(a) The firm selected should be capable of working on the project. This means that the firm should have the appropriate resources, such as well-trained employees, facilities for fieldwork, and good data analysis capabilities.

(b) The firm should possess a high degree of technical competence.

(c) The client and the supplier should cooperate with one another and maintain a professional relationship.

(d) Good communication between the client and the supplier is essential to the success of a project.

(e) The supplier should provide supervision and control of the fieldwork and other phases of the project and offer acceptable validation procedures.

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Business Research

Not all questions are researchable, and not all research questions are answerable. To be researchable, a question must be one for which observation or other data collection can provide the answer. Many questions cannot be answered based on information alone.

Questions of value and policy must often be weighed in management decisions. Management may be asking, “Should we hold out for a liberalization of the seniority rules in our new labor negotiations?” While information can be brought to bear on this question, such additional considerations as “fairness to the workers” or “management’s right to manage” may be important in the decision. It may be possible for many of these questions of value to be transformed into questions of fact. Concerning “fairness to the workers,” one might first gather information from which to estimate the extent and degree to which workers will be affected by a rule change; second, one could gather opinion statements of the workers about the fairness of seniority rules. Even so, substantial value elements remain. Left unanswered are such questions as “Should we argue for a policy that will adversely affect the security and well-being of older workers who are least well equipped to cope with this adversity?” Even if a question can be answered by facts alone, it might not be researchable because our procedures or techniques are inadequate.

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Scope of business research

Research methods provide you with the knowledge and skills you need to solve the problems and meet the challenges of a fast-paced decision-making environment. Business research courses are a recognition that students in business, not-for-profit, and public organizations – in all functional areas – need training in the scientific method and its application to decision making. Two factors stimulate an interest in more scientific decision making:

(1) the manager’s increased need for more and better information and
(2) the availability of improved techniques and tools to meet this need.

During the last two decades, we have witnessed dramatic changes in the business environment. Emerging from a historically economic role, the business organization has evolved in response to the social and political mandates of national public policy, explosive technology growth, and continuing innovations in global communications. These changes have created new knowledge needs for the manager. Other knowledge demands have arisen from problems with mergers, trade policies, protected markets, technology transfers, and macroeconomic savings – investment issues. 
The trend toward complexity has increased the risks associated with business decisions, making it more important to have a sound information base. Increased complexity means there are more variables to consider. The competition is more vigorous, with many business downsizing to make competitive gains. Workers, shareholders, customers, and the public are better informed and more sensitive to their self-interest. Government continues to show concern with all aspects of society. Each of these factors demands that managers have more and better information upon which to base decisions. 
To do well in such an environment, you will need to be equipped with an understanding of scientific methods and a means of incorporating them into decision making. You will need to know how to identify good research and how to conduct it. 
As the complexity of the business environment has increased, there has been a commensurate, increase in the number and power of the tools to conduct research. There is vastly more knowledge in all fields of management. We have begun to build better theories. The computer has given us a quantum leap in the ability to deal with problems. New techniques of quantitative analysis take advantage of this power. Communication and measurement techniques have also been enhanced. These trends reinforce each other and are having a massive impact on business management.

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Business Research Plan

A management question or decision triggers the need for information. In other situations, a controversy arises, a major commitment of resources is called for, or conditions in the environment signal the need for a decision. Such events cause managers to reconsider their purposes or objectives, define a problem for solution, or develop strategies for solutions they have identified.

The Research Questions

Once the researcher has a clear statement of a manager’s question, he must translate into a research question: a fact-oriented, information gathering questions. There are probably many different ways to address any management problem. This is the point at which the insight and expertise of the researcher come into play. It is also the point at which the manager’s decision is most important. A choice of wrong research for the right problem can be dangerous.


The term fine-tuning might seem like rather odd usage for research, but it creates an image that most researchers come to recognize. Fine-tuning the question is precisely what a skillful practitioner must do after the exploration stage. At this point, a clearer picture of the problem 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 or (2) a different question has appeared than the one originally addressed. The research question does not have to be materially different, but it will have evolved in some fashion. This is not cause for discouragement. A refined question will have better focus and move the research forward with more clarity than the old one.


The design of the study is the blueprint for fulfulling objectives and answering questions. Selecting a design may be complicated by the availability of a large variety of methods, techniques, procedures, protocols, and sampling plans. For example, you may decide on a secondary data study, case study, survey, experiment, or simulation. If a survey is selected, should it be administered by mail, computer, telephone, oral personal interview? Should all relevant data be collected at one time of at regular intervals? What kind of structure will the questionnaire or interview guide possess? What question wording should be employed? Should the responses be scaled or open-ended? How will reliability and validity be achieved? Will characteristics of the interviewer influence responses to the measurement questions? What kind of training should the data collectors receive? Is a sample or a census to be taken? What types of sampling should be considered? These questions represent only a few of the decisions that have to be made when just one method is chosen.


Another step in planning the design is to identify the target population and select the sample. We must determine how many people to interview and who they will be; what events to observe and how many there will be; or how many records to inspect and which ones. A sample is a part of the whole population carefully selected to represent that population. When researchers undertake sampling studies, they are interested in estimating one or more population values and/or testing one or more statistical hypotheses.


Data collection requires substantial resources but perhaps not as big a part of the budget as clients would expect. Employees must be paid, training and travel must be provided, and other expenses are incurred, but this phase of the project often takes no more than one-third of the total research budget. The geographic scope and the number of observations required do affect the cost, but much of the cost is relatively independent of the size of the data gathering effort. Thus, a guide might be that (1) project planning, (2) data gathering, and (3) analysis, interpretation, and reporting each share about equally in the budget.


A pilot test is conducted to detect weaknesses is design and instrumentation and provide proxy data for selection of probability sample. It should therefore draw subjects from the target population and simulate the procedures and protocols that have been designated for data collection. If the study is a survey to be executed by mail, the pilot questionnaire should also be mailed. If the design calls for observation by an unobtrusive researcher, this behavior should be practiced. The size of the pilot group may range from 25 to 100 subjects depending on the method to be tested, but the respondents do not have to be statistically selected. In very small populations or special applications, pilot testing runs the risk of exhausting the supply of respondents and sensitizing them to the purpose of the study. This risk is generally overshadowed by the improvements made to the design by a trial run.


Data as the facts presented to the researcher from the study’s environment. Data may be further characterized by their: (1) abstractness, (2) verifiability, (3) elusiveness, and (4) closeness to the phenomenon.

Data are edited to ensure consistency across respondents and to locate emissions. In the case of survey methods, editing reduces errors in the recording, improves legibility, and clarifies unclear and inappropriate responses.


After collecting the data, we still need to analyze it. Data analysis usually involves reducing accumulated data to a manageable size, developing summaries, looking for patterns, and applying statistical techniques. Scaled responses on questionnaires and experimental instruments often require the analyst to derive various functions, and relationships among variables are frequently explored after that. Further, we must interpret these findings in light of the client’s question, with theory-building research, determine if the results are consistent with out hypotheses and theories.


Finally, it is necessary to prepare a report and transmit the findings and recommendations to the client for the intended purpose of decision making. The style and organization of the report will differ according to the target audience, the occasion, and the purpose of the research. In applied research, communication of the results may cover a range of actions from a conference call, a letter, a written report, or an oral presentation – and sometimes all of them. Reports should be developed from the client’s perspective. The sophistication of the design and sampling plan or the esoteric software used to analyze the data may have helped to establish the researcher’s mind. Thus, the researcher must accurately assess the manager’s needs throughout the research process and incorporate this understanding into the final product.

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Steps in the marketing research process

The steps involved in the marketing research process are:

  1. Problem definition: define the marketing research problem to be addressed in terms of: discussion with the decision maker(s), interviews with industry experts, analysis of secondary data, and perhaps some qualitative research.
  2. Developing an approach to the problem: development of a broad specification of how the problem would be addressed, which involves the formulation of an objective or theoretical approach, analytical models, research questions, hypotheses, and an identification of characteristics or factors which influence the research design.
  3. Research design formulation: this is a framework for conducting the marketing research project that specifies the details of the procedures necessary for obtaining the required information.
  4. Fieldwork or data collection: data collection involves the use of some kind of field force where the field force could operate either in the field, as in the case of personal interviewing, or from an office, as in the case of phone or mail surveys.
  5. Data preparation and analysis: data preparation involves the editing, coding, transcription, and verification of data, and the purpose of data analysis is to derive meaning from the data which has been collected.
  6. Report preparation and presentation: the report should address the specific research questions identified in the problem definition, describe the approach, the research design, data collection, and the data analysis procedures adopted, and present the results and the major findings.

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Data sources may be classified as either internal (organizational) or external sources of information.

Internal Sources

Internal sources of organizational data are so varied that it is difficult to provide generalizations about their use. Accounting and management information systems create and store much of the internal data. Research and development, planning, and marketing functions also contribute. Examples are departmental reports, production summaries, financial and accounting reports, and marketing and sales studies. The collection methods used are unique to the specific situation, and collection success depends on knowing just where and how to look. Sometimes the information may exist in central files (i.e., at headquarters), in computer database, or in departmental chronological files. In other organizations, a central library keeps all relevant information. Systematic searches should be made through exploratory interviews with everyone who handles the information. Often company librarians, MIS. PR/communications, or departmental secretaries can help in pinpointing critical data sources. Internal data sources may be the only source of information for many studies.

External Sources

External sources are created outside the organization and are more varied than internal sources. There are also better defined methods for finding them. This discussion is restricted to published sources, although other sources of information may be useful.

Published sources of data can be classified into five categories. The newest and fastest growing one is computerized database. They are composed of interrelated data files. The files are sets of records grouped together for storage on some medium. Access may be through online search or CD-ROM. Online databases are often specialized and focus on information about a particular field.

Major source of published information consists of diverse materials from special collections. Within this category there are many reference books, each a compendium of a range of information. A second group includes university publications, of which there are master’s theses, doctoral dissertations, and research records. A third group includes company publications such as financial reports, company policy statements, speeches by prominent executives, sales literature, product specifications, and many others. There are miscellaneous information sources consisting of the productions of various trade, professional and other associations. These organizations often publish statistical compilation, research report, and proceeding of meeting. Finally, there are personal document. These are used in historical and other social science research, but less frequently in business studies.

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Explain Research Hypothesis

The research literature contains disagreements about the meanings of the terms proposition and hypothesis. We define a proposition as a statement about concepts that may be judged as true or false if it refers to observable phenomena. When a proposition is formulated for empirical testing, we call it a hypothesis. As a declarative statement, a hypothesis is of a tentative and conjectural nature.

Hypotheses have also been described as statements in which we assign variables to cases. A case is defined in this sense as the entity or thing the hypothesis talks about. The variable is the characteristic, trait, or attribute that, in the hypothesis, is imputed to the case. For example, we might form the hypothesis, “Executive Jones (case) has a higher than average achievement motivation (variable).” If our hypothesis was based on more than one case, it would be a generalization. For example, “Executives in Company Z (cases) have a higher than average achievement motivation (variable).” Both of these hypotheses are examples of descriptive hypotheses.

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