Lecture Notes in MBA 403 (Business Research)

Introduction to Research

“Research is a high-hat word that scares a lot of people. It need not. It is rather simple.
Essentially, it is nothing but a state of mind—a friendly, welcoming attitude towards change.
Going out to look for change, instead of waiting for it to come. Research for practical men, is an
effort to do things better and not to be caught at a switch. The research state of mind can apply
to anything, personal affairs or any kind of business, big or little. It is the problem solving mind
as contrasted with the let-well-enough-alone mind. It is the composer mind instead of the
fiddler mind; it is the ‘tomorrow’ mind, instead of the ‘yesterday’ mind.”

-CF Kettering

WHAT IS RESEARCH?

Research is a systematic process of collecting and analyzing data to find an answer to a

question or a solution to a problem, to validate or test an existing theory (David, 2002).

The Value of Research

Research has several functions:

 It helps us to answer questions, solve problems and make decisions.
 It enables us to see and understand how and why a situation or a problem exists.
 It helps us discover new things and ideas.
 It allows us to validate existing theories or generate new ones.
 It helps us identify and understand the causes and effects of a situation or a
phenomenon.

The Role of Research in Improving Our Quality of Life

 The vaccine for COVID-19 was developed through extensive research, as well as the
discovery of new variants

 Through research lung cancer was associated with smoking, so campaign against
smoking was intensified.

 The development of computer and its use in the banking system : ATM and online
banking

New knowledge New skills/ behavior/ practices

Research

Improved condition/
welfare
New technology New tools/devices
Approaches
What Is Business Research?

Business research is a field of practical study in which a company obtains data and
analyzes it in order to better manage the company. Business research can include financial
data, consumer feedback, product research and competitive analysis. Executives and managers
who use business research methods are able to better understand their company, the position
it holds in the market and how to improve that position.

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Financial Data
Financial data takes qualitative information--such as sales reports, revenues and cost
reports--to see what areas make money and what costs money. By reviewing data, managers
can find the products, staff and departments that are most efficient and determine areas of
unnecessary costs.

Consumer Feedback
Understanding what the public says about the products and services a company
provides is essential to making sure the company is meeting consumer needs. Customer
feedback includes case studies, focus groups, customer surveys and questionnaires.

Product Research
Product research seeks to improve the product to meet the needs of consumers. This
may include technological advancements, improved customer service or access to the product
through a variety of distribution channels.

Competitive Analysis
Competitive analysis is when one company compares its products and services to those
of another company. This can be done to improve the product, create a niche or determine a
more attractive price point to lure customers.

Industry Data
Using research tools such as the information compiled by Dun & Bradstreet can help a
company to understand how the industry as a whole is doing. This can help executives make
decisions based on economic factors affecting their industry that are not limited to their own
products.

What Is a Business Research Process?

Business research process includes gathering data and using it for business decisions.
Business research process entails studying all aspects of a company, its customers and the
market, then using that information to make sound business decisions. Typically, a company
will assess its own strengths and weaknesses, but place particular emphasis on how customers
view their products. When company managers study the market, they will usually take a
comprehensive look at key competitors and the industry in which they operate.

Significance
The business research process often starts with an overview of the market or industry.
The key objective is determining whether an opportunity exists within a certain market. One
determining factor may be how much market share or percent of total industry sales each
competitor possesses. For example, a small software company may determine there are two
major competitors. Competitors A and B may have a 60 and 20 percent market share,
respectively. The other 20 percent of the market may be served by a number of smaller
competitors. The software company must determine if there is enough potential business in the
market for it to make a considerable profit. Government regulation, trade policies and other
industry dynamics must also be taken into consideration.

Types of Data

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 Most industry data can be obtained through secondary research sources. These outside
agencies, including the NPD Group and Forrester Research, conduct research with consumers to
determine the size of certain industries as well as sales trends. Companies that want specific
information about their own customers must conduct primary research. Through primary
research, a company can study the needs and product preferences of its own customers. An
example of primary research is a customer satisfaction survey. A customer satisfaction survey
can help a company determine how satisfied its customers are with certain product features,
the price of the products and even customer service.

Function
After gathering data from primary and secondary research, business research process
entails analyzing the data and looking for specific market trends or consumer preferences.
Management will then use the key findings from the data to develop certain business or
marketing strategies. For example, if customers demand additional features, modification plans
may be made for a certain product. In addition, any other necessary changes about the
product, service or entering a new market will be determined during the analysis stage. The
company will then structure all of these alternatives for potential testing, according to the
article "Business Research Process" at docera.com, an international business consulting firm.

Considerations
The business research process also entails testing certain alternatives from the analysis
stage. The testing can involve the use of statistical models, which can better help predict future
customer behavior, such as the "intent to purchase products." In addition, new market testing
may include introducing a product on a small scale, studying the sales and profits, then rolling
the product out on a more regional or national basis. The purpose of testing in the business
research process is to better ensure potential success.
Prevention/Solution
Although the business research process usually ends with actual decision making, the
process of collecting data and analyzing it is ongoing. Companies should continue to gather
feedback from the market and customers, because consumer preferences can change as can
technology.

The Steps in a Business Research Process

The business research process entails learning everything possible about a company and
it’s customers, competitors and the industry. The major objectives of the process are
determining what products or services to offer, which customers are most likely to buy them,
where to sell them and how to price and promote them. Various steps in the business research
process help a company achieve these objectives.

Identifying Competitors
The first step is identifying key competitors in the industry. One way to garner
information on the competition is through secondary research. Secondary research information
is data that are already available about the industry: market share and total market sales.
Secondary research may also provide detailed information about competitors, such as number
of employees, products they sell and their key strengths. Secondary research can be obtained
through various sources, depending on the industry. For example, the NPD Group uses their
CREST analysis for restaurants. Nielsen provides data about consumer package goods.

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Studying Customers
The process continues with a study of the consumer or business customer. It is
important to determine what the customer wants and needs before developing products to
meet those needs. The consumer will usually dictate which products will sell. If consumers’
needs are not met, they will usually buy competitive products. The best way to determine
customer needs is through primary research. Primary research includes phone surveys,
personal interviews and even mail surveys. With these surveys, marketing research
professionals will often test certain product concepts, measure customer satisfaction and
determine the best features and prices for their products.

SWOT Analysis
Once detailed information on customers and the competition has been garnered, a
SWOT analysis can be used to study the company’s strengths, weaknesses, opportunities and
threats. A strength may be the company’s market share or a good reputation among
customers, according to "SWOT Analysis" at quickmba.com, a popular business reference site. A
weakness may be inexperienced management. Additionally, a company may have an
opportunity to purchase another company. Threats may include new government regulation in
the industry or a well-financed new competitor. A company uses the SWOT analysis to exploit
its strengths via available opportunities. For example, a company with strong financial backing
could purchase another company to increase its distribution and market share. A business can
also minimize its weaknesses against potential threats, for example by hiring more experienced
marketing people to deal with an increase in competition.

Studying the Target Audience

At least part of the business research process should be devoted to studying a
company’s target audience--the customers who are most likely to purchase the company’s
products. For example, a small radio station’s primary target audience may be white
professional women between the ages of 35 and 54. A company can determine its target
audience through primary research.

Application
The steps taken during the business research process are effective only if the company
uses them to develop marketing strategies. Also, business research is a constant endeavor.
Technologies change, as do customer tastes. Therefore, it is important to conduct business
research throughout the year.

How to Develop Research Objectives in the Consumer Research Process

Learn what you can from information on hand to develop focused research objectives in
the consumer research process.
Perhaps you have decided to embark on a marketing research project to answer a specific
question; or maybe you are trying to gain focus on an incomplete picture of the market, and
you are unsure of next steps. Make time for a critical first step in the consumer research
process by developing solid research objectives to underpin the project, and avoid wasting
capital by gathering incomplete data or information that answers the wrong question.
Step 1: Answer four (4) questions to provide a foundation or framework for understanding the
problem:

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  Who is your key customer, the primary target audience you derive the majority of your
income from? Be sure to exclude audiences as well as include; the goal is to narrow your
focus.
 What relevant behavior do you want to influence among this key group? Options
include initial trial, increased purchase, repeat business, improved relations, loyalty or
even better word of mouth to their associates.
 In what context does this desired behavior occur? This describes the market
environment, and depends on your industry--like business to consumer vs. business to
business, or retail versus wholesale.
 What competitive alternatives does the key customer choose from? Note that this
includes not making a choice at all, like putting off a purchase.
Step 2: Review information already in hand, to ascertain what you may already know or possess
about the products you market, the customers who purchase them, the competitors they have
to choose from and the industry in which you operate. Look through company reports, sales
data, research and development updates, customer feedback forms and industry trade
publications. Determine what you already know or feel confident about, and what holes you
think need to be filled to complete the picture.

Step 3: Decide on the nature of the marketing research project. If your information review
turned up little or no data, you may need an exploratory survey, to collect initial data to help
form assumptions to test later. Or you may have a partial picture, and you need a descriptive
study to better illustrate specifics, including the potential growth for a new product or the
demographic profile of a typical purchaser of a particular item. If you have a fairly well
developed picture and are considering next steps or a final decision, you may be ready to test
cause-and-effect or if-then, and need to conduct a causal--also termed casual--project.

Step 4: Brainstorm on specific objectives for the project, listing as many objectives as you can
that would cover the topic under consideration. For example, if the problem is a loss of market
share, objectives may include overall industry trends, basic demographics of general consumers
in the industry, attitudes toward and usage of brands, satisfaction levels of customers, and
product improvement or new product development.

Step 5: Write out the actual objective. Specify one action verb and one type of result you need
from the consumer research project. Verb examples include identify, define, evaluate, select or
test. Result types include market opportunities, product requirements, competitive
alternatives, customer preferences, or consumer usage. So two example sentences might read:

 Identify user preferences among our current product offerings.

 Evaluate the persuasiveness of alternative advertising message among prospective
customers.

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