JUNE 2014 EXAMINATION

DGM 07

RESEARCH METHODOLOGY
Time: Three Hours Maximum Marks: 100

Note:
1. The paper is divided in two sections: SECTION-A and SECTION-B.
2. There are five questions in SECTION-A. Students are required to attempt ANY
THREE.
3. All the questions of SECTION-B (Case Study) are compulsory.

Section-A (20 Marks each)

1. (a) Define research design and discuss the relative importance of exploratory,
descriptive and causal research. Rfefer ppt
(5+5)

(b) Welcome Restaurant is a chain of fast food restaurants located in major

metropolitan cities. Sales have been growing very slowly for the last two years.
Management has decided to add some new items to the menu, but first they
want to know more about their customers and their preferences. (5+5)
(i) List two hypotheses
(ii) What kind of research design is appropriate? Why? Causal

Relationship bet customer pref and sales

If customers are from which income level? Veg or non veg? which one to add interms of variety ?
H1 adding new item will lead to growth in revenue?
Extending the current product items or adding new product line?

2. (a) Discuss what is meant by a “good hypothesis”.

Conjectural statement, hypo tentative .. possible nearest answer de de jo
Clear and precise, should be able to be tested, represent relationsjip bet variables, hypo should limited in scope
and must be specific.shud be stated in simple terms so that user can understands it. Consistent wid established
facts. Amenable to be tsetd within a reasonable time.
(b) Discuss the different measurement scales & the statistics that is applicable in
each case.

3. (a) “Because questionnaire design is an art, it is useless to follow a rigid set of

guidelines. Rather, the process should be left entirely to the creativity and
ingenuity of the researcher.” Discuss the statement and justify your stand. (10)
I am a market researcher by profession, and there is nothing as far as the truth as this statement.

I would have to say that questionnaire design is more of a science then an art - it should be looked at in a more
logical, computer programming way.

The goal of writing a survey is to get the unbiased and honest opinions of people. When asking them
questions, you don't want to lead them on, change their opinions, influence them.. .
Also add questionaaire rules:

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 (b) Sweet Cookies, is planning to launch a new line of cookies and wants to assess
the market size. The cookies are of a mixed chocolate pineapple flavor and will
be targeted at the premium end of the market. Discuss the issue and formulate
the appropriate, Answer below:
(i) Management Decision Problem Descriptive Research
(ii) Marketing Research Problem
(iii) Research Design (2+3+5)
I would use the descriptive approach because is objective is to describe the market characteristics or functions.
It is the preplanned and structured design. It method is focused on secondary data, panels,
observational data, surveys

4. (a) A manufacturer would like to survey users to determine the demand potential
for a new power press. The new press has a capacity of 500 tons and costs
Rs.15 Crores. It is used for forming products from lightweight and heavyweight
steel and can be used by automobile, construction equipment, and major
appliance manufacturers. (2x5=10)
By Malhotra Naresh K.)pg 355)
(i) Identify the population and sampling frame that could be used.
Target population: carmakers, appliance manufacturers, construction equipment manufacturers
Sampling frame: association directory of carmakers, appliance manufacturers and construction equipment manufacturers
(ii) Describe how a simple random sample can be drawn using the
identified sampling frame.
Firstly researcher has to assign personal ID for each element in sampling frame. Then, sample generated by random
process, where all elements have the same probability to be in sample size.
(iii) Could a stratified sample be used? If so, how? Yes three starats can be
made based on users mentioned above
(iv) Could a cluster sample be used? If so, how? no
(v) Which sampling technique would you recommend? Why? Prob or non
prob

(b) Discuss the relationship between bivariate correlation, bivariate regression,

multiple regression, and analysis of variance. (10)
Univariate is analysed in bivariate two variables are studied. Pg 466 & 468…262 (1)

5. In a pilot study examining the effectiveness of three commercials (A, B, and C), 10
consumers were assigned to view each commercial and rate it on a 9-point Likert
scale. The data obtained from the 30 respondents are shown in the table below:

Commercials
A 4 5 3 4 3 4 4 3 5 5
B 7 4 6 5 4 6 5 5 4 4
C 8 7 7 6 8 7 8 8 5 6

Answer the following questions;

(i) Write the Null and Alternative hypotheses to test the effectiveness of the
commercials.
(ii) Test & interpret the result at 5% level of significance. (5+15)

Section-B (40 Marks)

Case Study (Compulsory)
Nike: Associating Athletes, Performance, and the Brand
Nike is the largest seller of athletic footwear, athletic apparel, and other athletic gear in the world,
with about 30 percent market share worldwide. Nike markets its products under its own brand, as well
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as Nike Golf, Nike Pro, Air Jordan, Team Starter, and subsidiaries, including Bauer, Cole Haan, Hurley
International, and Converse. As of 2009, the company sells its products through a mix of independent
distributors, licensees, and subsidiaries in approximately 120 countries worldwide. Nike has grown
from an $8,000 company in 1963 to a company with revenues of $25.31 billion for the year ended
2013.

In 2008, Nike spent an enormous amount of money, more than a billion dollars, on advertising,
endorsements, and sales promotion. In order to make sure that this money is being spent properly,
Nike relies on marketing research. It has shown a history of innovation and inspiration in its marketing
and is quick to adapt to the changing consumer and the world of sports. Nike has used marketing
research in understanding where the future growth lies. A recent example is Nike's shift from
marketing in the more traditional sports (basketball and running) to other sports (golf and soccer),
where it has not been as strong. Marketing research surveys revealed that the awareness of Nike
among soccer and golf players was low, and Nike decided to work on increasing these numbers. Nike
has decided that the money needed for licenses in its strong areas can be better spent in other areas
where Nike does
not have the brand awareness.

Today, the Nike Swoosh is recognized around the world. This is the result of more than 40 years of
work and innovation. It signed the first athletes to wear its shoe in 1973. Early on, Nike realized the
importance of associating athletes with its products. The partnerships help relate the excellence of the
athlete with the perception of the brand. Through focus groups and surveys, Nike discovered the
pyramid influence, which shows that the mass market
can be influenced by the preferences of a small group of top athletes. After it realized this effect. Nike
began to spend millions on celebrity endorsements. The association with the athlete also helps
dimensionalize the company and what it believes in. With Nike, this was, and remains extremely
important. It wants to convey a message that company's goal is to bring innovation to every athlete in
the world. Nike also uses the athletes to design new products by attempting to meet their individual
goals.

Explaining Nike's strategy of celebrity endorsement Trevor Edwards, vice president of U.S. Brand
Management says that the sports figures, such as Ronaldo, Michael Jordan, and Tiger Woods, who
have endorsed Nike brands all have represented excellence in some way. Nevertheless the athletes
also have a personal side, such as their drive to win or their ability to remain humble. All these
qualities speak something about the Nike brand; this not only benefits the brand, but also helps to
define what the Nike brand is and what it stands for.

The company also realized that in order to achieve its lofty growth goals, it must appeal to multiple
market segments. Based on marketing research, Nike divided the
market into three different groups: the ultimate athlete, the athletics participant, and the consumer
who is influenced by sports culture. The first segment is the professional athletes. The second
constituency is the participants, those who participate in sports and athletic activities but do not see
themselves as athletes or as being part of the larger sport. The third segment comprises those who
influence others and are influenced by the world of sports. These three different constituencies form
three different consumer segments, and Nike uses very different strategies for each.

Nike has always been an aggressive user of marketing research and this has been shown in its attack
on the European market. It decided to concentrate on different sports in order to reach European
consumers. Americans love baseball. And football. And basketball. But Europe's favourite game is
soccer. Nike placed its focus on major sporting events (World Cups and Olympics) and celebrity
athletes that are relevant to the European consumer. Marketing research in the form of focus groups
and survey research revealed that the best positioning for Nike shoes was one that enhanced
performance in the sport. Through massive advertising campaigns, it has been able to change the
perception of its products from fashion to performance and in the process increase sales dramatically.

Another technique Nike has used is to specifically design a product line for a certain market. Nike uses
marketing research to determine the lifestyles and product usage characteristics of a particular market
segment and then designs products for that segment. An example is the
Presto line, which was designed for a certain youth lifestyle. Nike focused on the lifestyle and designed
the products around this group. It also used marketing research to determine the most effective media
to communicate with the target market.

Because of these methods, the Nike logo is recognized by 97 percent of U.S. citizens, and its sales have
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soared as a result. However, Nike faces a new concern: that it has lost its traditional image of being a
smaller, innovative company. It also faces future obstacles in maintaining brand equity and brand
meaning. Continued reliance on marketing research will help Nike to meet these challenges, associate
its brand with top athletes and performance, and enhance its image.

Nike used marketing research to build its brand into one of the most well-known and easily recognized
brands in the world. Nike's strategy of celebrity endorsements, its expansion into Europe and resulting
stronger association with soccer are some of the steps taken by Nike to
grow its brand. In the coming years, as Nike expands to newer markets and capitalizes newer
opportunities, it will have to continue its reliance on marketing research and continue to associate
athletes, performance, and the brand.

6. Case Questions:

Read the case following Nike Case and answer the questions given below:

a) Nike would like to increase its share of the athletic shoe market. Define the
management decision problem.
b) Define an appropriate research problem corresponding to the management
decision problem you have identified.
c) Develop a graphical model explaining consumers' selection of a brand of
athletic shoes. How can qualitative research be used to strengthen Nike's
image?
d) Design a survey for the Nike. (4+12x3=40)

3 (b) The market research problem is to determine:

Whether consumer will like the new product line or not

The most suitable segment to be targeted
Whether the market size can afford the introduction of a new product or is it already saturated
Management Decision Problem & Marketing Research Problem
Management Decision Problem
• Should a new product line be introduced?
• Which market to be targeted?
• Is the market size enough for a new product line?

Market Research Problem

• Consumer preferences and purchase intentions for the proposed new product.
• Different market segments and the most suitable market to be targeted
• The market size and whether the market is saturated or not

Approach to the problem

Theoretical Framework
Market Size
Target Audience
Customer Preferences
Purchase Intentions
New Product Success
Variables
Market Size
Target Audience
Customer Preferences
Purchase Intentions
New Product Success
Independant Variables
Dependant Variable
Research Questions
RQ: Do consumers who prefer the new flavor intend to purchase the new product?
H1: Consumers who prefer the new flavor have higher intentions to purchase the product
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RQ: How does market size affect the success of a new product?
H1: The bigger the market size the bigger the target market

H2: Bigger target market has higher number of customers who prefer the new flavor

H3: Bigger target market has higher number of customers who intend to buy the product

H4: Market shouldn’t be saturated if the market size is big enough

RQ: What is the most suitable target market?

H1: The most suitable target market would be the premium end of the market
RQ: How important is the price of the product to the customers?
H1: Customers from the target market demands more quality than price

H2: They value new flavors

H3: They can be charged more for new flavors
H4: They prefer exotic food
RQ: Will customers who are loyal to competitors try the new product?
H1: Customers who are loyal to competitors have a higher chance of not trying the new product
H2: Customers who are loyal to competitors and preferred the new product will not have the intention to buy it
RQ: Will brand loyal customers buy the new product?
H1: Brand loyal customers are more likely to try the new product
H2: If they like the product they are more likely to purchase it consistently
H3: Brand loyal customers who dislike the new product might lose their brand loyalty

Specifications of information needed

Component: Target Market
This component involves criteria of selecting the target market from different market segments such as demographic,
geographic, psychographic and behavioristic segmentation
Component: Flavor And Preference
In this component information will be gathered about customer preferences regarding the new products flavor through
primary data collection, respondents will be asked to fill a questionnaire after they taste the new product in order to
gather information about their satisfaction with the new flavor
Component: Price
Information about the income and social level of the respondents must be collected in order to set a price that will satisfy
them
Component: Loyalty
Regarding loyalty respondents will be asked to answer questions about competitors strengths and weaknesses from the
respondents point of view and why they would prefer the competitor over our new product.
Component: Market Size
Respondents will be asked from their point of view if they think that the food market is saturated or not and according to
their answers and information gathered from it further market studies will be conducted
Research Design
Research Design
Single Cross-sectional
Multiple Cross-sectional
Longitudinal Research
Cross-sectional Research
Descriptive Research
Causal Research
Conclusive Research Design
Exploratory Research Design
Research Design
Exploratory study: A research study where very little knowledge or information is available on the subject under
investigation.
Descriptive study: A research study that describes the variables in a situation of interest to the researcher.
Causal Study: A research study conducted to establish case-and-effect relationships among variables.
The 6 W’s of the descriptive research
Who
: It’s about the target market for the new product which is in this case the (premium end of the market)
Why
: It’s why customers will buy the product, customers will choose our product either due to brand loyalty or to satisfy their
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need of trying new flavors
What
: It’s the new line of chocolate pineapple cookies that are introduced at a premium price for premium quality cookie
Where
: It’s where the product will be located for the target market which will be inside shopping malls
When
: Customers can expect the product during the working hours of shopping malls
What else
: Sweet cookies will offer better brand image, packaging and pricing strategy that will give them competitive advantage
over other competitors in the market

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