marketing research notes for students

8/6/2019 Marketing Research Notes for Students

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MARKETINGRESEARCHMETHODOLOGY OF MR


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MARKETING RESEARCH

WHAT IS MARKETING?

Marketing is a process of identifying consumer needs and then providing products or

services to satisfy these needs.

For this process, marketing dept. Needs continuous information about environment consistingof customers, competition and forces at market place.

Marketing research provides this information. Hence marketing research can be defined as:

Marketing research is a science of identifying data needs, and then colleting,organizing and analyzing data to help management to take marketing decisions .

WHY MARKETING RESEARCH ?

Todays manager needs to know more than any manager in the past because of:

Globalization of organizations.

Complexity of business and high cost of wrong decision.

Customer is becoming affluent, sophisticated & knowledgeable.

Availability of computers.

RESEARCH PROCESS:

Step 1 - Defining the Research ProblemStep 2 - Formulating Research DesignStep 3 - Collecting DataStep 4 - Analyzing DataStep 5 - Writing and Presenting Report

We will now study each step in detail.

STEP 1 DEFINING RESEARCH PROBLEM

Many a times management sees the symptoms & not the problem.For e.g. management problems would be:

Declining sales

Increasing employee turnover

Large no. of product complaints

These are symptoms. The researchers role is to help management to identify the problem andgive solutions.

Thus, there are two types of problems viz.:1. Management decision problems2. Research problems

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Management decision problem asks what decision maker should do.

Research problem asks what information is needed to solve the problem and howbest it can be obtained.

Hence, management decision problem is action oriented whereas research problem

is information oriented.For e.g.

Management decision problem Research problem

Should price of product be increased? To compute price elasticity of demand

Should a new product be introduced? To determine consumer preferences and purchaseintention of new product

Should advertising campaign bechanged?

To determine effectiveness of current advertisingcampaign

Following methods are used to convert management decision problem into research problem:

Discussion with decision makers

Interviews of industry experts

Secondary data analysis

Qualitative research

Research problem should be broken down into more specific questions for which data is to beobtained. Such fractionization helps in:

1. Designing questionnaire2. Selecting method of administering questionnaire3. Calculating sample size

4. Selecting sampling method5. Selecting data analysis techniques

Example 1:Management problem : A magazine publishing company was keen to know what changes

could be incorporated to improve its appeal to readers.Broad research problem: To gather0 information about magazine subscribersSpecific components:

1. Demographics of subscribers2. Psychological characteristics of subscribers like travel, credit card use, consumer

electronics, investments, property etc.

3. Readership of magazine covering time spent to read the magazine, articles read etc.

Example 2:Management problem : How to increase sales of dept store A?Broad research problem : To find out relative strength and weakness of department store

A vis--vis store B.Specific components:

1. What criteria do households use while selecting a department store?

2. How do households evaluate stores A and B in terms of criteria identified in 1 above?3. Are specific stored preferred while shopping specific product categories?4. % market share of each store

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5. What is the demographic and psychological profile of customers of store A? Does itdiffer from profile of customers of B?

While determining research problem often two types of errors occur. They are:1. Defined problem is too broad which does not provide clear guideline2. Defined problem is too narrow

There are two ways to overcome this problem:1. Make research person a part of decision-making process.2. A hypothetical output is shown to decision maker for his approval.

Research process problems:

1. Favored technique syndrome.2. Lack of knowledge of certain techniques. E.g. experimental designs.3. Inadequate data analysis techniques.4. Vested interest in research.

What is good research?

Generates dependable data

Follows standards of scientific methods:

Purpose is clearly defined

Research process explained in detail

Research design is scientific.

High ethical standards maintained

Limitations/assumptions clearly specified

Adequate data analysis done for decision making. Findings presented unambiguously.

Conclusions justified.

Requisites for careers in research:

Courses in statistics and quantitative methods.

Courses in computer skills

Courses in psychology

Courses in communication skills

Creativity in thinking

Now we will go to step 2 viz. formulating research design.

STEP 1 RESEARCH DESIGN

What is research design?It is the methodology to carry out the research. It can be called as a blueprint forconducting the research. It consists of following components:

1. Information to be collected.2. Methodology to be adopted to collect it.

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3. Sample size & sampling procedure4. Plan for data analysis.

Classification of research designs:Research designs are classified in two categories:

1. Exploratory design2. Conclusive design

Exploratory designs are useful when researcher lacks clear idea in carrying out theresearch whereas conclusive research is conducted for arriving at the final conclusionConclusive research begins where exploratory research ends.

Difference between exploratory and conclusive designs is as follows:

Exploratory Conclusive

Objective Provide insight to problem,enhances understanding fordeveloping researchmethodology

Test specific hypothesis & examinerelationship in data

Characteristics Information required isdefined loosely.

Research process isflexible & unstructured.

Sample is small & nonrepresentative ofpopulation

Data analysis isqualitative.

Information required isclearly defined.

Research process is formal& structured.

Sample is large &representative of population.

Data analysis is quantitative.

Findings Tentative Conclusive

The classification of research designs is as follows:

RESEARCH DESIGNS

EXPLORATORY CONCLUSIVE

SECONDARY QUALITATIVE DESCRIPTIVE CAUSALDATA RESEARCH

DIRECT INDIRECT SURVEY OBSERVATION(PROJECTIVE)

FOCUS DEPTH PERSONAL MECHANICALGROUP INTERVIEW

TELEPONE PERSONAL MAIL ELECTRONIC

ASSOCIATION COMPLETION CONSTRUCTION EXPRESSIVE

Exploratory research designs are useful when researcher does not have enoughunderstanding to proceed with research project.

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Conclusive research designs are used to finally arrive at a conclusion.

These designs are now described below:

I. EXPLORATORY RESEARCH:

It is conducted to:

1. Formulate a problem more precisely2. Develop hypothesis3. Identify key variables & relationships for further examination4. Gain insights for developing approach to the problem.

We will now study various exploratory designs:

SECONDARY DATA:

Data

Primary Secondary

The researcher originates primary data whereas secondary data is collected for purpose otherthan the researchers problem. Classification of secondary data:

1. Internal secondary data2. External secondary data

Internal data: internal secondary data is the data generated in the organization. It is readilyavailable with less cost e.g. Sales by region, outlets, cash/credit and products etc.External data: external data consists of following sources:

1. General business data : Published through directories, guides, indexes, journals, andperiodicals etc.

2. Govt. Sources : Like census data, RBI bulletin and economic surveys etc.

3. Syndicated sources : This data is collected by an organization & shared by no. of clientsSuch data is collected through:

Household surveys which involve interviews with large no. Of respondents usingpre-designed questionnaire.

Diary panels which involve collecting information from sample of respondents whoprovide specified information at regular intervals over a period of time.

Wholesalers & retailers who record their purchases, sale & inventory every month

Such data is called audit data.

Advantages & disadvantages of syndicated sources are as follows:Household surveys:

Advantages Disadvantages

o most flexible way of obtaining data

from respondents

o Response bias

o Errors in questionnaire design,

communication, recording of data

Diary panels:

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o provide more & higher quality data

than surveys

o Low representation of sample

Audits:

Advantages Disadvantageso provides relatively accurate

information on movement of large no.of products at wholesale / retail outlet.

o All markets not covered

Limitations of secondary data:1. Secondary data may not be current2. Variables defined in secondary data may not be consistent with those in research

project. (e.g. Income- gross/net)

3. Secondary data might have been compiled by a source, which is not reliable. E.g. Data

published to promote sale or carry out propaganda

QUALITATIVE RESEARCH:

Qualitative research is used:

To find values important to human beings in taking a particular decision in a situation.

In situations where respondent is unwilling to give truthful answers.

Techniques in qualitative research can be classified as follows:

Qualitative Research Techniques

Direct Indirect / Projective

(Non-disguised) (Disguised)

Focus groups Depth interview

Association Completion Construction ExpressiveTechnique Technique Technique Technique

These techniques are classified as either direct (non-disguised) or indirect (disguised).In direct approach, such purpose is known & in indirect approach it is not known.We will now discuss each technique:

I.Direct approach:

1. Focus group: It is an overview of small group of people conducted by a trained moderator in

unstructured way.

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The moderator leads the discussion on the issues of interest to researcher.Moderators job is of keeping discussion on the track without inhibiting flow ofideas and ensuring that each person participates in discussion.

Communication with others is an important aspect in forming ones opinionHence, real value of group data is found from analyzing interaction amongparticipants.

The value of the technique lies in the unexpected findings often obtained from afree-flowing group discussion, spontaneous responses and interaction amongmembers.

Characteristics of focus groups:

Group size : 8 - 12

Group composition : homogeneous, respondents pre-

screened

Physical setting : relaxed, informal atmosphere.

Time duration : 1 - 3 hours

Recording : use of audiocassettes, videotapes.

Moderator : trained & skilled.

Group size less than 8 fails to generate momentum in discussion & more than 12 is a

crowd.

Homogeneous in socio-economic characteristics. Homogeneous groups tends to

promote intense discussion and free interaction.

Respondents are pre-screened to ensure that they have adequate experience with the

object or issues being discussed.

We should have more than one focus group since outcome of one group maynot be representative.

Steps in organizing & conducting focus group:

Step 1: Determine Objectives Of Research Project & Define Problem.

Step 2: Specify Objectives Of Qualitative Research.

Step 3: Formulate Questions To Be Answered By Focus Group.

Step 4: Screen the Respondents

Step 5: Develop Moderators Outline.

Step 6: Conduct the Focus Group Interview

Step 7: Review Tapes & Analyze Data.

Step 8: Summarize Findings.

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Advantages & disadvantages of focus group:


Produce wider range of information, insights,ideas than individual responses obtainedprivately (synergy)

One persons comment triggers a chain reactionfrom other participants (snowballing)

Since participants are not required to answerspecific questions, their responses can bespontaneous & unconventional and shouldtherefore give accurate idea of their views(spontaneity)

Data collection is quick since number ofindividuals are interviewed at a time (speed)

Since participants feelings are similar to those ofother participants he feels comfortable inexpressing his ideas & feelings (security)

Can be misused byconsidering the results asconclusive thanexploratory (misuse)

Difficult to moderate(moderation)

Results are moresusceptible to misjudge(misjudge)

Unstructured nature ofresponses make coding,analysis & interpretation ofdata difficult (messy)

Compared to individual interviews that aim to obtain individual attitudes, focus group obtainsmultiplicity of views & interaction between group members.Focus groups can be used in:

Generate hypothesis.

Develop questions.

Understanding perceptions, preferences & behaviors.

Generating new ideas.

Copy material for advertisements. Obtaining preliminary reaction.

Findings of focus groups are not conclusive since sample of participants is small, hence, itdoes not represent population.

Compared to individual interviews which aim to obtain individual attitudes, focus group obtainsmultiplicity of views & group interaction

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E.g. Before Plymouth breeze car was introduced in 96, extensive focus group discussionswere conducted. The discussions revealed that the purchasing criteria for automobile changewith different stages in life. This finding has helped in formulating following hypotheses:

As peoples lifestyle & needs change, so does their preference for car.

As people make more money, they are willing to pay higher price for car.

People have negative perception of the sales pressure involved in car buying process.

These hypotheses were tested in quantitative survey.

2. Depth interviews:

It is an unstructured, direct, personal interview in which a highly skilled interviewerprobes a single respondent to find underlying feelings.

The wording & order of questions depend upon respondents replies.

Probing is of critical importance in obtaining meaningful responses & uncovering hiddenissues.

In depth interview, interviewers role is superior. He has to establish rapport with therespondent. He should:

Avoid appearing superior

Put respondent at ease

Be objective

Ask questions in an informative manner

Not accept brief yes, no answers.

Advantages & disadvantages of depth interviews:


Can uncover greater depth than focusgroup

Responses can be attributed tospecific respondent unlike focus group

Free exchange of information that maynot be possible in focus group

Need of skilled interviewer

Lack of structure makes resultssusceptible to interviewers influence

Obtained data is difficult to analyze &interpret. Services of psychologist areneeded.

Applications of depth interview:

Discussion of sensitive, confidential, embarrassing topics

Detailed understanding of complicated behaviors

Interview of professional people, experts.

II. Indirect approach / projective techniques:

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It is an unstructured, indirect form of questioning that encourages respondents to project theirunderlying feelings.

In this technique, respondents are asked to interpret the behaviour of others. In interpreting thebehaviour of others, respondents indirectly project their own feelings. In clinical psychology it isestablished that more the ambiguous situation, respondents project their true emotions.

In psychology these techniques are classified as association, completion, construction &expressive techniques.

1. Association technique:In Association Technique the respondent is presented with a

stimulus & asked to respond with the first thing that comes to his mind. word association isthe best known of these techniques. In word association technique respondent ispresented with a list of words, one at a time, & asked to respond to each with the first thingthat comes in his mind. The words of interest, called test words, are interspersed

throughout the list, which also contains to disguise the purpose of study. The underlyingassumption is that association allows the respondents to reveal their inner feelingsassociated with each word. Responses are analyzed by calculating:

a. Frequency with which a word is given a response.b. Average time elapses before a response is given.c. No. Of respondents who do not respond within a reasonable time (3 seconds)

2. Completion technique :The respondent is asked to complete an incomplete stimulus

situation. Common completion techniques are sentence completion & story completion

a) Sentence completion : respondents are given incomplete sentences &asked to complete them. Sentence completion can provide moreinformation on respondents feelings compared to word association butsentence completion is less disguised than word associationE.g. I) A person who shops at Apna Bazar is _____________.

ii) When I think buying shirt/dress material for me, I ___________.

b) Story completion : respondents are given part of story, enough to directattention to a particular topic but not to hint the end. They are asked tocomplete the story.

3. Construction technique :In this technique, the respondent is asked to construct a story,

dialogue or description for a stimulus shown to him. Main construction technique ispicture/cartoon response. A picture/cartoon is shown to the respondent & he is asked tobuild up a story based on the picture/cartoon.

4. Expressive technique:

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In expressive technique, respondents are presented with averbal or visual situation & asked to relate feelings & attitudes of other people to thesituation. The widely accepted method is role playing.

a) Role playing : in role playing, respondents are asked to play the roles orassume the behaviour of someone else. The assumption is that therespondent will project his own behaviour through the role.

II. CONCLUSIVERESEARCH:

DESCRIPTIVE RESEARCH DESIGNS survey & observation :

Descriptive research is conducted to:

Describe characteristics of relevant groups such as consumers, salespersonscompetitors and market areas. (qualitative research)

Estimate population parameters, establish relationships between variables. (quantitativeresearch)

Descriptive research is always structured.There are two types of descriptive research designs. They are:

1. Cross-sectional designs : This design involves collection of information from any givensample or population only once. In single cross-sectional design, information isobtained only once from one sample whereas in multiple cross-sectional designinformation is obtained only once from more than one sample.

2. Longitudinal designs : In this design data is collected from same sample(s) repeatedlyover a time period. Such sample is also called panel.

Relative advantages & disadvantages of cross-sectional and longitudinal designs are shownbelow:

Cross-sectional Longitudinal

Detecting change - +

Large volume of data collection - +

Accuracy - +

Representative sample + -

Survey method and observation methods are two descriptive research designs methods.

1. Survey method:

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Survey method is based on questioning of respondents. Questions can be asked verbally, inwriting or via computer. The questions can be administered in four major modes. They are:

Survey methods

Telephone personal mail electronicInterview interview interview interview

Telephone interview:

Advantages:

Respondents can be contacted faster.

Economical.

Disadvantages:

Persons with telephone connection can only be contacted.

Cannot show sample products, pictures, visual aids etc.

Personal interview:

An interview is called personal interview when interviewer asks questions face-to-face torespondent.

Advantages:

Respondent develops highest trust in interviewer.

Can show sample products, pictures, visual aids etc.

Longer interviews are possible.

Disadvantage:

Expensive.

Mail interview:

Advantages:

People give more honest answers when answering on computer followed by maisurvey.

Economical. Can show sample products, pictures, visual aids etc.

Useful for sensitive issues.

Respondent can answer at his leisure time.

Disadvantages:

Takes longer time to get responses.

Follow-up is required.

Lower response rate that may lead to biased sample.

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Electronic interview:

Advantages:

Respondent gives most honest answers.

Speed.

Online updating of database.

Can attach picture and sound files.

Disadvantages:

Respondent must have access to computer.

No control over responses that may lead to biased sample.

Few respondents can respond several times.

2. Observation method:

Observation method involves recording behaviour of people, objects and eventssystematically.

Observation methods can be classified by mode of administration & they are as follows:

observation methods

Personal mechanicalObservation observation

In personal observation, researcher observes actual behaviour as it occurs.

In mechanical observation, mechanical devices, rather than human observers, record theobservation. Various mechanical devices are as follows:

Audi meter: Attached to tv to continually record what channel is tuned?People meters: In addition to what channel is tuned to, records who is watching channel?On-site cameras: Records movement of objects.Eye-tracking monitors: Records the gaze movement of eyes. These devices can be used to

find out how a respondent reads the advertisement or views the TVcommercial.

Psycho galvanometer: Measures changes in the electrical resistance of the skin. Excitementleads to increase in electrical resistance of the skin.

Voice pitch analysis: Measures frequency of human voice.

Use of mechanical devices assumes that physiological reactions are associated with specificcognitive responses.

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The greatest advantage of observation method is that it permits measurement of actuabehaviour rather than intended or preferred behaviour. Also certain data can be best obtainedby observation. E.g. Babies at play

The most serious disadvantages of observation method is that little is known about theunderlying motives, beliefs of a particular behaviour. E.g. Customer may be purchasing abrand for his neighbour. Other disadvantages are these methods are expensive, difficulty in

observing & interpreting some form of behaviour.

Since observation method has potential to provide valuable information, it is to be viewed as acomplimentary method to survey method.

CAUSAL RESEARCH: experimental designs / experimentationOften researcher is interested to know why a particular phenomenon/behaviour occurs. He is

interested to find out cause-effect relationship. Experimental designs help to find out suchrelationship. It is used to test hypothesis of causation.

While survey & observation methods provide valuable information, it does not allow theresearcher to do experiments that will lead to find cause-effect relationship.

E.g. Researcher is interested to find out whether there is a relationship between discount given& sales generated. For this purpose he would offer discount coupons of varying % and recordsales. Such data will help him to find out if any relationship exists between discount offeredand sales generated. Here he has experimented with discount variable to find cause-effect

relationship.

Marketing effects (sales in above example) are caused by multiple variables (one of them isdiscount in above example). Hence cause-effect relationship tends to be probabilistic and notdeterministic.

Before making causal inference, three conditions must be satisfied & they are:

Concomitant (simultaneous) variation

Time order of occurrence of variables

Elimination of effects of other causal factors

Concomitant variation is the extent to which cause, x, & effect, y, varies together. Suchvariation can be assessed by qualitative or quantitative data.

For e.g., in qualitative case, suppose it is observed that the sale of a restaurant offering morevariety in food is high compared to the one offering less variety. Hence there is a concomitantvariation in sale (effect y) and variety of food (cause x). Such situation makes hypothesis ofmore variety more sale tenable, but it does not prove it. This is because there could be afactor, other than variety in food that has an impact on sales.

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In quantitative case, suppose we have the following data of 1000 respondents on purchase offashion garments and education of purchaser:

Purchase of fashionEducation garments

High Low

High 363 (73%) 137 (27%)Low 322 (64%) 178 (36%)

Above data shows that effect purchase of fashion garments and cause education move inthe same direction. It leads to a tenable hypothesis that as education level goes high so thepurchase of fashion garments. However, it does not prove the hypothesis since income ofpurchaser could also be a factor affecting the sale.

Time order of occurrence of events means cause should occur before or at least withthe effect. It cannot occur after the effect.

Elimination of effects of other causal factors means the effects of other causal factorsnot being studied should be either eliminated or controlled. For e.g. while understandingcause-effect relationship between education and purchase of fashion clothing, effect of incomeon purchase of fashion clothing should be eliminated or controlled.

Definitions of certain terms:

Independent variables (treatments): These are the variables that are manipulated (i.e. Levelsof such variables are changed by the researcher to test causal relationship). In aboveexamples they are variety of menu and education

Control group: It is the group in which independent variables are not manipulated.

Test units: These are individuals, organizations or other entities whose response to theindependent variables is examined. In above example test units are individuals.

Dependent variables: these are the variables that measure the effect of independent variableson test units. In above examples they are sale of restaurant and of fashion garments.

Extraneous variables (confounding variables): these are variables other than independentvariables that affect the response of test units. Since such variables confound (confuse) the

researcher, they are also called confounding variables. In above example such variable isincome.

There are four ways in which the effect of extraneous variables can be controlled. They are:

Randomization

Matching

Statistical control

Design control

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Randomization means test units are assigned to treatments on a random basis by usingrandom numbers so that we can reasonably assume that extraneous causal factors affectingdependent variable will be represented equally in each treatment condition.

Matching means the test units are matched on key variables and matched units are assignedto different treatments. The goal is to make sure that there are no significant differencesbetween characteristics of respondents assigned to various treatments.

Statistical control means measuring the effect of extraneous variables and adjusting for theireffects through statistical analysis. The statistical techniques used are analysis of variance(ANOVA) or analysis of covariance (ANCOVA).

Design control means using specialized statistical designs, which control effects of specificextraneous variables.

Validity in experiments:

While conducting experiments researcher has two objectives viz.

Draw valid conclusions about effect of independent variables on test units (internavalidity)

Make valid generalizations to population (external validity)

Internal validity refers to whether observed effect on test units could have been caused byvariables other than treatment i.e. by extraneous variables. Controlling the effect of extraneousvariables can increase internal validity.

External validity refers to whether cause-effect relationship found in the experiment can be

extended to population?

It is desirable to have both internal & external validity to an experiment. However, if internavalidity is increased, external validity declines. For e.g. Controlling effects of extraneousvariables can increase internal validity. But external validity would decline because effect ofextraneous variables cannot be controlled fully in population.Hence any experiment should balance both validities.

Laboratory & field experiments:

Experiments can be conducted in laboratory or in the field.

E.g. Of laboratory experiment: an advertisement is shown in mini-theatre to selectedcustomers.

E.g. Of field experiment: test marketing of a product.

Comparison of field & laboratory experiments is as follows:

Factors Laboratory Field

Environment Artificial Realistic

Control High Low

Internal validity High Low

External validity Low High

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Time Short Long

No. Of units Small Large

Ease of implementation High Low

Cost Low High

Field experiments are less common in marketing research because they are time consuming,expensive and difficult to administer.

Measurement & Scaling :

For analysis of any data, whether quantitative or qualitative, it has to be converted intonumbers. Hence we will first study primary scales of measurement and then find out how theycan be used for capturing different types of data.

There are four primary scales of measurement. They are:

Nominal scale

Ordinal scale

Interval scale

Ratio scale

In Nominal scale numbers are assigned to identify objects uniquely. For e.g. Vehicle nos.,account nos., credit card nos., roll nos. The only permissible operation on such numbers iscounting. %, mode, chi-square and binomial tests can be performed on such data.

In Ordinal scale numbers are assigned to objects to indicate the extent to which the objectspossess some characteristics. This scale allows to determine whether an object has more or

less of a characteristic than some other object, but not how much less or more. This means wecannot conclude about difference between values of two objects. We can calculate median,quartiles, deciles, percentiles & rank order correlation.

In Interval scale we can conclude about differences of values of two objects but not about theratios. This means interval scale contains all the information of ordinal scale and allows us tocompare difference of values of two objects but not ratios.

For e.g.

1. Let y = 20 + 6x. Values of y calculated for certain values of x are as follows:

Values of x y = 20 + 6x

1 262 323 384 44

Difference differencein x in y

2-1 = 1 32-26 = 63-2 = 1 38-32 = 64-3 = 1 44-38 = 6

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Ratio in x ratio in y

2/1 = 2 32/26 = 1.2304/2 = 2 44/32 = 1.375

From above it can be seen that difference of 1 in x is equivalent to difference of 6 in y. But thisis not true for ratio of 2 in x. In first case, ratio of y is 1.230 and in second case it is 1.375

Hence difference is valid but not ratios.

Such relation will exist between y and x if y = a + bx where a is not equal to zero.

2. Temperature can be measured in Fahrenheit or in centigrade. Relation betweenthem is as follows:

F = (9c/5) + 32

Values of c values of f

10 5020 68

30 8640 104

Difference differenceIn c in f

20-10 = 10 68-50 = 1830-20 = 10 86-68 = 1840-30 = 10 104-86 = 18

Ratio in c ratio in f

20/10 = 2 68/50 = 1.36

40/20 = 2 104/68 = 1.53

Above example shows that difference is valid whether temperature is measured in f or c, butnot ratio.

The equation in f & c can be obtained by putting a = 32 and b = 9/5 ingeneralized equation given above viz. Y = a + bx

Arithmetic mean, standard deviation, product-moment correlations can be applied to intervascale data.

In equation y = a + bx, if a=0, then y = bx.

In example (1) above, y = 6x. We will now calculate values of y for same values of x

Values of x y = 6x

1 62 123 184 24

Difference differencein x in y

2-1 = 1 12- 6 = 6

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3-2 = 1 18-12 = 64-3 = 1 24-18 = 6

Ratio in x ratio in y

2/1 = 2 12/ 6 = 24/2 = 2 24/12 = 2

Now the relation between x and y exists for difference as well as ratios. Such data is said to bein ratio scale.

In general if y = bx where b is positive then such scale is said to be ratio scale. E.g. areconsumption of product, income, and distance etc.

We can perform four basic mathematical operations of +, -, * and / on ratio scale data.

All statistical techniques can be applied to ratio scale data.

SCALING TECHNIQUES:

Scaling techniques are classified as comparative scales & non-comparative scales.

In Comparative Scale (also called as non-metric scale), direct comparison of objects is done.For e.g. Respondents are asked to compare LG TV with Samsung TV and tell which brandhe would prefer. Comparative scale data is always in ordinal scale. The benefits ocomparative scaling are:

Small differences between objects are detected.

The halo effect in responses is reduced.

The disadvantage is that:

Comparison is between the selected objects only. If new object is introduced, freshexercise needs to be done.

No. Of pairs become too high if no. Of objects to be compared is high.

In Non Comparative Scale (also called as monadic or metric scale), each object is scaledseparately. For e.g. LG and Samsung TVs may be evaluated on 7 point preference scalewhere 1 = not preferred at all and 7 = preferred very much. Non-comparative scales are widelyused in marketing research.

Scaling techniques are further classified as follows:

Scaling techniques

Comparative scales non comparative scales

Paired rank constantComparison order sum

Continuous Itemized

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Rating Rating

Likert Semantic StapelDifferential

Comparative scaling techniques

1. Paired comparison :

A respondent is presented two objects & he is asked to select one according to some criterion.If there are n objects to be compared there will be {n(n-1)/2} pairs.

On the basis of responses, a matrix is compiled as shown below:

Indica Santro Matiz Maruti

Indica 0 2 4 5

Santro 1 0 3 5

Matiz 4 5 0 2

Maruti 5 2 4 0

Total 10 9 11 12

The column total shows the number of times the brand is preferred.

This technique is useful when no. Of objects is limited. Its advantage is that it brings out eventhe smallest difference between two brands.

2. Rank order:

Respondents are presented all the objects simultaneously and asked to rank them accordingto some criterion.

When no. Of brands to be compared is high, rank order is preferred to paired comparison.

3. Constant sum:

In constant sum scaling, score is given to each object on the basis of some criterion. The sumof scores is constant.The main advantage of this scale is that it allows for fine discrimination among objects withouspending too much time.

There are two disadvantages of this scale & they are:

Sum of scores given by each respondent should be same. This needs to be checkedevery time.

If no. Of objects is too small or too large, giving score would be difficult.

Non-comparative scaling techniques:

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In non-comparative scaling, objects are not compared with each other, but each object isevaluated at a time independently. Hence non-comparative scale is also called monadicscale.

Non-comparative scale could be:

Continuous

Itemized.

1. Continuous rating scale:

In continuous scale (also called graphic rating scale), respondents rate objects by placingmark at the appropriate place on the line that runs from one extreme of the criterion variable toother extreme. Thus respondents are not restricted to marks set in advance by the researcher.These scores are treated in interval scale.

E.g. How would you rate jet airways as an airline?

Economical---------x-----------------------------------------expensive

Continuous rating scale is easy to construct. However scoring is cumbersome. Hence their usein practice is limited. In practice, itemized rating scale is frequently used, which is describedbelow.

2. Itemized rating scale:

In Itemized rating scale, respondents are provided with a scale that has numbers or briefdescriptions. These numbers or descriptions are called items. Respondent is requested togive his response for each criterion variable by using the numbers or brief descriptions given.

There are three itemized scale given below:

a) Likert scaleb) Semantic differential scale

c) Stapel scale

a) Likert scale:

Rensis Likert developed this scale. Each criterion variable has five responses viz. strongly

disagree, disagree, neither disagree nor agree, agree and strongly agree. Numbers 1, 23, 4, 5 or 2, -1, 0, 1, 2 are assigned five responses.Numbers given above facilitate researcher to analyze data. Data analysis can be performed foreach criterion (profile analysis) or total (summated analysis).

In profile analysis, average score is calculated for each criterion and compared.

In summated analysis, total of scores is computed and analyzed. While giving score, mostfavourable score will get score 5 and most unfavourable will get score 1. This is explainedbelow:

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E.g. Five criterion variables about shoppers stop are evaluated:

Stronglydisagree

Disagree Neither disagreenor agree

Agree Stronglyagree

Sells high qualitymerchandise

1 2 3 4 x 5

Charges higher prices than

other similar stores 5 4 x 3 2 1

Staff is courteous 1 2 3 x 4 5

Wide variety of dresses isavailable.

1 2 3 4 x 5

Poor display of dressesmakes selection difficult.

5 4 x 3 2 1

Note the scores given to second and fifth criteria. Total score will be 19.

Since summated approach is frequently used, Likert scale is also called summated scale.

Likert scale is easy to construct and administer. However, it takes a longer time to administerbecause respondent has to read each statement.

b) Semantic differential scale :

It is a seven point scale with end points associated with bipolar labels like weak/strongunreliable/reliable.E.g. Rate IFB washing machine on following criteria:

Strong--: --: --: --: --: --: --: delicate

Expensive --: --: --: --: --: --: --: economical

Durable --: --: --: --: --: --: --: non-durable

Good --: --: --: --: --: --: --: badPerformance performance

Old fashioned--: --: --: --: --: --: --: modern

c) Stapel scale :

Jan Stapel developed this scale. It is a unipolar scale with 10 categories numbered from 5 to+5, without 0. Higher the number, more accurately the term describes the object.For e.g. shoppers stop is:

+5 +5+4 +4+3 +3+2 +2

Note that favourable attributescan be on left as well as on rightpoles.

Individual items can be scored oneither 3 to +3 or 1 to 7 scale.The resulting data is commonlyanalyzed through profile analysis.Mean or median is computed forprofile analysis

Advantage of Stapel scale is that it does notrequire pre-testing the adjectives or phrasesto ensure true bipolarity.

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+1 +1High price wide variety

-1 -1-2 -2-3 -3-4 -4-5 -5

How to select right scale?

No. Of categories 5 to 9 categories

Balance v/sunbalanced

Balance categories preferred

Odd/even no. Ofcategories

If neutral response is possible, odd no. Should beused.

Forced v/s non- forced For not allowing respondent to be neutral, forcedresponse be used.

Verbal description As close to the scale as possible

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QUESTIONNAIRE DESIGN :

Any questionnaire has three objectives:

It should translate required information into questions, which respondents can answer.

It should motivate respondents to cooperate, get involved into interview and give trueanswers.

It should minimize response error.

There are no scientific principles that guarantee optimal or ideal questionnaire. Hencequestionnaire design is a skill that can only be mastered by experience.

Questionnaire design process:

Step 1: Specify information neededEnsure that information obtained addresses all issues related to research problem.For this, finalize output tables and work backwards to decide information needed.

Step 2: Specify interviewing methodSince questionnaire format and wordings of questions depend upon interviewingmethod, select the method(s).

Step 3: Determine content of each questionEvery question must contribute to the information needed. Check whether eachquestion is really needed. Group questions in:

Must know

Useful to know

Nice to knowDiscard last group.

Step 4: Design the questionGuidelines for designing question:

Use simple words

Use positive & negative statements

Avoid ambiguous words like often, usually, mostly, sometimes, occasionally, normallyetc. As well as unfamiliar words & abbreviations.

For e.g. are you in favour of section 37 of IPC?

Avoid leading questions. Leading questions are those that use negative phraseology.

For e.g. wouldnt you like to receive free gift from us?

Avoid such questions that respondent may not remember its answer:

For e.g. what % of your advertising budget do you spend on directmailing?

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Do not use double-barreled questions:

E.g. Do you think fast food is tasty & provides nourishment? (incorrectsince double-barreled)

Correct way is to split the question as follows:

1. Do you think that fast food is tasty?2. Do you think fast food provides nourishment?

Make sure that respondent has sufficient knowledge of the subject & he/she is the righcandidate as a respondent. For this purpose, use filter questions about familiarity withthe subject, product use, past experience etc before questions on research subject.

In case of objection from respondent on the purpose of information, convince him thatinformation sought has a legitimate purpose.

Produces variable responses.

For e.g. will you accept corruption? will not produce variable response.

Such questions do not give any useful information.

Tendency to crowd question to make the question look shorter should be avoided. Fore.g.

What is your net annual income?

--- below 1 lac --- 1 to 2 lacs --- 2 to 3 lacs --- 3 to 4 lacs --- 4 to 5 lacs ---above 5 lacs.

Better layout will be:

Below 1 lac ---1 to 2 lacs ---2 to 3 lacs ---3 to 4 lacs ---4 to 5 lacs ---

Above 5 lacs ---

Instructions/directions for any question should be placed before the question.

Provide for dont know, not applicable, other options.

Questionnaire should end by giving thanks to the respondent.

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Step 5: Arrange questions in proper order

Opening questions should be interesting, simple & doubt-free.

Transition between questions should be smooth. Grouping questions that are similar will

make questionnaire easier to complete.

Branching questions should provide all possible branches

Place sensitive questions at near end of survey.

Step 6: Identify form & layout of questionnaire

Questions & structured answers should be numbered

Questionnaires should be numbered serially

Leave some space at the end of questionnaire. Sometimes respondents give valuablefeedback which can be recorded here.

Step 7: Making copies of questionnaire:

Should have elegant appearance:

Use good quality paper

Booklet form is preferred for long questionnaire

Do not use colour printing. It gives an impression that questionnaire iscomplicated

Use different colour papers for each category of respondent, if need be. For e.gDifferent questionnaires for public sector & private sector

Do not print a question such that part of its content including response categories is

carried on next page.

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marketing research notes for students

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