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Economy is the energy of all people in motion with one serving the other without
superiority and subordination.
By Anone
2)Marketing Research specifies the information required to address these issues ,designs the
method for collecting information, manages and implements the data collection process, analyzes
the results and communicates the findings and their implications.
Problem identification research : identify problems that are not on the surface ,but likely to arise
in the future.
90% problem identification research. This type of research provides information about the
marketing environment and helps diagnose a problem.
Eg : declining market potential indicates that the firm is likely to have a problem achieving its
growth targets.
This would further involve discussion with the decision makers, interviews with
Industry experts , analysis of secondary data and perhaps some qualitative research such as
focus groups.
Once the problem has been precisely defined the research can be designed and conducted
properly.
A research design is a framework or blueprint for conducting the marketing research project . It
details the procedures necessary for obtaining the required information and its purpose is to
design a study that will test the hypotheses of interest , determine possible answers to the
research questions and provide the information needed for decision making.
Conducting exploratory research ,
Precisely defining the variables
Designing the appropriate scales to measure them are also part of the research design
The issue of how the data should be obtained from the respondents ( by conducting a survey or
an experiment) must be addressed. It is also necessary to design a questionnaire and sampling
plan to select respondents for the study.
Assessing Marketing
Providing
Information Decision
Information
needs Making
Marketing Managers
Market Segmentation
Target Market Selection
Marketing Programs
Performance Control
The emphasis in marketing is on the identification and satisfaction of customer needs. In order to
determine customer needs and to implement marketing strategies and programs aimed at
satisfying those needs, marketing managers need information. They need information about
customers , competitors , and other forces in the marketplace.
As firms have become national and international , more need for market research and
information on distant markets has increased.
As consumers have become more affluent and sophisticated, marketing managers need better
information on how they will respond to products and other marketing offerings.
As competition has become more intense , managers need information on the effectiveness of
their marketing tools.
As environment changes more rapidly , marketing managers need more timely information.
Today’s competitive marketing environment and the ever increasing costs attributed to poor
decision making require marketing research to provide sound information. Sound decisions are
not based on gut feeling, intuition or even pure judgment.
Although marketing research plays a central role in the collection, analysis and dissemination of
CI information . CI has evolved into a discipline of its own. The society of competitive
Intelligence professionals ( SCIP) consists of members conducting CI for large and small
Companies providing management with early warning of changes in the competitive landscape.
Marketing research should be conducted when the expected value of information it generates
exceeds the costs of conducting the marketing research project. Formal procedures are available
for quantifying the expected value as well as the costs of a marketing research project.
1) it is better not to conduct a research than undertake one in which the integrity of research is
compromised because of lack of resources.
2) a firm a lack resources to implement the recommendations arising from the findings of
marketing research.
3) If management does not have positive attitude towards research , then is is likely the project
will gather dust after the project is conducted.
Executive Board
Corporate Staff
Research Suppliers
External – Marketing
Internal
Research Industry
Field
Syndicated Services
Services
Coding &
Standardized Data Entry
Services
Customized Analytical
Services
Corporate Staff
Research Suppliers
External – Marketing
Internal
Research Industry
Field
Syndicated Services
Services
Coding &
Standardized Data Entry
Services
Customized Analytical
Services
Of all the tasks in a marketing research project, none is more vital to the ultimate fulfillment of a
client’s needs than a proper definition of the research problem .
Tasks
Involved
Analytical Specification
Objective
Model ,Verbal Research Of
Theoritical Hypothesis
, Graphical Questions Information
Foundations Needed
mathematical
The researcher should treat the underlying causes not merely address the symptoms.
ii) Interview with industry Experts : individuals have knowledge of the firms can help formulate
the marketing research problem , for products of technical nature
iii) Secondary Data Analysis : Secondary data is economical and quick source of the
background information .
Analysis of the secondary data is essential in the marketing problem research
iv) Qualitative Research : If all the above are not enough to define the research
problem then Qualitative research is undertaken to understand the problem.
It is unstructured , exploratory in nature , based on small samples & may use techniques such as
Focus Groups , word associations (asking respondents to indicate their first response to word
Stimulus), pilot surveys , case studies etc. Research is not conducted in a formal way but it can
provide valuable insights into the problem.
forecasts pertaining to the industry and the firm , resources and constraints of the firm, objectives of
the decision maker , buyer behavior, legal environment, economic environment, and marketing ,
technological skills of the firm .
Resources & Constraints : To formulate and scope a marketing Research problem it is necessary to
take into consideration both money and research skills and other constraints such as cost & time.
Legal Environment :
Public policies, laws, government agencies and pressure groups that influence and regulate various
organizations and individuals in society. Important areas of laws include patents , trademarks,
royalties, trade agreements, taxes and tariffs.
Federal laws have an impact on each element of the marketing mix
Laws have been passed to regulate specific industries
The legal environment can have an important bearing on the definition of the marketing research
problem.
Economic Environment :
Comprises of purchasing power, gross income , disposable income, discretionary income , prices ,
savings , credit availability and general economic conditions.
The general state of economy ( rapid growth , slow growth , recession or stagflation) influences the
willingness of consumers and businesses to take on credit and spend on big –ticket items. Thus the
economic environment can have important implications for marketing research problems.
Example : In a project conducted for a major consumer products firm, the management problem
was how to respond to a price cut initiated by a competitor.
The alternative courses of action initially identified by the firm’s research staff were
1) decrease the price of the firm’s brand to match the competitor’s price cut
2) maintain price but increase advertising heavily
3) decrease the price somewhat, without matching the competitor’s price ,and
moderately increasing advertising.
When outside marketing research experts were brought in , the problem was redefined as improving
the market share and profitability of the product line.
Qualitative research indicated that in blind tests consumers could not differentiate products offered
under different brand names.
Further more consumers relied on price as an indicator of product quality .
These findings led to a creative alternative: increase the price of the existing brand and introduce
two new brands – one priced to match the competitor and the other priced to undercut it. This
strategy was implemented leading to an increase in market share and profitability.
The likelihood of committing either type of error in problem definition can be reduced by stating the
marketing research problem in broad, general terms and identifying its specific components.
The broad statement provides perspective on the problem and acts as a safeguard against
committing the second type of error .
The specific components focus key aspects of the problem and provide clear guidelines on how to
proceed further , thereby reducing the likelihood of the first type of error.
Management
Research
Problem
Broad
Statement
Specific
components
It is gathered by compiling relevant findings from secondary sources . The researcher can rely on
the theory; to determine which variables should be investigated.
Further more theoretical considerations provide information on how the variables should be
operational zed and measured as well as how the research design and sample should be selected.
After all theories have been formulated after several experimentations and observations .
However applying theory to the research problem requires lot’s of creativity.
A theory may not specify adequately how its abstract constructs ( variables) can be embodied in a
real world phenomenon. Moreover theories are incomplete.
They deal with only a subset of variables that exist in the real world.
Hence the researcher must also identify and examine other non theoretical variables.
Analytical Model : a set of variables & their interrelationships designed to represent in whole or in
part some real system or process .
In verbal models : the variables and their relationships are stated in prose form. Such models may
be mere restatements of the main tenets of a theory.
Graphical models :are visual. They are used to isolate variables and to suggest directions of
relationships but are not designed to provide numerical results. They are logical preliminary steps to
developing mathematical models.
Model building : the consumer experiences the stores and evaluates the stores in terms of factors
comprising the choice criteria. If preference is strong enough , the consumer will patronize the store.
Verbal model : A consumer first becomes aware of a department store . That person then gains an
understanding of the store by evaluating the store in terms of the factors comprising the choice
Graphical model :
Patronage
Preference
Understanding : Evaluation
Awareness
Mathematical Model :
n
y = a0 + ∑ ai xi
i=1
where y = degree of preference
The phenomenon of store patronage stated verbally is represented for clarity through a
figure(graphical model)and is put in equation form (mathematical model) for ease of statistical
estimation and testing. Graphical models are particularly helpful in conceptualizing an approach to
the problem.
In Harley Davidson example , the underlying theory was that brand loyalty is the result of positive
beliefs, attitude ,affect and experience with the brand. This theory may be represented by the
following graphical model.
Affect
Research Questions :
Research questions (RQs )are refined statements of the specific components of the problem. Although
the components of the problem define the problem in specific terms, further detail may be needed to
develop an approach.
RQs ask what specific information is required with respect to the problem components.
The formulation of the research questions should be guided not only by the problem definition but
also by the theoretical framework and the analytical model adopted.
Hypothesis : A hypothesis is an unproven statement or proposition about a factor or phenomenon
that is of interest to the researcher.
Components of the
Marketing Research
Objective
Problem /theoretical
framework
Hypothesis
Example :
H1 : customers who are store loyal are less knowledgeable about the shopping environment
H2 : Store loyal customers are more risk averse than are non loyal customers.
Research
Design
Descriptive Causal
Research Research
Exploratory Research : To provide insights into and an understanding of the problem confronting
the researcher. It is used when you must define the problem more precisely, identify relevant courses
of action, or gain additional insights before an approach can be developed.
Insights gained from exploratory research might be verified or quantified by conclusive research as
in the opening example.
Conclusive research : It is typically more formal and structured than exploratory research. It is
based on large , representative samples and the data obtained are subjected to quantitative analysis.
The findings from this research are considered to be conclusive in nature that they are used as input
into managerial decision making. ( however from the philosophy of science nothing can be proven
and nothing is conclusive )
Exploratory Conclusive
Eg for Descriptive Research : Describe the characteristics of relevant groups , such as consumers,
sales people , organizations , market areas. “ profile of heavy users of prestigious department stores
like Saks Fifth Avenue , Neiman Marcus “ , determining perception of product characteristics,
degree to which marketing variables are associated, “ to what extent is shopping at department
stores related to eating out ?
Cross sectional Designs : Most frequently used descriptive design in marketing research . Involve
the collection of information from any given sample of population elements only once. Can be single
cross sectional or multiple cross sectional.
Single Cross Sectional Design : Only one sample of respondents is drawn from the target
population and information is obtained from the sample only once. Also called as sample survey
research design.
Cohort Analysis : Consists of series of surveys conducted at appropriate time intervals , where the
cohort serves as the basic unit of analysis.
A Cohort is a group of respondents who experience the same event within the same time interval.
The term cohort analysis refers to any study in which there are measures of some characteristics of
one or more cohorts at two or more points in time.
Examples : Used to predict changes in voter opinions during a political campaign.
Cohort is a group of persons with common statistical characteristic
For example the age cohort of people between 8 and 19 years old was selected and their soft drink
consumption was examined every 10 years for 30 years.
In other words , every 10 years a different sample of respondents was drawn from the population of
those who were then between 8 and 19 years old. This sample was drawn independently of any
previous sample drawn in this study from the population of 8 to 19 years old.
Obviously people who were selected once were unlikely to be included again in the same
age cohort(8 to 19 years old ) as these people would be much older at the time of subsequent
sampling. This study showed that the cohort had increased consumption of soft drinks over time.
Causal Research :
Eg : The common assumption that a decrease in price will lead to increased sales and market share
does not hold in certain competitive environments.
Causal research are appropriate for the following purposes
1) to understand which variables are the cause(independent variables) and which variables are
the effect ( dependent variables) of a phenomenon
2) To determine the nature of the relationship between the causal variables and the effect to be
predicted.
Like descriptive research causal research requires a planned and structured design.
Although descriptive research can determine the degree of association between variables, it is not
appropriate for examining causal relationships. Such an examination requires a controlled
environment. A relatively controlled environment is one in which the other variables that may effect
the dependent variable are controlled or checked as much as possible. The effect of this manipulation
on one or more dependent variables is then measured to infer causality.
The total error is the variation between the true mean value in the population of the variable of
interest and the observed mean value obtained in the marketing research project.
Random sampling Error : Occurs because the particular sample selected is an imperfect
representation of the population of interest. It is the variation between the true mean of the
population and the true mean for the original sample.
Non Sampling Error: Can be attributed to sources other than sampling and they may be random or
non random . They result from a variety of reasons , including errors in problem definition,
approach, scales , questionnaire design, interviewing methods, data preparation and analysis.
Example : researcher designs a poor questionnaire which contains several questions that lead the
respondents to give biased answers. Non sampling errors consist of non response errors and
response errors.
Non Response Error : When some of the respondents included in the sample do not respond
Response Error : When respondents give inaccurate answers or their answers are misrecorded
or misanalyzed.
Surrogate information error : Variation between the information needed for the marketing research
problem and the information sought by the researcher
Measurement Error : Variation between the information sought and the information generated by
the measurement process employed by the researcher. Eg : While seeking to measure consumer
preferences, the researcher employs a scale that measures perceptions than the preferences.
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 30
Population Definition Error : Variation between the actual population relevant to the problem at
hand and the population as defined by the researcher.
Sampling frame error : Variation between the population defined by the researcher and the
population as implied by the sampling frame(list) used.
Eg : the telephone directory used to generate a list of telephone numbers does not accurately
represent the population of potential consumers because of unlisted, disconnected and new numbers
in service.
Data Analysis Error : Errors that occur while raw data from questionnaires are being transformed
into research findings. Eg : in appropriate statistical procedure.
Respondent Selection Error : When interviewers select respondents other than those specified by
the sampling design or in a manner inconsistent with the sampling design.
Questioning Error : Errors made in asking questions of the respondents or in not probing when
more information is needed.
Recording Error : Errors in hearing, interpreting and recording the answers given by the
respondents
Cheating Error : when the interviewer fabricates answers to part or all of the interview.
Inability Error : Respondents inability to provide accurate answers, due to unfamiliarity, fatigue,
boredom, faulty recall , question format, question content, other factors.
Unwillingness Error : Respondents unwillingness to provide accurate information. Respondents may
intentionally misreport their answers because of a desire to provide socially acceptable answers ,
avoid embarrassment or please the interviewer. For example a respondent intentionally misreports
reading the Time magazine to impress the interviewer.
Non Sampling Error is likely to be more problematic than sampling Error.
After the research design , appropriately controlling the total error has been specified , the
budgeting & Scheduling decisions can be made.
Budgeting and scheduling the project : Ensures that the marketing research project is completed
with in the available resources – financial , time , personnel .
One can use CPM( Critical Path Method) or PERT( Program Evaluation & Review Technique)
, GERT ( graphical evaluation & review technique)
1) Demographic Data
• Identification(name,address,telephone)
• Sex
• Marital status
• Names of family members
• Age
• Income
• Occupation
• Number of children present
• Home ownership
• Length of residence
• Number and make of cars owned
2) Psychographic Lifestyle Data
• Interest in golf
• Interest in snow skiing, book reading , running, bicycling, pets, fishing, electronics
Cable television.
Secondary Data
Internal External
Requires further
Ready to use Published Materials
Processing
Computerized
Data Bases
Syndicated Services
General Business
Government Sources
Sources
Other Government
Directories
Publications
Indexes
Statistical Data
Households/
Institutions
Consumers
Electronic
Industrial
Surveys Panels Scanner Retailers Wholesalers
Firms
Services
Psychographi Volume
Direct
c& Purchase Media Tracking
Inquiries
Lifestyles Data
Scanner Clipping
General
Panels Services
Scanner
Advertising Panels Corporate
Evaluation With Cable Reports
TV
Advertising Evaluation :
Aim : to assess the effectiveness of advertising using print and broadcast media
Tools : MIRS ( Magazine Impact Research Service ) Gallup & Robinson
Process : ads are tested using an at home in magazine context among widely dispersed samples, the
system offers standardized measures with flexible design options.
Test ads may appear in the magazine or are inserted as tip-ins.
TV Advertising : Method 1) Recruited audience method ( respondents are recruited and brought to
a central viewing facility , such as theater or mobile viewing laboratory , the respondents view the
commercials and provide data regarding knowledge, attitudes, and preferences related to the
product being advertised and the commercial itself)
Method 2) In home viewing method ( consumers evaluate commercials at home in
their normal viewing environment). New commercials can be pre tested at the network level or in
local markets distributed via VCR cassettes. A survey of viewers is then conducted to assess the
effectiveness of the commercials)
Surveys : Properly analyzed survey data can be manipulated in many ways so that the researcher
can look at intergroup differences , examine the effects of independent variables such as age or
income or even predict future behavior.
Media Panels : Electronic devices automatically record viewing behavior, thus supplementing a
diary or an online panel.
Company : Nielsen Media National Ratings service.
System : Electronic measurement system called the Nielsen People Meter.
The meters are placed in a sample of 5000 households (13,000) persons in the US randomly selected
and recruited by Nielsen Media so as to be representative of the population.
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 38
The Meter measures two things . 1) what program or channel is being tuned in
2) who is watching
The information is also disaggregated by 10 demographic and socioeconomic characteristics such as
household income , education of head of house, occupation of head of house, household size , age of
children, age of woman and geographic location. This is useful for firms in selecting specific TV
programs on which to air their commercials.
Purchase Panels : Respondents record their purchases of a variety of different products , as in the
NPD Panel. Eg : forecasting sales , estimating market shares, assessing brand loyalty , brand
switching behavior, establishing profiles of specific user groups, measuring promotional
effectiveness, and conducting controlled store tests.
Advantages : Panels provide longitudinal data ( data can be obtained from same respondents
repeatedly)
Disadvantages : Lack of representative ness, maturation and response biases.
Volume tracking Data : info on purchases by brand, size, price, flavor or formulation based on
sales data collected from the check out scanner tapes.
Electronic Scanner Services : Scanner data reflect some of the latest technological developments in
the marketing research industry. Scanner data are collected by passing merchandise over a laser
scanner, which optically reads the bar coded description( the universal product code ) printed on the
product. Being used by Reliance Fresh.
Advanced use of scanning : Scanner panels with cable TV. Eg : Tata Sky
Quantitative
Qualitative Data
Data
Research
Descriptive
Procedures
Direct InDirect
Survey
Nondisguised Disguised
Depth Association
Data Types in Marketing Research Process : Causal
Interviews Technique
Completion Experimental
Technique Data
Construction
Technique
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 40
Expressive
Technique
Criteria for Evaluating Secondary Data
Criteria for Evaluating Secondary Data
Criteria Issues Remarks
Specifications/ Data should be reliable,
Methodology Data Collecting methods valid and generalizable to
the problem at hand
Response Rate
Quality of data
Sampling Technique
Error /
Accuracy Examine errors in : Assess accuracy by
Approach, research design comparing data from
Sampling, data collection different sources
data analysis, reporting
Expertise,
Dependability credibility,reputation Data should be obtained
from an original rather
trustworthiness of data than an acquired source
Electronic devices
automatically
Media
recording behavior,
Panels
supplemented by a Same as Same as purchase Establishing
diary purchase panel panel advertising rates
selecting media
program or air time
establishing viewer
profiles
Scanner panels of
households that Data reflect actual Data may not be Promotional mix
subscribe to cable TV purchases; representative analysis
Scanner
Panels Quality of data is
with Cable sample control limited copy testing
TV ability to link panel
datato household
characteristics new product testing
positioning
Data banks on
industrial
establishments Important source Data are lacking in Determining market
Industrial created through direct of information in terms of content potential by
Product inquiries of companies industrial firms quality and quality geographic area
Syndicate particularly useful
d Services in initial phases of defining sales
clipping services projects territories
allocating advertising
corporate reports budget
Construction Techniques :
Are closely related to completion techniques. Require the respondent to construct a response in the
form of a story , dialogue or description. The researcher provides less initial structure to the
respondent than in a completion technique. The two main construction techniques are
1) Picture response : The roots can be traced to the (TAT : Thematic Apperception Test) The
respondent is exposed to pictures of persons or objects that are clearly depicted and others that
relatively vague. The respondent is asked to tell stories about these pictures . The interpretation
gives indications of the individual’s personality. The individual may be characterized as
impulsive, creative , unimaginative and so on. The name thematic is used because of the themes
are elicited based on the subject’s perceptual interpretation( apperception) of pictures.
2) Cartoons : Cartoon characters are shown in a specific situation related to the problem. The
respondents are asked to indicate what one cartoon character might say in response to the
comments of another character. The response indicates the respondents feelings, beliefs and
attitudes toward the situation.
Expressive Techniques : Respondents are presented with a verbal or visual situation and asked to
relate the feelings and attitudes of other people to the situation. The respondents express not their
own feelings or attitudes but those of others. The two main expressive techniques are role playing
and third – person technique.
Role Playing : In role playing respondents are asked to play the role or assume the behavior of
someone else. The researcher assumes that the respondents will project their own feelings into the
role. These can then be uncovered by analyzing the responses.
Third –Person Technique: The respondent is presented with a verbal or visual situation and asked
to relate the beliefs and attitudes of a third person rather than directly expressing personal beliefs
and attitudes. Again the researcher will assume that the respondent is revealing personal beliefs and
attitudes while describing the reactions of a third party.
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 49
Application of Projective Techniques :
Word association is commonly used to test brand names and to measure attitudes about particular
products , brands packages or advertisements.
The usefulness of Projective Techniques is enhanced when the following guidelines are observed.
1) Projected technique should be used because the required information cannot be accurately
obtained by direct methods.
2) For exploratory research to gain initial insights and understanding
3) Given their complexity , projective techniques cannot be used naively.
Survey
Methods
Observation
Methods
1)Concomitant variation : is the extent to which a cause X and an effect Y occur together or vary
together in the way predicted by the hypothesis under consideration. Evidence pertaining to
concomitant variation can be obtained in a qualitative or quantitative manner.
Eg : in the qualitative case the management believes that sales are highly dependant upon the quality
of in store service. This hypothesis could be examined by assessing concomitant variation.
Causal factor X : Instore service
Effect Factor Y : Sales
2)Time order occurrence of variables : The causing event must occur either before or
simultaneously with the effect; it cannot occur afterwards.
Validity in Experimentation :
When conducting an experiment , a researcher has two goals.
1) draw valid conclusions about the effects of independent variables on the study group
2) make valid generalizations to a larger population of interest.
The first goal concerns internal validity and the second goal concerns external validity.
Internal Validity : Whether the manipulation of the independent variables or treatments actually
caused the observed effects on the dependent variables . if the observed effects are influenced or
confounded by extraneous variables , it is difficult to draw valid inferences about the causal
relationship between the independent and dependent variables.
External Validity :refers to whether the cause and effect relationships found in the experiment can
be generalized. Can the results be generalized beyond the experimental situation and if so to what
Extraneous Variables :
History
Refers to specific events that are external to the experiment but occur at the same time as the
experiment. These events may effect the dependent variable.
Eg : O1 X1 O2
O1 , O2 : measure of sales of a department store chain in a specific region and X1 represents a new
promotional campaign. Sales before and after the campaign.
The difference O2 – O1 is the treatment effect is the treatment effect. If there was no difference
between O2 and O1 then can we conclude that the promotional campaign was ineffective?
The promotional campaign is not the only possible explanation of the difference between O2 and
O1 . The campaign might be effective what if the general economic conditions declined during the
experiment.
The greater the time interval between observations, the greater the possibility that history will
confound an experiment of this type.
Maturation : Maturation (MA) is similar to history except that it refers to changes in the test units
themselves. The changes are caused by impact of the independent variables or treatments occur with
the passage of time.
In an experiment involving people , maturation takes place as people become older , more
experienced , tired , bored or uninterested . Tracking and market studies that span several months
are vulnerable to maturation , because it is difficult to know how respondents are changing over
time.
The main testing effect may also be reactive , causing the respondents to change their attitudes
simply because these attitudes have been measured.
In the interactive testing effect( IT) a prior measurement affects the test unit’s response to the
independent variable. Continuing with our advertising experiment when people are asked to indicate
their attitudes toward a brand, they become aware of that brand. They are sensitized to that brand
and become more likely to pay attention to the test commercial than people who were not included in
the experiment.
The measured effects are then not generalizable to the population : therefore the interactive testing
effects influence the experiment’s external validity.
Instrumentation : Refers to the changes in the measuring instrument , in the observers or in the
scores themselves. Sometimes measuring instruments are modified during the course of an
experiment. In the advertising experiment this could lead to variations in the responses obtained.
Eg : experiment in which dollar sales are being measured before and after exposure to an in-store
display (treatment). If there is a non experimental price change between O1 and O2 , this results in a
change in instrumentation because dollar sales will be measured using different unit prices.
In this case the treatment effect ( O2 – O1) could be attributed to a change in instrumentation.
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 58
Statistical Regression : effects occur when test units with extreme scores move closer to the average
score during the course of the experiment. In the advertising experiment suppose that some
respondents had either a very favorable or very unfavorable attitudes. On post treatment
measurement , their attitudes might have moved toward the average because people’s attitudes
change continuously . People with extreme attitudes have more room for change, so variation is
more likely. This has a confounding effect on the experimental results, because the observed
effect( change in attitude) may be attributable to statistical regression rather than to the
treatment( test commercial).
Selection Bias : Refer to the improper assignment of test units to treatment conditions. This bias
occurs when selection or assignment of test units results in treatment groups that differ on the
dependent variable before the exposure to treatment condition. If test units self select their own
groups or are assigned to groups on the basis of the researchers judgment , selection bias is possible.
Eg: merchandising experiment in which two different merchandising displays (old and new) are
assigned to different department stores . the stores vary on the key characteristic called store size.
Store size is likely to affect sales regardless of which merchandising display was assigned to a store.
Mortality : Refers to the loss of test units while the experiment is in progress. This happens for many
reasons , such as test units refusing to continue in the experiment. Mortality confounds results
because it is difficult to determine if the lost test units would respond in the same manner to the
treatment as those that remain .
Eg : merchandising display experiment. Suppose during the course of the experiment , three stores in
the new display treatment condition drop out. The researcher could not determine whether the
average sales for the new display stores would have been higher or lower if these three stores had
continued in the experiment.
Experimen
tal
Designs
Pretest-
Multiple
One Shot Posttest Time Randomize Latin
Time Factorial
case Study Control Series d Blocks Square
Series
Group
Post test
One Group
only
Pretest -
Control
Posttest
Group
Solomon
Static
Four -
Group
Group
Symbolic
Experiment Advantag
Representati Description Disadvantages Case study example
s es
on
Symbolic
Experimen
Representat Description Disadvantages Case study example
ts
ion
A group of test
units is measured
twice. There is no
control group. First
a pre treatment Example of sears again :
measure is taken Respondents are recruited to
(O1), then the central theatre locations in
group is exposed to different test cities. At the central
one Group the treatment (X). location, respondents are first
Pretest- Finally a post administered a personal interview
Post Test treatment measure The treatment to measure , among other things
Design is taken ( O2). effect is computed attitudes towards the store ,
History , as O2 - O1, but the Sears (O1). Then they watch a
maturation, validity of this TV Program , the respondents
testing , conclusion is are again administered a
instrumentation,sel questionable personal interview to measure
ection, mortality because attitudes towards the store
and regression extreneous Sears(O2). The effectiveness of
could possibly be variables are the test commercial is measured
2 O1 X O2 present. largely uncontrolled as O2- O1.
Experimen
ts
True The distinguishing feature of the true experimental desings as compared to pre experimental
Experimen designs is randomization. In true experimental designs , the researcher randomly assigns test
tal units to experimental groups and treatments to experimental groups. True experimental
Designs designs include the pretest - post test control group design, the post test only control group
4 design
Symbolic
Experiments
Representation
Experiments
Symbolic
Experiments Representatio Description Disadvantages Case study example
n
Statistical Designs
Sno Description Example
It is useful when there is only one major external variable such as sales ,store
size, or income of the respondent that might influence the dependent variable.
The test units are blocked or grouped on the basis of the external variable.
The researcher must be able to identify and measure the blocking variable.
Randomized block designs are more useful than completely random designs,
their main limitation is that the researcher can control only one external
Randomized block variable. when more than one variable must be controlled the researcher must
1 design use latin square design
For more indepth information of the above topics you can refer to N. K Malhotra
Further Scaling & measurement process has been specified and the questionnaire designed .
Sampling process
Target Population : Collection of elements or objects that possess the information sought by the
researcher and about which inferences are to be made. The target population must be defined
precisely.
Element : The object about which or from which the information is desired , the element is usually a
respondent .
Sampling Unit : It is an element or a unit containing the element , that is available for selection at
some stage of the sampling process .
Example for Target Population : The target population for the department store project was defined
as follows.
Elements : Male or Female head of the household responsible for most of the shopping at
department stores
Sampling units : Households
Here Sampling unit and population element are different.
Consider a marketing research project assessing consumer response to a new brand of men’s
cologne. Who should be included in the target population ? Men 17 or older ? should females be
included , because some women buy colognes for their husbands ? these and similar questions must
be resolved before the target population can be approximately defined ?
Sampling Frame :
It is a representation of the elements of the target population . It consists of a list or a set of
directions for identifying the target population .
Examples :
Telephone book
A city directory
Map
Sampling Technique :
It involves several decisions of a broader nature . The researcher must decide whether to use a
Bayesian or traditional sampling approach, to sample with or without replacement , and to use non
probability or probability sampling.
Bayesian Approach : The elements are selected sequentially. After each element is added to the
sample, the data are collected, sample statistics computed and sampling costs determined.
Sampling with Replacement : An element is selected from the sampling frame and appropriate data
are obtained . Then the element is placed back in the sampling frame. As a result , it is possible for
an element to be included in the sample more than once.
Sampling without Replacement : Once an element is selected for inclusion in the sample , it is
removed from the sampling frame and therefore cannot be selected again.
The most important decision about the choice of sampling technique is whether to use probability or
non probability sampling.
Sample Size : Refers to the number of elements to be included in the study . Determining the sample
size is complex and involves several qualitative and quantitative considerations.
Finally the sample size should be guided by a consideration of the resource constraints.
In any marketing research project, money and time are limited . Other constraints include the
availability of qualified personnel for the data collection.
Execution of the sampling process requires a detailed specification of how the sampling design
decisions with respect to the population , sampling frame, sampling unit, sampling technique and
sample size are to be implemented .
Sampling Techniques
Judgmental Systematic
Sampling Sampling
Quota Stratified
Sampling Sampling
Snowball Proportionate
Sampling
Disproportionate
Cluster
Sampling
Other Sampling
Techniques
In probability sampling , sampling units are selected by chance. It is possible to pre specify every
potential sample of a given size that could be drawn from the population as well as the probability of
selecting each sample.
Every potential sample need not have the same probability of selection, but it is possible to specify
the probability of selecting any particular sample of a given size. Confidence intervals which contain
the true population value with a given level of certainty can be calculated .
It is the lest expensive and least time consuming of all sampling techniques
Judgemental Sampling : it is a form of convenience sampling in which the population elements are
selected based on the judgement of the researcher. The researcher exercising judgement or expertise
chooses the elements to be included in the sample , because he or she believes that they are
respresentative of the population of interest or are otherwise appropriate.
The first stage consists of developing control categories , or quotas of population elements
To develop these quotas , the researcher lists relevant control characteristics and determines the
distribution of these characteristics in the target population. . The relevant control characteristics
which may include sex, age and race are identified on the basis of judgement .
Often the quotas are assigned so that the proportion of the sample elements possessing the control
characteristics is the same as the proportion of population elements with these characteristics.
Snowball Sampling : An initial group of respondents is selected , usually at random. After being
interviewed these respondents are asked to identify others who belong to the target population of
interest.
Major objective of snowball sampling is to estimate characteristics that are rare in the population.
Eg : users of particular government or social services such as food stamps, whose names cannot be
revealed,
1) Convenience Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
Group D happens to assemble at a convenient time and place. So all the elements in this group
are selected . The resulting sample consists of elements 16,17,18,19 and 20 . No elements are
selected from groups A, B, C and E.
2) Judgmental Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
The researcher considers groups B , C and E to be typical and convenient. Within each of
these groups one or two elements are selected based on typicality and convenience. The
resulting sample consists of elements 8,10,11,13 and 24. Note that no elements are selected
from groups A and D.
3) Quota Sampling
A B C D E
1 6 11 16 21
2 7 12 17 22
3 8 13 18 23
4 9 14 19 24
5 10 15 20 25
A quota of one element from each group, A to E is imposed. Within each group, one element
is selected based on judgement or convenience. The resulting sample consists of elements 3, 6,
13,20 and 22. One element is selected from each column or group.
4) Snowball sampling
Eg : lottery system .
The researcher first compiles a sampling frame in which each element is assigned a unique
identification number.
2) Systematic Sampling :
In systematic sampling , the sample is chosen by selecting a random starting point and then
picking every ith element in succession from the sampling frame.
The sampling interval i is determined by dividing the population size N by the sample size
n and rounding to the nearest integer.
Next elements are selected from each stratum by a random procedure usually SRS.
Technically only SRS should be employed in selecting the elements from each stratum.
In practice sometimes systematic sampling and other probability sampling procedures are
employed.
It differs from quota sampling in that the sample elements are selected probabilistically
rather than based on convenience or judgement.
4) Cluster Sampling.
The target population is first divided into mutually exclusive and collectively exhaustive sub
populations or clusters.
Then a random sample of clusters is selected , based on a probability sampling technique such as
SRS.
For each selected cluster , either all the elements are included in the sample or a sample of
elements is drawn probabilistically.
If all elements in each selected cluster are included in the sample, the procedure is called one
stage cluster sampling.
If a sample of elements is drawn probabilistically from each selected cluster, the procedure is
two stage cluster sampling.
Two stage cluster sampling can be either simple two stage cluster sampling involving SRS or
probability proportionate to size (PPS) sampling.
Cluster Sampling
Probability
Simple Cluster
Proportionate
Sampling
To size sampling
In probability proportionate to size sampling , the clusters are sampled with probability
proportional to size. The size of cluster is defined in terms of the number of sampling units within
that cluster.
So in first stage large clusters are more likely to be included than small clusters.
In second stage the probability of selecting a sampling unit in a selected cluster varies inversely with
the size of the cluster.
Internet Sampling
Internet
Sampling
Statistic : is a summary description of a characteristic or measure of the sample. The sample statistic
is used as an estimate of the population parameter
Finite Population Correction : The finite population correction (FPC) is a correction for
overestimation of the variance of a population parameter, for example a mean or proportion when
the sample size is 10 % or more of the population size.
Precision Level : When estimating a population parameter by using a sample statistic, the precision
level is the desired size of the estimating interval. This is the maximums permissible difference
between the sample statistic and the population parameter.
Confidence Interval : The confidence interval is the range into which the true population parameter
will fall, assuming a given level of confidence.
Confidence Level : The confidence level is the probability that a confidence interval will include the
population parameter.
Sampling Process
It is the specific group of people, firms, conditions , activities which form the pivotal point of
research project.
For developing a sample it becomes the primary duty of the researcher to define the population from
which to draw the sample.
2) Sampling frame
Developing a sampling frame.
A sampling frame may be defined as the listing of the general components of the individual units
that comprise the defined population.
Eg : a fertilizer manufacturing company wants to test its fertilizer efficiency with regard to crop
yields.
3) Sampling methods .
Probability Sampling :
Degree of precision , knowledge of standard error and confidence intervals.
The size of the sample in Non Probability sampling is generally 1/10th of the population size.
Sampling Metrics
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 79
Standard Errors of Mean & Proportion
i) Sampling of variables involves a numerical value such as average height, weight , expenditure
here we estimate the standard error of the mean. Sigma x bar
ii) Sampling of proportions is expressed in dichotomous terms.
Eg : good or bad, heavy or light , high or low here standard error of the proportion is calculated.
This means that if a large number of probability samples ( size 500 ) were taken from the particular
city college student body, 95 % of these samples would contain the actual mean of the universe
within an interval of +- 1.96 standard errors of their mean values.
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 80
This is want the 95 % confidence interval of Rs 98.74 to Rs 101.26 mean. It is assumed that this
sample with a mean of Rs 100 is among those 95 percent.
What does this 99 % mean. It means that if a large number of samples ( size 500) are taken from the
student body, 99% of these would contain the actual mean of the universe within an interval +- 2.57
of standard errors of their mean value.
Example : A study of 5000 students was conducted by taking a sample of 400 students. It was
regarding the students attitudes towards a company’s products. It was found that 88 % of the students
(22% ), had favorable attitudes toward the company’s products while 312 students (78 %) held
unfavorable ones. Based on this information, what would be the 95 % confidence interval depicting
the attitude of the entire student body toward company’s products?
Sp = Sqrt((P.q)/n * (N-n)/N))
S xbar = s/ Sqrt(n)
n = S 2 / S xbar 2
Example : Colgate Palmolive India Ltd wants to know how much does a male student spend
annually on toothpastes. They selected Punjab agricultural university , ludhiana as population and
took sample for the study . Assume that there were 18,000 students of which 8,300 were males. The
company wants to be reasonably confident that the amount obtained will be within +- Rs 2 of the
average male students real expenditure. How large a sample will be needed to achieve this precision.
The researcher is fairly confident that the range of annual expenditures for toothpastes by male
students at Punjab agricultural university is from Rs 0 to Rs 80.
n = S 2/ S xbar 2
n= S 2 / Sx 2
n=(Rs 80 / 6) 2 / Sx 2
= (Rs 13.5 ) 2 / Sx 2
Here we divided S / 6 because in a normally distributed set of values , the range encompasses
approximately three standard deviations . Thus 80 / 6 gives a reasonable estimate of 1 standard
deviation.
Thus to be 95 % confident and the sample mean within +- Rs 2 of the population mean a sample of
175 male students must be contacted.
If colgate Palmolive needs greater precision, that is a smaller interval of +- Re 1 requires a sample of
701 students as under
1.96 Sx = Re1
So Sx = 0.51
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 82
n=(Rs 13.5)2 / 0.51 2 = 182.25 / 0.26 = 701
Now small change in precision sought ( + - Re 1 vs +- 2 ) requires almost 4 fold increase in the
size of the sample needed.
Now small change in precision size i.e if the n value generated by the above procedure i.e is
more than 5 % of the population ( n / N > 5% ) the sample size should be revised downward .
The downward revision would take the following form.
Now in the above example sample size was 175, this is only 2 % of the total population of 8300
students , so no downward adjustment is needed.
In case 701 is the sample size ( 8.5 % of the population ) downward adjustment is needed.
What do we Measure ?
• Perceptions, attitudes, preferences or any relevant characteristics.
Specification of Rules
• Important aspect of measurement : Measurement Process must be Isomorphic. Isomorphic
means – one to one correspondence between the numbers and the characteristics being
measured.
Scaling Example
• Consider a scale from 1 to 100 for locating consumers according to the characteristic
“ attitude toward department Stores”
Each respondent is assigned a number from 1 to 100
1 = extremely unfavorable
100 = extremely favorable
• Scaling is the process of placing the respondents on a continuum with respect to their
attitude towards an object or process
Examples
• Nominal Scale - Numbers assigned to Runners
Example :
Project : Department Store
Numbers 1 to 10 were assigned to the stores. Number 9 was assigned to Sears
This does not imply that Sears was inferior or superior to others.
• Ordinal Scale – Numbers are assigned to objects to indicate the relative extent to which the
objects possess some characteristic.
• Indicates relative position,not the magnitude of differences between the objects.
• The object ranked first has more characteristic as compared to the object ranked second.
Examples
Quality rankings, rankings of teams in a tournament, socioeconomic class & occupational status.
**************************
Interval Scale
• Interval Scale – Numerically equal distances on the scale represent equal values in the
characteristic being measured.
• Contains all the information of an ordinal scale, but it also allows you to compare the
differences between objects.
Two interval scales that rate objects A,B,C,D as 1,2,3 & 4 or as 22,24,26 & 28 are equivalent.
• Interval Scale – Numerically equal distances on the scale represent equal values in the
characteristic being measured.
Attitudinal data obtained from rating scales are often treated as interval data.
Comparative scales must be interpreted in relative terms and have only ordinal or rank order
properties.
Tend to reduce the halo or carryover effects from one judgment to another.
To compare RC Cola to coke and pepsi the researcher would have to do a new study.
Non Comparative Scales : Monadic or metric scales each object is scaled independently or the
others in the stimulus set.
Example : Respondents might be asked to evaluate coke on a 1-6 preference scale( 1= not at all
preferred , 6= greatly preferred)
Paired Comparison
• Respondent is presented with two objects and asked to select one according to some
criterion.
• The data obtained are ordinal in nature.
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 88
• Used frequently when stimulus objects are physical products.
We are going to present you with 10 pairs of shampoo brands, for each pair
, please indicate which one of the two brands of shampoo in the pair you
would prefer for personal use
Clinic Head & Shoulders Sunsilk
Clinic 1 0 1
Sunsilk 1 0 1
Number of times 2 1 3
preferred
Respondents are presented with several objects simultaneously and asked to order or rank them
according to some criterion.
Allows for fine discrimination among stimulus objects without requiring too much time.
It has two primary disadvantages. Respondents may allocate more or fewer units than those
specified.
For example a respondent may allocate more or fewer units than those specified
Lather 53 12 6
Packaging 15 9 10
Moisturizing 13 19 12
Sum
Continuous rating scale : also called as graphic rating 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.
Version 1
Probably the worst _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Probably the best
Once the respondent has provided the ratings, the researcher divides the line
into as many categories as desired and assigns scores based on the
categories into which the ratings fall.
Example :
Different opinions about sears store
1 = strongly disagree
2 = disagree
3 = neither agree nor disagree
4 = agree
5 = strongly agree
Sears is
Powerful _:_:_:_:_:_:X-:_:_:Weak
Unrealible_:_:_::_:_:_:_:_:_X:_:_:Reliable
Example
Select a + number for the phrases you think describe the store accurately.
The more accurately you thing the phrase describes the larger the + number you should choose
Select a - number for phrases you think do not describe it accurately. The less accurately you think
the phrase describes the larger the – number u should choose
Form Sears High Quality Poor Service
+5 +5 -1 -1
+4 +4 -3 -2
Major decisions the researcher must take while constructing the scales.
1. Number of scale categories to use
2. Balanced versus unbalanced scale
3. Odd or even number of categories
4. Forced versus non forced choice
5. The nature and degree of the verbal description
6. The physical form of the scale
Number of Scale Categories : Two conflicting considerations are involved in deciding the
number of scale categories. The greater the number of scale categories , the finer the
discrimination among stimulus objects that is possible. On the other hand respondents
cannot handle more than a few categories.
Forced versus Nonforced Scales : On forced rating scales, the respondents are forced to express
Nature & Degree of Verbal Description : The nature and degree of verbal description associated
with scale categories varies considerably and can have an effect on the responses. Scale categories
may have verbal numerical or even pictorial descriptions. Furthermore the researcher must decide
whether to label every scale category, some scale categories or only extreme scale categories.
Labeling can be done to reduce the scale ambiguity. The category description should be located as
close to the response categories as possible.
Physical Form or Configuration : A number of options are available with respect to scale form or
configuration. Scales can be presented vertically or horizontally . Categories can be expressed by
boxes, discrete lines, or units on a continuum and may not have numbers assigned to them. If
numerical values are used , they may be positive , negative or both.
Two unique rating scale configurations used in marketing research are
1) thermometer scale : the higher the temperature the more favorable the evaluation
2) smiling face scale : happier faces indicate more favorable evaluations.
Develop a Theory
Scale Evaluation :
A measurement is a number that reflects some characteristic of an object. A measurement is
Source : N. K Malhotra Reproduced by : Premchandrahas Sastry 96
not true value of the characteristic of interest but rather an observation of it.
Scale
Evaluation
Generalizabili
Reliability Validity
ty
Alternative Internal
Test/ Retest Content Criterion Construct
Forms Consistency
Convergent
Discriminant
Nomological
Sampling Process
1) How population is defined .
It is the specific group of people, firms, conditions , activities which form the pivotal point of
research project.
For developing a sample it becomes the primary duty of the researcher to define the population from
which to draw the sample.
2) Sampling frame
Developing a sampling frame.
A sampling frame may be defined as the listing of the general components of the individual units that
comprise the defined population.
Eg : a fertilizer manufacturing company wants to test its fertilizer efficiency with regard to crop
yields.
3) Sampling methods .
Probability Sampling :
Degree of precision , knowledge of standard error and confidence intervals.
The size of the sample in Non Probability sampling is generally 1/10th of the population size.
Sampling Metrics
i) Sampling of variables involves a numerical value such as average height, weight , expenditure
here we estimate the standard error of the mean. Sigma x bar
ii) Sampling of proportions is expressed in dichotomous terms.
Eg : good or bad, heavy or light , high or low here standard error of the proportion is calculated.
This means that if a large number of probability samples ( size 500 ) were taken from the particular
city college student body, 95 % of these samples would contain the actual mean of the universe
within an interval of +- 1.96 standard errors of their mean values.
This is want the 95 % confidence interval of Rs 98.74 to Rs 101.26 mean. It is assumed that this
sample with a mean of Rs 100 is among those 95 percent.
What does this 99 % mean. It means that if a large number of samples ( size 500) are taken from the
student body, 99% of these would contain the actual mean of the universe within an interval +- 2.57
of standard errors of their mean value.
Example : A study of 5000 students was conducted by taking a sample of 400 students. It was
regarding the students attitudes towards a company’s products. It was found that 88 % of the
students (22% ), had favorable attitudes toward the company’s products while 312 students (78 %)
held unfavorable ones. Based on this information, what would be the 95 % confidence interval
depicting the attitude of the entire student body toward company’s products?
S xbar = s/ Sqrt(n)
n = S 2 / S xbar 2
Example : Colgate Palmolive India Ltd wants to know how much does a male student spend
annually on toothpastes. They selected Punjab agricultural university , ludhiana as population and
took sample for the study . Assume that there were 18,000 students of which 8,300 were males. The
company wants to be reasonably confident that the amount obtained will be within +- Rs 2 of the
average male students real expenditure. How large a sample will be needed to achieve this precision.
The researcher is fairly confident that the range of annual expenditures for toothpastes by male
students at Punjab agricultural university is from Rs 0 to Rs 80.
n = S 2/ S xbar 2
n= S 2 / Sx 2
n=(Rs 80 / 6) 2 / Sx 2
= (Rs 13.5 ) 2 / Sx 2
Here we divided S / 6 because in a normally distributed set of values , the range encompasses
approximately three standard deviations . Thus 80 / 6 gives a reasonable estimate of 1 standard
deviation.
Thus to be 95 % confident and the sample mean within +- Rs 2 of the population mean a sample of
175 male students must be contacted.
If colgate Palmolive needs greater precision, that is a smaller interval of +- Re 1 requires a sample
of 701 students as under
1.96 Sx = Re1
So Sx = 0.51
Now small change in precision size i.e if the n value generated by the above procedure i.e is more
than 5 % of the population ( n / N > 5% ) the sample size should be revised downward . The
downward revision would take the following form.
Now in the above example sample size was 175, this is only 2 % of the total population of 8300
students , so no downward adjustment is needed.
In case 701 is the sample size ( 8.5 % of the population ) downward adjustment is needed.
IT should be noted that ABC cannot pay any arbitary amount demanded by this consultancy firm. It
should therefore fix up an upper limit beyond which it would like to pay. How is this limit
determined ?
Assume that ABC Co is fully acquainted with the plans of its competitior XYZ co . In such a case
ABC will choose S1 and gain a payoff of Rs 6 million when XYZ introduces a new product. This is
because S2 will yield only Rx 4 million. Likewise , ABC will choose S2 and gain a pay-off of
Rx 15 million when it is certain that XYZ will not introduce a new product. This is because s1 will
yield only Rx 10 million.
Now from the information given above , it is known that XYZ will choose C1 during 60 percent of
the time and C2 during 40 percent of the time . In view of this , the expected monetary value under
certainty will be as follows :
EMV ( C ) = (6 x 0.6 ) + ( 15 X 0.4 )
= 3.6 + 6
= Rs 9.6 million
Now the expected monetary value of perfect information is to be determined . This is the difference
between the expected monetary value under certainty and expected monetary value of the optimal
strategy calculated under conditions of uncertainity (i.e) EMV ( UC) . Thus the expected monetary
value of perfect information is :